ZEBRA TECHNOLOGIES CORP (Form: 10-Q, Received: 05/06/2010 14:16:00)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-Q

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended April 3, 2010

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 000-19406

Zebra Technologies Corporation

(Exact name of registrant as specified in its charter)


Delaware		36-2675536
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

475 Half Day Road, Suite 500, Lincolnshire, IL 60069

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (847) 634-6700

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ¨ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

As of April 30, 2010, there were 57,730,176 shares of Class A Common Stock, $.01 par value, outstanding.

ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES

QUARTER ENDED APRIL 3, 2010

INDEX


		PAGE
PART I - FINANCIAL INFORMATION

Item 1.	Consolidated Financial Statements

	Consolidated Balance Sheets as of April 3, 2010 (unaudited) and December 31, 2009	3

	Consolidated Statements of Earnings (unaudited) for the three months ended April 3, 2010 and April 4, 2009	4

	Consolidated Statements of Cash Flows (unaudited) for the three months ended April 3, 2010 and April 4, 2009	5

	Notes to Consolidated Financial Statements	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31

Item 4.	Controls and Procedures	32

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	33

Item 1A.	Risk Factors	33

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	33

Item 5.	Other Information	33

Item 6.	Exhibits	37

SIGNATURES		38

PART I - FINANCIAL INFORMATION

Item 1.

Consolidated Financial Statements

ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Amounts in thousands)


	April 3, 2010			December 31, 2009
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	35,988		$	38,943
Restricted cash		1,598			1,725
Investments and marketable securities		136,565			114,064
Accounts receivable, net		145,642			150,992
Inventories, net		81,565			79,926
Deferred income taxes		10,561			10,792
Income taxes receivable		—			4,724
Prepaid expenses and other current assets		14,288			9,771

Total current assets		426,207			410,937

Property and equipment at cost, net of accumulated depreciation and amortization		77,951			77,589
Long-term deferred income taxes		32,643			35,842
Goodwill		152,288			153,225
Other intangibles, net		53,486			55,982
Long-term investments and marketable securities		79,947			91,989
Other assets		4,435			4,915

Total assets	$	826,957		$	830,479

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	26,870		$	28,137
Accrued liabilities		43,322			52,591
Deferred revenue		22,553			24,082
Income taxes payable		423			—

Total current liabilities		93,168			104,810
Deferred rent		3,702			4,108
Other long-term liabilities		9,168			9,432

Total liabilities		106,038			118,350

Stockholders’ equity:
Preferred Stock		—			—
Class A Common Stock		722			722
Additional paid-in capital		136,143			136,104
Treasury stock		(401,123	)		(385,831	)
Retained earnings		993,928			969,195
Accumulated other comprehensive loss		(8,751	)		(8,061	)

Total stockholders’ equity		720,919			712,129

Total liabilities and stockholders’ equity	$	826,957		$	830,479

See accompanying notes to consolidated financial statements.

ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EARNINGS

(Amounts in thousands, except per share data)

(Unaudited)


	Three Months Ended
	April 3, 2010			April 4, 2009
Net sales
Net sales of tangible products	$	202,084		$	166,684
Revenue from services and software		24,347			25,925

Total net sales		226,431			192,609


Cost of sales
Cost of sales of tangible products		108,540			95,859
Cost of services and software		10,556			10,941

Total cost of sales		119,096			106,800


Gross profit		107,335			85,809


Operating expenses:
Selling and marketing		27,500			23,199
Research and development		23,072			22,149
General and administrative		20,869			21,357
Amortization of intangible assets		2,358			2,634
Exit, restructuring and integration costs		1,816			2,296

Total operating expenses		75,615			71,635


Operating income		31,720			14,174


Other income (expense):
Investment income		842			1,178
Foreign exchange gain (loss)		199			(1,284	)
Other, net		(349	)		(317	)

Total other income (expense)		692			(423	)


Income before income taxes		32,412			13,751
Income taxes		7,679			4,399

Net income	$	24,733		$	9,352


Basic earnings per share	$	0.43		$	0.16
Diluted earnings per share	$	0.42		$	0.16

Basic weighted average shares outstanding		58,016			60,266
Diluted weighted average and equivalent shares outstanding		58,265			60,332

See accompanying notes to consolidated financial statements.

ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

(Unaudited)


	Three Months Ended
	April 3, 2010			April 4, 2009
Cash flows from operating activities:
Net income	$	24,733		$	9,352
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization		7,814			7,953
Equity-based compensation		2,231			3,167
Excess tax benefit from equity-based compensation		(3	)		—
Gain on sale of assets		(82	)		—
Deferred income taxes		3,535			3,263
Changes in assets and liabilities:
Accounts receivable, net		3,990			13,018
Inventories, net		(1,780	)		(1,400	)
Other assets		224			(244	)
Accounts payable		870			(6,539	)
Accrued liabilities		(9,118	)		(23,946	)
Deferred revenue		(1,618	)		2,544
Income taxes		4,295			(8,055	)
Other operating activities		(4,917	)		(327	)

Net cash provided by (used in) operating activities		30,174			(1,214	)


Cash flows from investing activities:
Purchases of property and equipment		(5,818	)		(6,802	)
Acquisition of intangible assets		—			(425	)
Purchases of investments and marketable securities		(89,586	)		(57,473	)
Maturities of investments and marketable securities		61,144			72,401
Sales of investments and marketable securities		17,736			22,583

Net cash provided by (used in) investing activities		(16,524	)		30,284


Cash flows from financing activities:
Purchase of treasury stock		(20,823	)		(28,593	)
Proceeds from exercise of stock options and stock purchase plan purchases		4,191			1,168
Excess tax benefit from equity-based compensation		3			—

Net cash used in financing activities		(16,629	)		(27,425	)

Effect of exchange rate changes on cash		24			(213	)


Net increase (decrease) in cash and cash equivalents		(2,955	)		1,432
Cash and cash equivalents at beginning of period		38,943			33,267

Cash and cash equivalents at end of period	$	35,988		$	34,699


Supplemental disclosures of cash flow information:
Income taxes (refunded) paid		(454	)	$	8,302

See accompanying notes to consolidated financial statements.

ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1 – Basis of Presentation

Management prepared these unaudited interim consolidated financial statements for Zebra Technologies Corporation and subsidiaries (“Zebra”) according to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by United States generally accepted accounting principles (“GAAP”) for complete financial statements. Therefore, these consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in Zebra’s Annual Report on Form 10-K for the fiscal year ended December 31, 2009.

The consolidated balance sheet as of December 31, 2009 in this Form 10-Q is taken from the audited consolidated balance sheet in our Form 10-K. These interim financial statements include all adjustments (of a normal, recurring nature) necessary to present fairly Zebra’s consolidated financial position as of April 3, 2010, the consolidated results of operations for the three months ended April 3, 2010 and April 4, 2009, and cash flows for the three months ended April 3, 2010 and April 4, 2009. These results, however, are not necessarily indicative of results for the full year.

Reclassifications . Certain amounts in the prior years’ financial statements have been reclassified to conform to the current year’s presentation. For the three months ended April 4, 2009, general and administrative expenses of $523,000 were reclassified to selling and marketing expenses, also, general and administrative expenses of $345,000 were reclassified to research and development expenses. These reclassifications were made to better reflect costs as they relate to their functional areas. Prior period amounts will differ in these categories from amounts previously reported.

Note 2 – Fair Value Measurements

Financial assets and liabilities are to be measured using inputs from three levels of the fair value hierarchy. Fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Zebra uses a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels:

Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.

Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data.

Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.

In determining fair value, we utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as consider counterparty credit risk in the assessment of fair value.

Included in our investment portfolio are four auction rate security instruments. These instruments are classified as available-for-sale securities and are reflected at fair value. Due to events in credit markets, however, the auction events for the instruments held by Zebra as of April 3, 2010, are failed. Therefore, the fair values of these securities are estimated utilizing broker quotations, discounted cash flow analysis or other types of valuation adjustment methodologies at April 3, 2010. These analyses consider, among other items, the collateral underlying the security instruments, the creditworthiness of the counterparty, the timing of expected future cash flows, estimates of the next time the security is expected to have a successful auction, and Zebra’s intent and ability to hold such securities until credit markets improve. These securities were also compared, when possible, to other securities with similar characteristics.

Of the four auction rate security instruments, Zebra deemed one item to be other than temporarily impaired and recorded the market value decline in 2008. The decline in the market value of the other securities is considered temporary and has been recorded in accumulated other comprehensive income (loss) on Zebra’s balance sheet. Since Zebra has the intent and ability to hold these securities until they are sold at auction, redeemed at carrying value or reach maturity, we have classified them as long-term investments on the balance sheet.

Financial assets and liabilities carried at fair value as of April 3, 2010, are classified below (in thousands):


	Level 1		Level 2		Level 3		Total
Assets:
U.S. government and agency securities	$	24,695	$	—	$	—	$	24,695
Obligations of government-sponsored enterprises (1)		14,392		—		—		14,392
State and municipal bonds		154,515		—		4,133		158,648
Corporate securities		15,827		—		2,914		18,741
Other investments		36		—		—		36

Investments subtotal		209,465		—		7,047		216,512
Forward contracts (2)		3,896		—		—		3,896
Money market investments related to the deferred compensation plan		2,955		—		—		2,955

Total assets at fair value	$	216,316	$	—	$	7,047	$	223,363


Liabilities:
Liabilities related to the deferred compensation plan	$	2,968	$	—	$	—	$	2,968

Total liabilities at fair value	$	2,968	$	—	$	—	$	2,968

Financial assets and liabilities carried at fair value as of December 31, 2009, are classified below (in thousands):


	Level 1		Level 2		Level 3		Total
Assets:
U.S. government and agency securities	$	12,811	$	—	$	—	$	12,811
Obligations of government-sponsored enterprises (1)		10,666		—		—		10,666
State and municipal bonds		161,839		—		4,133		165,972
Corporate securities		13,654		—		2,914		16,568
Other investments		36		—		—		36

Investments subtotal		199,006		—		7,047		206,053
Forward contracts (2)		851		—		—		851
Money market investments related to the deferred compensation plan		3,155		—		—		3,155

Total assets at fair value	$	203,012	$	—	$	7,047	$	210,059


Liabilities:
Liabilities related to the deferred compensation plan	$	3,155	$	—	$	—	$	3,155

Total liabilities at fair value	$	3,155	$	—	$	—	$	3,155

(1)	Includes investments in notes issued by the Federal Home Loan Mortgage Corporation, the Federal National Mortgage Association and the Federal Home Loan Bank.

(2)	The fair value of forward contracts are calculated as follows:

Fair value of forward collar contract associated with forecasted sales hedges are calculated using the midpoint of ask and bid rates for similar contracts.

Fair value of regular forward contracts associated with forecasted sales hedges are calculated using the period-end exchange rate adjusted for the discount rate (3 month LIBOR rate).

Fair value of balance sheet hedges are calculated at the period end exchange rate adjusted for current forward points unless the hedge has been traded but not settled at period end. If this is the case, the fair value is calculated at the rate at which the hedge is being settled.

The following table presents Zebra’s activity for assets measured at fair value on a recurring basis using significant unobservable inputs, Level 3, for the three month periods (in thousands):


	Three Months Ended
	April 3, 2010		April 4, 2009
Balance at beginning of the year	$	7,047	$	7,047
Transfers to Level 3		—		—
Total losses (realized or unrealized):
Included in earnings		—		—
Included in other comprehensive income (loss)		—		—
Purchases and settlements (net)		—		—

Balance at end of period	$	7,047	$	7,047

Total gains and (losses) for the period included in earnings attributable to the change in unrealized losses relating to assets still held at end of period	$	—	$	—

The following is a summary of short-term and long-term investments at April 3, 2010 and December 31, 2009 (in thousands):


	As of April 3, 2010
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
U.S. government and agency securities	$	24,809	$	53	$	(167	)	$	24,695
Obligations of government-sponsored enterprises		14,310		94		(12	)		14,392
State and municipal bonds		158,358		852		(562	)		158,648
Corporate securities		18,944		211		(414	)		18,741
Other investments		36		—		—			36

Total investments	$	216,457	$	1,210	$	(1,155	)	$	216,512


	As of December 31, 2009
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
U.S. government and agency securities	$	12,931	$	45	$	(165	)	$	12,811
Obligations of government-sponsored enterprises		10,589		82		(5	)		10,666
State and municipal bonds		165,366		1,177		(571	)		165,972
Corporate securities		16,680		306		(418	)		16,568
Other investments		36		—		—			36

Total investments	$	205,602	$	1,610	$	(1,159	)	$	206,053

The maturity dates of investments are as follows (in thousands):


	As of April 3, 2010
	Amortized Cost		Estimated Fair Value
Less than 1 year		136,800		136,565
1 to 5 years		71,723		72,473
6 to 10 years		1,657		1,699
Thereafter		6,277		5,775

Total	$	216,457	$	216,512

The carrying value for Zebra’s financial instruments classified as current assets (other than short-term investments) and current liabilities approximate fair value due to short maturities.

Note 3 – Investments and Marketable Securities

We classify our investments in marketable debt securities as available-for-sale. As of April 3, 2010, all of our investments in marketable debt securities with maturities greater than one year are classified as long-term investments on the balance sheet due to our ability and intent to hold them until maturity.

Changes in the market value of available-for-sale securities are reflected in the accumulated other comprehensive income caption of stockholders’ equity in the balance sheet, until we dispose of the securities. Once these securities are disposed of, either by sale or maturity, the accumulated changes in market value are transferred to investment income. On the cash flow statements, changes in the balances of available-for-sale securities are shown as purchases, sales and maturities of investments and marketable securities under investing activities.

Changes in market value of trading securities would be recorded in investment income as they occur, and the related cash flow statement would include changes in the balances of trading securities as operating cash flows.

Change in unrealized gains and losses on available-for-sale securities are included in these financial statements as follows (in thousands):


	Three Months Ended
	April 3, 2010			April 4, 2009
Changes in unrealized gains and (losses) on available for-sale securities, net of tax, recorded in accumulated other comprehensive income	$	(247	)	$	587

Note 4 – Inventories

The components of inventories are as follows (in thousands):


	As of
	April 3, 2010			December 31, 2009
Raw material	$	28,492		$	27,953
Work in process		270			162
Deferred costs of long-term contracts		1,148			1,937
Finished goods		61,141			58,928

Total inventories, gross		91,051			88,980
Inventory reserves		(9,486	)		(9,054	)

Total inventories, net	$	81,565		$	79,926

Note 5 – Goodwill and Other Intangible Asset Data

Intangible asset data are as follows (in thousands):


	April 3, 2010					December 31, 2009
	Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization
Amortized intangible assets
Current technology	$	31,898	$	(17,965	)	$	32,038	$	(17,071	)
Patent and patent rights		13,663		(7,356	)		13,663		(6,774	)
Customer relationships		44,712		(11,466	)		44,822		(10,696	)

Total	$	90,273	$	(36,787	)	$	90,523	$	(34,541	)

Aggregate amortization expense
For the year ended December 31, 2009						$	10,466
For the three months ended April 3, 2010	$	2,358

	As of April 3, 2010
Estimated amortization expense
For the year ended December 31, 2010	$	9,255
For the year ended December 31, 2011		8,842
For the year ended December 31, 2012		8,187
For the year ended December 31, 2013		6,838
For the year ended December 31, 2014		3,858
Thereafter		18,864

Total	$	55,844


Unamortized intangible assets	April 3, 2010			December 31, 2009
Goodwill at gross cost	$	265,799		$	265,799
Impairment charges		(112,184	)		(112,184	)
Foreign exchange impact		(1,327	)		(390	)

Goodwill	$	152,288		$	153,225

Certain of our intangible assets including goodwill are denominated in foreign currency and, as such, include the effects of foreign currency translation.

We test goodwill for impairment on an annual basis or more frequently if we believe indicators of impairment exist. Factors considered that may trigger an impairment review consist of:

•

Significant underperformance relative to historical or projected future operating results,

•

Significant changes in the manner of use of the acquired assets or the strategy for the overall business,

•

Significant negative industry or economic trends,

•

Significant decline in Zebra’s stock price for a sustained period, and

•

Significant decline in market capitalization relative to net book value.

If we believe that one or more of the above indicators of impairment have occurred, we perform an impairment test. The performance of the test involves a two-step process. The first step of the impairment test involves comparing the fair values of the applicable reporting units with their aggregate carrying values, including goodwill. We generally determine the fair value of our reporting units using three valuation methods: Income Approach – Discounted Cash Flow Analysis, Market Approach – Guideline Public Company Method and Market Approach – Comparative Transactions Method. If the carrying amount of a reporting unit exceeds the reporting unit’s fair value, we perform the second step of the goodwill impairment test to determine the amount of impairment loss. The second step of the goodwill impairment test involves comparing the implied fair value of the affected reporting unit’s goodwill with the carrying value of that goodwill.

During the fourth quarter of 2008, we determined that certain impairment indicators existed related to identified intangible assets and conducted an additional impairment test of intangibles. Due to the deterioration of the economy and a significant reduction in the price of our stock, we determined that our goodwill and other intangible assets were impaired which resulted in impairment charges.

We performed our annual impairment test in June 2009 and determined that our goodwill was not impaired as of the end of May 2009.

Note 6 – Costs Associated with Exit or Disposal Activities

In 2008, we announced plans to establish regional distribution and configuration centers, consolidate our supplier base, and transfer final assembly of thermal printers to Jabil Circuit, Inc., a global third-party electronics manufacturer. These actions are intended to optimize our global printer product supply chain by improving responsiveness to customer needs and increasing Zebra’s flexibility to meet emerging business opportunities. As a result, substantially all printer manufacturing in our Vernon Hills, Illinois, and Camarillo, California, facilities has been transferred to Jabil’s facility in Guangzhou, China.

As of April 3, 2010, we have incurred and expect to incur the following exit costs (in thousands):


Type of Cost	Cost incurred through December 31, 2009		Costs incurred for the three months ended April 3, 2010		Total costs incurred as of April 3, 2010		Additional costs expected to be incurred		Total costs expected to be incurred
Severance, stay bonuses, and other employee-related expenses	$	7,633	$	430	$	8,063	$	207	$	8,270
Professional services		5,915		35		5,950		249		6,199
Relocation and transition costs		8,802		1,306		10,108		362		10,470
Other exit costs		30		45		75		45		120

Total	$	22,380	$	1,816	$	24,196	$	863	$	25,059

Included in the above costs incurred for the three month period ended April 3, 2010 is $55,000 related to our Zebra Enterprise Solutions (ZES) segment. These costs are broken down as $10,000 for severance (severance, stay bonuses and other employee-related expenses), and $45,000 for other. The remainder relate to Zebra’s Specialty Printing Group (SPG) segment.

For the three-month period ended April 4, 2009, we incurred exit, restructuring and integration costs of $474,000 for severance (severance, stay bonuses and other employee-related expenses), $91,000 for professional services, $1,323,000 for relocation and transition costs, which totaled $1,888,000. Also included in the line item exit, restructuring and integration costs for 2009 are expenses related to an integration project to combine our acquisitions of WhereNet Corp., proveo AG, Navis Holdings, LLC, and Multispectral Solutions, Inc., to form our ZES segment. Expenses related to integrating ZES totaled $0 for the three month period ended April 3, 2010 and $408,000 for the three month period ended April 4, 2009.

Liabilities and expenses related to exit activities were as follows (in thousands):


	Three Months Ended
	April 3, 2010			April 4, 2009
Balance at beginning of period	$	3,038		$	6,378
Charged to earnings		1,816			1,888
Cash paid		(2,322	)		(4,125	)

Balance at the end of period	$	2,532		$	4,141

Liabilities related to exit activities are included in the accrued liabilities line item on the balance sheet. All current exit costs are included in operating expenses under the line item exit, restructuring and integration costs.

Note 7 – Derivative Instruments

In the normal course of business, portions of our operations are subject to fluctuations in currency values. We manage these risks using derivative financial instruments. We conduct business on a multinational basis in a wide variety of foreign currencies. Our exposure to market risk for changes in foreign currency exchange rates arises from international financing activities between subsidiaries, foreign currency denominated monetary assets and liabilities and transactions arising from international trade. Our objective is to preserve the economic value of non-functional currency denominated cash flows. We attempt to hedge transaction exposures with natural offsets to the fullest extent possible and, once these opportunities have been exhausted, through foreign exchange forward and option contracts with third parties.

Credit and market risk

Financial instruments, including derivatives, expose us to counterparty credit risk for nonperformance and to market risk related to interest and currency exchange rates. We manage our exposure to counterparty credit risk through specific minimum credit standards, diversification of counterparties, and procedures to monitor concentrations of credit risk. Our counterparties in derivative transactions are commercial banks with significant experience using derivative instruments. We monitor the impact of market risk on the fair value and cash flows of our derivative and other financial instruments considering reasonably possible changes in interest rates and currency exchange rates and restrict the use of derivative financial instruments to hedging activities.

We continually monitor the creditworthiness of our customers to which we grant credit terms in the normal course of business. The terms and conditions of our credit sales are designed to mitigate or eliminate concentrations of credit risk with any single customer. Our sales are not materially dependent on a single customer or a small group of customers.

Fair Value of Derivative Instruments

Zebra has determined that derivative instruments for hedges that have settled are considered Level 1 in the fair value hierarchy, and hedges that have not settled are considered Level 2 in the fair value hierarchy. Derivative instruments are used to manage risk and are not used for trading or other speculative purposes, nor do we use leveraged derivative financial instruments. Our foreign currency exchange contracts are valued using broker quotations or market transactions, in either the listed or over-the-counter markets.

Hedging of Net Assets

We use forward contracts and options to manage exposure related to our pound and euro-denominated net assets. Forward contracts typically mature within three months after execution of the contracts. We record gains and losses on these contracts and options in income each quarter along with the transaction gains and losses related to our net asset positions, which would ordinarily offset each other. Summary financial information related to these activities included in our consolidated statement of earnings as other income (expense) is as follows (in thousands):


	Three Months Ended
	April 3, 2010			April 4, 2009
Change in gains (losses) from foreign exchange derivatives	$	3,913		$	3,252
Gain (loss) on net foreign currency assets		(3,714	)		(4,536	)

Foreign exchange gain (loss)	$	199		$	(1,284	)


	As of
	April 3, 2010			December 31, 2009
Notional balance of outstanding contracts:
Pound/US dollar	£	7,605		£	7,500
Euro/US dollar	€	36,404		€	37,000
Net fair value of outstanding contracts	$	37		$	(6	)

Summary financial information related to the cash flow hedges is as follows (in thousands):


	As of
	April 3, 2010		December 31, 2009
Net unrealized gains (losses) deferred in other comprehensive income:
Gross	$	—	$	31
Income tax benefit		—		12

Net	$	—	$	19

Hedging of Anticipated Sales

We can manage the exchange rate risk of anticipated euro-denominated sales using purchased options, forward contracts, participating forwards and option collars. We designate these contracts as cash flow hedges which mature within twelve months after the execution of the contracts. Gains and losses on these contracts are deferred in other comprehensive income until the contracts are settled and the hedged sales are realized, the deferred gains or losses will then be reported as an increase or decrease to sales. We did not have any outstanding contracts or option collars as of April 3, 2010 and December 31, 2009. Summary financial information related to the cash flow hedges of future revenues follows (in thousands, except percentages):


	As of
	April 3, 2010		December 31, 2009
Notional balance of outstanding contracts versus the dollar	€	—	€	—
Hedge effectiveness		—		—

	Three Months Ended
	April 3, 2010		April 4, 2009
Net gains and (losses) included in revenue	$	—	$	1,370

Forward contracts

We record our forward contracts at fair value on our consolidated balance sheet as either long-term other assets or long-term other liabilities depending upon the fair value calculation as detailed in Note 2 of Zebra’s financial statements. The amounts recorded as of April 3, 2010, on our consolidated balance sheet are as follows (in thousands):


	As of
	April 3, 2010		December 31, 2009
Assets:
Other assets	$	3,896	$	851

Total	$	3,896	$	851

Liabilities:
Other long-term liabilities	$	—	$	—

Total	$	—	$	—

Note 8 – Warranty

In general, Zebra provides warranty coverage of one year on SPG printers against defects in material and workmanship. SPG printheads are warranted for nine months and batteries are warranted for twelve months. Warranty coverage for most ZES hardware products is similar, with coverage periods ranging from 90 days to one year depending on the nature of the product. Battery based products, such as location tags, are covered by a 30 day warranty. For ZES software products, the warranty period is generally 90 days and provides coverage against defects in material and workmanship as well as performance materially in compliance with the accompanying documentation. A provision for warranty expense is recorded at the time of shipment and adjusted quarterly based on historical warranty experience.

The following table is a summary of Zebra’s accrued warranty obligation (in thousands):


	Three Months Ended
	April 3, 2010			April 4, 2009
Balance at the beginning of the year	$	3,813		$	2,814
Warranty expense		694			958
Warranty payments		(1,346	)		(1,031	)

Balance at the end of the period	$	3,161		$	2,741

In the European Union, we have an obligation to recycle printers. We reserve for this obligation based on the number of new printers sold after August 13, 2005, and printers sold prior to that date that are returned to us upon our sale of a new printer to a customer. The following is a summary of Zebra’s accrued recycling obligation (in thousands):


	Three Months Ended
	April 3, 2010			April 4, 2009
Balance at the beginning of the year	$	1,001		$	1,207
Recycling expense		—			14
Recycling payments		—			—
Other adjustments		(3	)		(9	)

Balance at the end of the period	$	998		$	1,212

Note 9 – Contingencies

We are subject to a variety of investigations, claims, suits and other legal proceedings that arise from time to time in the ordinary course of business, including but not limited to, intellectual property, employment, tort and breach of contract matters. We currently believe that the outcomes of such proceedings, individually and in the aggregate, will not have a material adverse impact on our business, cash flows, financial position, or results of operations. Any legal proceedings are subject to inherent uncertainties, and management’s view of these matters and their potential effects may change in the future.

Note 10 – Changes to Benefit Programs

Zebra has a Retirement Savings and Investment Plan (401(k) Plan), which is intended to qualify under Section 401(k) of the Internal Revenue Code. During the first quarter of 2009, Zebra announced changes to its 401(k) Plan, profit sharing plan and stock purchase plan. Qualified employees may participate in Zebra’s 401(k) Plan by contributing up to 15% of their gross earnings to the plan subject to certain Internal Revenue Service restrictions. Effective March 1, 2009, Zebra reduced the company match to each participant’s contribution from 6% of gross eligible earnings at the rate of 50%, to 3% of gross eligible earnings at the rate of 50%. Effective January 1, 2010, Zebra increased the company match to each participant’s contribution to a total of 4%. Zebra will match 100% of the first 2% of gross eligible earnings, and also match the next 4% of gross eligible earnings at the rate of 50%. Zebra may contribute additional amounts to its 401(k) Plan at the discretion of the Board of Directors, subject to certain legal limits.

Zebra also has a discretionary profit-sharing plan for qualified employees, to which it contributes a percentage of eligible payroll each year. Zebra announced that it will suspend any contributions to the profit sharing plan for the 2009 plan year and plan years going forward. Participants are not permitted to make contributions under the discretionary profit-sharing plan.

Note 11 – Stockholders’ Equity

Share count and par value data related to stockholders’ equity are as follows:


	April 3, 2010		December 31, 2009
Preferred Stock
Par value per share	$	0.01	$	0.01
Shares authorized		10,000,000		10,000,000
Shares outstanding		—		—
Common Stock – Class A
Par value per share	$	0.01	$	0.01
Shares authorized		150,000,000		150,000,000
Shares issued		72,151,857		72,151,857
Shares outstanding		57,724,510		58,318,983
Treasury stock
Shares held		14,427,347		13,832,874

During the three-month period ended April 3, 2010, Zebra purchased 750,000 shares of common stock for $20,823,000 under board authorized share repurchase plans compared to the three-month period ended April 4, 2009, in which Zebra purchased 1,652,772 shares of common stock for $28,593,000.

Zebra issued 166,528 treasury shares of common stock upon exercise of stock options and purchases under the stock purchase plan during the first three months of 2010. Zebra also issued from treasury shares 3,995 shares of common stock under restricted stock awards during the first three months of 2010. During the first three months of 2009, Zebra issued 88,372 treasury shares of common stock upon the exercise of stock options and purchases under the stock purchase plan and issued 106,370 shares of common stock from treasury shares under restricted stock awards.

Note 12 – Earnings Per Share

Earnings per share were computed as follows (in thousands, except per share amounts):


	Three Months Ended
	April 3, 2010		April 4, 2009
Basic earnings per share:
Net income	$	24,733	$	9,352

Weighted average common shares outstanding		58,016		60,266

Per share amount	$	0.43	$	0.16

Diluted earnings per share:
Net income	$	24,733	$	9,352

Weighted average common shares outstanding		58,016		60,266
Add: Effect of dilutive securities		249		66

Diluted weighted average and equivalent shares outstanding		58,265		60,332

Per share amount	$	0.42	$	0.16

Potentially dilutive securities that were excluded from the earnings per share calculation consist of options with an exercise price greater than the market closing price of the Class A common stock as of April 3, 2010. These options were as follows:


	Three Months Ended
	April 3, 2010	April 4, 2009
Potentially dilutive shares	1,924,000	2,875,000

Note 13 – Equity-Based Compensation

Zebra has an equity-based compensation plan and a stock purchase plan available for future grants. Zebra recognizes compensation costs using the straight-line method over the vesting period of 1 month to 5 years.

The compensation expense and the related tax benefit for equity-based payments were included in the Consolidated Statement of Earnings as follows (in thousands):


	Three Months Ended
	April 3, 2010		April 4, 2009
Cost of sales	$	249	$	281
Selling and marketing		311		417
Research and development		357		551
General and administrative		1,314		1,918

Total compensation	$	2,231	$	3,167

Income tax benefit	$	770	$	1,093

Cash flows resulting from the tax benefits from tax deductions in excess of the compensation cost recognized (excess tax benefits) are classified as financing cash flows in the statement of cash flows. The tax benefits classified as financing cash flows for the three months ended April 3, 2010 was $3,000 and for the three months ended April 4, 2009, was less than $1,000.

The fair value of equity-based compensation is estimated on the date of grant using a binomial model. Volatility is based on an average of the implied volatility in the open market and the annualized volatility of Zebra stock prices over our entire stock history. Stock option grants in the table below include both stock options, all of which were non-qualified, and stock appreciation rights (SAR) that will be settled in Zebra stock. The following table shows the weighted-average assumptions used for grants of stock options and SARs as well as the fair value of the grants based on those assumptions:


	Three Months Ended
	April 3, 2010			April 4, 2009
Expected dividend yield		0	%		0	%
Forfeiture rate		9.92	%		8.99	%
Volatility		43.08	%		37.79	%
Risk free interest rate		2.23	%		3.17	%
– Range of interest rates		0.15% - 3.29	%		0.81% - 3.87	%
Expected weighted-average life		5.23 years			5.09 years
Fair value of options and SARs granted	$	145,000		$	186,000
Weighted-average grant date fair value of options and SARs granted	$	11.85		$	7.62

Stock option and SAR activity was as follows:


	Three Months Ended April 3, 2010
Options and SARs	Shares			Weighted-Average Exercise Price
Outstanding at beginning of year		3,451,945		$	32.81
Granted		12,277			29.34
Exercised		(139,148	)		25.60
Forfeited		(48,022	)		30.50
Expired		(36,017	)		37.73

Outstanding at end of period		3,241,035		$	33.04

Exercisable at end of period		1,830,013		$	36.46

Intrinsic value of exercised options and SARs	$	495,000

For the three months ended April 3, 2010, equity granted above includes SARs with respect to 12,277 shares of Zebra common stock. The terms of the SARs are established under the 2006 Zebra Technologies Corporation Incentive Compensation Plan (the 2006 Plan) and the applicable SAR agreement. Once vested, a SAR entitles the holder to receive a payment equal to the difference between the per-share base price of the SAR and the fair market value of a share of Zebra stock on the date the SAR is exercised, multiplied by the number of SAR’s exercised. Exercised SARs are settled in whole shares of Zebra stock, and any fraction of a share is settled in cash. The SARs granted during the first three months of 2010 vest annually in four equal amounts on each of the first four anniversaries of the grant date and expire 10 years after the grant date.

The following table summarizes information about stock options and SARs outstanding at April 3, 2010:


	Outstanding				Exercisable
Range of Exercise Prices	Number of Shares	Weighted-Average Remaining Contractual Life	Weighted-Average Exercise Price		Number of Shares	Weighted-Average Exercise Price
$ 1.29-$19.56	760,872	8.05 years	$	18.59	126,686	$	13.98
$ 19.57-$34.59	679,630	4.45 years		25.13	509,460		24.53
$ 34.60-$39.27	616,348	7.15 years		36.51	255,080		36.48
$ 39.28-$43.35	552,566	6.70 years		42.07	319,168		42.24
$ 43.36-$53.92	631,619	4.74 years		47.66	619,619		47.69

	3,241,035				1,830,013


	Outstanding		Exercisable
Aggregate intrinsic value	$	11,941,000	$	4,830,000
Weighted-average remaining contractual term		6.3 years		4.7 years

Restricted stock award activity, granted under the 2006 Plan, for the period ended April 3, 2010, was as follows:


	Three Months Ended April 3, 2010
Restricted Stock Awards	Shares		Weighted-Average Grant Date Fair Value
Outstanding at beginning of year	507,984		$	23.90
Granted	3,995			29.38
Released	(11,441	)		33.31
Forfeited	(11,045	)		25.93

Outstanding at end of period	489,493		$	23.68

As of April 3, 2010, there was $16,089,000 of unearned compensation cost related to awards granted under Zebra’s equity-based compensation plans, which is expected to be recognized over a weighted-average period of 2.3 years.

The fair value of the purchase rights of all Zebra employees issued under the stock purchase plan is estimated using the following weighted-average assumptions for purchase rights granted. Expected lives of three months to one year have been used along with these assumptions.


	Three Months Ended
	April 3, 2010			April 4, 2009
Fair market value	$	28.35		$	19.02
Option price	$	26.93		$	16.17
Expected dividend yield		0	%		0	%
Expected volatility		21	%		45	%
Risk free interest rate		0.06	%		0.11	%

Note 14 – Income Taxes

Zebra has identified, evaluated, and measured the amount of income tax benefits to be recognized for all of our income tax positions. Included in deferred tax assets are amounts related to federal and state net operating losses that resulted from our acquisition of WhereNet Corp. Zebra’s intention is to utilize these net operating loss carryforwards to offset future income tax expense.

Zebra has concluded all U.S. federal income tax audits for years through 2006. The tax years 2005 through 2009 remain open to examination by multiple state taxing jurisdictions. Tax authorities in the United Kingdom have completed income tax audits for tax years through 2006.

Zebra’s continuing practice is to recognize interest and/or penalties related to income tax matters as part of income tax expense. For the three month periods ended April 3, 2010 and April 4, 2009, we did not accrue any interest or penalties into income tax expense.

The effective income tax rate for the first quarter of 2010 was 23.7% compared with an income tax rate of 32.0% for the first quarter of 2009. Zebra’s effective tax rate for the quarter ended April 3, 2010 included a $2,764,000 reduction of federal taxes related to prior years’ adjustments for intercompany profit in ending inventory which reduced our effective rate by 8.5%.

Note 15 – Other Comprehensive Income

Stockholders’ equity includes certain items classified as accumulated other comprehensive income, including:

•

Foreign currency translation adjustment relates to our non-U.S. subsidiary companies that have designated a functional currency other than the U.S. dollar. We are required to translate the subsidiary functional currency financial statements to dollars using a combination of historical, period-end, and average foreign exchange rates. This combination of rates creates the foreign currency translation adjustment component of other comprehensive income.

•

Unrealized gains (losses) on foreign currency hedging activities relate to derivative instruments used to hedge the currency exchange rates for forecasted euro sales. These hedges are designated as cash flow hedges, and we have deferred income statement recognition of gains and losses until the hedged transaction occurs. See Note 7 for more details.

•

Unrealized gains (losses) on investments classified as available-for-sale are deferred from income statement recognition until the gains or losses are realized. See Note 3 for more details.

The Consolidated Statements of Comprehensive Income are as follows (in thousands):


	Three Months Ended
	April 3, 2010			April 4, 2009
Net income	$	24,733		$	9,352
Other comprehensive income (loss):
Foreign currency translation adjustment		(444	)		(1,581	)
Changes in unrealized gains (losses) on hedging transactions, net of tax		1			8
Changes in unrealized gains (losses) on investments, net of tax		(247	)		587

Comprehensive income	$	24,043		$	8,366

The components of other comprehensive income gross and net of income tax are as follows (in thousands):


	Three Months Ended
	April 3, 2010			April 4, 2009
Changes in unrealized gains and losses on foreign currency hedging activities:
Gross	$	1		$	13
Income tax (benefit)		—			5

Net	$	1		$	8

Changes in unrealized gains and losses on investments classified as available-for-sale:
Gross	$	(396	)	$	941
Income tax (benefit)		(149	)		354

Net	$	(247	)	$	587

The components of accumulated other comprehensive income (loss) included in the Consolidated Balance Sheets are as follows (in thousands):


	As of
	April 3, 2010			December 31, 2009
Foreign currency translation adjustments	$	(8,786	)	$	(8,342	)

Unrealized gains and (losses) on hedging transactions:
Gross	$	—		$	(1	)
Income tax (benefit)		—			—

Net	$	—		$	(1	)


Unrealized gains and (losses) on investments classified as available-for-sale:
Gross	$	56		$	452
Income tax (benefit)		21			170

Net	$	35		$	282

Note 16 – Segment Information

Zebra has two reportable segments: Specialty Printing Group (SPG) and Zebra Enterprise Solutions (ZES).

SPG includes direct thermal and thermal transfer label and receipt printers, passive radio frequency identification (RFID) printer/encoders, dye sublimation card printers and digital photo printers. Also included in this group is a comprehensive range of specialty supplies consisting of self-adhesive labels, thermal transfer ribbons, thermal printheads, batteries and other accessories, including software for label design and printer network management.

ZES has evolved since the beginning of 2007 with the acquisitions of WhereNet Corp., proveo AG, Navis Holdings, LLC and Multispectral Solutions, Inc. The solutions that these companies provide are generally sold on a contract basis and are typically installed over several quarters. These contracts cover a range of services, including design, installation and ongoing maintenance services.

Segment information is as follows (in thousands):


	Three Months Ended
	April 3, 2010			April 4, 2009
Net sales:
SPG Tangible products	$	199,200		$	162,498
SPG Service & software		8,728			8,270

SPG Net Sales		207,928			170,768

ZES Tangible products		2,884			4,186
ZES Service & software		15,619			17,655

ZES Net Sales		18,503			21,841

Total	$	226,431		$	192,609


Operating profit (loss):
SPG	$	54,443		$	33,999
ZES		(5,411	)		(3,359	)
Corporate and other		(17,312	)		(16,466	)

Total	$	31,720		$	14,174


	As of
	April 3, 2010			December 31, 2009
Identifiable assets:
SPG	$	335,215		$	336,428
ZES		181,189			185,495
Corporate and other		310,553			308,556

Total	$	826,957		$	830,479

Zebra records its federal and state deferred tax assets and liabilities in corporate and other as reflected above. Intersegment sales are not significant. Corporate and other includes corporate administration costs or assets that support both reporting segments.

Note 17 – New Accounting Pronouncements

In October 2009, the FASB issued update 2009-13, ASC 605, Revenue Recognition: Multiple –Deliverable Revenue Arrangements-a consensus of the FASB Emerging Issues Task Force. The revised guidance provides for two significant changes to existing multiple element arrangement guidance. The first relates to the determination of when the individual deliverables included in a multiple-

element arrangement may be treated as separate units of accounting. This change is significant as it may result in the requirement to separate more deliverables within an arrangement, ultimately leading to less revenue deferral. The second change modifies the manner in which the transaction consideration is allocated across the separately identifiable deliverables. These changes may result in earlier recognition of revenue for multiple-element arrangements than under previous guidance. This standard is effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010. We have not yet determined the effect of this standard upon our consolidated financial statements.

In October 2009, the FASB issued update 2009-14, ASC 985, Software: Certain Revenue Arrangements That Include Software Elements – a consensus of the FASB Emerging Issues Task Force. This updated guidance is expected to significantly affect how entities account for revenue arrangements that contain both hardware and software elements. This standard is effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010. We have not yet determined the effect of this standard upon our consolidated financial statements.

In January 2010, the FASB issued update 2010-06, ASC 820, Fair Value Measurements and Disclosures: Improving Disclosures about Fair Value Measurements. This updated guidance requires new disclosures related to transfers in and out of Levels 1 and 2. The standard also provides guidance on the disclosures related to Level 3 activities. In addition, existing disclosures related to disaggregation levels and disclosures about inputs and valuation techniques are clarified. This standard is effective for interim and annual periods beginning after December 15, 2009. This standard did not have a material effect upon our consolidated financial statements.

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Results of Operations: First Quarter of 2010 versus First Quarter of 2009

Consolidated Results of Operations

(Amounts in thousands, except percentages):


	Three Months Ended
	April 3, 2010		April 4, 2009			Percent Change		Percent of Net Sales - 2010	Percent of Net Sales - 2009
Net Sales
Tangible products	$	202,084	$	166,684		21.2		89.2	86.5
Service & software		24,347		25,925		(6.1	)	10.8	13.5

Total net sales		226,431		192,609		17.6		100.0	100.0
Cost of Sales
Tangible products		108,540		95,859		13.2		49.9	49.7
Service & software		10,556		10,941		(3.5	)	4.7	5.7

Total cost of sales		119,096		106,800		11.5		52.6	55.4

Gross profit		107,335		85,809		25.1		47.4	44.6
Operating expenses		75,615		71,635		5.6		33.4	37.2

Operating income		31,720		14,174		123.8		14.0	7.4
Other income (expense)		692		(423	)	263.6		0.3	(0.3	)

Income before income taxes		32,412		13,751		135.7		14.3	7.1
Income taxes		7,679		4,399		74.6		3.4	2.2

Net income	$	24,733	$	9,352		164.5		10.9	4.9

Diluted earnings per share	$	0.42	$	0.16

Consolidated Results of Operations – First quarter

Sales

Net sales for the first quarter of 2010 compared with the 2009 quarter increased 17.6% due to a broad-based increase in demand for Zebra products. The increase in sales was largely attributable to increased hardware sales with notable volume increases in high-performance tabletop, desktop, mobile printers and aftermarket parts. Supplies sales increased from greater shipments of labels and thermal ribbons. Printer unit volume increased 22.7% for the first quarter of 2010 compared to levels in 2009.

Sales by product category were as follows (amounts in thousands, except percentages):


	Three Months Ended
Product Category	April 3, 2010		April 4, 2009		Percent Change		Percent of Net Sales - 2010	Percent of Net Sales - 2009
Hardware	$	160,030	$	127,235	25.8		70.7	66.1
Supplies		40,697		38,081	6.9		18.0	19.8
Service and software		24,347		25,925	(6.1	)	10.8	13.5
Shipping and handling		1,357		1,368	(0.8	)	0.5	0.6

Total net sales	$	226,431	$	192,609	17.6		100.0	100.0

Sales increased in all geographic territories due primarily to the global economic recovery. The sales growth on a percentage basis was greatest in Latin America and Asia Pacific because of higher rates of economic growth in those regions. Movements in foreign exchange rates, principally a weaker euro against the dollar, increased sales in the Europe, Middle East and Africa region by $4,294,000, net of hedges.

Sales to customers by geographic region were as follows (in thousands, except percentages):


	Three Months Ended
Geographic Region	April 3, 2010		April 4, 2009		Percent Change	Percent of Net Sales - 2010	Percent of Net Sales - 2009
Europe, Middle East and Africa	$	83,544	$	74,620	12.0	36.9	38.7
Latin America		20,990		13,071	60.6	9.3	6.8
Asia-Pacific		25,347		19,409	30.6	11.2	10.0

Total International		129,881		107,100	21.3	57.4	55.5
North America		96,550		85,509	12.9	42.6	44.5

Total net sales	$	226,431	$	192,609	17.6	100.0	100.0

Gross Profit

Gross profit increased due to higher volumes and an improved product mix, with increased sales in high-performance and mid-range table top printers, partially offset by $5,915,000 in higher freight costs in 2010. The benefit of outsourcing printer production to a third party and continued cost control contributed to increase gross profit.

Operating Expenses

Operating expenses for the three-month period increased 5.6% due mainly to greater selling and marketing expenses from the higher level of business activity. Several categories accounted for the increase, including compensation costs, outside commissions, advertising and direct marketing, travel and entertainment and offsite meeting expenses. Amortization of intangibles decreased $276,000 and exit, restructuring and integration costs decreased $480,000 in the first quarter of 2010 as compared to 2009. Amortization decreases were due to an intangible asset being fully amortized at the end of 2009. Zebra’s program for outsourcing its manufacturing operations is nearing completion and the related restructuring costs for this program are declining. In addition, integration costs associated with integrating the Zebra Enterprise Solutions (ZES) businesses were completed in 2009.

Operating expenses are summarized below (in thousands, except percentages):


	Three Months Ended
Operating Expenses	April 3, 2010		April 4, 2009		Percent Change		Percent of Net Sales 2010	Percent of Net Sales 2009
Selling and marketing	$	27,500	$	23,199	18.5		12.1	12.0
Research and development		23,072		22,149	4.2		10.2	11.5
General and administrative		20,869		21,357	(2.3	)	9.2	11.1
Amortization of intangible assets		2,358		2,634	(10.5	)	1.0	1.4
Asset impairment charges		—		—	—		—	—
Exit, restructuring and integration costs		1,816		2,296	(20.9	)	0.9	1.2

Total operating expenses	$	75,615	$	71,635	5.6		33.4	37.2

Other Income

Investment income for 2010 declined primarily from lower short-term interest rates in the first quarter of 2010 compared with 2009. Zebra recorded a foreign exchange gain in the first quarter of 2010 as the U.S. dollar strengthened during the period against the euro versus 2009 when exchange rates were not as favorable.

Zebra’s non-operating income and expense items are summarized in the following table (in thousands):


	Three Months Ended
	April 3, 2010			April 4, 2009
Investment income (loss)	$	842		$	1,178
Foreign exchange gain (loss)		199			(1,284	)
Other, net		(349	)		(317	)

Total other income (loss)	$	692		$	(423	)

Operating Income (Loss)

The operating income increase for the first quarter of 2010 was the result of increased sales and gross profit as noted above.

Income Taxes

Business Groups

Specialty Printing Group

(Amounts in thousands, except percentages):


	Three Months Ended
	April 3, 2010		April 4, 2009		Percent Change	Percent of Net Sales - 2010	Percent of Net Sales - 2009
Net Sales
Tangible products	$	199,200	$	162,498	22.6	95.8	95.2
Service & software		8,728		8,270	5.5	4.2	4.8

Total net sales		207,928		170,768	21.8	100.0	100.0
Cost of Sales
Tangible products		106,026		92,642	14.4	51.1	54.3
Service & software		5,473		4,454	22.9	2.5	2.6

Total cost of sales		111,499		97,096	14.8	53.6	56.9

Gross profit		96,429		73,672	30.9	46.4	43.1
Operating expenses		41,986		39,673	5.8	20.2	23.2

Operating income	$	54,443	$	33,999	60.1	26.2	19.9

Specialty Printing Group – First quarter

Net sales in our Specialty Printing Group (SPG) increased 21.8% with the highest percentage growth in sales occurring in Latin America and Asia Pacific, and the highest dollar growth occurring in North America and the Europe, Middle East and Africa region.

The increase in sales was largely attributable to increased hardware sales, with notable increases in sales of high-performance and mid-range tabletop, desktop, mobile printers and aftermarket parts. Supplies sales increased from higher shipments of labels and thermal ribbons.

Gross profit for SPG was affected by favorable foreign currency movements which increased first quarter gross profit by $3,681,000. Gross profit also increased due to higher volumes and a favorable product mix with increased sales of high-performance table top printers, partially offset by higher freight costs of $5,915,000 in 2010. The benefit of outsourcing printer production to a third party and continued cost control contributed to increase gross profit.

Printer unit volumes and average selling price information is summarized below:


	Three Months Ended
	April 3, 2010		April 4, 2009		Percent Change
Total printers shipped		244,422		199,218	22.7
Average selling price of printers shipped	$	547	$	517	5.8

For the first quarter of 2010, unit volumes increased in nearly all printer product lines compared to the same period of 2009, with notable volume increases in high-performance tabletop, desktop and mobile printers. These increases were offset by a reduction in photo printers as this line was discontinued in 2009.

Operating expense related changes for SPG are as follows (in thousands):


	Three Months Ended				Increase/ (Decrease)
	April 3, 2010		April 4, 2009		Increase/ (Decrease)
Payroll and benefit costs	$	25,577	$	24,412	$	1,165
Business development		3,838		3,320		518
Outside professional services		2,107		1,341		766
Travel and entertainment		1,334		1,037		297
Exit, restructuring and integration costs		1,600		2,038		(438	)
Other expenses		7,530		7,525		5

Total operating expenses	$	41,986	$	39,673	$	2,313

Operating expenses for SPG increased primarily to greater selling and marketing expenses from the higher level of business activity and expansion into new markets. Operating expenses are higher due to increases in payroll and benefit costs, advertising and marketing costs, consulting fees, compliance costs, and travel and entertainment expenses. Exit, restructuring and integration costs are being reduced as the outsourcing project is nearing completion.

Zebra Enterprise Solutions

(Amounts in thousands, except percentages):


	Three Months Ended
	April 3, 2010			April 4, 2009			Percent Change		Percent of Net Sales - 2010		Percent of Net Sales - 2009
Net Sales
Tangible products	$	2,884		$	4,186		(31.1	)	15.6		19.2
Service & software		15,619			17,655		(11.5	)	84.4		80.8

Net sales		18,503			21,841		(15.3	)	100.0		100.0
Cost of Sales
Tangible products		2,514			3,217		(21.9	)	13.6		14.7
Service & software		5,083			6,487		(21.6	)	27.5		29.7

Cost of sales		7,597			9,704		(21.7	)	41.1		44.4

Gross profit		10,906			12,137		(10.1	)	58.9		55.6
Operating expenses		16,317			15,496		5.3		88.1		71.0

Operating loss	$	(5,411	)	$	(3,359	)	61.1		(29.2	)	(15.4	)

Zebra Enterprise Solutions – First quarter

ZES sales decreased 15.3% for the first quarter of 2010 compared to 2009 primarily due to lower bookings and delays associated with project implementations affecting license revenue. Sales of hardware declined due to reduced or delayed bookings. Margins improved in services provided to customers due to reduced service costs.

Operating expense changes for ZES are due to the following (in thousands):


	Three Months Ended				Increase/ (Decrease)
	April 3, 2010		April 4, 2009		Increase/ (Decrease)
Payroll and benefit costs	$	10,031	$	9,053	$	978
Business development		387		328		59
Outside professional services		640		380		260
Travel and entertainment		768		509		259
Exit, restructuring and integration costs		55		408		(353	)
Amortization expense		1,668		1,946		(278	)
Other expenses		2,768		2,872		(104	)

Total operating expenses	$	16,317	$	15,496	$	821

ZES operating expenses for the first quarter of 2010 are higher than 2009 due to increases in payroll and benefit costs, consulting, project expenses and travel and entertainment costs. These increases were offset due to the collection of receivables that had been previously considered uncollectible, reduced integration costs, and lower amortization expense due to an intangible asset being fully amortized at the end of 2009.

Liquidity and Capital Resources

(Amounts in thousands, except percentages):


	Three Months Ended
	April 3,			April 4,
Rate of Return Analysis:	2010			2009
Average cash and marketable securities balances	$	250,409		$	207,098
Annualized rate of return		0.3	%		2.3	%

Average cash and marketable securities balances for the first quarter of 2010 increased compared to 2009 as a result of increased cash provided by operations and a lesser amount spent on stock repurchases throughout 2009 compared to 2008.

As of April 3, 2010, Zebra had $254,098,000 in cash, restricted cash, investments and marketable securities, compared with $246,721,000 at December 31, 2009. Factors affecting cash and investment balances during the first three months of 2010 include the following (changes below include the impact of foreign currency):

•

Operations provided cash in the amount of $30,174,000, primarily from net income and collection of receivables.

•

Accounts receivable decreased $3,990,000 because of successful collection efforts. Days sales outstanding, as calculated by the financial method, improved from 62 days to 59 days.

•

Accrued liabilities decreased $9,118,000, due to the payment of payroll-related expenses, sales promotions and rebates.

•

Taxes payable increased $4,295,000 due to the timing of tax payments.

•

Purchases of property and equipment totaled $5,818,000.

•

Net sales of investments totaled $17,736,000.

•

Purchases of treasury shares totaled $20,823,000.

•

Stock option exercises and purchases under the stock purchase plan contributed $4,191,000.

Management believes that existing capital resources and funds generated from operations are sufficient to finance anticipated capital requirements.

Critical Accounting Policies and Estimates

Management prepared the consolidated financial statements of Zebra under accounting principles generally accepted in the United States of America. These principles require the use of estimates, judgments and assumptions. We believe that the estimates, judgments and assumptions we used are reasonable, based upon the information available.

Our estimates and assumptions affect the reported amounts in our financial statements. The following accounting policies comprise those that we believe are the most critical in understanding and evaluating Zebra’s reported financial results.

Revenue Recognition

Product revenue is recognized once four criteria are met: (1) we have persuasive evidence that an arrangement exists; (2) delivery has occurred and title has passed to the customer, which happens at the point of shipment provided that no significant obligations remain; (3) the price is fixed and determinable; and (4) collectability is reasonably assured. Other items that affect our revenue recognition include:

Customer Returns

Customers have the right to return products that do not function properly within a limited time after delivery. We monitor and track product returns and record a provision for the estimated future returns based on historical experience and any notification received of pending returns. Returns have historically been within expectations and the provisions established, but Zebra cannot guarantee that it will continue to experience return rates consistent with historical patterns. Historically, our product returns have not been significant. However, if a significant issue should arise, it could have a material impact on our financial statements.

Growth Rebates

Some of our channel program partners are offered incentive rebates based on the attainment of specific growth targets related to products they purchase from us over a quarter or year. These rebates are recorded as a reduction to revenue. Each quarter, we estimate the amount of outstanding growth rebates and establish a reserve for them based on shipment history. Historically, actual growth rebates have been in line with our estimates.

Pass Through Rebate Program

Some of our distributors are offered monthly rebates based on distribution of products to our program partners. These rebates are recorded as a reduction to revenue. Each month we estimate the amount of rebate earned and establish a reserve for them based on recent trends of actual activity. The actual distributor rebates paid have historically been in line with our estimates.

Price Protection

Some of our customers are offered price protection by Zebra as an incentive to carry inventory of our product. These price protection plans provide that if we lower prices, we will credit them for the price decrease on inventory they hold. We estimate future payments under price protection programs quarterly and establish a reserve, which is charged against revenue. Our customers typically carry limited amounts of inventory, and Zebra infrequently lowers prices on current products. As a result, the amounts paid under these plans have been minimal.

Software Revenue

We sell four types of software and record revenue as follows:

•

ZES has fixed fee software implementation projects , for which we use the percentage of completion method for revenue recognition. Under this method of accounting, we recognize revenue based on the ratio of costs incurred to total estimated costs. If increases in projected costs-to-complete are sufficient to create a loss contract, the entire estimated loss is charged to operations in the period the loss first becomes known.

•

Our printers contain embedded firmware, which is part of the hardware purchase. We consider the sale of this firmware to be incidental to the sale of the printer and do not attribute any revenue to it.

•

We sell a limited amount of prepackaged, or off-the-shelf, software for the creation of bar code labels using our printers. There is no customization required to use this software, and we have no post-shipment obligations on the software. Revenue is recognized at the time this prepackaged software is shipped.

•

We sometimes provide custom software as part of a printer installation project. We bill custom software development services separate from the related hardware. Revenue related to custom software is recognized once the custom software development services have been completed and accepted by the customer.

•

We recognize license revenue when (1) a signed contract is obtained; (2) delivery of the product has occurred; (3) the license fee is fixed or determinable; and (4) collection is probable.

Maintenance and Support Agreements

We enter into post-contract maintenance and support agreements. Revenues are recognized ratably over the service period and the cost of providing these services is expensed as incurred.

Shipping and Handling

We charge our customers for shipping and handling services based upon our internal price list for these items. The amounts billed to customers are recorded as revenue when the product ships. Any costs incurred related to these services are included in cost of sales.

Zebra enters into sales transactions that include more than one product type. This bundle of products might include printers, current or future supplies, and services. When this type of transaction occurs, we allocate the purchase price to each product type based on the fair value of the individual products determined by vendor specific objective evidence. The revenue for each individual product is then recognized when the recognition criteria for that product is fully met.

Investments and Marketable Securities

Investments and marketable securities at April 3, 2010, consisted of the following:


U.S. government and agency securities	11.4	%
Obligations of government sponsored enterprises (1)	6.7	%
State and municipal bonds	73.3	%
Corporate securities	8.6	%

(1)	Includes investments in notes issued by the Federal Home Loan Mortgage Corporation, the Federal National Mortgage Association and the Federal Home Loan Bank.

We classify our debt and marketable equity securities in one of three categories: trading, available-for-sale or held-to-maturity. Trading securities are bought and held principally for the purpose of selling them in the near term. Held-to-maturity securities are those debt securities that Zebra has the ability and intent to hold until maturity. All investments in marketable securities are classified as available-for-sale securities.

Trading and available-for-sale securities are recorded at fair value. Held-to-maturity securities are recorded at amortized cost, adjusted for the amortization or accretion of discounts or premiums. Unrealized holding gains and losses on trading securities are included in earnings. Unrealized holding gains and losses, net of the related tax effect, on available-for-sale securities are excluded from earnings and are reported as a separate component of stockholders’ equity until realized. As of April 3, 2010, Zebra’s investments in marketable debt securities are classified as available-for-sale. In addition, as of April 3, 2010, all of our investments in marketable debt securities with maturities greater than one year are classified as long-term in the consolidated balance sheet due to our ability and intent to hold them until maturity.

Accounts Receivable

We have standardized credit granting and review policies and procedures for all customer accounts, including:

•

Credit reviews of all new customer accounts,

•

Ongoing credit evaluations of current customers,

•

Credit limits and payment terms based on available credit information,

•

Adjustments to credit limits based upon payment history and the customer’s current creditworthiness,

•

An active collection effort by regional credit functions, reporting directly to the corporate financial officers, and

•

Limited credit insurance on the majority of our international receivables.

We reserve for estimated credit losses based upon historical experience and specific customer collection issues. Over the last three years, accounts receivable reserves varied from 1.4% to 3.8% of total accounts receivable. Accounts receivable reserves as of April 3, 2010, were $2,325,000, or 1.6% of the balance due. Accounts receivable reserves as of December 31, 2009, were $2,186,000, or 1.4% of the balance due. The decrease is driven primarily by the collection of previously reserved accounts. We believe our reserve level is appropriate considering the quality of the portfolio as of April 3, 2010. While credit losses have historically been within expectations and the provisions established, we cannot guarantee that our credit loss experience will continue to be consistent with historical experience.

Inventories

We value our inventories at the lower of the actual cost to purchase or manufacture using the first-in, first-out (FIFO) method, or the current estimated market value. We review inventory quantities on hand and record a provision for excess and obsolete inventory based on forecasts of product demand and production requirements for the subsequent twelve months.

Over the last three years, our reserves for excess and obsolete inventories have ranged from 6.8% to 12.4% of gross inventory. As of April 3, 2010, inventory reserves were $9,486,000, or 10.4% of gross inventory compared to inventory reserves of $9,054,000, or 10.2% of gross inventory as of December 31, 2009. We believe our reserve level is appropriate considering the quantities and quality of the inventories as of April 3, 2010.

Valuation of Goodwill

We test the impairment of goodwill each year at the end of May or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. We completed our annual assessment during June 2009 and determined that our goodwill was not impaired as of the end of May 2009.

Goodwill of a reporting unit is tested for impairment between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. Examples of such events or circumstances include:

•

Significant adverse change in legal factors or in the business climate,

•

Adverse action or assessment by a regulator,

•

Unanticipated competition,

•

Loss of key personnel,

•

More-likely-than-not expectation that a reporting unit or a significant portion of a reporting unit will be sold or otherwise disposed of,

•

Testing for recoverability under ASC 360 (formerly SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets ) of a significant asset group within a reporting unit,

•

Recognition of a goodwill impairment loss in the financial statement of a subsidiary that is a component of a reporting unit, or

•

Allocation of a portion of goodwill to a business to be disposed of.

Due to the deterioration of the economy and a significant reduction in the price of our stock, we performed an interim test of our goodwill in the fourth quarter of 2008 and determined that the goodwill associated with our ZES segment was impaired. See Note 5 of the Consolidated Financial Statements for further discussion of this impairment charge.

Under the “Income Approach – Discounted Cash Flow Analysis” the key assumptions consider sales, cost of sales and operating expenses projected through the year 2015. These assumptions were determined by management utilizing our internal operating plan and assuming growth rates for revenues and operating expenses, and margin assumptions. The fourth key assumption under this approach is the discount rate which is determined by looking at current risk-free rates of capital, current market interest rates and the evaluation of risk premia relevant to the business segment. If our assumptions relative to growth rates were to change or were incorrect, our fair value calculation may change which could result in impairment.

Under the “Market Approach – Guideline Company Method” we identified 12 publicly traded companies, including Zebra, which we believe have significant relevant similarities. For these 12 companies we calculated the mean ratio of invested capital to revenues and invested capital to EBITDA. Similar to the Income approach discussed above, sales, cost of sales, operating expenses and their respective growth rates were the key assumptions utilized. The market prices of Zebra and other guideline company shares are key assumptions. If these market prices increase, the estimated market value would increase. If the market prices decrease, the estimated market value would decrease.

Under the “Market Approach – Comparative Transactions Method” we looked at 22 market based transactions for companies that have similarities to our business segment, including similarities to one or more of the business lines, markets, growth prospects, margins and size. We calculated mean revenue and EBITDA multiples for the selected transactions. These multiples were applied to forecasted Zebra results for that segment to estimate market value. The key assumptions and impact to changes to those assumptions would be similar to those assumptions under the “Income Approach – Discounted Cash Flow Analysis” and the “Market Approach – Guideline Company Method”.

The results of these three methods are weighted based upon management’s determination with more weighing upon the Income approach because it considers anticipated future financial performance. The Market approaches are based upon historical and current economic conditions which might not reflect the long term prospects or opportunities for our business segment being evaluated.

If the carrying amount of a reporting unit exceeds the reporting unit’s fair value, we perform the second step of the goodwill impairment test to determine the amount of impairment loss. The second step of the goodwill impairment test involves comparing the implied fair value of the affected reporting unit’s goodwill with the carrying value of that goodwill.

Due to the deterioration of the economy and a significant reduction in the price of our stock, we determined that our goodwill from our recent ZES acquisitions was impaired requiring goodwill impairment charges of $113,679,000 at December 31, 2008. Upon completion of a detailed second step impairment analysis we recorded a credit of $1,495,000 in the second quarter of 2009 to adjust a portion of the original estimated goodwill impairment for ZES.

Valuation of Long-Lived and Other Intangible Assets

We evaluate the impairment of identifiable intangibles and other long-lived assets whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Factors considered that may trigger an impairment review consist of:

•

Significant underperformance relative to expected historical or projected future operating results,

•

Significant changes in the manner of use of the acquired assets or the strategy for the overall business,

•

Significant negative industry or economic trends,

•

Significant decline in Zebra’s stock price for a sustained period, and

•

Significant decline in market capitalization relative to net book value.

If we believe that one or more of the above indicators of impairment have occurred and the undiscounted cash flow test has failed in the case of amortizable assets, we measure impairment based on projected discounted cash flows using a discount rate that incorporates the risk inherent in the cash flows.

During the fourth quarter of 2008, we determined that certain impairment indicators related to identified intangible assets existed and conducted an additional impairment test of intangibles. Due to the deterioration of the economy and a significant reduction in the price of our stock, we determined that our other intangible assets consisting of our recent ZES acquisitions and intellectual property were impaired requiring total estimated impairment charges of $43,921,000 at December 31, 2008. The intangible asset impairment charges in our SPG segment were related primarily to radio frequency identification patents and patent rights. The intangible asset impairment charges in our ZES segment were related to customer relationships, technology, third party technology licenses and non-competition agreements. We recorded an impairment charge to a ZES intangible asset of $437,000 in 2009.

Net intangible assets, long-lived assets and goodwill amounted to $283,725,000 as of April 3, 2010.

Income Taxes

Significant Customer

ScanSource, Inc. is our most significant customer. Our net sales to ScanSource, Inc., an international distributor of Zebra products, as a percentage of total net sales, were as follows:

No other customer accounted for 10% or more of total net sales during these periods.

Safe Harbor

Forward-looking statements contained in this filing are subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995 and are highly dependent upon a variety of important factors which could cause actual results to differ materially from those reflected or implied in such forward looking statements. These factors include:

•

Market acceptance of Zebra’s printer and software products and competitors’ product offerings and the potential effects of technological changes,

•

The effect of market conditions in North America and other geographic regions,

•

Our ability to control manufacturing and operating costs, including the success of migrating final printer product assembly offshore to a third-party manufacturer,

•

Success of acquisitions and their integration,

•

Interest rate and financial market conditions because of our large investment portfolio,

•

Foreign exchange rates due to the large percentage of our international sales and operations, and

•

The outcome of litigation in which Zebra is involved, particularly litigation or claims related to infringement of third-party intellectual property rights.

When used in this document and documents referenced, the words “anticipate,” “believe,” “estimate,” “will” and “expect” and similar expressions as they relate to Zebra or its management are intended to identify such forward-looking statements. We encourage readers of this report to review Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2009, for a further discussion of issues that could affect Zebra’s future results. Zebra undertakes no obligation, other than as may be required by law, to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances or any other reason after the date of this report.

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

There were no material changes in Zebra’s market risk during the quarter ended April 3, 2010. For additional information on market risk, refer to the “Quantitative and Qualitative Disclosures About Market Risk” section of our Form 10-K for the year ended December 31, 2009. See Note 3 to the Consolidated Financial Statements included in this report for further discussion of investments and marketable securities.

In the normal course of business, portions of Zebra’s operations are subject to fluctuations in currency values. We manage these risks using derivative financial instruments. See Note 7 to the Consolidated Financial Statements included in this report for further discussion of derivative instruments.

Item 4.

Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)) as of the end of the period covered by this Form 10-Q. The evaluation was conducted under the supervision of our Disclosure Committee, and with the participation of management, including our Chief Executive Officer and Chief Financial Officer. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective to provide reasonable assurance that (i) the information required to be disclosed by us in this report on Form 10-Q was recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and (ii) information required to be disclosed by us in our reports that we file or furnish under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

In January 2008, Zebra began a program to update substantially all of its key financial systems over a three year period. As pieces of these systems are completed, they will be subject to the requirements related to internal control over financial reporting. The requirements for internal control over financial reporting will be a fundamental element of the design and implementation of these systems.

As of January 1, 2010, we changed the functional currency of our UK subsidiary from the pound to the U. S. dollar. As a result we modified and enhanced our reconciliation and management review controls over this subsidiary. The modified controls have been in effect since the conversion date.

During the first three months of 2010, we made additional changes to our controls and procedures as part of our ongoing monitoring of our controls. None of these changes has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. In addition, there were no other changes that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on the Effectiveness of Controls

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within Zebra have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

PART II - OTHER INFORMATION

Item 1.

Legal Proceedings

See Note 9 to the Consolidated Financial Statements included in this report.

Item 1A.

Risk Factors

In addition to the other information included in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2009, and the factors identified under “Safe Harbor” at the end of Item 2 of Part I of this Quarterly Report on Form 10-Q, which could materially affect our business, financial condition, cash flows or results of operations. The risks described in our Annual Report on Form 10-K are not the only risks facing Zebra. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, cash flows and/or results of operations.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

Treasury Shares

During the first quarter of 2010, Zebra purchased 750,000 shares of Zebra’s Class A Common Stock at a weighted average share price of $27.76 per share, as follows:

ISSUER PURCHASES OF EQUITY SECURITIES


Period	Total number of shares purchased	Average price paid per share		Total number of shares purchased as part of publicly announced programs	Maximum number of shares that may yet be purchased under the program
January 2010 (January 1 – January 30)	117,796	$	27.49	117,796	2,081,490
February 2010 (January 31 – February 27)	382,204	$	26.88	382,204	1,699,286
March 2010 (February 28 – April 3)	250,000	$	29.24	250,000	1,449,286

(1)	On February 17, 2009, Zebra announced that the Board authorized the purchase of an additional 3,000,000 shares under the same terms. The February 2009 authorization does not have an expiration date.

(2)	During the first quarter, Zebra acquired 3,951 shares of Zebra Class A Common Stock through the withholding of shares necessary to satisfy tax withholding obligations upon the vesting of restricted stock awards. These shares were acquired at an average price of $27.63 per share.

Item 5.

Other Information

In lieu of filing under Form 8-K, Zebra is making this filing under Item 5 of Form 10-Q.

Amendment to By-laws

On May 1, 2010, the Board of Directors of Zebra approved an amendment to the Amended and Restated By-laws of Zebra (the “By-laws”), effective immediately, to (1) add a new Article VI to our By-laws that would provide for mandatory indemnification and advancement of expenses for Zebra’s directors and executive officers and former directors and executive officers and (2) delete a redundant Section 2.11 because Section 2.12 also sets forth the voting standard for approval of a matter submitted to a vote of stockholders.

New Article VI of our By-laws also would give Zebra the ability to decide, on a case-by-case basis, the indemnification and advancement rights of Zebra’s other officers, employees and agents. The following description of Article VI is qualified in its entirety by reference to the complete text of the By-laws, as amended, a copy of which is attached as Exhibit 3(ii) to this Form 10-Q and is incorporated herein by reference.

Indemnification. Directors and executive officers and former directors and executive officers are entitled to the broad indemnification rights provided for under the Delaware law. It includes expenses, attorneys’ fees and, for third party proceedings, judgments, fines, penalties and amounts paid in settlement actually and reasonably incurred in connection with an investigation, preparation of defense or defense of such action, suit, proceeding or claim. Zebra is not required to indemnify any person in connection with any action or proceeding initiated by the person other than (1) an action or proceeding authorized by the Board or (2) an action or proceeding seeking or defending that person’s right to indemnification.

Advancement of Expenses. A claimant is entitled to be paid by Zebra his or her expenses in advance of the final disposition of an action or proceeding. To the extent required by law, the claimant is be required, prior to obtaining advancement of expenses, to make an undertaking to repay any amounts advanced if it is ultimately determined that the person is not entitled to be indemnified.

Procedures. If a claim is not paid in full within thirty days after a written claim has been received by Zebra, the claimant may file suit to recover the unpaid amounts. Expenses incurred by a claimant in connection with successfully establishing his or her right to indemnification or advancement (in whole or in part) also would be indemnified. In any action for indemnification or advancement of expenses, Zebra would have the burden of proving that the person is not entitled to the indemnification or advancement of expenses.

Amendment or Repeal. The indemnification and advancement rights may not be impaired by an amendment or repeal of the By-laws after the occurrence of the act or omission that is the subject of the indemnification or advancement proceeding.

Other Sources. If a person collects indemnification or advancement of expenses from another entity, Zebra’s obligation to indemnify or advance expenses will be reduced by that amount.

Indemnification Agreement

On May 1, 2010, the Board of Directors of Zebra also approved a form of indemnification agreement between Zebra and directors and executive officers of Zebra. The following description of the form of indemnification agreement is qualified in its entirety by reference to the complete text of the agreement, a copy of which is attached as Exhibit 10.1 to this Form 10-Q and is incorporated herein by reference.

Service to Zebra and Indemnification. Individuals agree to continue to serve as a director or officer of Zebra and, at the request of Zebra, as a director, officer, employee, agent or fiduciary of another entity on behalf of Zebra. Under the agreement, an individual who is, or is threatened to be made, a party to or a participant in any threatened, pending or completed action, suit or other proceeding, other than a proceeding by or in the right of Zebra, is indemnified for all expenses, judgments, liabilities, fines, penalties and amounts paid in settlement actually and reasonably incurred, as long as the individual acted in good faith and in a manner the individual reasonably believed to be in or not opposed to the best interests of Zebra and, as to a criminal proceeding, had no reasonable cause to believe that the individual’s conduct was unlawful. no indemnity for judgments, liabilities, fines, penalties and amounts paid in settlement since these amounts accrue to Zebra. However, indemnity for judgments, liabilities, fines, penalties and amounts paid in settlement can be made if Delaware law subsequently allows. With respect to proceedings by or in the right of Zebra, there is no indemnity for judgments, liabilities, fines, penalties and amounts paid in settlement. Either disinterested directors or independent counsel will determine if an individual is entitled to indemnification. When determining whether an entitlement to indemnification exists, the disinterested directors or independent counsel must presume the individual is entitled to indemnification and Zebra has the burden to overcome that presumption.

Exceptions to Indemnification. The agreement provides that there will not be an indemnity for (1) insurance actually paid to the individual, (2) short-swing profits under Section 16 of the Exchange Act for transactions involving equity securities of Zebra, (3) for clawbacks under the Sarbanes-Oxley Act of 2002 of incentive compensation to the chief executive officer or chief financial officer, and (4) proceedings initiated by the individual.

Advancement of Expenses. Zebra will advance expenses incurred in connection with a proceeding within 30 days after Zebra receives a statement requesting an advance. The request can be made prior to or after final disposition of a proceeding. Advances are unsecured and interest-free.

Notice to Zebra. An individual must notify Zebra of any matter with respect to which the individual intends to seek indemnification or advancement of expenses.

Rights of Individuals. Individuals are entitled to a court proceeding to determine their rights under the agreement, although the individual has the right to choose arbitration. The rights of indemnification and to receive advancement of expenses are not exclusive of any other rights the individual may have under applicable law, Zebra’s Certificate of Incorporation, Zebra’s By-laws, a resolution of directors, or otherwise. If Zebra maintains a directors’ and officers’ insurance policy, the individual must be covered under the policy. Zebra is subrogated to any other rights of recovery the individual may have to the extent Zebra makes a payment under the agreement.

Equity Awards to Executive Officers and Directors

Forms of Stock Appreciation Rights Agreement, Restricted Stock Award Agreement and Performance-Based Restricted Stock Award Agreement

2010 Stock Appreciation Rights Agreement and 2010 Restricted Stock Award Agreement for Employees other than the Chief Executive Officer. On April 23, 2010, the Compensation Committee of Zebra’s Board of Directors approved forms of a (1) 2010 stock appreciation rights agreement and (2) 2010 restricted stock award agreement for employees other than the Chief Executive Officer to be used in connection with annual grants to be made in May 2010. These award agreements are substantially identical to their predecessor forms of agreements. Zebra filed the predecessor form of stock appreciation rights agreement, including a description of the agreement, in a Current Report on Form 8-K dated May 7, 2009. Zebra filed the predecessor form of restricted stock award agreement, including a description of the agreement, in a Current Report on Form 8-K dated December 2, 2008. The forms of 2010 stock appreciation rights agreement and 2010 restricted stock award agreement for employees other than the CEO are filed as Exhibits 10.2 and 10.3 to this Form 10-Q and are incorporated herein by reference.

On May 1, 2010, the Board of Directors approved, upon the recommendation of the Compensation Committee, (1) a form of 2010 performance-based restricted stock award agreement for executive officers other than the CEO, (2) forms of 2010 stock appreciation rights agreement, 2010 restricted stock award agreement, and 2010 performance-based restricted stock agreement for Anders Gustafsson, the Chief Executive Officer of Zebra, and (3) a form of 2010 stock appreciation rights agreement for non-employee directors under the 2006 Zebra Technologies Corporation Incentive Compensation Plan (the “Plan”).

2010 Performance-Based Restricted Stock Award Agreement for Executive Officers other than the Chief Executive Officer. The form of 2010 performance-based restricted stock award agreement for executive officers other than the CEO is substantially identical to the form of 2010 restricted stock award agreement, referenced above, for employees other than the CEO, except the restricted stock will vest at a threshold to maximum number of shares on the third anniversary of the grant date, subject to attaining levels of achievement of performance objectives relating to (a) compounded annual growth rate of 2012 total net sales over 2009 total net sales and (b) return on invested capital, with return on invested capital acting as a modifier of the number of shares vested under the total net sales objective. In addition, in the event a participant’s employment is terminated due to the participant’s death, disability, by the participant for good reason, or by Zebra other than for cause, (1) prior to December 31, 2012, the target number of shares of restricted stock will vest or (2) on or after December 31, 2012, the vested number of shares of restricted stock will be determined in accordance with the performance-based vesting objectives. In the event of a change in control of Zebra, the number of shares that would vest will be the greater of the target number of restricted shares or the number of shares determined in accordance with the performance-based vesting objectives.

2010 Stock Appreciation Rights Agreement, 2010 Restricted Stock Award Agreement, and 2010 Performance-Based Restricted Stock Award Agreement for Chief Executive Officer. The forms of 2010 stock appreciation rights agreement and 2010 restricted stock award agreement for the CEO are identical to the forms (referenced above) of agreements for employees other than the CEO, except that the CEO’s awards vest over a five-year instead of a four-year period. The CEO’s awards will vest 25% on each of the third and fourth anniversaries of the grant date and 50% on the fifth anniversary of the grant date. For employees other than the CEO, these awards vest 25% on each of the first four anniversaries of the grant date. The form of 2010 performance-based restricted stock award agreement for the CEO is substantially identical to the form of 2010 performance-based restricted stock award agreement, referenced above, for executive officers other than the CEO, except (1) the CEO’s award will vest pro rata in the event of a termination of employment due to death, disability, by the CEO for good reason, or by Zebra other than for cause and (2) in the event of a change in control of Zebra, the target number of shares would vest. The forms of 2010 stock appreciation rights agreement, 2010 restricted stock award agreement, and 2010 performance-based restricted stock award agreement for the CEO are filed as Exhibits 10.5, 10.6 and 10,7 to this Form 10-Q and are incorporated herein by reference.

2010 Stock Appreciation Rights Agreement for Non-Employee Directors. The form of 2010 stock appreciation rights agreement for non-employee directors is substantially identical to the predecessor form of 2009 stock appreciation rights agreement for non-employee directors and, other than the vesting terms, substantially identical to the form of 2010 stock appreciation rights agreement for employees other than the CEO. The 2010 stock appreciation rights agreement for non-employee directors provides that the stock appreciation rights will vest 100% on the earlier of the first anniversary of the grant date and immediately prior to the next annual meeting of stockholders at which directors are to be elected. The forms of 2010 and 2009 stock appreciation rights agreement for non-employee directors are filed as Exhibits 10.8 and 10.9 to this Form 10-Q and are incorporated herein by reference.

Amended and Restated Employment Agreement and Letter Agreement

On May 1, 2010, the Board of Directors approved, upon the recommendation of the Compensation Committee, an amended and restated employment agreement (the “Employment Agreement”) between Zebra and Mr. Gustafsson. The approved Employment Agreement does not provide, nor does it make Mr. Gustafsson eligible to receive, any additional compensation or benefits. As amended and restated, the Employment Agreement (1) amends the current employment agreement to reinstate the term Annual Equity Award that was inadvertently deleted when the third amendment to the current agreement dated March 7, 2009 was executed; (2) restates the current agreement to integrate the existing first, second, and third amendments into the current agreement; and (3) amends the current agreement in non-substantive ways to reflect the amendment and restatement, such as the elimination of references to equity awards made in connection with Mr. Gustafsson’s commencement of employment. The Board also approved, upon the recommendation of the Compensation Committee, a letter agreement between Zebra and Mr. Gustafsson that amends Section 2 of Mr. Gustafsson’s stock option agreement dated April 24, 2008, Section 2 of the SAR agreement dated May 7, 2009, and Section 2 of the restricted stock agreement dated May 7, 2009 to include references to the Employment Agreement that were inadvertently omitted when these awards were prepared.

Zebra filed the original employment agreement, including a description of the agreement, in a Current Report on Form 8-K dated August 31, 2007. The Employment Agreement and letter agreement are filed as Exhibits 10.10 and 10.11 to this Form 10-Q and are incorporated herein by reference.

Item 6.

Exhibits


3(ii)		Amended and Restated By-laws of Zebra Technologies Corporation effective May 1, 2010

10.1		Form of indemnification agreement between Zebra Technologies Corporation and each director and executive officer. +

10.2		Form of 2010 time-vested stock appreciation rights agreement for employees. +

10.3		Form of 2010 time-vested restricted stock agreement for employees. +

10.4		Form of 2010 performance-based restricted stock agreement for executive officers other than the chief executive officer. +

10.5		Form of 2010 time-vested stock appreciation rights agreement for chief executive officer. +

10.6		Form of 2010 time-vested restricted stock agreement for chief executive officer. +

10.7		Form of 2010 performance-based restricted stock agreement for chief executive officer. +

10.8		Form of 2010 time-vested stock appreciation rights agreement for non-employee directors. +

10.9		Form of 2009 time-vested stock appreciation rights agreement for non-employee directors. +

10.10		Amended and Restated Employment Agreement between Zebra Technologies Corporation and Anders Gustafsson dated as of May 6, 2010. +

10.11		Letter Agreement between Zebra Technologies Corporation and Anders Gustafsson dated as of May 6, 2010. +

31.1		Rule 13a-14(a)/15d-14(a) Certification

31.2		Rule 13a-14(a)/15d-14(a) Certification

32.1		Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2		Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Management contract or compensatory plan or arrangement required to be filed as an exhibit to this Annual Report on Form 10-K.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	ZEBRA TECHNOLOGIES CORPORATION

Date: May 6, 2010	By:	/s/ Anders Gustafsson
		Anders Gustafsson
		Chief Executive Officer

Date: May 6, 2010	By:	/s/ Michael C. Smiley
		Michael C. Smiley
		Chief Financial Officer

Exhibit 3(ii)

AMENDED AND RESTATED BY-LAWS

ZEBRA TECHNOLOGIES CORPORATION

ARTICLE I

Offices

Section 1.1 The registered office shall be in the City of Wilmington, County of New Castle, State of Delaware.

Section 1.2 The corporation may also have offices at such other places both within and without the State of Delaware as the board of directors may from time to time determine or the business of the corporation may require.

ARTICLE II

Meetings of Stockholders

Section 2.1 All meetings of the stockholder for the election of directors shall be held at such place within or without the State of Delaware as shall be designated from time to time by the board of directors and stated in the notice of the meeting. Meetings of stockholders for any other purpose may be held at such time and place, within or without the States of Delaware, as shall be stated by the board of directors in its notice of the meeting.

Section 2.2 An annual meeting of the stockholders, for the election of directors to succeed those whose terms expire and for the transaction of such other business as may properly come before the meeting, shall be held at such place, on such date, and at such time as the Board of Directors shall each year fix.

Section 2.3 Except as otherwise required by law, written notice of the annual meeting stating the place, date and hour of the meeting shall be given to each stockholder entitled to vote at such meeting not fewer than 10 or more than 60 days before the date of the meeting.

Section 2.4

(1) Nominations of persons for election to the Board of Directors and the proposal of business to be transacted by the stockholders may be made at an annual meeting of stockholders (a) pursuant to the Corporation’s proxy materials with respect to such meeting, (b) by or at the direction of the Board of Directors, or (c) by any stockholder of record of the Corporation (the “Record Stockholder”) at the time of the giving of the notice required in the following paragraph, who is entitled to vote at the meeting and who has complied with the notice procedures set forth in this section. For the avoidance of doubt, clause (c) shall be the exclusive means for a stockholder to make nominations or propose business (other than business included in the Corporation’s proxy materials pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, as amended (such act, and the rules and regulations promulgated thereunder, the “Exchange Act”)) at an annual meeting of stockholders.

(2) For nominations or business to be properly brought before an annual meeting by a Record Stockholder pursuant to clause (c) of the foregoing paragraph, (a) the Record Stockholder must have given timely notice thereof in writing to the Secretary of the Corporation, (b) any such business must be a proper matter for stockholder action under Delaware law, and (c) the Record Stockholder and the beneficial owner, if any, on whose behalf any such proposal or nomination is made, must have acted in accordance with the representations set forth in the Solicitation Statement required by these By-laws. To be timely, a Record Stockholder’s notice shall be received by the Secretary at the principal executive offices of the Corporation not less than 60 or more than 90 days prior to the one-year anniversary (the “Anniversary”) of the date on which the Corporation first mailed its proxy materials for the preceding year’s annual meeting of stockholders; provided, however, that, subject to the last sentence of this paragraph, if the meeting is convened more than 30 days prior to or delayed by more than 30 days after the anniversary of the preceding year’s annual meeting, notice by the Record Stockholder to be timely must be so received not later than the close of business on the later of (i) the 90th day before such annual meeting or (ii) the 10th day following the day on which public announcement of the date of such meeting is first made.

Notwithstanding anything in the preceding sentence to the contrary, in the event that the number of directors to be elected to the Board of Directors is increased and there is no public announcement naming all of the nominees for director or specifying the size of the increased Board of Directors made by the Corporation at least 10 days before the last day a Record Stockholder may deliver a notice of nomination in accordance with the preceding sentence, a Record Stockholder’s notice required by this by-law shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it shall be received by the Secretary at the principal executive offices of the Corporation not later than the close of business on the 10th day following the day on which such public announcement is first made by the Corporation. In no event shall an adjournment or postponement of an annual meeting commence a new time period for the giving of a Record Stockholder’s notice.

(3) Such Record Stockholder’s notice shall set forth:

a. if such notice pertains to the nomination of directors, as to each person whom the Record Stockholder proposes to nominate for election or reelection as a director all information relating to such person as would be required to be disclosed in solicitations of proxies for the election of such nominees as directors pursuant to Regulation 14A under the Exchange Act, and such person’s written consent to serve as a director if elected;

b. as to any business that the Record Stockholder proposes to bring before the meeting, a brief description of such business, the reasons for conducting such business at the meeting, any material interest in such business of such Record Stockholder and the beneficial owner, if any, on whose behalf the proposal is made, and a description of all agreements, arrangements, understandings between such stockholder and beneficial owner, if any, and any other person or persons (including their names) in connection with the proposal of such business by such stockholder; and

c. as to (1) the Record Stockholder giving the notice and (2) the beneficial owner, if any, on whose behalf the nomination or proposal is made (each, a “party”):

(i) the name and address of each such party as they appear on the Corporation’s books;

(ii) (A) the class, series, and number of shares of the Corporation that are owned, directly or indirectly, beneficially and of record by each such party, (B) any option, warrant, convertible security, stock appreciation right, or similar right with an exercise or conversion privilege or a settlement payment or mechanism at a price related to any class or series of shares of the Corporation or with a value derived in whole or in part from the value of any class or series of shares of the Corporation, whether or not such instrument or right shall be subject to settlement in the underlying class or series of capital stock of the Corporation or otherwise (a “Derivative Instrument”) directly or indirectly owned beneficially by each such party, and any other direct or indirect opportunity to profit or share in any profit derived from any increase or decrease in the value of shares of the Corporation, (C) any proxy, contract, arrangement, understanding, or relationship pursuant to which either party has a right to vote, directly or indirectly, any shares of any security of the Corporation, (D) any short interest in any security of the Corporation held by each such party (for purposes of this Section 2.4, a person shall be deemed to have a short interest in a security if such person directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has the opportunity to profit or share in any profit derived from any decrease in the value of the subject security), (E) any rights to dividends on the shares of the Corporation owned beneficially directly or indirectly by each such party that are separated or separable from the underlying shares of the Corporation, (F) any proportionate interest in shares of the Corporation or Derivative Instruments held, directly or indirectly, by a general or limited partnership in which either party is a general partner or, directly or indirectly, beneficially owns an interest in a general partner and (G) any performance-related fees (other than an asset-based fee) that

each such party is directly or indirectly entitled to based on any increase or decrease in the value of shares of the Corporation or Derivative Instruments, if any, as of the date of such notice, including without limitation any such interests held by members of each such party’s immediate family sharing the same household (which information set forth in this paragraph shall be supplemented by such stockholder or such beneficial owner, as the case may be, not later than ten (10) days after the record date for the meeting to disclose such ownership as of the record date);

(iii) any other information relating to each such party that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for, as applicable, the proposal and/or for the election of directors in a contested election pursuant to Section 14 of the Exchange Act; and

(iv) a statement whether or not each such party will deliver a proxy statement and form of proxy to holders of, in the case of a proposal, at least the percentage of voting power of all of the shares of capital stock of the Corporation required under applicable law to carry the proposal or, in the case of a nomination or nominations, at least the percentage of voting power of all of the shares of capital stock of the Corporation reasonably believed by the Record Stockholder or beneficial holder, as the case may be, to be sufficient to elect the nominee or nominees proposed to be nominated by the Record Stockholder (such statement, a “Solicitation Statement”).

(4) A person shall not be eligible for election or re-election as a director at an annual meeting unless (i) the person is nominated by a Record Stockholder in accordance with Section 2.4(1)(c) or (ii) the person is nominated by or at the direction of the Board of Directors. Only such business shall be conducted at an annual meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth in this Section 2.4. The chairman of the meeting shall have the power and the duty to determine whether a nomination or any business proposed to be brought before the meeting has been made in accordance with the procedures set forth in these By-laws and, if any proposed nomination or business is not in compliance with these By-laws, to declare that such defectively proposed business or nomination shall not be presented for stockholder action at the meeting and shall be disregarded.

(5) For purposes of these By-laws, “public announcement” shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press, PR Newswire, Business Wire or a comparable national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act.

(6) Notwithstanding the foregoing provisions of this Section 2.4, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to matters set forth in this Section 2.4. Nothing in this Section 2.4 shall be deemed to affect any rights of stockholders to request inclusion of proposals in the Corporation’s proxy statement pursuant to Rule 14a-8 under the Exchange Act.

Section 2.5 Special meetings of the stockholders, other than those required by statute, may be called and conducted in the manner provided in the Corporation’s Certificate of Incorporation. The Board of Directors may postpone or reschedule any previously scheduled special meeting.

Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting by or at the direction of the Board of Directors, or if called by holders of Common Stock in accordance with, and only in accordance with, the Certificate of Incorporation, such business as is called for by the holders of shares of the Corporation’s Common Stock representing at least 66-2/3% of the votes entitled to be cast generally in the election of directors. The notice of such special meeting shall include the purpose for which the meeting is called.

Section 2.6 Nominations of persons for election to the Board of Directors may be made at a special meeting of stockholders at which directors are to be elected (a) by or at the direction of the Board of Directors or (b) by any stockholder of record at the time of giving of notice provided for in this paragraph, who shall be entitled to vote at the meeting and who delivers a written notice to the

Secretary setting forth the information set forth in Section 2.4(3)(a) and 2.4(3)(c) of this Article II. Nominations by stockholders of persons for election to the Board of Directors may be made at such a special meeting of stockholders only if such Record Stockholder’s notice required by the preceding sentence shall be received by the Secretary at the principal executive offices of the Corporation not later than the close of business on the later of the 90th day prior to such special meeting or the 10th day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board of Directors to be elected at such meeting. In no event shall an adjournment or postponement of a special meeting commence a new time period for the giving of a Record Stockholder’s notice. A person shall not be eligible for election or reelection as a director at a special meeting unless the person is nominated (i) by or at the direction of the Board of Directors or (ii) by a Record Stockholder in accordance with the notice procedures set forth in this Article II.

Notwithstanding the foregoing provisions of Sections 2.5 and 2.6, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to matters set forth in Sections 2.5 and 2.6. Nothing in Sections 2.5 or 2.6 shall be deemed to affect any rights of stockholders to request inclusion of proposals in the Corporation’s proxy statement pursuant to Rule 14a-8 under the Exchange Act

Section 2.7 Written notice of a special meeting stating the place, date and hour of the meeting and the purpose or purposes for which the meeting is called, shall be given not fewer than 10 or more than 60 days before the date of the meeting, to each stockholder entitled to vote at such meeting.

Section 2.8 In order that the corporation may determine the stockholders entitled to vote at any meeting of stockholders or any adjournment thereof, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the board of directors may fix a record date, which shall not precede the date upon which the resolution fixing the record date is adopted, and which shall be (i) not more than 60 or less than 10 days before the date of a meeting, and (ii) not more than 60 days prior to the other action. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the board of directors may fix a new record date for any adjourned meeting.

Section 2.9 The officer who has charge of the stock ledger of the corporation shall prepare and make, at least 10 days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder for any purpose germane to the meeting, during ordinary business hours, for a period of at least 10 days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present.

Section 2.10 The holders of a majority of the voting power of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business except as otherwise provided by statute or by the certificate of incorporation. If, however, such quorum shall not be represent or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented; provided that, if the adjournment is for more than 30 days, or if a new record date is fixed by the directors, a new notice shall be transmitted to the stockholders. At such adjourned meeting at which a quorum shall be present or represented any business may be transacted at the meeting as originally notified.

Section 2.11 Unless otherwise provided in the certificate of incorporation, each stockholder shall at every meeting of the stockholders be entitled to one vote in person or by proxy for each share of the capital stock having voting power held by such stockholder, but no proxy shall be voted on after three years from its date, unless the proxy provides for a longer period. At any meeting of the stockholders, every stockholder entitled to vote may vote in person or by proxy authorized by an instrument in writing or by a transmission permitted by law filed in accordance with the procedure established for the meeting. Any copy, facsimile

telecommunication or other reliable reproduction of the writing or transmission created pursuant to this paragraph may be substituted or used in lieu of the original writing or transmission for any and all purposes for which the original writing or transmission could be used; provided that, such copy, facsimile telecommunication or other reproduction shall be a complete reproduction of the entire original writing or transmission. All voting, excepting where otherwise required by law, may be by a voice vote.

The corporation may, and to the extent required by law, shall, in advance of any meeting of stockholders, appoint one or more inspectors to act at the meeting and make a written report thereof. The corporation may designate one or more persons as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate is able to act at a meeting of stockholders, the person presiding at the meeting may, and to the extent required by law, shall, appoint one or more inspectors to act at the meeting. Each inspector, before entering upon the discharge of his duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of his ability. Every vote taken by ballots shall be counted by an inspector or inspectors appointed by the chairman of the meeting. All elections shall be determined by a plurality of the votes cast, and except as otherwise required by law or by the certificate of incorporation, all other matters shall be determined by a majority of the votes cast affirmatively or negatively.

Section 2.12 The chairman of the board of directors shall preside at all meetings of the stockholders. In the absence or inability to act of the chairman, the vice chairman, the president or a vice president (in that order) shall preside, and in their absence or inability to act another person designated by one of them shall preside. The secretary of the corporation shall act as secretary of each meeting of the stockholders. In the event of his absence or inability to act, the chairman of the meeting shall appoint a person who need not be a stockholder to act as secretary of the meeting.

Section 2.13 Meetings of the stockholders shall be conducted in a fair manner but need not be governed by any prescribed rules of order. The presiding officer’s rulings on procedural matters shall be final. The presiding officer is authorized to impose reasonable time limits on the remarks of individual stockholders and may take such steps as such officer may deem necessary or appropriate to assure that the business of the meeting is conducted in a fair and orderly manner.

ARTICLE III

Directors

Section 3.1 The business and affairs of the corporation shall be managed by or under the direction of a Board of Directors consisting of not less than 2 nor more than 11 directors. The exact number shall be determined from time to time by resolution adopted by the affirmative vote of a majority of the directors in office at the time of adoption of such resolution.

Section 3.2 Directors shall be elected and serve in the manner provided in the Certificate of Incorporation. Any vacancies occurring in the Board of Directors and newly created directorships shall be filled in the manner provided in the Certificate of Incorporation.

Section 3.3 Except as otherwise provided by law, directors may be removed only in the manner provided in the Certificate of Incorporation.

Meetings of the Board of Directors

Section 3.4 The board of directors of the corporation may hold meetings, both regular and special, either within or without the State of Delaware. Members of the board of directors may participate in any such meeting by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation by such means shall constitute presence in person at such meeting.

Section 3.5 The first meeting of each newly elected board of directors shall be held immediately following the adjournment of the annual meeting of the stockholders at the same place as such annual meeting and no notice of such meeting shall be necessary to the newly elected directors in order legally to constitute the meeting, provided a quorum shall be present. In the event such meeting is not held at such time and place, the meeting may be held at such time and place as shall be specified in a notice given as hereinafter provided for special meetings of the board of directors, or as shall be specified in a written waiver signed by all of the directors.

Section 3.6 Regular meetings of the board of directors may be held without notice at such time and at such place as shall from time to time be determined by the board.

Section 3.7 Special meetings of the board may be called by the chairman or president on at least one day’s notice to each director, either personally, or by courier, telephone, telefax, mail or telegram. Special meetings shall be called by the chairman or president in like manner and on like notice at the written request of one-half or more of the directors comprising the board stating the purpose or purposes for which such meeting is requested. Notice of any meeting of the board of directors for which a notice is required may be waived in writing signed by the person or persons entitled to such notice, whether before or after the time of such meeting, and such waiver shall be equivalent to the giving of such notice. Attendance of a director at any such meeting shall constitute a waiver of notice thereof, except where a director attends a meeting for the express purpose of objecting to the transaction of any business because such meeting is not lawfully convened. Neither the business to be transacted at nor the purpose of any meeting of the board of directors for which a notice is required need be specified in the notice, or waiver of notice, of such meeting. The chairman shall preside at all meetings of the board of directors. In the absence or inability to act of the chairman, the vice chairman, the president or a vice president (in that order) shall preside, and in their absence or inability to act another director designated by one of them shall preside.

Section 3.8 At all meetings of the board a majority of the then duly elected directors shall constitute a quorum for the transaction of business and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the board of directors, except as may be otherwise specifically provided by statute or by the certificate of incorporation. If a quorum shall not be present at any meeting of the board of directors, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present.

Section 3.9 Any action required or permitted to be taken at any meeting of the board of directors or of any committee thereof may be taken without a meeting, if all members of the board or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the board or committee.

Committees of Directors

Section 3.10 The board of directors may, by resolution passed by a majority of the whole board, designate one or more committees, each committee to consist of one or more of the directors of the corporation. The board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he, she or they constitute a quorum, may unanimously appoint another member of the board of directors to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in the resolution of the board of directors, shall have and may exercise all the powers and authority of the board of directors in the management of the business and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to amending the certificate of incorporation (except that a committee may, to the extent authorized in the resolution or resolutions providing for the issuance of shares of stock adopted by the board of directors as provided in subsection (a) of Section 151 of the Delaware General Corporation Law, fix the designations and any of the preferences or rights of such shares relating to dividends, redemption, dissolution, any distribution of assets of the corporation or the conversion into, or the exchange of such shares for, shares of any other class or classes or any other series of the same or any other class or classes of stock of the corporation or fix the number of shares of any series of stock or authorize the increase or decrease of the number of shares of any series), and if the resolution which designates the committee or a supplemental resolution of the board of directors shall so provide, such committee shall have the power and authority to adopt a certificate of ownership and merger pursuant to Section 253 of the Delaware General Corporation Law or to declare a dividend or to authorize the issuance of stock. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the board of directors.

Section 3.11 Each committee shall keep regular minutes of its meetings and shall file such minutes and all written consents executed by its members with the secretary of the corporation. Each committee may determine the procedural rules for meeting and conducting its business and shall act in accordance therewith, except as otherwise provided herein or required by law. Adequate provision shall be made for notice to members of all meetings; one-third of the members shall constitute a quorum unless the committee shall consist of one or two members, in which event one member shall constitute a quorum; and all matters shall be determined by a majority vote of the members present. Action may be taken by any committee without a meeting if all members thereof consent thereto in writing, and the writing or writings are filed with the minutes of the proceedings of such committee. Members of any committee of the board of directors may participate in any meeting of such committee by means of conference telephone or similar communications equipment by means of which all persons participating may hear each other, and participation in a meeting by such means shall constitute presence in person at such meeting.

Compensation of Directors

Section 3.12 In the discretion of the board of directors, the directors may be paid their expenses, if any, of attendance at each meeting of the board of directors and may be paid a fixed sum for attendance at each meeting of the board of directors or a stated salary as director. No such payment shall preclude any director from serving the corporation in any other capacity and receiving compensation therefor. Members of special or standing committees may be allowed like compensation for attending committee meetings.

ARTICLE IV

Notices

Section 4.1 Whenever, under applicable law or the certificate of incorporation or these by-laws, notice is required to be given to any director or stockholder, unless otherwise provided by applicable law, in the certificate of incorporation or these by-laws, such notice may be given in writing, by courier or mail, addressed to such director or stockholder, at his or her address as it appears on the records of the corporation, with freight or postage thereon prepaid, and such notice shall be deemed to be given at the time when the same shall have been deposited with such courier or in the United States mail.

Section 4.2 Whenever any notice is required to be given under applicable law or the certificate of incorporation or these by-laws, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto.

ARTICLE V

Officers

Section 5.1 The officers of the corporation shall be appointed by the board of directors and shall include a chief executive officer (who may or may not be the president), a secretary and a treasurer. The board of directors may appoint a chairman, who may be the chief executive officer of the corporation, or a non-executive independent director. The chairman shall have the duties assigned by the board of directors from time to time. The board of directors may also appoint one or more vice-chairmen, a president, vice-presidents, assistant vice-presidents, assistant secretaries and assistant treasurers. Any number of offices may be held by the same person, unless the certificate of incorporation or these by-laws otherwise provide. The board of directors may also designate persons as officers of divisions of the corporation, but such persons shall not be officers of the corporation.

Section 5.2 The board of directors at its first meeting after each annual meeting of stockholders shall appoint a president, a secretary, a treasurer and such other officers as the board of directors shall deem desirable.

Section 5.3 The board of directors may also appoint such other officers and agents as it shall deem necessary who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the board.

Section 5.4 The salaries of all officers of the corporation shall be fixed by the board of directors.

Section 5.5 The officers of the corporation shall hold office until their successors are appointed and qualify or until their earlier resignation or removal. Any officer elected or appointed by the board of directors may be removed at any time by the affirmative vote of a majority of the board of directors. Any vacancy occurring in any office of the corporation shall be filled by the board of directors.

Section 5.6

(a) Chief Executive Officer . The chief executive officer shall, subject to the oversight of the board of directors, have and provide general supervision, direction and control of the corporation’s business and its officers and, if there is no president, active management of the business of the corporation; shall see that the resolutions and directions of the board of directors are carried into effect except in those instances in which that responsibility is specifically assigned to some other person by the board of directors; and, in general, shall discharge all duties incident to the office of the chief executive officer and such other duties as may be prescribed by the board of directors from time to time. Except in those instances in which the authority to execute is expressly delegated to another officer or agent of the corporation or a different mode of execution is expressly prescribed by the board of directors or these by-laws, the chief executive officer may execute for the corporation certificates for its shares, and any contracts, deeds, mortgages, bonds, or other instruments which the board of directors has authorized to be executed, and may accomplish such execution either under or without the seal of the corporation and either individually or with the secretary, any assistant secretary, or any other officer thereunto authorized by the board of directors, according to the requirements of the form of the instrument. The chief executive officer may vote all securities which the corporation is entitled to vote except as and to the extent such authority shall be vested in a different officer or agent of the corporation by the board of directors.

(b) President . The president shall, subject to the oversight of the board of directors and the supervisory powers of the chief executive officer (if there is a chief executive officer other than the president), have responsibility for the active management of the business of the corporation; and, in general, shall discharge all duties incident to the office of the president and such other duties as may be prescribed by the board of directors from time to time. The president shall possess the power to sign all certificates, contracts and other instruments which may be authorized by the board of directors, except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the board of directors to some other officer or agent of the corporation.

Section 5.7 The vice-presidents shall perform such duties and have such powers as the board of directors or the president may from time to time prescribe. A vice-president may execute contracts on behalf of the corporation pertaining to the normal course of his or her duties. In the absence of the president or in the event of his or her inability to act, the vice-president (or in the event there be more than one vice-president, the vice-presidents in the order designated, or in the absence of any designation, then in the order of their election) shall perform the duties of the president, and when so acting, shall have all the powers of and be subject to all the restrictions upon the president.

Section 5.8 The secretary shall attend all meetings of the board of directors and all meetings of the stockholders and record all the proceedings of the meetings of the corporation and of the board of directors in a book to be kept for that purpose and shall perform like duties for the standing committees when required. He or she shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the board of directors, and shall perform such other duties as may be prescribed by the board of directors or president, under whose supervision he or she shall be. The secretary shall have custody of the corporate seal of the corporation and he or she, or an assistant secretary, shall have authority to affix the same to any instrument requiring it and when so affixed, it may be attested by his or her signature or by the signature of such assistant secretary.

The board of directors may give general authority to any other officer to affix the seal of the corporation and to attest the affixing by his or her signature.

Section 5.9 The assistant secretary, or if there be more than one, the assistant secretaries in the order determined by the board of directors (or if there be no such determination, then in the order of their election), shall, in the absence of the secretary or in the event of his or her inability or refusal to act, perform the duties and exercise the powers of the secretary and shall perform such other duties and have such other powers as the board of directors may from time to time prescribe.

Section 5.10 The treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the corporation and shall deposit all monies and other valuable effects in the name and to the credit of the corporation in such depositories as may be designated by the board of directors. He or she shall disburse the funds of the corporation as may be ordered by the board of the directors, taking proper vouchers for such disbursements, and shall render to the president and the board of directors, at its regular meetings, or when the board of directors so requires, an account of all of his or her transactions as treasurer and of the financial condition of the corporation. If required by the board of directors, he or she shall give the corporation a bond (which shall be renewed every six years) in such sum and with such surety or sureties as shall be satisfactory to the board of directors for the faithful performance of the duties of his or her office and for the restoration to the corporation, in case of his or her death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his or her possession or under his or her control belonging to the corporation.

Section 5.11 The assistant treasurer, or if there shall be more than one, the assistant treasurers in the order determined by the board of directors (or if there be no such determination, then in the order of their election), shall, in the absence of the treasurer or in the event of his or her inability or refusal to act, perform the duties and exercise the powers of the treasurer and shall perform such other duties and have such other powers as the board of directors may from time to time prescribe.

ARTICLE VI

Section 6.1 Right to Indemnification . The corporation shall indemnify and hold harmless, to the fullest extent permitted by applicable law as it presently exists or may hereafter be amended, any person (a “Covered Person”) who was or is made or is threatened to be made a party or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a “proceeding”), by reason of the fact that he or she, or a person for whom he or she is the legal representative, is or was a director or executive officer of the corporation or, while a director or executive officer of the corporation, is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust, enterprise or nonprofit entity, including service with respect to employee benefit plans, against all liability and loss suffered and expenses (including attorneys’ fees) reasonably incurred by such Covered Person. Notwithstanding the preceding sentence, except as otherwise provided in Section 6.3, the corporation shall be required to indemnify a Covered Person in connection with a proceeding (or part thereof) commenced by such Covered Person only if the commencement of such proceeding (or part thereof) by the Covered Person was authorized in the specific case by the Board of Directors of the corporation.

Section 6.2 Prepayment of Expenses . The corporation shall to the fullest extent not prohibited by applicable law pay the expenses (including attorneys’ fees) incurred by a Covered Person in defending any proceeding in advance of its final disposition, provided , however , that, to the extent required by law, such payment of expenses in advance of the final disposition of the proceeding shall be made only upon receipt of an undertaking by the Covered Person to repay all amounts advanced if it should be ultimately determined that the Covered Person is not entitled to be indemnified under this Article VI or otherwise.

Section 6.3 Claims . If a claim for indemnification (following the final disposition of such proceeding) or advancement of expenses under this Article VI is not paid in full within thirty (30) days after a written claim therefor by the Covered Person has been received by the corporation, the Covered Person may file suit to recover the unpaid amount of such claim and, if successful in whole or in part, shall be entitled to be paid the expense of prosecuting such claim to the fullest extent permitted by law. In any such action the corporation shall have the burden of proving that the Covered Person is not entitled to the requested indemnification or advancement of expenses under applicable law.

Section 6.4 Nonexclusivity of Rights . The rights conferred on any Covered Person by this Article VI shall not be exclusive of any other rights which such Covered Person may have or hereafter acquire under any statute, provision of the certificate of incorporation, these bylaws, agreement, vote of stockholders or disinterested directors or otherwise.

Section 6.5 Other Sources . The corporation’s obligation, if any, to indemnify or to advance expenses to any Covered Person who was or is serving at its request as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, enterprise or nonprofit entity shall be reduced by any amount such Covered Person may collect as indemnification or advancement of expenses from such other corporation, partnership, joint venture, trust, enterprise or non-profit enterprise.

Section 6.6 Amendment or Repeal . Any right to indemnification or to advancement of expenses of any Covered Person arising hereunder shall not be eliminated or impaired by an amendment to or repeal of these bylaws after the occurrence of the act or omission that is the subject of the civil, criminal, administrative or investigative action, suit or proceeding for which indemnification or advancement of expenses is sought.

Section 6.7 Other Indemnification and Advancement of Expenses . This Article VI shall not limit the right of the corporation, to the extent and in the manner permitted by law, to indemnify and to advance expenses to persons other than Covered Persons when and as authorized by appropriate corporate action

Section 6.8 Executive Officers . For purposes of this Article VI, “executive officer” has the meaning set forth in Rule 3b-7 under the Securities Exchange Act of 1934, as amended.

ARTICLE VII

Certificates of Stock

Section 7.1 Certificates shall represent the shares of the corporation, provided that the board of directors of the corporation may provide by resolution or resolutions that some or all of any or all classes or series of its stock shall be uncertificated shares. Any such resolution shall not apply to shares represented by a certificate until such certificate is surrendered to the corporation. Notwithstanding the adoption of such a resolution by the board of directors, every holder of stock represented by certificates shall be entitled to have a certificate signed by, or in the name of the corporation by, (i) the chairperson or vice-chairperson of the board of directors, or the president or vice-president, and (ii) the treasurer or an assistant treasurer, or the secretary or an assistant secretary of the corporation, representing the number of shares registered in certificate form.

Section 7.2 Where a certificate is countersigned (1) by a transfer agent other than the corporation or its employee, or (2) by a registrar other than the corporation or its employee, any other signatures on the certificate may be facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the corporation with the same effect as if he or she were such officer, transfer agent or registrar at the date of issue.

Section 7.3 Subject to the foregoing, certificates for stock of the corporation shall be in such form as the board of directors may from time to time prescribe.

Lost Certificates

Section 7.4 The board of directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that

fact by the person claiming the certificate of stock to be lost, stolen or destroyed. When authorizing such issue of a new certificate or certificates, the board of directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate or certificates, or his or her legal representative, to advertise the same in such manner as it shall require and/or give the corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the corporation or its transfer agent or registrar with respect to the certificate alleged to have been lost, stolen or destroyed.

Transfers of Stock

Section 7.5 No transfer of stock shall be valid as against the corporation for any purpose until such transfer has been entered on the stock records of the corporation by an entry showing from and to whom such stock is transferred. Transfers of stock shall be made on the stock records of the corporation and (i) with respect to stock represented by a certificate, upon surrender of the previously issued certificate which is outstanding and not canceled, duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, and (ii) with respect to uncertificated shares, upon receipt of proper transfer instructions from the record holder thereof and compliance with appropriate procedures for transferring shares in uncertificated form. Subject to the provisions of the certificate of incorporation and these by-laws, the board of directors may prescribe such additional rules and regulations as it may deem appropriate relating to the issue, transfer and registration of shares of the corporation.

Registered Stockholders

Section 7.6 The corporation shall be entitled to recognize the exclusive right of a person registered on the stock records of the corporation as the owner of shares to receive dividends and to vote as such owner and to hold liable for calls and assessments a person registered on the stock records of the corporation as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the General Corporation Law of Delaware.

ARTICLE VIII

Conflict of Interests

Section 8.1 No contract or transaction between the corporation and one or more of its directors or officers, or between the corporation and any other corporation, partnership, association, or other organization in which one or more of its directors or officers are directors or officers, or have a financial interest, shall be void or voidable solely for this reason, or solely because the director or officer is present at or participates in the meeting of the board of committee thereof which authorizes the contract or transaction, or solely because his, her or their votes are counted for such purpose, if:

(1)

The material facts as to his relationship or interest and as to the contract or transaction are disclosed or are known to the board of directors or the committee, and the board or committee in good faith authorizes the contract or transaction by the affirmative vote of a majority of the disinterested directors, even though the disinterested directors be less than a quorum; or

(2)

The material facts as to his or her relationship or interest and as to the contract or transaction are disclosed or are known to the stockholders entitled to vote thereon, and the contract or transaction is specifically approved in good faith by vote of the stockholders; or

(3)

The contract or transaction is fair as to the corporation as of the time it is authorized, approved or ratified, by the board of directors, a committee thereof, or the stockholders.

Section 8.2 Common or interested directors may be counted in determining the presence of a quorum at a meeting of the board of directors or of a committee which authorizes the contract or transaction.

ARTICLE IX

General Provisions

Dividends

Section 9.1 Dividends upon the capital stock of the corporation, subject to the provisions of the certificate of incorporation, if any, may be declared by the board of directors at any regular or special meeting, pursuant to law. Dividends may be paid in cash, in property, or in shares of the capital stock or rights to acquire the same, subject to the provisions of the certificate of incorporation.

Section 9.2 Before payment of any dividend, there may be set aside out of any funds of the corporation available for dividends such sum or sums as the directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the corporation, or for such other purpose as the directors shall think conducive to the interest of the corporation, and the directors may modify or abolish any such reserve in the manner in which it is created.

Checks

Section 9.3 All checks or demands for money and notes of the corporation shall be signed by such officer or officers or such other person or persons as the board of directors may from time to time designate.

Fiscal Year

Section 9.4 The fiscal year of the corporation shall be fixed by resolution of the board of directors.

Seal

Section 9.5 The corporate seal shall have inscribed thereon the name of the corporation. The seal may be used by causing it or a facsimile thereof to be impressed, affixed or otherwise reproduced.

ARTICLE X

Amendments

These by-laws may be altered, amended, or repealed or new by-laws may be adopted only in the manner provided in the corporation’s certificate of incorporation.

(Dated as of May 1, 2010)

Exhibit 10.1

INDEMNIFICATION AGREEMENT

This Indemnification Agreement (“ Agreement ”) is made as of May 1, 2010 by and between Zebra Technologies Corporation, a Delaware corporation (the “ Company ”), and (“ Indemnitee ”). This Agreement supersedes and replaces any and all previous Agreements between the Company and Indemnitee covering the subject matter of this Agreement.

RECITALS

WHEREAS, there is a risk that qualified persons will be reluctant to serve corporations as directors or officers or in other capacities unless they are provided with adequate protection through insurance or adequate indemnification against risks of claims and actions against them arising out of their service to and activities on behalf of the corporation;

WHEREAS, the Board of Directors of the Company (the “ Board ”) has determined that, in order to attract and retain qualified individuals, the Company will attempt to maintain, at its sole expense, liability insurance to protect persons serving the Company and its subsidiaries from certain liabilities;

WHEREAS, while the furnishing of such insurance has been a customary practice among United States-based corporations and other business enterprises, the Company believes that there is a risk that such insurance may be available in the future at higher premiums and with more coverage exclusions and that directors, officers, and other persons in service to corporations or business enterprises can be subjected to expensive and time-consuming litigation relating to, among other things, matters that traditionally would have been brought only against the corporation or business enterprise itself;

WHEREAS, the Amended and Restated By-laws (the “ By-laws ”) and the Certificate of Incorporation (the “ Certificate of Incorporation ”) of the Company require indemnification of the directors of the Company, [the By-laws require indemnification of the executive officers of the Company,] and Indemnitee may also be entitled to indemnification pursuant to the General Corporation Law of the State of Delaware (the “ DGCL ”);

WHEREAS, the By-laws, the Certificate of Incorporation and the DGCL expressly provide that the indemnification provisions set forth therein are not exclusive, and thereby contemplate that contracts may be entered into between the Company and members of the Board, officers and other persons with respect to indemnification;

WHEREAS, the uncertainties relating to such insurance and to indemnification have increased the difficulty of attracting and retaining qualified persons;

WHEREAS, the Board has determined that the increased difficulty in attracting and retaining qualified persons is detrimental to the best interests of the Company and its stockholders and that the Company should act to assure such persons that there will be increased certainty of such protection in the future;

WHEREAS, it is reasonable, prudent and necessary for the Company contractually to obligate itself to indemnify, and to advance expenses on behalf of, such persons to the fullest extent permitted by applicable law so that they will serve or continue to serve the Company free from undue concern that they will not be so indemnified;

WHEREAS, this Agreement is a supplement to and in furtherance of the By-laws and the Certificate of Incorporation and any resolutions adopted pursuant thereto, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder; and

WHEREAS, the Company desires that the Indemnitee serve as an officer or director with adequate protection against claims and actions arising out of service to and activities on behalf of the Company, and Indemnitee is willing to serve, continue to serve and to take on additional service for or on behalf of the Company.

NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:

Section 1. Services to the Company. [Indemnitee agrees to continue to serve as a director of the Company,] [Indemnitee agrees to continue to serve as an officer of the Company,] including, at the request of the Company, as a director, officer, employee, agent or fiduciary of another Enterprise. Indemnitee may at any time and for any reason resign from such position (subject to any other contractual obligation or any obligation imposed by operation of law), in which event the Company shall have no obligation under this Agreement to continue Indemnitee in such position. This Agreement shall not be deemed an employment contract between the Company (or any of its subsidiaries or any Enterprise) and Indemnitee. Indemnitee specifically acknowledges that Indemnitee’s employment with the Company (or any of its subsidiaries or any Enterprise), if any, is at will, and the Indemnitee may be discharged at any time for any reason, with or without cause, except as may be otherwise provided in any written employment contract between Indemnitee and the Company (or any of its subsidiaries or any Enterprise), other applicable formal severance policies adopted by the Board or by the Certificate of Incorporation, the Company’s By-laws or the DGCL. The foregoing notwithstanding, this Agreement shall continue in force after Indemnitee has ceased to serve as [a director as provided in Section 16 hereof.] [an officer of the Company or at the request of the Company, as a director, officer, employee, agent or fiduciary of another Enterprise, as provided in Section 16 hereof.]

Section 2. Definitions. As used in this Agreement:

(a) References to “ agent ” shall mean any person who is or was a director, officer, or employee of the Company or a subsidiary of the Company or other person authorized by the Company to act for the Company, and includes such person serving in such capacity as a director, officer, employee, fiduciary or other official of another Enterprise.

(b) A “ Change in Control ” shall be deemed to occur upon the earliest to occur after the date of this Agreement of any of the following events:

i.	Acquisition of Stock by Third Party. Any Person, including a group as defined in Section 13(d)(3) of the Exchange Act, is or becomes the Beneficial Owner (except that a Person shall be deemed to be a Beneficial Owner of all shares that any such Person

shall be deemed to have the right to acquire, whether such right is exercisable immediately or only after the passage of time) of more than thirty five percent (35%) of the total voting power of the then outstanding voting equity securities of the Company entitled to vote generally in the election of directors (“ Outstanding Company Voting Securities ”); provided, however, that a Person shall not be deemed the Beneficial Owner of shares tendered pursuant to a tender or exchange offer made by that Person or any affiliate of that Person until the tendered shares are accepted for purchase or exchange; provided, further, that a “Change in Control” shall not be deemed to occur as a result of (i) any acquisition of equity securities by the Company, (ii) any acquisition of equity securities directly from the Company (including through an underwriter or other financial intermediary), other than (x) an acquisition by virtue of the exercise of a conversion privilege unless the security being so converted was itself directly acquired from the Company, or (y) in connection with the acquisition by the Company or its affiliates of a business, or (iii) any acquisition by an employee benefit plan (or related trust) sponsored or maintained by the Company or any entity controlled by the Company;

ii.

Change in Board of Directors. Within any period of 24 consecutive months, persons who were members of the Board immediately prior to such 24-month period, together with any persons who were first elected as directors (other than as a result of any settlement of a proxy or consent solicitation contest or any action taken to avoid such a contest) during such 24-month period by or upon the recommendation of persons who were members of the Board immediately prior to such 24-month period and who constituted a majority of the Board at the time of such election (“ Incumbent Directors ”), cease to constitute a majority of the Board;

iii.

Liquidation. The approval by the shareholders of the Company of a complete liquidation or dissolution of the Company other than to a corporation which would satisfy the requirements of sub-clauses (1), (2) and (3) of clause (iv) of this definition of “Change in Control,” assuming for this purpose that such liquidation or dissolution was a Business Combination; and

iv.

Corporate Transactions. Consummation of a reorganization, merger or consolidation of the Company or any direct or indirect subsidiary of the Company or sale or other disposition of all or substantially all of the assets of the Company (a “ Business Combination ”), in each case, unless, following such Business Combination, (1) all or substantially all of the individuals and entities who were the Beneficial Owners, respectively, of the Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than fifty percent (50%) of the then-outstanding voting securities entitled to vote generally in the election of directors of the corporation resulting from such Business Combination (which shall include for these purposes, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination, of Outstanding Company Voting Securities, (2) no Person (excluding any corporation resulting from such Business Combination or any employee benefit plan (or

related trust) of the Company or such corporation resulting from such Business Combination and any Person beneficially owning, immediately prior to such Business Combination, directly or indirectly, 35% or more of the Outstanding Company Voting Securities) beneficially owns, directly or indirectly, thirty five percent (35%) or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination, or the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors, and (3) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were Incumbent Directors at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination.

For purposes of this Section 2(b), the following terms shall have the following meanings:

(A) “ Exchange Act ” shall mean the Securities Exchange Act of 1934, as amended from time to time.

(B) “ Person ” shall have the meaning as set forth in Sections 13(d) and 14(d) of the Exchange Act; provided, however, that Person shall exclude (i) the Company, (ii) any trustee or other fiduciary holding securities under an employee benefit plan of the Company, and (iii) any corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company.

(C) “ Beneficial Owner ” shall have the meaning given to such term in Rule 13d-3 under the Exchange Act; provided, however, that Beneficial Owner shall exclude any Person otherwise becoming a Beneficial Owner by reason of the stockholders of the Company approving a merger of the Company with another entity.

(c) “ Corporate Status ” describes the status of a person who is or was a director, trustee, partner, managing member, officer, employee, agent or fiduciary of the Company or of any Enterprise.

(d) “ Disinterested Director ” shall mean a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.

(e) “ Enterprise ” shall mean the Company and any other corporation, limited liability company, partnership, joint venture, trust or other enterprise of which Indemnitee is or was serving at the request of the Company as a director, officer, trustee, partner, managing member, employee, agent or fiduciary.

(f) “ Expenses ” shall include all reasonable attorneys’ fees, retainers, court costs, transcript costs, fees of experts and other professionals, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service

fees, fax transmission charges, secretarial services, any federal, state, local or foreign taxes imposed on Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement, ERISA excise taxes and penalties, and all other disbursements, obligations or expenses of the types customarily incurred in connection with, or as a result of, prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a deponent or witness in, or otherwise participating in, a Proceeding. Expenses also shall include (i) Expenses incurred in connection with any appeal resulting from any Proceeding, including without limitation the premium, security for, and other costs relating to any cost bond, supersedeas bond, or other appeal bond or its equivalent, (ii) expenses incurred in connection with recovery under any directors’ and officers’ liability insurance policies maintained by the Company, regardless of whether the Indemnitee is ultimately determined to be entitled to such indemnification, advancement or Expenses or insurance recovery, as the case may be, and (iii) for purposes of Section 14(d) only, Expenses incurred by or on behalf of Indemnitee in connection with the interpretation, enforcement or defense of Indemnitee’s rights under this Agreement, by litigation or otherwise. The parties agree that for the purposes of any advancement of Expenses for which Indemnitee has made written demand to the Company in accordance with this Agreement, all Expenses included in such demand that are certified by affidavit of Indemnitee’s counsel as being reasonable shall be presumed conclusively to be reasonable. Expenses, however, shall not include amounts paid in settlement by Indemnitee or the amount of judgments or fines against Indemnitee.

(g) “ Independent Counsel ” shall mean a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither presently is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party (other than with respect to matters concerning the Indemnitee under this Agreement, or of other indemnitees under similar indemnification agreements), or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement. The Company agrees to pay the reasonable fees and expenses of the Independent Counsel referred to above and to fully indemnify such counsel against any and all Expenses, claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.

(h) The term “ Proceeding ” shall include any threatened, pending or completed action, suit, claim, counterclaim, cross claim, arbitration, mediation, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought in the right of the Company or otherwise and whether of a civil, criminal, administrative, regulatory, legislative, or investigative (formal or informal) nature, including any appeal therefrom, in which Indemnitee was, is or will be involved as a party, potential party, non-party witness or otherwise by reason of the fact that Indemnitee is or was a director or officer of the Company, by reason of any action taken by Indemnitee (or a failure to take action by Indemnitee) or of any action (or failure to act) on his part while acting pursuant to his Corporate Status, in each case whether or not serving in such capacity at the time any liability or Expense is incurred for which indemnification, reimbursement, or advancement of Expenses can be provided under this Agreement. If the Indemnitee believes in good faith that a given situation may lead to or culminate in the institution of a Proceeding, this shall be considered a Proceeding under this paragraph.

(i) Reference to “ other enterprise ” shall include employee benefit plans; references to “ fines ” shall include any excise tax assessed with respect to any employee benefit plan; references to “ serving at the request of the Company ” shall include any service as a director, officer, employee or agent of the Company which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner he reasonably believed to be in the best interests of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the Company” as referred to in this Agreement.

Section 3. Indemnity in Third-Party Proceedings. The Company shall indemnify Indemnitee in accordance with the provisions of this Section 3 if Indemnitee is, or is threatened to be made, a party to or a participant in any Proceeding, other than a Proceeding by or in the right of the Company to procure a judgment in its favor. Pursuant to this Section 3, Indemnitee shall be indemnified to the fullest extent permitted by applicable law against all Expenses, judgments, liabilities, fines, penalties and amounts paid in settlement (including all interest, assessments and other charges paid or payable in connection with or in respect of such Expenses, judgments, liabilities, fines, penalties and amounts paid in settlement) actually and reasonably incurred by or on behalf of Indemnitee in connection with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Company and, in the case of a criminal Proceeding had no reasonable cause to believe that Indemnitee’s conduct was unlawful. The parties hereto intend that this Agreement shall provide to the fullest extent permitted by law for indemnification in excess of that expressly permitted by statute, including, without limitation, any indemnification provided by the Certificate of Incorporation, the By-laws, vote of its stockholders or disinterested directors or applicable law.

Section 4. Indemnity in Proceedings by or in the Right of the Company. The Company shall indemnify Indemnitee in accordance with the provisions of this Section 4 if Indemnitee is, or is threatened to be made, a party to or a participant in any Proceeding by or in the right of the Company to procure a judgment in its favor. Pursuant to this Section 4, Indemnitee shall be indemnified to the fullest extent permitted by applicable law against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Company. If applicable law so provides, no indemnification for Expenses shall be made under this Section 4 in respect of any claim, issue or matter as to which Indemnitee shall have been finally adjudged by a court to be liable to the Company, unless and only to the extent that the Delaware Court of Chancery or any court in which the Proceeding was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnification.

Section 5. Indemnification for Expenses of a Party Who is Wholly or Partly Successful. Notwithstanding any other provisions of this Agreement, to the fullest extent permitted by applicable law and to the extent that Indemnitee is a party to (or a participant in) and is successful, on the merits or otherwise, in any Proceeding or in defense of any claim, issue or matter therein, in whole or in part, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with or related to each successfully resolved claim, issue or matter to the fullest extent permitted by law. For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.

Section 6. Indemnification For Expenses of a Witness. Notwithstanding any other provision of this Agreement, to the fullest extent permitted by applicable law and to the extent that Indemnitee is, by reason of his Corporate Status, a witness or otherwise asked to participate in any aspect of a Proceeding to which Indemnitee is not a party, Indemnitee shall be indemnified against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection therewith.

Section 7. Partial Indemnification. If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of Expenses, but not, however, for the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is entitled.

Section 8. Additional Indemnification.

(a) Notwithstanding any limitation in Sections 3, 4, or 5, the Company shall indemnify Indemnitee to the fullest extent permitted by applicable law if Indemnitee is a party to or threatened to be made a party to or a participant in any Proceeding (including a Proceeding by or in the right of the Company to procure a judgment in its favor) against all Expenses, judgments, fines and amounts paid in settlement (including all interest, assessments and other charges paid or payable in connection with or in respect of such Expenses, judgments, fines and amounts paid in settlement) actually and reasonably incurred by or on behalf of Indemnitee in connection with the Proceeding.

(b) For purposes of Section 8(a), the meaning of the phrase “to the fullest extent permitted by applicable law” shall include, but not be limited to:

i. to the fullest extent permitted by the provision of the DGCL that authorizes or contemplates additional indemnification by agreement, or the corresponding provision of any amendment to or replacement of the DGCL, and

ii. to the fullest extent authorized or permitted by any amendments to or replacements of the DGCL adopted after the date of this Agreement that increase the extent to which a corporation may indemnify its officers and directors.

Section 9. Exclusions. Notwithstanding any other provision in this Agreement, the Company shall not be obligated under this Agreement to make any indemnification payment in connection with any claim made against Indemnitee:

(a) for which payment has actually been made to or on behalf of Indemnitee under any insurance policy or other indemnity provision, except with respect to any excess beyond the amount paid under any insurance policy or other indemnity provision; or

(b) for (i) an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company within the meaning of Section 16(b) of the Exchange Act or similar provisions of state statutory law or common law, or (ii) any payment to the Company by Indemnitee of any bonus or other incentive-based or equity-based compensation or of any profits realized by the Indemnitee from the sale of securities of the Company, as required in each case under the Exchange Act (including any such reimbursements that arise pursuant to Section 304 of the Sarbanes-Oxley Act of 2002 (the “ Sarbanes-Oxley Act ”), or the payment to the Company of profits arising from the purchase and sale by Indemnitee of securities in violation of Section 306 of the Sarbanes-Oxley Act) or as required pursuant to any policy adopted by the Board; or

(c) except as provided in Section 14(d) of this Agreement, in connection with any Proceeding (or any part of any Proceeding) initiated by Indemnitee, including any Proceeding (or any part of any Proceeding) initiated by Indemnitee against the Company or its directors, officers, employees or other indemnitees, unless (i) the Board authorized the Proceeding (or any part of any Proceeding) prior to its initiation, (ii) such payment arises in connection with any mandatory counterclaim or cross-claim or affirmative defense brought or raised by Indemnitee in any Proceeding (or any part of any Proceeding), or (iii) the Company provides the indemnification, in its sole discretion, pursuant to the powers vested in the Company under applicable law.

Section 10. Advances of Expenses. Notwithstanding any provision of this Agreement to the contrary (other than Section 14(d)), the Company shall advance, to the extent not prohibited by law, the Expenses incurred by or on behalf of Indemnitee in connection with any Proceeding (or any part of any Proceeding) not initiated by Indemnitee, and such advancement shall be made within thirty (30) days after the receipt by the Company of a statement or statements requesting such advances from time to time (which shall include invoices received by the Indemnitee in connection with such Expenses but, in the case of invoices in connection with legal services, any references to legal work performed or to expenditures made that would cause Indemnitee to waive any privilege accorded by applicable law shall not be so included), whether prior to or after final disposition of any Proceeding. Advances shall be unsecured and interest free. Advances shall be made without regard to Indemnitee’s ability to repay the Expenses and without regard to Indemnitee’s ultimate entitlement to indemnification under the other provisions of this Agreement. In accordance with Section 14(d), advances shall include any and all reasonable Expenses incurred pursuing an action to enforce this right of advancement,

including Expenses incurred preparing and forwarding statements to the Company to support the advances claimed. The Indemnitee shall qualify for advances upon the execution and delivery to the Company of this Agreement, which shall constitute an undertaking providing that the Indemnitee undertakes to repay the amounts advanced (without interest) to the extent that it is ultimately determined that Indemnitee is not entitled to be indemnified by the Company. No other form of undertaking shall be required other than the execution of this Agreement. This Section 10 shall not apply to any claim made by Indemnitee for which indemnity is excluded pursuant to Section 9.

Section 11. Procedure for Notification and Defense of Claim.

(a) Indemnitee shall notify the Company in writing of any matter with respect to which Indemnitee intends to seek indemnification or advancement of Expenses hereunder as soon as reasonably practicable following the receipt by Indemnitee of written notice thereof or Indemnitee’s becoming aware thereof. The written notification to the Company shall include a description of the nature of the Proceeding and the facts underlying the Proceeding, in each case to the extent known to Indemnitee. To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification following the final disposition of such Proceeding. The failure by Indemnitee to notify the Company hereunder will not relieve the Company from any liability which it may have to Indemnitee hereunder or otherwise than under this Agreement, and any delay in so notifying the Company shall not constitute a waiver by Indemnitee of any rights under this Agreement, except to the extent (solely with respect to the indemnity hereunder) that such failure or delay materially prejudices the Company. The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board in writing that Indemnitee has requested indemnification.

(b) The Company will be entitled to participate in the Proceeding at its own expense.

(c) The Company shall not settle any Proceeding (in whole or in part) if such settlement would impose any Expense, judgment, liability, fine, penalty or limitation on Indemnitee which Indemnitee is not entitled to be indemnified hereunder without the Indemnitee’s prior written consent.

Section 12. Procedure Upon Application for Indemnification.

(a) Upon written request by Indemnitee for indemnification pursuant to Section 11(a), a determination, if required by applicable law, with respect to Indemnitee’s entitlement thereto shall be made in the specific case: (i) if a Change in Control shall have occurred, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee; or (ii) if a Change in Control shall not have occurred, (A) by a majority vote of the Disinterested Directors, even though less than a quorum of the Board, (B) by a committee of Disinterested Directors designated by a majority vote of the Disinterested Directors, even though

less than a quorum of the Board, (C) if there are no such Disinterested Directors or, if such Disinterested Directors so direct, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee or (D) if so directed by the Board, by the stockholders of the Company; and, if it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten (10) business days after such determination. Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitee’s entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination. Any costs or Expenses (including attorneys’ fees and disbursements) incurred by or on behalf of Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee’s entitlement to indemnification) and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom. The Company promptly will advise Indemnitee in writing with respect to any determination that Indemnitee is or is not entitled to indemnification, including a description of any reason or basis for which indemnification has been denied.

(b) In the event the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 12(a) hereof, the Independent Counsel shall be selected as provided in this Section 12(b). If a Change in Control shall not have occurred, the Independent Counsel shall be selected by the Board, and the Company shall give written notice to Indemnitee advising Indemnitee of the identity of the Independent Counsel so selected. If a Change in Control shall have occurred, the Independent Counsel shall be selected by Indemnitee (unless Indemnitee shall request in writing that such selection be made by the Board, in which event the preceding sentence shall apply), and Indemnitee shall give written notice to the Company advising the Company of the identity of the Independent Counsel so selected. In either event, Indemnitee or the Company, as the case may be, may, within ten (10) business days after such written notice of selection shall have been given, deliver to the Company or to Indemnitee, as the case may be, a written objection to such selection; provided , however , that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of “Independent Counsel” as defined in Section 2 of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion. Absent a proper and timely objection, the person so selected shall act as Independent Counsel. If such written objection is so made and substantiated, the Independent Counsel so selected may not serve as Independent Counsel unless and until such objection is withdrawn or the Delaware Court has determined that such objection is without merit. If, within twenty (20) days after the later of submission by Indemnitee of a written request for indemnification pursuant to Section 11(a) hereof and the final disposition of the Proceeding, no Independent Counsel shall have been selected and not objected to, either the Company or Indemnitee may petition the Delaware Court for resolution of any objection which shall have been made by the Company or Indemnitee to the other’s selection of Independent Counsel and/or for the appointment as Independent Counsel of a person selected by such court or by such other person as such court shall designate, and the person with respect to whom all objections are so resolved or the person so appointed shall act as Independent Counsel under Section 12(a) hereof. Upon the due commencement of any judicial proceeding or arbitration pursuant to Section 14(a) of this Agreement, Independent Counsel shall be discharged and relieved of any further responsibility in such capacity (subject to the applicable standards of professional conduct then prevailing).

(c) If the Company disputes a portion of the amounts for which indemnification is requested, the undisputed portion shall be paid and only the disputed portion withheld pending resolution of any such dispute.

Section 13. Presumptions and Effect of Certain Proceedings.

(a) In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall, to the fullest extent not prohibited by law, presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 11(a) of this Agreement, and the Company shall, to the fullest extent not prohibited by law, have the burden of proof to overcome that presumption in connection with the making by any person, persons or entity of any determination contrary to that presumption. Neither the failure of the Company (including by its directors or Independent Counsel) to have made a determination prior to the commencement of any action pursuant to this Agreement that indemnification is proper in the circumstances because Indemnitee has met the applicable standard of conduct, nor an actual determination by the Company (including by its directors or Independent Counsel) that Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct.

(b) Subject to Section 14(e), if the person, persons or entity empowered or selected under Section 12 of this Agreement to determine whether Indemnitee is entitled to indemnification shall not have made a determination within sixty (60) days after receipt by the Company of the request therefor, the requisite determination of entitlement to indemnification shall, to the fullest extent not prohibited by law, be deemed to have been made and Indemnitee shall be entitled to such indemnification, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law; provided , however , that such 60-day period may be extended for a reasonable time, not to exceed an additional thirty (30) days, if the person, persons or entity making the determination with respect to entitlement to indemnification in good faith requires such additional time for the obtaining or evaluating of documentation and/or information relating thereto; and provided , further , that the foregoing provisions of this Section 13(b) shall not apply (i) if the determination of entitlement to indemnification is to be made by the stockholders pursuant to Section 12(a) of this Agreement and if (A) within fifteen (15) days after receipt by the Company of the request for such determination the Board has resolved to submit such determination to the stockholders for their consideration at an annual meeting thereof to be held within seventy-five (75) days after such receipt and such determination is made thereat, or (B) a special meeting of stockholders is called within fifteen (15) days after such receipt for the purpose of making such determination, such meeting is held for such purpose within sixty (60) days after having been so called and such determination is made thereat, or (ii) if the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 12(a) of this Agreement.

(c) The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that his conduct was unlawful.

(d) For purposes of any determination of good faith, Indemnitee shall be deemed to have acted in good faith if Indemnitee’s action is based on the records or books of account of the Enterprise, including financial statements, or on information supplied to Indemnitee by the directors or officers of the Enterprise in the course of their duties, or on the advice of legal counsel for the Enterprise or on information or records given or reports made to the Enterprise by an independent certified public accountant or by an appraiser or other expert selected with the reasonable care by the Enterprise. The provisions of this Section 13(d) shall not be deemed to be exclusive or to limit in any way the other circumstances in which the Indemnitee may be deemed to have met the applicable standard of conduct set forth in this Agreement. Whether or not the foregoing provisions of this Section 13(d) are satisfied, it shall in any event be presumed that Indemnitee has at all times acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company.

(e) The knowledge and/or actions, or failure to act, of any director, officer, trustee, partner, managing member, fiduciary, agent or employee of the Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement.

Section 14. Remedies of Indemnitee.

(a) Subject to Section 14(e), in the event that (i) a determination is made pursuant to Section 12 of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 10 of this Agreement, (iii) no determination of entitlement to indemnification shall have been made pursuant to Section 12(a) of this Agreement within ninety (90) days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to Section 5, 6 or 7 or the last sentence of Section 12(a) of this Agreement within ten (10) business days after receipt by the Company of a written request therefor, (v) payment of indemnification pursuant to Section 3, 4 or 8 of this Agreement is not made within ten (10) business days after a determination has been made that Indemnitee is entitled to indemnification, or (vi) the Company or any other person or entity takes or threatens to take any action to declare this Agreement void or unenforceable, or institutes any litigation or other action or proceeding designed to deny, or to recover from, Indemnitee the benefits provided or intended to be provided to the Indemnitee hereunder, Indemnitee shall be entitled to an adjudication by a court of Indemnitee’s entitlement to such indemnification or advancement of Expenses. Alternatively, Indemnitee, at Indemnitee’s option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the Commercial Arbitration Rules of the American Arbitration Association. Indemnitee shall commence such proceeding seeking an adjudication or an award in arbitration within 180

days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 14(a); provided , however , that the foregoing clause shall not apply in respect of a proceeding brought by Indemnitee to enforce Indemnitee’s rights under Section 5 of this Agreement. The Company shall not oppose Indemnitee’s right to seek any such adjudication or award in arbitration.

(b) In the event that a determination shall have been made pursuant to Section 12(a) of this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding or arbitration commenced pursuant to this Section 14 shall be conducted in all respects as a de novo trial, or arbitration, on the merits and Indemnitee shall not be prejudiced by reason of that adverse determination. In any judicial proceeding or arbitration commenced pursuant to this Section 14 the Company shall have the burden of proving Indemnitee is not entitled to indemnification or advancement of Expenses, as the case may be.

(c) If a determination shall have been made pursuant to Section 12(a) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 14, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law.

(d) The Company shall, to the fullest extent not prohibited by law, be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 14 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the Company is bound by all the provisions of this Agreement. It is the intent of the Company that, to the fullest extent permitted by law, the Indemnitee not be required to incur legal fees or other Expenses associated with the interpretation, enforcement or defense of Indemnitee’s rights under this Agreement by litigation or otherwise because the cost and expense thereof would substantially detract from the benefits intended to be extended to the Indemnitee hereunder. The Company shall, to the fullest extent permitted by law, indemnify Indemnitee against any and all Expenses and, if requested by Indemnitee, shall (within ten (10) business days after receipt by the Company of a written request therefor) advance, to the extent not prohibited by law, such Expenses to Indemnitee, which are incurred by or on behalf of Indemnitee in connection with any action brought by Indemnitee for indemnification or advancement of Expenses from the Company under this Agreement or under any directors’ and officers’ liability insurance policies maintained by the Company if, in the case of indemnification, Indemnitee is wholly successful on the underlying claims; if Indemnitee is not wholly successful on the underlying claims, then such indemnification shall be only to the extent Indemnitee is successful on such underlying claims or otherwise as permitted by law, whichever is greater.

(e) Notwithstanding anything in this Agreement to the contrary, no determination as to entitlement of Indemnitee to indemnification under this Agreement shall be required to be made prior to the final disposition of the Proceeding.

Section 15. Non-exclusivity; Survival of Rights; Insurance; Subrogation.

(a) The rights of indemnification and to receive advancement of Expenses as provided by this Agreement (i) shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Certificate of Incorporation, the By-laws, any agreement, a vote of stockholders or a resolution of directors, or otherwise and (ii) shall be interpreted independently of, and without reference to, any other such rights to which Indemnitee may at any time be entitled. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his Corporate Status prior to such amendment, alteration or repeal. To the extent that a change in Delaware law, whether by statute or judicial decision, permits greater indemnification or advancement of Expenses than would be afforded currently under the [By-laws] [Certificate of Incorporation] and this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.

(b) To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, officers, employees, or agents of the Enterprise, Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any such director, officer, employee or agent under such policy or policies. If, at the time of the receipt of a notice of a claim pursuant to the terms hereof, the Company has director and officer liability insurance in effect, the Company shall give prompt notice of such claim or of the commencement of a Proceeding, as the case may be, to the insurers in accordance with the procedures set forth in the respective policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such Proceeding in accordance with the terms of such policies.

(c) In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.

(d) The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable (or for which advancement is provided hereunder) hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.

(e) The Company’s obligation to indemnify or advance Expenses hereunder to Indemnitee who is or was serving at the request of the Company as a director, officer, trustee, partner, managing member, fiduciary, employee or agent of any other corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other Enterprise shall be reduced by any amount Indemnitee has actually received as indemnification or advancement of Expenses from such other corporation, limited liability company, partnership, joint venture, trust or other Enterprise.

Section 16. Duration of Agreement. This Agreement shall continue until and terminate upon the later of: (a) ten (10) years after the date that Indemnitee shall have ceased to serve as [a director] [an officer] of the Company or (b) one (1) year after the final termination of any Proceeding then pending in respect of which Indemnitee is granted rights of indemnification or advancement of Expenses hereunder and of any proceeding (including any appeal) commenced by Indemnitee pursuant to Section 14 of this Agreement relating thereto. The indemnification and advancement of Expenses rights provided by or granted pursuant to this Agreement shall be binding upon and be enforceable by the parties hereto and their respective successors and assigns (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of the Company), shall continue as to an Indemnitee who has ceased to be a director, officer, employee or agent of the Company or of any other Enterprise, and shall inure to the benefit of Indemnitee and Indemnitee’s spouse, assigns, heirs, devisees, executors and administrators and other legal representatives. The Company shall require and shall cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Company to, by written agreement, expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place.

Section 17. Severability. If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by law; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.

Section 18. Enforcement.

(a) The Company expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it hereby in order to induce Indemnitee to serve as a director or officer of the Company, and the Company acknowledges that Indemnitee is relying upon this Agreement in serving as a director or officer of the Company.

(b) This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof; provided , however , that this Agreement is a supplement to and in furtherance of the Certificate of Incorporation, the By-laws, any directors and officers insurance maintained by the Company and applicable law, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder.

Section 19. Modification and Waiver. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions of this Agreement nor shall any waiver constitute a continuing waiver.

Section 20. Notice by Indemnitee. Indemnitee agrees promptly to notify the Company in writing upon being served with any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification or advancement of Expenses covered hereunder. The failure of Indemnitee to so notify the Company shall not relieve the Company of any obligation which it may have to the Indemnitee under this Agreement or otherwise.

Section 21. Notices. All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been duly given if (a) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, (b) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed, (c) mailed by reputable overnight courier and receipted for by the party to whom said notice or other communication shall have been directed or (d) sent by facsimile transmission, with receipt of oral confirmation that such transmission has been received:

(a) If to Indemnitee, at the address indicated on the signature page of this Agreement, or such other address as Indemnitee shall provide to the Company.

(b) If to the Company to 475 Half Day Road, Suite 500, Lincolnshire, Illinois 60069; attention Corporate Secretary, or to any other address as may have been furnished to Indemnitee by the Company.

Section 22. Contribution. To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by or on behalf of Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Proceeding; and/or (ii) the relative fault of the Company (and its directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/or transaction(s).

Section 23. Applicable Law and Consent to Jurisdiction. This Agreement and the legal relations among the parties shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to its conflict of laws rules. Except with respect to any arbitration commenced by Indemnitee pursuant to Section 14(a) of this Agreement, the Company and Indemnitee hereby irrevocably and unconditionally (i) agree that any action or proceeding arising out of or in connection with this Agreement shall be brought only in the Chancery Court of the State of Delaware (the “ Delaware Court ”), and not in any other state or federal court in the United States of America or any court in any other country, (ii) consent to submit to the exclusive jurisdiction of the Delaware Court for purposes of any action or proceeding arising out of or in connection with this Agreement, (iii) appoint, to the extent such party is not otherwise subject to service of process in the State of Delaware, irrevocably RL&F Service Corp., One Rodney Square, 10th Floor, 10th and King Streets, Wilmington, Delaware 19801 as its agent in the State of Delaware as such party’s agent for acceptance of legal process in connection with any such action or proceeding against such party with the same legal force and validity as if served upon such party personally within the State of Delaware, (iv) waive any objection to the laying of venue of any such action or proceeding in the Delaware Court, and (v) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in the Delaware Court has been brought in an improper or inconvenient forum.

Section 24. Identical Counterparts. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement.

Section 25. Miscellaneous. The headings of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.

IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as of the day and year first above written.


ZEBRA TECHNOLOGIES CORPORATION						INDEMNITEE

By:
Name:						Name:
Office:						Address:

Exhibit 10.2

S TOCK A PPRECIATION R IGHTS A GREEMENT

This STOCK APPRECIATION RIGHTS AGREEMENT (this “SAR Agreement”), dated as of << Insert Grant Date as determined under Equity Grant Approval Process >> (the “Grant Date”), is between ZEBRA TECHNOLOGIES CORPORATION , a Delaware corporation (the “Company”), and <<Insert SAR Recipient’s Name>> (the “Participant”), relating to a stock appreciation right granted under the 2006 Zebra Technologies Corporation Incentive Compensation Plan (the “Plan”). Capitalized terms used in this SAR Agreement without definitions shall have the meanings ascribed to such terms in the Plan.

1.	Grant of Stock Appreciation Right .

(a)

Grant . Subject to the provisions of this SAR Agreement and pursuant to the provisions of the Plan, the Company hereby grants to the Participant as of the Grant Date a stock appreciation right (the “SAR”) covering <<Insert Number of Shares>> shares (the “SAR Shares”) of the Company’s Class A Common Stock, $0.01 par value per share (the “Stock”), at a price of << Insert Stock Price on Grant Date >> per share (the “SAR Price”). The SAR is not issued in tandem with an Option. This SAR Agreement shall be null and void unless the Participant accepts this SAR Agreement by either (i) electronically accepting this SAR Agreement through the Company’s electronic delivery and acceptance process operated by e*Trade or (ii) executing this SAR Agreement in the space provided below and returning it to the Company not later than June 5, 2010.

(b)

Term of the SAR . Unless the SAR terminates earlier pursuant to other provisions of the SAR Agreement, the SAR shall expire on the tenth (10 ^th ) anniversary of the Grant Date (the “Expiration Date”).

(c)

Nontransferability . The SAR shall be nontransferable, except by will or the laws of descent and distribution, or as otherwise permitted under the Plan.

2.	Vesting of the SAR .

(a)

General Vesting Rule . Prior to the Expiration Date, the SAR shall become and be exercisable on the anniversary of <<insert the Grant Date for annual awards or the hire date, the promotion date or the recognition date for new hire, promotion and recognition awards>> (the “Vesting Date”) as follows:


Vesting Date Anniversary		Percentage of SAR Exercisable

Prior to the first anniversary of the Vesting Date		0%

On or after the first anniversary of the Vesting Date		25%

On or after the second anniversary of the Vesting Date, an additional		25%

On or after the third anniversary of the Vesting Date, an additional		25%

On or after the fourth anniversary of the Vesting Date, an additional		25%

provided, however, except as otherwise provided for under this SAR Agreement, the Participant must remain employed by the Company or any Subsidiary continuously through the applicable vesting dates.

(b)

Additional Vesting Rules . Notwithstanding Section 2(a) hereof, the SAR shall be subject to the following additional vesting rules in the following circumstances:

(i)

Death or Disability . In the event the Participant’s employment with the Company and/or any Subsidiary is terminated due to the Participant’s death or Disability, any unvested portion of the SAR as of the date of such Participant’s termination of employment shall immediately become fully vested and exercisable and, along with any unexercised vested portion of the SAR, shall remain exercisable until the earlier of:

(A)

the Expiration Date; or

(B)

one (1) year after the date of the Participant’s termination of employment due to the Participant’s death or Disability.

In the event of the Participant’s death, the Participant’s beneficiary or estate may exercise the vested SAR.

(ii)

Retirement . In the event the Participant’s employment with the Company and/or any Subsidiary is terminated due to Retirement, any unexercised vested portion of the SAR as of the date of the Participant’s termination of employment shall remain exercisable until the earlier of:

(A)

the Expiration Date; or

(B)

one (1) year after the date of the Participant’s termination of employment due to Retirement.

For purposes of this SAR Agreement, “Retirement” means the Participant’s voluntary termination of employment with the Company and/or any Subsidiary after attaining either:

•

age fifty-five (55) with ten (10) or more complete years of service with the Company and/or any Subsidiary; or

•

age sixty-five (65).

(iii)

Termination for Cause . In the event the Participant’s employment with the Company and/or any Subsidiary is terminated for Cause, any unexercised SAR, whether vested or not, shall expire immediately, be forfeited, and be considered null and void. For purposes of this SAR Agreement, “Cause” has the meaning set forth in the employment agreement, if any, between the Company and/or any Subsidiary and the Participant or, if the Participant is not subject to such an agreement, “Cause” means, as determined by the Company in its sole discretion, termination of the Participant’s employment with the Company or any Subsidiary because of the Participant’s:

(A)

material breach (as determined by the Committee in good faith) of this SAR Agreement or of any other agreement to which the Participant and the Company are parties;

(B)

or material violation of Company policy, regardless of whether within or outside of his or her authority; or

(C)

willful or intentional misconduct; gross negligence; dishonest, fraudulent, or unethical behavior; or

(D)

other conduct involving serious moral turpitude in the performance of his or her duties; or

(E)

dishonesty, theft or conviction of any crime or offense involving money or property of the Company or any Subsidiary; or

(F)

breach of any fiduciary duty owing to the Company or any Subsidiary; or unauthorized disclosure of Confidential Information (as defined in Section 6(a) hereof) or unauthorized dissemination of Company Materials (as defined in Section 6(a) hereof); or

(G)

conduct that is, or could reasonably be expected to be, materially harmful to the Company or any of its subsidiaries or affiliates, as determined by the Committee in good faith.

(iv)

Other Termination of Employment . In the event the Participant’s employment with the Company or any Subsidiary is terminated for any reason other than as provided in Section 2(b)(i), (ii) or (iii) hereof, the unexercised vested portion of the SAR as of the date of such Participant’s termination of employment shall remain exercisable until the earliest of:

(A)

the Expiration Date; or

(B)

ninety (90) days after the date of the Participant’s involuntary (as to the Participant) termination of employment for reasons other than death, Disability, Retirement, or Cause; or

(C)

thirty (30) days after the date of the Participant’s voluntary termination of employment for reasons other than Retirement.

3.	Exercise of SAR.

(a) Notice of Exercise . Prior to the Expiration Date, the vested portion of the SAR may be exercised, in whole or in part, by delivering written notice to the Company in accordance with Section 7(j) hereof and in such form as the Company may require from time to time. Such notice of exercise shall specify the number of SAR Shares to be exercised.

(b) Payment . As of the date of exercise of the SAR, the Company shall settle the exercised portion of the SAR as provided in Section 7.5 of the Plan. The amount of the payment for each SAR Share exercised shall equal (i) the Fair Market Value of a share of Stock on the date of exercise, less (ii) the SAR Price for each such exercised SAR Share. The exercised SAR shall be settled in whole shares of Stock, and cash for the value of a fractional share of Stock.

(c) Payment of Taxes . If the Company is obligated to withhold an amount on account of any tax imposed as a result of the exercise of the SAR, the Participant shall be required to remit such amount to the Company, as provided in Section 17.1 of the Plan. Alternatively, subject to Committee approval, the Participant may elect to withhold a portion of the SAR exercise payment equal to the minimum statutory tax that would be imposed on the exercise, as provided under Section 17.2 of the Plan. The Participant acknowledges and agrees that the Participant is responsible for the tax consequences associated with the grant of the SAR and its exercise.

(d) Death Prior to Exercise . In the event of the Participant’s death prior to the exercise of any vested portion of the SAR, the Participant’s beneficiary or estate may exercise the vested SAR.

Compliance with Federal and State Law . The Company reserves the right to delay the Participant’s exercise of any portion of the SAR if (a) the Company’s issuance of Stock upon such exercise would violate any applicable federal or state securities laws or any other applicable laws or regulations, or (b) the Company reasonably determines that payment of such SAR portion would not be deductible under Code Section 162(m). The Participant may not sell or otherwise dispose of any portion of the SAR in violation of any applicable law. The Company may postpone issuing and delivering any Stock in payment for the exercise of such portion of the SAR for so long as the Company reasonably determines to be necessary to satisfy the following:

(i)

its completing or amending any securities registration or qualification of the Stock or it or the Participant satisfying any exemption from registration under any federal or state law, rule, or regulation;

(ii)

its receiving proof it considers satisfactory that a person seeking to exercise the SAR after the Participant’s death is entitled to do so;

(iii)

Participant complying with any requests for representations under the Plan; and

(iv)

Participant complying with any federal, state, or local tax withholding obligations.

5.	Change in Control . Subject to Section 15 of the Plan:

(a) Notwithstanding any provision in this Agreement, in the event of a Change in Control pursuant to Section 2.5(c) or (d) of the Plan in connection with which holders of Shares may receive consideration consisting solely of shares of common stock that are registered under Section 12 of the Exchange Act (and disregarding the payment of cash in lieu of fractional shares), this SAR shall become immediately exercisable in full and, along with the unexercised vested portion of the SAR, shall remain exercisable through the Expiration Date, and there shall be substituted for each SAR Share then subject to this SAR Agreement, the number and class of shares into which each outstanding Share shall be converted pursuant to such Change in Control. In the event of any such substitution, the SAR Price shall be appropriately adjusted by the Committee (whose determination shall be final, binding and conclusive), such adjustments to be made without an increase in the aggregate SAR Price.

(b) Notwithstanding any provision in this Agreement to the contrary, in the event of a Change in Control pursuant to Section 2.5(a) or (b) of the Plan, or in the event of a Change in Control pursuant to Section 2.5(c) or (d) of the Plan as to which Section 5(a) above does not apply, this grant shall be surrendered to the Company by the Participant, and this grant shall immediately be canceled by the Company, and Participant shall receive, within 30 days following the effective date of the Change in Control, a cash payment from the Company in an amount equal to the number of SAR Shares then subject to this SAR, multiplied by the excess, if any, of the greater of (i) the highest per Share price offered to stockholders of the Company in any transaction whereby the Change in Control takes place or (ii) the Fair Market Value of a Share on the effective date of the Change in Control, over the SAR Price.

6.	Confidentiality, Non-Solicitation and Non-Compete . The Participant agrees to, understands, and acknowledges the following:

(a)

Confidential Information . The Participant will be furnished, use or otherwise have access to certain Confidential Information of the Company and/or a Subsidiary. For purposes of this SAR Agreement, “Confidential Information” means any and all financial, technical, commercial or other information concerning the business and affairs of the Company and/or a Subsidiary that is confidential and proprietary to the Company and/or a Subsidiary, including without limitation:

(i)

information relating to the Company’s or Subsidiary’s past and existing customers and vendors and development of prospective customers and vendors, including specific customer product requirements, pricing arrangements, payment terms, customer lists and other similar information;

(ii)

inventions, designs, methods, discoveries, works of authorship, creations, improvements or ideas developed or otherwise produced, acquired or used by the Company and/or a Subsidiary;

(iii)

the Company’s or Subsidiary’s proprietary programs, processes or software, consisting of, but not limited, to computer programs in source or object code and all related documentation and training materials, including all upgrades, updates, improvements, derivatives and modifications thereof and including programs and documentation in incomplete stages of design or research and development;

(iv)

the subject matter of the Company’s or Subsidiary’s patents, design patents, copyrights, trade secrets, trademarks, service marks, trade names, trade dress, manuals, operating instructions, training materials, and other industrial property, including such information in incomplete stages of design or research and development; and

(v)

other confidential and proprietary information or documents relating to the Company’s or Subsidiary’s products, business and marketing plans and techniques, sales and distribution networks and any other information or documents that the Company and/or a Subsidiary reasonably regards as being confidential.

The Company and its Subsidiaries devote significant financial, human and other resources to the development of their products, customer base and the general goodwill associated with their business, and the Company and its Subsidiaries diligently maintain the secrecy and confidentiality of their Confidential Information. Each and every component of the Confidential Information is sufficiently secret to derive economic value from its not being generally known to other persons. While employed by the Company and/or Subsidiary and thereafter, the Participant will hold in the strictest confidence and not use in any manner which is detrimental to the Company or its Subsidiaries or disclose to any individual or entity any Confidential Information, except as may be required by the Company or its Subsidiaries in connection with the Participant’s employment.

All Company Materials are and will be the sole property of the Company and/or Subsidiary. The Participant agrees that during and after his or her employment by the Company and/or Subsidiary, the Participant will not remove any Company Materials from the business premises of the Company or a Subsidiary or deliver any Company Materials to any person or entity outside the Company or a Subsidiary, except as the Participant is required to do so in connection with performing the duties of his or her employment. The Participant further agrees that, immediately upon the termination of his or her employment for any reason, or during the Participant’s employment if so requested by the Company, the Participant will return all Company Materials and other physical property, and any reproduction thereof, excepting only the Participant’s copy of this Agreement. For purposes of this SAR Agreement, “Company Materials” means documents or other media or tangible items that contain or embody Confidential Information or any other information concerning the business, operations or future/strategic plans of the Company and/or any Subsidiary, whether such documents have been prepared by the Participant or by others.

(b)

Non-Solicitation and Non-Compete . Notwithstanding any provision of this SAR Agreement, if at any time prior to the date that is one year after the date of exercise of all or any portion of the SAR, the Participant directly or indirectly:

(i)

breaches or violates Section 6(a) of this SAR Agreement; or

(ii)

employs, recruits or solicits for employment any person who is (or was within the six (6) months prior to the Participant’s employment termination date) an employee of the Company and/or any Subsidiary; or

(iii)

accepts employment or engages in a competing business that may require contact, solicitation, interference or diverting of any of the Company’s or any Subsidiary’s customers, or that may result in the disclosure, divulging, or other use of Confidential Information or Company Materials acquired during the Participant’s employment with the Company or any Subsidiary; or

(iv)

solicits or encourages any customer, vendor or potential customer or vendor of the Company or any Subsidiary with whom the Participant had contact while employed by the Company or any Subsidiary to terminate or otherwise alter his, her or its relationship with the Company or any Subsidiary. The Participant understands that any person or entity that the Participant contacted during the twelve (12) months prior to the date of the Participant’s termination of employment for the purpose of soliciting sales from such person or entity shall be regarded as a “potential customer” of the Company to whom the Company or a Subsidiary has a protectable proprietary interest;

the SAR shall terminate automatically on the date the Participant engages in such activity and the Participant shall pay the Company, within five business days of receipt by the Participant of a written demand therefor, an amount in cash determined by multiplying the number of Shares as to which the SAR was exercised within the one-year period described above by the difference between (i) the Fair Market Value of a Share on the date of such exercise and (ii) the SAR Price per SAR (without reduction for any Shares withheld by the Company pursuant to Section 3(c)).

(c)

Remedies for Violation.

(i)

Injunctive Action . The Participant acknowledges that if he or she violates the terms of this Section 6, the injury that would be suffered by the Company and/or a Subsidiary as a result of a breach of the provisions of this SAR Agreement (including any provision of Section 6(a) or (b) hereof) would be irreparable and that an award of monetary damages to the Company and/or a Subsidiary for such a breach would be an inadequate remedy. Consequently, the Company and/or a Subsidiary will have the right, in addition to any other rights it may have, to obtain injunctive relief to restrain any breach or threatened breach or otherwise to specifically enforce any provision of this SAR Agreement, and the Company and/or a Subsidiary will not be obligated to post bond or other security in seeking such relief. Without limiting the Company’s or a Subsidiary’s rights under this Section 0 (or Sections 6(a) or (b) hereof) or any other remedies of the Company or a Subsidiary, if the Participant breaches any of the provisions of Section 6(a) or (b) hereof, the Company will have the right to cancel this SAR Agreement.

(ii)

Attorneys’ Fees; Set-off Right . In addition to the rights available to the Company and its Subsidiaries under Section 0(i) hereof, if the Participant violates the terms of this Section 6 at any time, the Company shall be entitled to reimbursement from the Participant of any fees and expenses (including attorneys’ fees) incurred by or on behalf of the Company or any Subsidiary in enforcing the Company’s or a Subsidiary’s rights under this Section 6. By accepting this SAR grant, the Participant hereby consents to a deduction from any amounts the Company or any Subsidiary owes to the Participant from time to time (including amounts owed to the Participant as wages or other compensation, fringe benefits, or vacation pay, as well as any other amounts owed to the Participant by the Company or any Subsidiary), unless such amount is subject to Section 409A of the Code, to the extent of any amounts that the Participant owes the Company under this Section 6. In addition to any injunctive relief sought under Section 0(i) hereof and whether or not the Company or any Subsidiary elects to make any set-off in whole or in part, if the Company or any Subsidiary does not recover by means of set-off the full amount the Participant owes to the Company or any Subsidiary, calculated as set forth in this Section 0(ii), the Participant agrees to immediately pay the unpaid balance to the Company or any Subsidiary.

(d)

(e)

Written Acknowledgement by the Participant . The Committee, in its sole discretion, may require the Participant, as a condition to the exercise of this SAR, to acknowledge in writing that he or she has not engaged, and is not in the process of engaging, in any of the activities described in this Section 6.

7.	Miscellaneous Provisions .

(a)

No Service or Employment Rights . No provision of this SAR Agreement or of the SAR granted hereunder shall give the Participant any right to continue in the service or employ of the Company or any Subsidiary, create any inference as to the length of employment or service of the Participant, affect the right of the Company or any Subsidiary to terminate the employment or service of the Participant, with or without Cause, or give the Participant any right to participate in any employee welfare or benefit plan or other program (other than the Plan) of the Company or any Subsidiary.

(b)

Stockholder Rights . Until the SAR shall have been duly exercised into Stock and such Stock has been officially recorded as issued on the Company’s official stockholder records, no person or entity shall be entitled to vote, receive dividends or be deemed for any purpose the holder of such Stock, and adjustments for dividends or otherwise shall be made only if the record date thereof is subsequent to the date such shares are recorded and after the date of exercise and without duplication of any adjustment.

(c)

Plan Document Governs . The SAR is granted pursuant to the Plan, and the SAR and this SAR Agreement are in all respects governed by the Plan and subject to all of the terms and provisions thereof, whether such terms and provisions are incorporated in this SAR Agreement by reference or are expressly cited. Any inconsistency between the SAR Agreement and the Plan shall be resolved in favor of the Plan. The Participant hereby acknowledges receipt of a copy of the Plan.

(d)

Beneficiary Designation . The Participant may, from time to time, in accordance with procedures set forth by the Committee, name any beneficiary or beneficiaries (who may be named contingently or successively) to whom any benefit under this SAR Agreement is to be paid in case of his or her death before he or she receives any or all of such benefit. Each such designation shall revoke all prior designations by the Participant, shall be in a form prescribed by the Company, and will be effective only when filed by the Participant in writing with the Committee during the Participant’s lifetime. In the absence of any such designation, benefits remaining unpaid at the Participant’s death shall be paid to the Participant’s estate or exercised by the Participant’s estate.

(e)

Administration . This SAR Agreement and the rights of the Participant hereunder are subject to all the terms and conditions of the Plan, as the same may be amended from time to time, as well as to such rules and regulations as the Committee may adopt for administration of the Plan. It is expressly understood that the Committee is authorized to administer, construe, and make all determinations necessary or appropriate to the administration of the Plan and this SAR Agreement, all of which shall be binding upon the Participant.

(f)

No Vested Right in Future Awards . the Participant acknowledges and agrees (by executing this SAR Agreement) that the granting of the SAR under this SAR Agreement is made on a fully discretionary basis by the Company and that this SAR Agreement does not lead to a vested right to further SAR or other awards in the future.

(g)

Use of Personal Data . By executing this SAR Agreement, the Participant acknowledges and agrees to the collection, use, processing and transfer of certain personal data, including his or her name, salary, nationality, job title, position, and details of all past Awards and current Awards outstanding under the Plan (“Data”), for the purpose of managing and administering the Plan. The Participant is not obliged to consent to such collection, use, processing and transfer of personal data, but a refusal to provide such consent may affect his or her ability to participate in the Plan. The Company or its Subsidiaries may transfer Data among themselves or to third parties as necessary for the purpose of implementation, administration and management of the Plan. These various recipients of Data may be located elsewhere throughout the world. The Participant authorizes these various recipients of Data to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing the Plan. The Participant may, at any time, review Data with respect to the Participant and require any necessary amendments to such Data. The Participant may withdraw his or her consent to use Data herein by notifying the Company in writing; however, the Participant understands that by withdrawing his or her consent to use Data, the Participant may affect his or her ability to participate in the Plan.

(h)

Severability . In the event that any provision of this SAR Agreement (including, without limitations, the provisions of Section 6 hereof) are held to be unenforceable under applicable law to any extent, such provision(s) shall, to that extent, be excluded from this SAR Agreement and the balance of the SAR Agreement shall be interpreted as if such provision(s) were so excluded to that extent and shall be enforceable in accordance with its terms.

(i)

Waiver; Cumulative Rights . The failure or delay of either party to require performance by the other party of any provision hereof shall not affect its right to require performance of such provision unless and until such performance has been waived in writing. Each and every right hereunder is cumulative and may be exercised in part or in whole from time to time.

(j)

Notices . Any notice which either party hereto may be required or permitted to give the other shall be in writing and may be delivered personally or by mail, postage prepaid, addressed to the Secretary of the Company, at its then corporate headquarters, and the Participant at the Participant’s address (including any electronic mail address) as shown on the Company’s records, or to such other address as the Participant, by notice to the Company, may designate in writing from time to time. The Participant hereby consents to electronic delivery of any notices that may be made hereunder.

(k)

Counterparts . This SAR Agreement may be signed in counterparts, each of which shall be an original, but both of which shall constitute but one and the same instrument.

(l)

Successors and Assigns . This SAR Agreement shall inure to the benefit of and be binding upon each successor and assign of the Company. All obligations imposed upon the Participant, and all rights granted to the Company hereunder, shall be binding upon the Participant’s heirs, legal representatives and successors.

(m)

Governing Law . This SAR Agreement and the SAR granted hereunder shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without giving effect to provisions thereof regarding conflict of laws.

(n)

Entire Agreement . This SAR Agreement, together with the Plan, constitutes the entire obligation of the parties hereto with respect to the subject matter hereof and shall supersede any prior expressions of intent or understanding with respect to this transaction.

(o)

Amendment . Any amendment to this SAR Agreement shall be in writing and signed by an executive officer of the Company or the Director of Compensation and Benefits.

(p)

Headings . The headings contained in this SAR Agreement are for reference purposes only and shall not affect the meaning or interpretation of this SAR Agreement.

IN WITNESS WHEREOF , the Company has caused this SAR Agreement to be duly executed by an officer thereunto duly authorized, and the Participant has hereunto set his or her hand, all as of the day and year first above written.


ZEBRA TECHNOLOGIES CORPORATION		PARTICIPANT

By:		Signed:
Name:	Joanne Townsend	Name: <<Insert Recipient’s Name>>
Title:	Vice President, Human Resources

Exhibit 10.3

R ESTRICTED S TOCK A GREEMENT

This RESTRICTED STOCK AGREEMENT (this “Stock Agreement”), dated as of <<Insert the Grant Date as determined under the Equity Grant Approval Process >> (the “Grant Date”), is between ZEBRA TECHNOLOGIES CORPORATION , a Delaware corporation (the “Company”), and <<Insert Stock Recipient’s Name>> (the “Participant”), relating to restricted stock granted under the 2006 Zebra Technologies Corporation Incentive Compensation Plan (the “Plan”). Capitalized terms used in this Stock Agreement without definition shall have the meanings ascribed to such terms in the Plan.

1. Grant of Restricted Stock .

(a) Grant . Subject to the provisions of this Stock Agreement and pursuant to the provisions of the Plan, the Company hereby grants to the Participant as of the Grant Date <<Insert Number of Shares>> shares of the Company’s Class A Common Stock, $.01 par value per share (the “Restricted Stock”). This Stock Agreement shall be null and void unless the Participant accepts this Stock Agreement by either (i) electronically accepting this Stock Agreement through the Company’s electronic delivery and acceptance process operated by e*Trade or (ii) executing this Stock Agreement in the space provided below and returning it to the Company not later than June 5, 2010.

(b) Nontransferability . Except as otherwise permitted under the Plan or this Stock Agreement, the Restricted Stock granted hereunder shall be non-transferable by the Participant during the Period of Restriction set forth under Section 2 of this Stock Agreement.

2. Vesting of Restricted Stock .

(a) Period of Restriction . The Restricted Stock shall be forfeitable and non-transferable during the Period of Restriction. The “Period of Restriction” with respect to the Restricted Stock shall begin on the Grant Date and end at the close of business on <<insert three year anniversary of the Grant Date for annual awards or the hire date, promotion date or recognition date for the new hire, the promotion or the recognition awards>>; provided, that the Participant must remain employed by the Company or any Subsidiary continuously through the Period of Restriction.

(b) Additional Vesting Rules . Notwithstanding Section 2(a) hereof, the Restricted Stock shall be subject to the following additional vesting rules in the following circumstances:

(i) Death, Disability or Good Reason . In the event the Participant’s employment with the Company and its Subsidiaries is terminated due to death or Disability, or by reason of the Participant’s resignation for Good Reason, any unvested Restricted Stock as of the effective date of the Participant’s termination of employment shall immediately become fully vested and the remainder of the Period of Restriction relating to such Restricted Stock shall immediately lapse. For purposes of this Stock Agreement, “Good Reason” means termination of the Participant’s employment with the Company and its Subsidiaries because of resignation by the Participant for any of the following reasons:

(A)

demotion of the Participant by the Company to a lesser position (including a material diminution in the status of the Participant’s responsibilities, authorities, powers or duties taken as a whole) or assignment to the Participant to any duties materially inconsistent with the status and responsibilities of that position;

(B)

material breach of any provision of the Participant’s employment agreement, if any, by the Company and the Company’s failure to cure such breach within fifteen (15) business days after receipt of written notice from the Participant specifying in reasonable detail the nature of the breach; or


Confidential Section 4 – Compensation Committee April 2010 – 2010 Annual Equity Grant		1

(C)

decrease in base salary at the rate in effect on the date of grant (unless such decrease is applied on a proportionally equal basis to all executive officers of the Company) (an “Applicable Decrease”), but only if the Participant terminates his or her employment with the Company as a result of an Applicable Decrease within ten (10) business days after the effective date of the Applicable Decrease. For clarification purposes, if the Participant fails to terminate his or her employment with the Company within ten (10) business days after the effective date of an Applicable Decrease, such termination shall not constitute termination of employment by Participant for Good Reason under this provision.

(ii) Termination by the Company or any Subsidiary other than for Cause . In the event the Participant’s employment with the Company and its Subsidiaries is terminated by the Company and/or any Subsidiary other than for Cause, any unvested Restricted Stock as of the effective date of the Participant’s termination of employment shall immediately become fully vested and the remainder of the Period of Restriction relating to such Restricted Stock shall immediately lapse. For purposes of this Stock Agreement, “Cause” means, as determined by the Company, in its sole discretion, termination of the Participant’s employment with the Company and its Subsidiaries because of the Participant’s:

(A)

material breach of this Stock Agreement or of any other agreement to which the Participant and the Company are parties, as determined by the Company in good faith; or

(B)

material violation of Company policy, regardless of whether within or outside of his or her authority; or

(C)

willful or intentional misconduct; gross negligence; or dishonest, fraudulent, or unethical behavior; or other conduct involving serious moral turpitude, in the performance of his or her duties; or

(D)

dishonesty, theft or conviction of any crime or offense involving money or property of the Company or any Subsidiary; or

(E)

breach of any fiduciary duty owing to the Company or any Subsidiary; or

(F)

unauthorized disclosure of Confidential Information or unauthorized dissemination of Company Materials; or

(G)

conduct that is, or could reasonably be expected to be, materially harmful to the Company or any of its subsidiaries or affiliates, as determined by the Company in good faith.

(iii) Other Termination of Employment . In the event the Participant’s employment with the Company and its Subsidiaries is terminated for any reason other than as provided in Section 2(b)(i) or (ii) hereof, any unvested Restricted Stock as of the effective date of the Participant’s termination of employment shall immediately be forfeited to the Company.


Confidential Section 4 – Compensation Committee April 2010 – 2010 Annual Equity Grant		2

3. Rights While Holding Restricted Stock .

(a) Custody and Availability of Shares. The Company shall hold the shares of Restricted Stock subject to this Agreement in uncertificated, book-entry form registered in the Participant’s name until the Restricted Stock shall have vested, in whole or in part, pursuant to Section 2. Subject to Section 4, if and to the extent shares of Restricted Stock become vested, the Company shall remove or cause the removal of the restrictions on transfer of such shares arising from this Stock Agreement. Such unrestricted shares shall be made available to the Participant in uncertificated, book-entry form registered in the Participant’s name.

(b) Rights as a Stockholder. During the period that shares of Restricted Stock remain unvested, the Participant shall have all of the rights of a stockholder of the Company with respect to the Restricted Stock including, but not limited to, the right to receive dividends paid on the shares of Restricted Stock and the full right to vote such shares.

(c) Section 83(b) Election . The Participant is not permitted to make a Section 83(b) election with respect to the Restricted Stock.

(d) Compliance with Federal and State Law . The Company may postpone issuing and delivering any Restricted Stock for so long as the Company reasonably determines to be necessary to satisfy the following:

(i) its completing or amending any securities registration or qualification of the Restricted Stock or it or the Participant satisfying any exemption from registration under any federal or state law, rule, or regulation;

(ii) the Participant complying with any requests for representations under the Plan;

(iii) the Participant complying with any federal, state, or local tax withholding obligations; and

(iv) its deferring payment of any amount that it reasonably determines would not be deductible under Code Section 162(m) until the earlier of:

(A)

the earliest date on which the Company reasonably determines that the deductibility of the payment will not be limited; or

(B)

the year following the Participant’s termination of employment.

4. Payment of Taxes . If the Company is obligated to withhold an amount on account of any tax imposed as a result of the issuance of the Restricted Stock, the Participant shall be required to pay such amount to the Company, as provided under Section 17 of the Plan. The Participant acknowledges and agrees that the Participant is responsible for the tax consequences associated with the grant of the Restricted Stock and its vesting.

5. Change in Control . Subject to Section 15 of the Plan:


Confidential Section 4 – Compensation Committee April 2010 – 2010 Annual Equity Grant		3

(b) Notwithstanding any provision in this Agreement to the contrary, in the event of a Change in Control pursuant to Section 2.5(a) or (b) of the Plan, or in the event of a Change in Control pursuant to Section 2.5(c) or (d) of the Plan as to which Section 5(a) above does not apply, this grant shall be surrendered to the Company by the Participant, and this grant shall immediately be canceled by the Company, and the Participant shall receive, within 30 days following the effective date of the Change in Control, a cash payment from the Company in an amount equal to the number of Shares of unvested Restricted Stock as of the effective date of the Change in Control, multiplied by the greater of (i) the highest per Share price offered to stockholders of the Company in any transaction whereby the Change in Control takes place or (ii) the Fair Market Value of a Share on the effective date of the Change in Control.

6. Confidentiality, Non-Solicitation and Non-Compete . The Participant agrees to, understands and acknowledges the following:

(a) Confidential Information . The Participant will be furnished, use or otherwise have access to certain Confidential Information of the Company and/or a Subsidiary. For purposes of this Stock Agreement, “Confidential Information” means any and all financial, technical, commercial or other information concerning the business and affairs of the Company and/or a Subsidiary that is confidential and proprietary to the Company and/or a Subsidiary, including without limitation,

(i) information relating to the Company’s or Subsidiary’s past and existing customers and vendors and development of prospective customers and vendors, including specific customer product requirements, pricing arrangements, payment terms, customer lists and other similar information;

(ii) inventions, designs, methods, discoveries, works of authorship, creations, improvements or ideas developed or otherwise produced, acquired or used by the Company and/or a Subsidiary;

(iii) the Company’s or Subsidiary’s proprietary programs, processes or software, consisting of but, not limited to, computer programs in source or object code and all related documentation and training materials, including all upgrades, updates, improvements, derivatives and modifications thereof and including programs and documentation in incomplete stages of design or research and development;

(iv) the subject matter of the Company’s or Subsidiary’s patents, design patents, copyrights, trade secrets, trademarks, service marks, trade names, trade dress, manuals, operating instructions, training materials, and other industrial property, including such information in incomplete stages of design or research and development; and

(v) other confidential and proprietary information or documents relating to the Company’s or Subsidiary’s products, business and marketing plans and techniques, sales and distribution networks and any other information or documents which the Company reasonably regards as being confidential.

The Company and its Subsidiaries devotes significant financial, human and other resources to the development of its products, its customer base and the general goodwill associated with its business, and the Company and its Subsidiaries diligently maintains the secrecy and confidentiality of their Confidential Information. Each and every component of the Confidential Information is sufficiently secret to derive economic value from its not being generally known to other persons. While employed by the Company and/or Subsidiary and thereafter, the Participant will hold in the strictest confidence and not use in any manner which is detrimental to the Company or its Subsidiaries or disclose to any individual or entity any Confidential Information, except as may be required by the Company or its Subsidiaries in connection with the Participant’s employment.


Confidential Section 4 – Compensation Committee April 2010 – 2010 Annual Equity Grant		4

a Subsidiary, except as the Participant is required to do so in connection with performing the duties of his or her employment. The Participant further agrees that, immediately upon the termination of his or her employment for any reason, or during the Participant’s employment if so requested by the Company, the Participant will return all Company Materials and other physical property, and any reproduction thereof, excepting only the Participant’s copy of this Agreement. For purposes of this Stock Agreement, “Company Materials” means documents or other media or tangible items that contain or embody Confidential Information or any other information concerning the business, operations or future/strategic plans of the Company and/or any Subsidiary, whether such documents have been prepared by the Participant or by others.

(b) Non-Solicitation and Non-Compete . Notwithstanding any provision of this Stock Agreement, if at any time prior to the date that is one year after the date of vesting of all or any portion of the Restricted Stock, the Participant, directly or indirectly:

(i) breaches or violates Section 6(a) of this Stock Agreement; or

(ii) employs, recruits or solicits for employment any person who is (or was within six (6) months prior to the Participant’s employment termination date) an employee of the Company and/or any Subsidiary; or

(iii) accepts employment or engages in a competing business which may require contact, solicitation, interference or diverting of any of the Company’s or any Subsidiary’s customers, or that may result in the disclosure, divulging, or other use, of Confidential Information or Company Materials acquired during the Participant’s employment with the Company or any Subsidiary; or

(iv) solicits or encourages any customer, vendor or potential customer or vendor of the Company or any Subsidiary with whom the Participant had contact while employed by the Company or any Subsidiary to terminate or otherwise alter his, her or its relationship with the Company or any Subsidiary. The Participant understands that any person or entity that the Participant contacted during the twelve (12) months prior to the date of the Participant’s termination of employment for the purpose of soliciting sales from such person or entity shall be regarded as a “potential customer” of the Company to whom the Company or a Subsidiary has a protectable proprietary interest;

the unvested Restricted Stock shall be forfeited automatically on the date the Participant engages in such activity and then the Participant shall pay the Company, within five business days of receipt by the Participant of a written demand therefor, an amount in cash determined by multiplying the number of Shares of Restricted Stock subject to this Stock Agreement which vested within the one-year period described above by the Fair Market Value of a Share, determined as of the date of vesting.

(i) Injunctive Action . Participant acknowledges that if he or she violates the terms of this Section 6 the injury that would be suffered by the Company and/or a Subsidiary as a result of a breach of the provisions of this Stock Agreement (including any provision of Section 6(a) or (b) hereof) would be irreparable and that an award of monetary damages to the Company and/or a Subsidiary for such a breach would be an inadequate remedy. Consequently, the Company and/or a Subsidiary will have the right, in addition to any other rights it may have, to obtain injunctive relief to restrain any breach or threatened breach or otherwise to specifically enforce any provision of this Stock Agreement, and the Company and/or a Subsidiary will not be obligated to post bond or other security in seeking such relief. Without limiting the Company’s or a Subsidiary’s rights under this Section(c) (or Sections 6(a) or (b) hereof) or any other remedies of the Company or a Subsidiary, if the Participant breaches any of the provisions of Sections(a) or (b) hereof, the Company will have the right to cancel this Stock Agreement.


Confidential Section 4 – Compensation Committee April 2010 – 2010 Annual Equity Grant		5

(ii) Forfeiture of Restricted Stock. In addition to the rights available to the Company and its Subsidiaries under Section 6(c)(i) hereof, if the Participant violates the terms of this Section 6 at any time, the Participant, without any further action by the Company or the Participant, shall forfeit, as of the first day of any such violation, all right, title and interest to unvested Restricted Stock and the Company further shall be entitled to reimbursement from the Participant of any fees and expenses (including attorneys’ fees) incurred by or on behalf of the Company or any Subsidiary in enforcing the Company’s or a Subsidiary’s rights under this Section 6. By accepting this Restricted Stock grant, the Participant hereby consents to a deduction from any amounts the Company or any Subsidiary owes to the Participant from time to time (including amounts owed to the Participant as wages or other compensation, fringe benefits, or vacation pay, as well as any other amounts owed to the Participant by the Company or any Subsidiary), unless such amount is subject to Section 409A of the Code, to the extent of any amounts that the Participant owes to the Company under this Section 6. In addition to any injunctive relief sought under Section 6(c)(i) hereof and whether or not the Company or any Subsidiary elects to make any set-off in whole or in part, if the Company or any Subsidiary does not recover by means of set-off the full amount the Participant owes to the Company or any Subsidiary, calculated as set forth in this Section 6(c)(ii), the Participant agrees to immediately pay the unpaid balance to the Company or any Subsidiary.

(d) Enforceability of Restrictive Covenants . The scope and duration of the restrictive covenants contained in this Stock Agreement are reasonable and necessary to protect a legitimate, protectable interest of the Company and its Subsidiaries.

(e) Written Acknowledgement by Participant . The Committee, in its sole discretion, may require the Participant, as a condition to lapsing any restriction on the Restricted Stock, to acknowledge in writing that the Participant has not engaged, and is not in the process of engaging, in any of the activities described in this Section 6.

7. Miscellaneous Provisions .

(a) No Service or Employment Rights . No provision of this Stock Agreement or of the Restricted Stock granted hereunder shall give the Participant any right to continue in the service or employ of the Company or any Subsidiary, create any inference as to the length of employment or service of the Participant, affect the right of the Company or any Subsidiary to terminate the employment or service of the Participant, with or without Cause, or give the Participant any right to participate in any employee welfare or benefit plan or other program (other than the Plan) of the Company or any Subsidiary.

(b) Plan Document Governs . The Restricted Stock is granted pursuant to the Plan, and the Restricted Stock and this Stock Agreement are in all respects governed by the Plan and subject to all of the terms and provisions thereof, whether such terms and provisions are incorporated in this Stock Agreement by reference or are expressly cited. Any inconsistency between the Stock Agreement and the Plan shall be resolved in favor of the Plan. Participant hereby acknowledges receipt of a copy of the Plan.

(c) Beneficiary Designation . The Participant may, from time to time, in accordance with procedures set forth by the Committee, name any beneficiary or beneficiaries (who may be named contingently or successively) to whom any benefit under this Stock Agreement is to be paid in case of his or her death before he or she receives any or all of such benefit. Each such designation shall revoke all prior designations by the Participant, shall be in a form prescribed by the Company, and will be effective only when filed by the Participant in writing with the Committee during the Participant’s lifetime. In the absence of any such designation, benefits remaining unpaid at the Participant’s death shall be paid to the Participant’s estate or exercised by the Participant’s estate.

(d) Administration . This Stock Agreement and the rights of the Participant hereunder are subject to all the terms and conditions of the Plan, as the same may be amended from time to time, as well as to such rules and regulations as the Committee may adopt for administration of the Plan. It is expressly understood that the Committee is authorized to administer, construe, and make all determinations necessary or appropriate to the administration of the Plan and this Stock Agreement, all of which shall be binding upon the Participant.


Confidential Section 4 – Compensation Committee April 2010 – 2010 Annual Equity Grant		6

(e) No Vested Right In Future Awards . Participant acknowledges and agrees (by executing this Stock Agreement) that the granting of Restricted Stock under this Stock Agreement is made on a fully discretionary basis by the Company and that this Stock Agreement does not lead to a vested right to further restricted stock or other awards in the future.

(f) Use Of Personal Data . By executing this Stock Agreement, Participant acknowledges and agrees to the collection, use, processing and transfer of certain personal data, including his or her name, salary, nationality, job title, position and details of all past Awards and current Awards outstanding under the Plan (“Data”), for the purpose of managing and administering the Plan. The Participant is not obliged to consent to such collection, use, processing and transfer of personal data, but a refusal to provide such consent may affect his or her ability to participate in the Plan. The Company, or its Subsidiaries, may transfer Data among themselves or to third parties as necessary for the purpose of implementation, administration and management of the Plan. These various recipients of Data may be located elsewhere throughout the world. The Participant authorizes these various recipients of Data to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing the Plan. The Participant may, at any time, review Data with respect to the Participant and require any necessary amendments to such Data. The Participant may withdraw his or her consent to use Data herein by notifying the Company in writing; however, the Participant understands that by withdrawing his or her consent to use Data, the Participant may affect his or her ability to participate in the Plan.

(g) Severability . In the event that any provision of this Stock Agreement (including, without limitations, the provisions of Section 6 hereof) are held to be unenforceable under applicable law to any extent, such provision(s) shall, to that extent, be excluded from this Stock Agreement and the balance of the Stock Agreement shall be interpreted as if such provision(s) were so excluded to that extent and shall be enforceable in accordance with its terms.

(h) Waiver; Cumulative Rights. The failure or delay of either party to require performance by the other party of any provision hereof shall not affect its right to require performance of such provision unless and until such performance has been waived in writing. Each and every right hereunder is cumulative and may be exercised in part or in whole from time to time.

(i) Notices . Any notice which either party hereto may be required or permitted to give the other shall be in writing and may be delivered personally or by mail, postage prepaid, addressed to the Secretary of the Company, at its then corporate headquarters, and the Participant at the Participant’s address (including any electronic mail address) as shown on the Company’s records, or to such other address as the Participant, by notice to the Company, may designate in writing from time to time. The Participant hereby consents to electronic delivery of any notices that may be made hereunder.

(j) Counterparts . This Stock Agreement may be signed in two counterparts, each of which shall be an original, but both of which shall constitute but one and the same instrument.

(k) Successors and Assigns . This Stock Agreement shall inure to the benefit of and be binding upon each successor and assign of the Company. All obligations imposed upon the Participant, and all rights granted to the Company hereunder, shall be binding upon the Participant’s heirs, legal representatives and successors.

(l) Governing Law . This Stock Agreement and the Restricted Stock granted hereunder shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without giving effect to provisions thereof regarding conflict of laws.


Confidential Section 4 – Compensation Committee April 2010 – 2010 Annual Equity Grant		7

(m) Entire Agreement. This Stock Agreement, together with the Plan, constitute the entire obligation of the parties hereto with respect to the subject matter hereof and shall supersede any prior expressions of intent or understanding with respect to this transaction.

(n) Amendment . Any amendment to this Stock Agreement shall be in writing and signed by an executive officer of the Company or the Director of Compensation and Benefits.

(o) Headings . The headings contained in this Stock Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Stock Agreement.

IN WITNESS WHEREOF , the Company has caused this Stock Agreement to be duly executed by an officer thereunto duly authorized, and the Participant has hereunto set his or her hand, all as of the day and year first above written.


ZEBRA TECHNOLOGIES CORPORATION		PARTICIPANT

By:		Signed:
Name:	Joanne Townsend	Name: <<Insert Recipient’s Name>>
Title:	Vice President, Human Resources


Confidential Section 4 – Compensation Committee April 2010 – 2010 Annual Equity Grant		8

Exhibit 10.4

R ESTRICTED S TOCK A GREEMENT

This RESTRICTED STOCK AGREEMENT (this “Stock Agreement”), dated as of <<Insert Grant Date as determined under the Equity Grant Approval Process >> (the “Grant Date”), is between ZEBRA TECHNOLOGIES CORPORATION , a Delaware corporation (the “Company”), and <<Insert Stock Recipient’s Name>> (the “Participant”), relating to restricted stock granted under the 2006 Zebra Technologies Corporation Incentive Compensation Plan (the “Plan”). Capitalized terms used in this Stock Agreement without definition shall have the meanings ascribed to such terms in the Plan.

1.	Grant of Restricted Stock .

Grant. Subject to the provisions of this Stock Agreement and pursuant to the provisions of the Plan, the Company hereby grants to the Participant as of the Grant Date << Insert Number of Shares >> shares (the “Target Shares”) of the Company’s Class A Common Stock, $.01 par value per share (the “Restricted Stock”). This Stock Agreement shall be null and void unless the Participant accepts this Stock Agreement by either (i) electronically accepting this Stock Agreement through the Company’s electronic delivery and acceptance process operated by e*Trade or (ii) executing this Stock Agreement in the space provided below and returning it to the Company not later than June 5, 2010.

Nontransferability . Except as otherwise permitted under the Plan or this Stock Agreement, the Restricted Stock granted hereunder shall be non-transferable by the Participant during the Period of Restriction set forth under Section 2 of this Stock Agreement.

2.	Vesting of Restricted Stock .

Period of Restriction and Performance Objective .

(i)

The Restricted Stock shall be forfeitable and non-transferable during the Period of Restriction. The “Period of Restriction” with respect to the Restricted Stock shall begin on the Grant Date and shall end at the close of business on May 6, 2013; provided, however, that the Period of Restriction shall lapse on May 6, 2013 in accordance with Exhibit A .

(ii)

Except as otherwise provided for under this Stock Agreement, the Participant must remain employed continuously through May 6, 2013; provided, however, that in the event the Participant’s employment with the Company and its Subsidiaries is terminated on or after December 31, 2012 and on or prior to May 6, 2013 due to death or Disability, or by reason of the Participant’s resignation for Good Reason (as defined below), or by the Company and/or any Subsidiary other than for Cause (as defined below), the Period of Restriction shall lapse as of the effective date of the Participant’s termination of employment in accordance with Exhibit A . Any Restricted Stock which is unvested at the expiration of the Period of Restriction shall immediately be forfeited to the Company.

Additional Vesting Rules . Notwithstanding Section 2(a) hereof, the Restricted Stock shall be subject to the following additional vesting rules in the following circumstances:

(i)

Death, Disability or Good Reason . In the event the Participant’s employment with the Company and its Subsidiaries is terminated prior to December 31, 2012 due to death or Disability, or by reason of the Participant’s resignation for Good Reason, a number of Shares equal to the Target Shares shall immediately become fully vested as of the effective date of the Participant’s termination of employment and the remainder of the Period of Restriction relating to such Restricted Stock shall immediately lapse. For purposes of this Stock Agreement, “Good Reason” means termination of the Participant’s employment with the Company and its Subsidiaries because of resignation by the Participant for any of the following reasons:

(A)

(B)

(C)

(ii)

Termination by the Company or any Subsidiary other than for Cause . In the event the Participant’s employment with the Company and its Subsidiaries is terminated prior to December 31, 2012 by the Company and/or any Subsidiary other than for Cause, a number of Shares equal to the Target Shares shall immediately become fully vested as of the effective date of the Participant’s termination of employment and the remainder of the Period of Restriction relating to such Restricted Stock shall immediately lapse. For purposes of this Stock Agreement, “Cause” means, as determined by the Company, in its sole discretion, termination of the Participant’s employment with the Company and its Subsidiaries because of the Participant’s:

(A)

material breach of this Stock Agreement or of any other agreement to which the Participant and the Company are parties, as determined by the Company in good faith; or

(B)

material violation of Company policy, regardless of whether within or outside of his or her authority; or

(C)

willful or intentional misconduct; gross negligence; or dishonest, fraudulent, or unethical behavior; or other conduct involving serious moral turpitude, in the performance of his or her duties; or

(D)

dishonesty, theft or conviction of any crime or offense involving money or property of the Company or any Subsidiary; or

(E)

breach of any fiduciary duty owing to the Company or any Subsidiary; or

(F)

unauthorized disclosure of Confidential Information or unauthorized dissemination of Company Materials; or

(G)

conduct that is, or could reasonably be expected to be, materially harmful to the Company or any of its subsidiaries or affiliates, as determined by the Company in good faith.

(iii)

Other Termination of Employment . In the event the Participant’s employment with the Company and its Subsidiaries is terminated for any reason other than as provided in Section 2(b)(i) or (ii) hereof, any unvested Restricted Stock as of the effective date of the Participant’s termination of employment shall immediately be forfeited to the Company.

(iv)

Change in Control Vesting . Subject to the provisions of Section 15 of the Plan and Section 5 of this Stock Agreement, if a Change in Control occurs:

(A)

prior to December 31, 2012, a number of Shares equal to the Target Shares shall immediately become fully vested as of the effective date of the Change of Control and the remainder of the Period of Restriction relating to such Restricted Stock shall immediately lapse or, if greater, the vested number of Shares of Restricted Stock shall be the number of Shares determined in accordance with Exhibit A but based on (a) total net sales during the most recently completed four quarters prior to the effective date of the Change in Control and (b) ROIC (as defined in Exhibit A ) during the period beginning January 1, 2010 to the end of the most recently completed quarter prior to the effective date of the Change in Control, using December 31, 2009 as the first balance sheet date.

(B)

on or after December 31, 2012, the Period of Restriction shall lapse as of the effective date of the Change in Control in accordance with Exhibit A .

3.	Rights While Holding Restricted Stock .

a. Custody and Availability of Shares. The Company shall hold the shares of Restricted Stock subject to this Agreement in uncertificated, book-entry form registered in the Participant’s name until the Restricted Stock shall have vested, in whole or in part, pursuant to Section 2. Subject to Section 4, if and to the extent shares of Restricted Stock become vested, the Company shall remove or cause the removal of the restrictions on transfer of such shares arising from this Stock Agreement. Such unrestricted shares shall be made available to the Participant in uncertificated, book-entry form registered in the Participant’s name.

b. Rights as a Stockholder . During the period that shares of Restricted Stock remain unvested, the Participant shall have all of the rights of a stockholder of the Company with respect to the Restricted Stock including, but not limited to, the right to receive dividends paid on the shares of Restricted Stock and the full right to vote such shares.

c. Section 83(b) Election . The Participant is not permitted to make a Section 83(b) election with respect to the Restricted Stock.

d. Compliance with Federal and State Law . The Company may postpone issuing and delivering any Restricted Stock for so long as the Company reasonably determines to be necessary to satisfy the following:

(ii) the Participant complying with any requests for representations under the Plan; and

(iii) the Participant complying with any federal, state or local tax withholding obligations.

4. Payment of Taxes . If the Company is obligated to withhold an amount on account of any tax imposed as a result of the issuance of the Restricted Stock, the Participant shall be required to pay such amount to the Company, as provided under Section 17 of the Plan. The Participant acknowledges and agrees that the Participant is responsible for the tax consequences associated with the grant of the Restricted Stock and its vesting.

5. Change in Control . Subject to Section 15 of the Plan:

(a) Notwithstanding any provision in this Agreement, in the event of a Change in Control pursuant to Section 2.5(c) or (d) of the Plan in connection with which holders of Shares may receive consideration consisting solely of shares of common stock that are registered under Section 12 of the Exchange Act (and disregarding the payment of cash in lieu of fractional shares), the number of Shares which shall be treated as vested Restricted Stock under this Stock Agreement immediately after the Change in Control shall equal the number of Shares determined pursuant to Section 2(b)(iv) of this Stock Agreement and there shall be substituted for each such vested Share the number and class of shares into which each outstanding Share shall be converted pursuant to such Change in Control.

(b) Notwithstanding any provision in this Agreement to the contrary, in the event of a Change in Control pursuant to Section 2.5(a) or (b) of the Plan, or in the event of a Change in Control pursuant to Section 2.5(c) or (d) of the Plan as to which Section 5(a) above does not apply, this grant shall be surrendered to the Company by the Participant, and this grant shall immediately be canceled by the Company, and the Participant shall receive, within 30 days following the effective date of the Change in Control, a cash payment from the Company in an amount equal to the number of Shares of vested Restricted Stock determined pursuant to Section 2(b)(iv) of this Stock Agreement, multiplied by the greater of (i) the highest per Share price offered to stockholders of the Company in any transaction whereby the Change in Control takes place or (ii) the Fair Market Value of a Share on the effective date of the Change in Control.

6. Confidentiality, Non-Solicitation and Non-Compete . Participant agrees to, understands and acknowledges the following:

a. Confidential Information . The Participant will be furnished, use or otherwise have access to certain Confidential Information of the Company and/or a Subsidiary. For purposes of this Stock Agreement, “Confidential Information” means any and all financial, technical, commercial or other information concerning the business and affairs of the Company and/or a Subsidiary that is confidential and proprietary to the Company and/or a Subsidiary, including without limitation,

(ii) inventions, designs, methods, discoveries, works of authorship, creations, improvements or ideas developed or otherwise produced, acquired or used by the Company and/or a Subsidiary;

(iii) the Company’s or Subsidiary’s proprietary programs, processes or software, consisting of, but not limited to, computer programs in source or object code and all related documentation and training materials, including all upgrades, updates, improvements, derivatives and modifications thereof and including programs and documentation in incomplete stages of design or research and development;

All Company Materials are and will be the sole property of the Company and/or Subsidiary. The Participant agrees that during and after his or her employment by the Company and/or Subsidiary, the Participant will not remove any Company Materials from the business premises of the Company or a Subsidiary or deliver any Company Materials to any person or entity outside the Company or a Subsidiary, except as the Participant is required to do so in connection with performing the duties of his or her employment. The Participant further agrees that, immediately upon the termination of his or her employment for any reason, or during the Participant’s employment if so requested by the Company, the Participant will return all Company Materials and other physical property, and any reproduction thereof, excepting only the Participant’s copy of this Agreement. For purposes of this Stock Agreement, “Company Materials” means documents or other media or tangible items that contain or embody Confidential Information or any other information concerning the business, operations or future/strategic plans of the Company and/or any Subsidiary, whether such documents have been prepared by the Participant or by others.

b. Non-Solicitation and Non-Compete . Notwithstanding any provision of this Stock Agreement, if at any time prior to the date that is one year after the date of vesting of all or any portion of the Restricted Stock, the Participant directly or indirectly:

(i) breaches or violates Section 6(a) of this Stock Agreement; or

(iv) solicits or encourages any customer, vendor or potential customer or vendor of the Company with whom the Participant had contact while employed by the Company to terminate or otherwise alter his, her or its relationship with the Company or any Subsidiary. The the Participant understands that any person or entity that Participant contacted during the twelve (12) months prior to the date of the Participant’s termination of employment for the purpose of soliciting sales from such person or entity shall be regarded as a “potential customer” of the Company to whom the Company or a Subsidiary has a protectable proprietary interest;

the unvested Restricted Stock shall be forfeited automatically on the date the Participant engages in such activity and the Participant shall pay the Company, within five business days of receipt by the Participant of a written demand therefor, an amount in cash determined by multiplying the number of Shares of Restricted Stock subject to this Stock Agreement which vested within the one-year period described above by the Fair Market Value of a Share, determined as of the date of vesting

c. Remedies for Violation .

(i) Injunctive Action . Participant acknowledges that if he or she violates the terms of this Section 6 the injury that would be suffered by the Company and/or a Subsidiary as a result of a breach of the provisions of this Stock Agreement (including any provision of Section 6(a) or (b) hereof) would be irreparable and that an award of monetary damages to the Company and/or a Subsidiary for such a breach would be an inadequate remedy. Consequently, the Company and/or a Subsidiary will have the right, in addition to any other rights it may have, to obtain injunctive relief to restrain any breach or threatened breach or otherwise to specifically enforce any provision of this Stock Agreement, and the Company and/or a Subsidiary will not be obligated to post bond or other security in seeking such relief. Without limiting the Company’s or a Subsidiary’s rights under this Section 6(c) (or Sections 6(a) or (b) hereof) or any other remedies of the Company or a Subsidiary, if the Participant breaches any of the provisions of Sections 6(a) or (b) hereof, the Company will have the right to cancel this Stock Agreement.

(ii) Attorneys’ Fees; Set-off Right . In addition to the rights available to the Company and its Subsidiaries under Section 6(c)(i) hereof, if the Participant violates the terms of this Section 6 at any time, the Company shall be entitled to reimbursement from the Participant of any fees and expenses (including attorneys’ fees) incurred by or on behalf of the Company or any Subsidiary in enforcing the Company’s or a Subsidiary’s rights under this Section 6. By accepting this Restricted Stock grant, the Participant hereby consents to a deduction from any amounts the Company or any Subsidiary owes to the Participant from time to time (including amounts owed to the Participant as wages or other compensation, fringe benefits or vacation pay, as well as any other amounts owed to the Participant by the Company or any Subsidiary), unless such amount is subject to Section 409A of the Code, to the extent of any amounts that the Participant owes to the Company under this Section 6. In addition to any injunctive relief sought under Section 6(c)(i) hereof and whether or not the Company or any Subsidiary elects to make any set-off in whole or in part, if the Company or any Subsidiary does not recover by means of set-off the full amount the Participant owes to the Company or any Subsidiary, calculated as set forth in this Section 6(c)(ii), the Participant agrees to immediately pay the unpaid balance to the Company or any Subsidiary.

d. Enforceability of Restrictive Covenants . The scope and duration of the restrictive covenants contained in this Stock Agreement are reasonable and necessary to protect a legitimate, protectable interest of the Company and its Subsidiaries.

e. Written Acknowledgement by Participant . The Committee, in its sole discretion, may require the Participant, as a condition to lapsing any restriction on the Restricted Stock, to acknowledge in writing that the Participant has not engaged, and is not in the process of engaging, in any of the activities described in this Section 6.

7. Miscellaneous Provisions .

a. No Service or Employment Rights . No provision of this Stock Agreement or of the Restricted Stock granted hereunder shall give the Participant any right to continue in the service or employ of the Company or any Subsidiary, create any inference as to the length of employment or service of the Participant, affect the right of the Company or any Subsidiary to terminate the employment or service of the Participant, with or without Cause, or give the Participant any right to participate in any employee welfare or benefit plan or other program (other than the Plan) of the Company or any Subsidiary.

b. Plan Document Governs . The Restricted Stock is granted pursuant to the Plan, and the Restricted Stock and this Stock Agreement are in all respects governed by the Plan and subject to all of the terms and provisions thereof, whether such terms and provisions are incorporated in this Stock Agreement by reference or are expressly cited. Any inconsistency between the Stock Agreement and the Plan shall be resolved in favor of the Plan. Participant hereby acknowledges receipt of a copy of the Plan.

c. Beneficiary Designation . The Participant may, from time to time, in accordance with procedures set forth by the Committee, name any beneficiary or beneficiaries (who may be named contingently or successively) to whom any benefit under this Stock Agreement is to be paid in case of his or her death before he or she receives any or all of such benefit. Each such designation shall revoke all prior designations by the Participant, shall be in a form prescribed by the Company, and will be effective only when filed by the Participant in writing with the Committee during the Participant’s lifetime. In the absence of any such designation, benefits remaining unpaid at the Participant’s death shall be paid to the Participant’s estate or exercised by the Participant’s estate.

d. Administration . This Stock Agreement and the rights of the Participant hereunder are subject to all the terms and conditions of the Plan, as the same may be amended from time to time, as well as to such rules and regulations as the Committee may adopt for administration of the Plan. It is expressly understood that the Committee is authorized to administer, construe, and make all determinations necessary or appropriate to the administration of the Plan and this Stock Agreement, all of which shall be binding upon the Participant.

e. No Vested Right In Future Awards . Participant acknowledges and agrees (by executing this Stock Agreement) that the granting of Restricted Stock under this Stock Agreement is made on a fully discretionary basis by the Company and that this Stock Agreement does not lead to a vested right to further restricted stock or other awards in the future.

f. Use Of Personal Data . By executing this Stock Agreement, Participant acknowledges and agrees to the collection, use, processing and transfer of certain personal data, including his or her name, salary, nationality, job title, position and details of all past Awards and current Awards outstanding under the Plan (“Data”), for the purpose of managing and administering the Plan. The Participant is not obliged to consent to such collection, use, processing and transfer of personal data, but a refusal to provide such consent may affect his or her ability to participate in the Plan. The Company, or its Subsidiaries, may transfer Data among themselves or to third parties as necessary for the purpose of implementation, administration and management of the Plan. These various recipients of Data may be located elsewhere throughout the world. The Participant authorizes these various recipients of Data to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing the Plan. The Participant may, at any time, review Data with respect to the Participant and require any necessary amendments to such Data. The Participant may withdraw his or her consent to use Data herein by notifying the Company in writing; however, the Participant understands that by withdrawing his or her consent to use Data, the Participant may affect his or her ability to participate in the Plan.

g. Severability . If one or more provisions of this Stock Agreement (including, without limitations, the provisions of Section 6 hereof) are held to be unenforceable under applicable law to any extent, such provision(s) shall, to that extent, be excluded from this Stock Agreement and the balance of the Stock Agreement shall be interpreted as if such provision(s) were so excluded to that extent and shall be enforceable in accordance with its terms.

h. Waiver; Cumulative Rights . The failure or delay of either party to require performance by the other party of any provision hereof shall not affect its right to require performance of such provision unless and until such performance has been waived in writing. Each and every right hereunder is cumulative and may be exercised in part or in whole from time to time.

i. Notices . Any notice which either party hereto may be required or permitted to give the other shall be in writing and may be delivered personally or by mail, postage prepaid, addressed to the Secretary of the Company, at its then corporate headquarters, and the Participant at the Participant’s address (including any electronic mail address) as shown on the Company’s records, or to such other address as the Participant, by notice to the Company, may designate in writing from time to time. The Participant hereby consents to electronic delivery of any notices that may be made hereunder.

j. Counterparts . This Stock Agreement may be signed in two counterparts, each of which shall be an original, but both of which shall constitute but one and the same instrument.

k. Successors and Assigns . This Stock Agreement shall inure to the benefit of and be binding upon each successor and assign of the Company. All obligations imposed upon the Participant, and all rights granted to the Company hereunder, shall be binding upon the Participant’s heirs, legal representatives and successors.

l. Governing Law . This Stock Agreement and the Restricted Stock granted hereunder shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without giving effect to provisions thereof regarding conflict of laws.

m. Entire Agreement . This Stock Agreement, together with the Plan, constitute the entire obligation of the parties hereto with respect to the subject matter hereof and shall supersede any prior expressions of intent or understanding with respect to this transaction.

n. Amendment . Any amendment to this Stock Agreement shall be in writing and signed by an executive officer of the Company or the Director of Compensation and Benefits.

o. Headings and Construction . The headings contained in this Stock Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Stock Agreement. This Stock Agreement is intended to be a stock right excluded from the requirements of Code Section 409A. The terms of this Stock Agreement shall be administered and construed in a manner consistent with the intent that it be a stock right excluded from the requirements of Code Section 409A.


ZEBRA TECHNOLOGIES CORPORATION				PARTICIPANT


<<Officer and Title>>				<<Executive Officer Name>>

Exhibit A

1.	Total Net Sales Performance Objective.


	Below Threshold		Threshold		Target		Maximum
Compounded Annual Growth Rate of Total Net Sales	< 5.00	%	5.00	%	7.50	%	10.00	%
Vested Percentage of Restricted Stock	0	%	50.00	%	100.00	%	150.00	%

Compounded Annual Growth Rate of Total Net Sales (“CAGR”) equals (A) the quotient obtained by dividing 2012 total net sales of the Company by 2009 total net sales of the Company, (B) raised to the one-third power, minus (C) one. CAGR shall be rounded to the nearest one-hundredth of one percent. For a CAGR between 5.00% and 10.00%, the Vested Percentage of Shares of Restricted Stock shall be interpolated on a straight line basis and rounded to the nearest one-hundredth of one percent. The number of Shares of Restricted Stock, if any, that vest shall be rounded to the nearest whole Share (the “Initial Vested Shares”).

Unless the Committee or the Board otherwise determines in its sole discretion, (A) net sales of the Company derived from acquisitions shall be included in the calculation of CAGR and (B) divestitures of subsidiaries or businesses of the Company where the net sales of the divested subsidiary or business constitutes part of the 2009 total net sales of the Company shall result in a decrease in the 2009 total net sales of the Company for purposes of calculating the CAGR.

Return on Invested Capital . If the number of Initial Vested Shares exceeds zero as calculated under Section 1 of this Exhibit A, then the number of “Vested Shares” shall equal the product of the Initial Vested Shares multiplied by the Modifier set forth in the following table (rounded to the nearest whole share):


ROIC	< 9.00	%	9.00 < 11.00	% to %	11.00 < 14.00	% to	Equal to or greater than 14.00	%
Modifier	0.6		0.8		1.0		1.2

ROIC equals the average of the Annual Fiscal ROIC for 2010, 2011 and 2012. Annual Fiscal ROIC is defined as net operating profit after tax (“NOPAT”) for the fiscal period divided by Invested Capital where (1) NOPAT equals Income from Operations of the Company for the fiscal period multiplied by (1-budgeted tax rate for the fiscal period ) and (2) Invested Capital equals total assets, less cash and cash equivalents, current and long-term investments and marketable securities, and non-interest-bearing current liabilities, and which is calculated as the average Invested Capital reflected on five balance sheet dates (the ending balance for the prior fiscal year and the ending balance for all four fiscal quarters. “Income from Operations” means the consolidated operating income of the Company for the fiscal year , adjusted to remove non-recurring charges and for acquisitions as described in this subsection.

Unless the Committee or the Board otherwise determines in its sole discretion, non-recurring charges specifically include such expense items as (i) one-time charges, non-operating charges or expenses incurred that are not under the control of operations management, as ratified by the Committee or the Board; (ii) restructuring expenses; (iii) exit expenses; (iv) integration expenses; (v) Board of Directors project activities (e.g.: director searches); or (vi) gains or losses on the sale of assets; (vii) acquired in-process technology or (viii) impairment charges. This list is not exhaustive and is meant to represent examples of the kind of expenses typically excluded from the calculations of income from operations. Unless the Committee or the Board otherwise determines in its sole discretion, an acquisition shall be included beginning with the first quarter beginning at least six months after the acquisition closes.

Changes in accounting principles shall be consistently applied.

Exhibit 10.5

S TOCK A PPRECIATION R IGHTS A GREEMENT

This STOCK APPRECIATION RIGHTS AGREEMENT (this “SAR Agreement”), dated as of May 6, 2010 (the “Grant Date”), is between ZEBRA TECHNOLOGIES CORPORATION , a Delaware corporation (the “Company”), and Anders Gustafsson (the “Participant”), relating to a stock appreciation right granted under the 2006 Zebra Technologies Corporation Incentive Compensation Plan (the “Plan”). Capitalized terms used in this SAR Agreement without definitions shall have the meanings ascribed to such terms in the Plan.

1.	Grant of Stock Appreciation Right .

(a)

Grant . Subject to the provisions of this SAR Agreement and pursuant to the provisions of the Plan, the Company hereby grants to the Participant as of the Grant Date a stock appreciation right (the “SAR”) covering 111,558 shares (the “SAR Shares”) of the Company’s Class A Common Stock, $0.01 par value per share (the “Stock”), at a price of << Insert Stock Price on Grant Date >> per share (the “SAR Price”). The SAR is not issued in tandem with an Option. This SAR Agreement shall be null and void unless the Participant accepts this SAR Agreement by either (i) electronically accepting this SAR Agreement through the Company’s electronic delivery and acceptance process operated by e*Trade or (ii) executing this SAR Agreement in the space provided below and returning it to the Company not later than June 5, 2010.

(b)

(c)

Nontransferability . The SAR shall be nontransferable, except by will or the laws of descent and distribution, or as otherwise permitted under the Plan.

2.	Vesting of the SAR .

(a)

General Vesting Rule . Prior to the Expiration Date, the SAR shall become and be exercisable as follows:


Vesting Date Anniversary		Percentage of SAR Exercisable

Prior to the third anniversary of the Grant Date		0%

On or after the third anniversary of the Grant Date		25%

On or after the fourth anniversary of the Grant Date, an additional		25%

On or after the fifth anniversary of the Grant Date, an additional		50%

provided, however, except as otherwise provided for under this SAR Agreement, the Participant must remain employed by the Company or any Subsidiary continuously through the applicable vesting dates.

(b)

Additional Vesting Rules . Notwithstanding Section 2(a) hereof, the SAR shall be subject to the following additional vesting rules in the following circumstances:

(i)

Death, Disability, Good Reason or Termination by the Company or any Subsidiary other than for Cause . Notwithstanding the Employment Agreement between the Company and the Participant effective as of September 4, 2007, as amended (the “Employment Agreement”), and unless otherwise determined by the Board of Directors of the Company or the Compensation Committee of the Board of Directors, in the event the Participant’s employment with the Company and/or any Subsidiary is terminated due to the Participant’s death or Disability, or by reason of the Participant’s resignation for Good Reason, or by the Company and/or any Subsidiary other than for Cause, the number of SAR Shares that shall be vested as of the date of the Participant’s termination of employment shall equal the number obtained by (A) multiplying 111,558 by a fraction, the numerator of which is the number of days from but excluding the Grant Date and to and including the date of the Participant’s termination of employment, and the denominator of which is 1826 and (B) subtracting from such product the number, if any, of SAR Shares that vested prior to the date of the Participant’s termination of employment in accordance with Section 2(a). Any unexercised vested portion of the SAR shall remain exercisable until the earlier of:

(A)

the Expiration Date; or

(B)

one (1) year after the date of the Participant’s termination of employment due to the Participant’s death or Disability; or

(C)

ninety (90) days after the date of the Participant’s termination of employment by reason of the Participant’s resignation for Good Reason, or by the Company and/or any Subsidiary other than for Cause.

For purposes of this SAR Agreement, “Good Reason” and “Cause” have the meanings assigned to them in the Participant’s Employment Agreement. In the event of the Participant’s death, the Participant’s beneficiary or estate may exercise the vested SAR.

(ii)

(A)

the Expiration Date; or

(B)

one (1) year after the date of the Participant’s termination of employment due to Retirement.

For purposes of this SAR Agreement, “Retirement” means the Participant’s voluntary termination of employment with the Company and/or any Subsidiary after attaining either:

•

age fifty-five (55) with ten (10) or more complete years of service with the Company and/or any Subsidiary; or

•

age sixty-five (65).

(iii)

3.	Exercise of SAR .

(c) Payment of Taxes . If the Company is obligated to withhold an amount on account of any tax imposed as a result of the exercise of the SAR, the Participant shall be required to remit such amount to the Company, as provided in Section 17.1 of the Plan. Alternatively, subject to Company approval, the Participant may elect to withhold a portion of the SAR exercise payment equal to the minimum statutory tax that would be imposed on the exercise, as provided under Section 17.2 of the Plan. The Participant acknowledges and agrees that the Participant is responsible for the tax consequences associated with the grant of the SAR and its exercise.

(i)

(ii)

its receiving proof it considers satisfactory that a person seeking to exercise the SAR after the Participant’s death is entitled to do so;

(iii)

Participant complying with any requests for representations under the Plan; and

(iv)

Participant complying with any federal, state, or local tax withholding obligations.

5.	Change in Control . Subject to Section 15 of the Plan:

6.	Confidentiality, Non-Solicitation and Non-Compete . The Participant agrees to, understands, and acknowledges the following:

(a)

(i)

(ii)

inventions, designs, methods, discoveries, works of authorship, creations, improvements or ideas developed or otherwise produced, acquired or used by the Company and/or a Subsidiary;

(iii)

(iv)

(v)

(b)

(i)

breaches or violates Section 6(a) of this SAR Agreement; or

(ii)

(iii)

(iv)

(c)

Remedies for Violation .

(i)

Injunctive Action . The Participant acknowledges that if he or she violates the terms of this Section 6, the injury that would be suffered by the Company and/or a Subsidiary as a result of a breach of the provisions of this SAR Agreement (including any provision of Section 6(a) or (b) hereof) would be irreparable and that an award of monetary damages to the Company and/or a Subsidiary for such a breach would be an inadequate remedy. Consequently, the Company and/or a Subsidiary will have the right, in addition to any other rights it may have, to obtain injunctive relief to restrain any breach or threatened breach or otherwise to specifically enforce any provision of this SAR Agreement, and the Company and/or a Subsidiary will not be obligated to post bond or other security in seeking such relief. Without limiting the Company’s or a Subsidiary’s rights under this Section 6 (or Sections 6(a) or (b) hereof) or any other remedies of the Company or a Subsidiary, if the Participant breaches any of the provisions of Section 6(a) or (b) hereof, the Company will have the right to cancel this SAR Agreement.

(ii)

Attorneys’ Fees; Set-off Right . In addition to the rights available to the Company and its Subsidiaries under Section 6(i) hereof, if the Participant violates the terms of this Section 6 at any time, the Company shall be entitled to reimbursement from the Participant of any fees and expenses (including attorneys’ fees) incurred by or on behalf of the Company or any Subsidiary in enforcing the Company’s or a Subsidiary’s rights under this Section 6. By accepting this SAR grant, the Participant hereby consents to a deduction from any amounts the Company or any Subsidiary owes to the Participant from time to time (including amounts owed to the Participant as wages or other compensation, fringe benefits, or vacation pay, as well as any other amounts owed to the Participant by the Company or any Subsidiary), unless such amount is subject to Section 409A of the Code, to the extent of any amounts that the Participant owes the Company under this Section 6. In addition to any injunctive relief sought under Section 6(i) hereof and whether or not the Company or any Subsidiary elects to make any set-off in whole or in part, if the Company or any Subsidiary does not recover by means of set-off the full amount the Participant owes to the Company or any Subsidiary, calculated as set forth in this Section 6(ii), the Participant agrees to immediately pay the unpaid balance to the Company or any Subsidiary.

(d)

(e)

7.	Miscellaneous Provisions .

(a)

(b)

(c)

(d)

(e)

(f)

(g)

(h)

(i)

Waiver; Cumulative Rights . The failure or delay of either party to require performance by the other party of any provision hereof shall not affect its right to require performance of such provision unless and until such performance has been waived in writing. Each and every right hereunder is cumulative and may be exercised in part or in whole from time to time.

(j)

(k)

Counterparts . This SAR Agreement may be signed in counterparts, each of which shall be an original, but both of which shall constitute but one and the same instrument.

(l)

(m)

(n)

Entire Agreement . This SAR Agreement, together with the Plan, constitutes the entire obligation of the parties hereto with respect to the subject matter hereof and shall supersede any prior expressions of intent or understanding with respect to this transaction.

(o)

Amendment . Any amendment to this SAR Agreement shall be in writing and signed by an executive officer of the Company or the Director of Compensation and Benefits.

(p)

Headings . The headings contained in this SAR Agreement are for reference purposes only and shall not affect the meaning or interpretation of this SAR Agreement.


ZEBRA TECHNOLOGIES CORPORATION		PARTICIPANT

By:		Signed:
Name:	Joanne Townsend	Name:	Anders Gustafsson
Title:	Vice President, Human Resources

Exhibit 10.6

R ESTRICTED S TOCK A GREEMENT

This RESTRICTED STOCK AGREEMENT (this “Stock Agreement”), dated as of May 6, 2010 (the “Grant Date”), is between ZEBRA TECHNOLOGIES CORPORATION , a Delaware corporation (the “Company”), and Anders Gustafsson (the “Participant”), relating to restricted stock granted under the 2006 Zebra Technologies Corporation Incentive Compensation Plan (the “Plan”). Capitalized terms used in this Stock Agreement without definition shall have the meanings ascribed to such terms in the Plan.

1. Grant of Restricted Stock .

(a) Grant . Subject to the provisions of this Stock Agreement and pursuant to the provisions of the Plan, the Company hereby grants to the Participant as of the Grant Date 41,667 shares of the Company’s Class A Common Stock, $.01 par value per share (the “Restricted Stock”). This Stock Agreement shall be null and void unless the Participant accepts this Stock Agreement by either (i) electronically accepting this Stock Agreement through the Company’s electronic delivery and acceptance process operated by e*Trade or (ii) executing this Stock Agreement in the space provided below and returning it to the Company not later than June 5, 2010.

2. Vesting of Restricted Stock .

(a) Period of Restriction . The Restricted Stock shall be forfeitable and non-transferable during the Period of Restriction. The “Period of Restriction” with respect to the Restricted Stock shall begin on the Grant Date and end at the close of business on May 6, 2015 (the “Vesting Date”); provided, however, that prior to the Vesting Date, the Shares of Restricted Stock shall vest as follows:


Vesting Date Anniversary		Percentage of Restricted Stock Vested

Prior to the third anniversary of the Grant Date		0%

On or after the third anniversary of the Grant Date		25%

On or after the fourth anniversary of the Grant Date, an additional		25%

On or after the fifth anniversary of the Grant Date, an additional		50%

provided, however, except as otherwise provided for under this Stock Agreement, that the Participant must remain employed by the Company or any Subsidiary continuously through the Period of Restriction.

(b) Additional Vesting Rules . Notwithstanding Section 2(a) hereof, the Restricted Stock shall be subject to the following additional vesting rules in the following circumstances:

(i) Death, Disability, Good Reason or Termination by the Company or any Subsidiary other than for Cause . Notwithstanding the Employment Agreement between the Company and the Participant effective as of September 4, 2007, as amended (the “Employment Agreement”), and unless otherwise determined by the Board of Directors of the Company or the Compensation Committee of the Board of Directors, in the event the Participant’s employment with the Company and its Subsidiaries is terminated due to death or Disability, or by reason of the Participant’s resignation for Good Reason, or by the Company and/or any Subsidiary other than for Cause, the number of shares of Restricted Stock that shall be vested as of the date of the Participant’s termination of employment shall equal the number obtained by (A) multiplying 41,667 by a fraction, the numerator of which is the number of days from but excluding the Grant Date and to and including the date of the Participant’s termination of employment, and the denominator of which is 1826 and (B) subtracting from such product the number, if any, of shares of Restricted Stock that vested prior to the date of the Participant’s termination of employment in accordance with Section 2(a). For purposes of this Stock Agreement, “Good Reason” and “Cause” have the meanings assigned to them in the Participant’s Employment Agreement.

(ii) Other Termination of Employment . In the event the Participant’s employment with the Company and its Subsidiaries is terminated for any reason other than as provided in Section 2(b)(i), any unvested Restricted Stock as of the effective date of the Participant’s termination of employment shall immediately be forfeited to the Company.

3. Rights While Holding Restricted Stock .

(b) Rights as a Stockholder . During the period that shares of Restricted Stock remain unvested, the Participant shall have all of the rights of a stockholder of the Company with respect to the Restricted Stock including, but not limited to, the right to receive dividends paid on the shares of Restricted Stock and the full right to vote such shares.

(c) Section 83(b) Election . The Participant is not permitted to make a Section 83(b) election with respect to the Restricted Stock.

(ii) the Participant complying with any requests for representations under the Plan;

(iii) the Participant complying with any federal, state, or local tax withholding obligations; and

(iv) its deferring payment of any amount that it reasonably determines would not be deductible under Code Section 162(m) until the earlier of:

(A)

the earliest date on which the Company reasonably determines that the deductibility of the payment will not be limited; or

(B)

the year following the Participant’s termination of employment.

4. Payment of Taxes . If the Company is obligated to withhold an amount on account of any tax imposed as a result of the issuance of the Restricted Stock, the Participant shall be required to pay such amount to the Company, as provided under Section 17 of the Plan. The Participant acknowledges and agrees that the Participant is responsible for the tax consequences associated with the grant of the Restricted Stock and its vesting.

5. Change in Control . Subject to Section 15 of the Plan:

(b) Notwithstanding any provision in this Agreement to the contrary, in the event of a Change in Control pursuant to Section 2.5(a) or (b) of the Plan, or in the event of a Change in Control pursuant to Section 2.5(c) or (d) of the Plan as to which Section 5(a) above does not apply, this grant shall be surrendered to the Company by the Participant, and this grant shall immediately be canceled by the Company, and the Participant shall receive, within 30 days following the effective date of the Change in Control, a cash payment from the Company in an amount equal to the number of Shares of unvested Restricted Stock as of the effective date of the Change in Control, multiplied by the greater of (i) the highest per Share price offered to stockholders of the Company in any transaction whereby the Change in Control takes place or (ii) the Fair Market Value of a Share on the effective date of the Change in Control.

6. Confidentiality, Non-Solicitation and Non-Compete . The Participant agrees to, understands and acknowledges the following:

(ii) inventions, designs, methods, discoveries, works of authorship, creations, improvements or ideas developed or otherwise produced, acquired or used by the Company and/or a Subsidiary;

All Company Materials are and will be the sole property of the Company and/or Subsidiary. The Participant agrees that during and after his or her employment by the Company and/or Subsidiary, the Participant will not remove any Company Materials from the business premises of the Company or a Subsidiary or deliver any Company Materials to any person or entity outside the Company or a Subsidiary, except as the Participant is required to do so in connection with performing the duties of his or her employment. The Participant further agrees that, immediately upon the termination of his or her employment for any reason, or during the Participant’s employment if so requested by the Company, the Participant will return all Company Materials and other physical property, and any reproduction thereof, excepting only the Participant’s copy of this Agreement. For purposes of this Stock Agreement, “Company Materials” means documents or other media or tangible items that contain or embody Confidential Information or any other information concerning the business, operations or future/strategic plans of the Company and/or any Subsidiary, whether such documents have been prepared by the Participant or by others.

(i) breaches or violates Section 6(a) of this Stock Agreement; or

(ii) Forfeiture of Restricted Stock . In addition to the rights available to the Company and its Subsidiaries under Section 6(c)(i) hereof, if the Participant violates the terms of this Section 6 at any time, the Participant, without any further action by the Company or the Participant, shall forfeit, as of the first day of any such violation, all right, title and interest to unvested Restricted Stock and the Company further shall be entitled to reimbursement from the Participant of any fees and expenses (including attorneys’ fees) incurred by or on behalf of the Company or any Subsidiary in enforcing the Company’s or a Subsidiary’s rights under this Section 6. By accepting this Restricted Stock grant, the Participant hereby consents to a deduction from any amounts the Company or any Subsidiary owes to the Participant from time to time (including amounts owed to the Participant as wages or other compensation, fringe benefits, or vacation pay, as well as any other amounts owed to the Participant by the Company or any Subsidiary), unless such amount is subject to Section 409A of the Code, to the extent of any amounts that the Participant owes to the Company under this Section 6. In addition to any injunctive relief sought under Section 6(c)(i) hereof and whether or not the Company or any Subsidiary elects to make any set-off in whole or in part, if the Company or any Subsidiary does not recover by means of set-off the full amount the Participant owes to the Company or any Subsidiary, calculated as set forth in this Section 6(c)(ii), the Participant agrees to immediately pay the unpaid balance to the Company or any Subsidiary.

7. Miscellaneous Provisions .

(d) Administration . This Stock Agreement and the rights of the Participant hereunder are subject to all the terms and conditions of the Plan, as the same may be amended from time to time, as well as to such rules and regulations as the Committee may adopt for administration of the Plan. It is expressly understood that the Committee is authorized to administer, construe, and make all determinations necessary or appropriate to the administration of the Plan and this Stock Agreement, all of which shall be binding upon the Participant.

(e) No Vested Right In Future Awards . Participant acknowledges and agrees (by executing this Stock Agreement) that the granting of Restricted Stock under this Stock Agreement is made on a fully discretionary basis by the Company and that this Stock Agreement does not lead to a vested right to further restricted stock or other awards in the future.

(f) Use Of Personal Data . By executing this Stock Agreement, Participant acknowledges and agrees to the collection, use, processing and transfer of certain personal data, including his or her name, salary, nationality, job title, position and details of all past Awards and current Awards outstanding under the Plan (“Data”), for the purpose of managing and administering the Plan. The Participant is not obliged to consent to such collection, use, processing and transfer of personal data, but a refusal to provide such consent may affect his or her ability to participate in the Plan. The Company, or its Subsidiaries, may transfer Data among themselves or to third parties as necessary for the purpose of implementation, administration and management of the Plan. These various recipients of Data may be located elsewhere throughout the world. The Participant authorizes these various recipients of Data to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing the Plan. The Participant may, at any time, review Data with respect to the Participant and require any necessary amendments to such Data. The Participant may withdraw his or her consent to use Data herein by notifying the Company in writing; however, the Participant understands that by withdrawing his or her consent to use Data, the Participant may affect his or her ability to participate in the Plan.

(g) Severability . In the event that any provision of this Stock Agreement (including, without limitations, the provisions of Section 6 hereof) are held to be unenforceable under applicable law to any extent, such provision(s) shall, to that extent, be excluded from this Stock Agreement and the balance of the Stock Agreement shall be interpreted as if such provision(s) were so excluded to that extent and shall be enforceable in accordance with its terms.

(h) Waiver; Cumulative Rights . The failure or delay of either party to require performance by the other party of any provision hereof shall not affect its right to require performance of such provision unless and until such performance has been waived in writing. Each and every right hereunder is cumulative and may be exercised in part or in whole from time to time.

(j) Counterparts . This Stock Agreement may be signed in two counterparts, each of which shall be an original, but both of which shall constitute but one and the same instrument.

(m) Entire Agreement . This Stock Agreement, together with the Plan, constitute the entire obligation of the parties hereto with respect to the subject matter hereof and shall supersede any prior expressions of intent or understanding with respect to this transaction.

(n) Amendment . Any amendment to this Stock Agreement shall be in writing and signed by an executive officer of the Company or the Director of Compensation and Benefits.

(o) Headings . The headings contained in this Stock Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Stock Agreement.


ZEBRA TECHNOLOGIES CORPORATION		PARTICIPANT

By:		Signed:
Name:	Joanne Townsend	Name:	Anders Gustafsson
Title:	Vice President, Human Resources

Exhibit 10.7

R ESTRICTED S TOCK A GREEMENT

1. Grant of Restricted Stock .

Grant . Subject to the provisions of this Stock Agreement and pursuant to the provisions of the Plan, the Company hereby grants to the Participant as of the Grant Date 100,000 shares (the “Target Shares”) of the Company’s Class A Common Stock, $.01 par value per share (the “Restricted Stock”). This Stock Agreement shall be null and void unless the Participant accepts this Stock Agreement by either (i) electronically accepting this Stock Agreement through the Company’s electronic delivery and acceptance process operated by e*Trade or (ii) executing this Stock Agreement in the space provided below and returning it to the Company not later than June 5, 2010.

2. Vesting of Restricted Stock .

Period of Restriction and Performance Objective .

(i)

(ii)

Except as otherwise provided for under this Stock Agreement, the Participant must remain employed by the Company or any Subsidiary continuously through the Period of Restriction. Any Restricted Stock which is unvested at the expiration of the Period of Restriction shall immediately be forfeited to the Company.

Additional Vesting Rules . Notwithstanding Section 2(a) hereof, the Restricted Stock shall be subject to the following additional vesting rules in the following circumstances:

(i)

Death, Disability, Good Reason or Termination by the Company or any Subsidiary other than for Cause . Notwithstanding the Employment Agreement between the Company and the Participant effective as of September 4, 2007, as amended (the “Employment Agreement”), and unless otherwise determined by the Board of Directors of the Company or the Compensation Committee of the Board of Directors, in the event the Participant’s employment with the Company and its Subsidiaries is terminated prior to May 6, 2013 due to death or Disability, or by reason of the Participant’s resignation for Good Reason, or by the Company and/or any Subsidiary other than for Cause, the number of shares of Restricted Stock that shall be vested as of the date of the Participant’s termination of employment shall equal the product obtained by multiplying 100,000 by a fraction, the numerator of which is the number of days from but excluding the Grant Date and to and including the date of the Participant’s termination of employment, and the denominator of which is 1096. For purposes of this Stock Agreement, “Good Reason” and “Cause” have the meanings assigned to them in the Participant’s Employment Agreement.

(ii)

Other Termination of Employment . In the event the Participant’s employment with the Company and its Subsidiaries is terminated for any reason other than as provided in Section 2(b)(i), any unvested Restricted Stock as of the effective date of the Participant’s termination of employment shall immediately be forfeited to the Company.

(iii)

Change in Control Vesting . Subject to the provisions of Section 15 of the Plan and Section 5 of this Stock Agreement, if a Change in Control occurs on or prior to May 6, 2013, a number of Shares equal to the Target Shares shall immediately become fully vested as of the effective date of the Change of Control and the remainder of the Period of Restriction relating to such Restricted Stock shall immediately lapse.

3. Rights While Holding Restricted Stock .

a. Custody and Availability of Shares . The Company shall hold the shares of Restricted Stock subject to this Agreement in uncertificated, book-entry form registered in the Participant’s name until the Restricted Stock shall have vested, in whole or in part, pursuant to Section 2. Subject to Section 4, if and to the extent shares of Restricted Stock become vested, the Company shall remove or cause the removal of the restrictions on transfer of such shares arising from this Stock Agreement. Such unrestricted shares shall be made available to the Participant in uncertificated, book-entry form registered in the Participant’s name.

b. Rights as a Stockholder . During the period that shares of Restricted Stock remain unvested, the Participant shall have all of the rights of a stockholder of the Company with respect to the Restricted Stock including, but not limited to, the right to receive dividends paid on the shares of Restricted Stock and the full right to vote such shares.

c. Section 83(b) Election . The Participant is not permitted to make a Section 83(b) election with respect to the Restricted Stock.

d. Compliance with Federal and State Law . The Company may postpone issuing and delivering any Restricted Stock for so long as the Company reasonably determines to be necessary to satisfy the following:

(ii) the Participant complying with any requests for representations under the Plan; and

(iii) the Participant complying with any federal, state or local tax withholding obligations.

5. Change in Control . Subject to Section 15 of the Plan:

(a) Notwithstanding any provision in this Agreement, in the event of a Change in Control pursuant to Section 2.5(c) or (d) of the Plan in connection with which holders of Shares may receive consideration consisting solely of shares of common stock that are registered under Section 12 of the Exchange Act (and disregarding the payment of cash in lieu of fractional shares), the number of Shares which shall be treated as vested Restricted Stock under this Stock Agreement immediately after the Change in Control shall equal the number of Target Shares and there shall be substituted for each such vested Share the number and class of shares into which each outstanding Share shall be converted pursuant to such Change in Control.

(b) Notwithstanding any provision in this Agreement to the contrary, in the event of a Change in Control pursuant to Section 2.5(a) or (b) of the Plan, or in the event of a Change in Control pursuant to Section 2.5(c) or (d) of the Plan as to which Section 5(a) above does not apply, this grant shall be surrendered to the Company by the Participant, and this grant shall immediately be canceled by the Company, and the Participant shall receive, within 30 days following the effective date of the Change in Control, a cash payment from the Company in an amount equal to the number of Target Shares multiplied by the greater of (i) the highest per Share price offered to stockholders of the Company in any transaction whereby the Change in Control takes place or (ii) the Fair Market Value of a Share on the effective date of the Change in Control.

6. Confidentiality, Non-Solicitation and Non-Compete . Participant agrees to, understands and acknowledges the following:

a. Confidential Information . The Participant will be furnished, use or otherwise have access to certain Confidential Information of the Company and/or a Subsidiary. For purposes of this Stock Agreement, “Confidential Information” means any and all financial, technical, commercial or other information concerning the business and affairs of the Company and/or a Subsidiary that is confidential and proprietary to the Company and/or a Subsidiary, including without limitation,

(ii) inventions, designs, methods, discoveries, works of authorship, creations, improvements or ideas developed or otherwise produced, acquired or used by the Company and/or a Subsidiary;

All Company Materials are and will be the sole property of the Company and/or Subsidiary. The Participant agrees that during and after his or her employment by the Company and/or Subsidiary, the Participant will not remove any Company Materials from the business premises of the Company or a Subsidiary or deliver any Company Materials to any person or entity outside the Company or a Subsidiary, except as the Participant is required to do so in connection with performing the duties of his or her employment. The Participant further agrees that, immediately upon the termination of his or her employment for any reason, or during the Participant’s employment if so requested by the Company, the Participant will return all Company Materials and other physical property, and any reproduction thereof, excepting only the Participant’s copy of this Agreement. For purposes of this Stock Agreement, “Company Materials” means documents or other media or tangible items that contain or embody Confidential Information or any other information concerning the business, operations or future/strategic plans of the Company and/or any Subsidiary, whether such documents have been prepared by the Participant or by others.

(i) breaches or violates Section 6(a) of this Stock Agreement; or

(iv) solicits or encourages any customer, vendor or potential customer or vendor of the Company with whom the Participant had contact while employed by the Company to terminate or otherwise alter his, her or its relationship with the Company or any Subsidiary. The Participant understands that any person or entity that Participant contacted during the twelve (12) months prior to the date of the Participant’s termination of employment for the purpose of soliciting sales from such person or entity shall be regarded as a “potential customer” of the Company to whom the Company or a Subsidiary has a protectable proprietary interest;

c. Remedies for Violation .

(i) Injunctive Action . Participant acknowledges that if he or she violates the terms of this Section 6 the injury that would be suffered by the Company and/or a Subsidiary as a result of a breach of the provisions of this Stock Agreement (including any provision of Section 6(a) or (b) hereof) would be irreparable and that an award of monetary damages to the Company and/or a Subsidiary for such a breach would be an inadequate remedy. Consequently, the Company and/or a Subsidiary will have the right, in addition to any other rights it may have, to obtain injunctive relief to restrain any breach or threatened breach or otherwise to specifically enforce any provision of this Stock Agreement, and the Company and/or a Subsidiary will not be obligated to post bond or other security in seeking such relief. Without limiting the Company’s or a Subsidiary’s rights under this Section 6(c) (or Sections 6(a) or (b) hereof) or any other remedies of the Company or a Subsidiary, if the Participant breaches any of the provisions of Sections 6(a) or (b) hereof, the Company will have the right to cancel this Stock Agreement.

(ii) Attorneys’ Fees; Set-off Right . In addition to the rights available to the Company and its Subsidiaries under Section 6(c)(i) hereof, if the Participant violates the terms of this Section 6 at any time, the Company shall be entitled to reimbursement from the Participant of any fees and expenses (including attorneys’ fees) incurred by or on behalf of the Company or any Subsidiary in enforcing the Company’s or a Subsidiary’s rights under this Section 6. By accepting this Restricted Stock grant, the Participant hereby consents to a deduction from any amounts the Company or any Subsidiary owes to the Participant from time to time (including amounts owed to the Participant as wages or other compensation, fringe benefits or vacation pay, as well as any other amounts owed to the Participant by the Company or any Subsidiary), unless such amount is subject to Section 409A of the Code, to the extent of any amounts that the Participant owes to the Company under this Section 6. In addition to any injunctive relief sought under Section 6(c)(i) hereof and whether or not the Company or any Subsidiary elects to make any set-off in whole or in part, if the Company or any Subsidiary does not recover by means of set-off the full amount the Participant owes to the Company or any Subsidiary, calculated as set forth in this Section 6(c)(ii), the Participant agrees to immediately pay the unpaid balance to the Company or any Subsidiary.

7. Miscellaneous Provisions .

d. Administration . This Stock Agreement and the rights of the Participant hereunder are subject to all the terms and conditions of the Plan, as the same may be amended from time to time, as well as to such rules and regulations as the Committee may adopt for administration of the Plan. It is expressly understood that the Committee is authorized to administer, construe, and make all determinations necessary or appropriate to the administration of the Plan and this Stock Agreement, all of which shall be binding upon the Participant.

i. Notices . Any notice which either party hereto may be required or permitted to give the other shall be in writing and may be delivered personally or by mail, postage prepaid, addressed to the Secretary of the Company, at its then corporate headquarters, and the Participant at the Participant’s address (including any electronic mail address) as shown on the Company’s records, or to such other address as the Participant, by notice to the Company, may designate in writing from time to time. The Participant hereby consents to electronic delivery of any notices that may be made hereunder.

j. Counterparts . This Stock Agreement may be signed in two counterparts, each of which shall be an original, but both of which shall constitute but one and the same instrument.

n. Amendment . Any amendment to this Stock Agreement shall be in writing and signed by an executive officer of the Company or the Director of Compensation and Benefits.


ZEBRA TECHNOLOGIES CORPORATION				PARTICIPANT


Joanne Townsend				Anders Gustafsson
Vice President, Human Resources				Chief Executive Officer

Exhibit A

1.	Total Net Sales Performance Objective .


	Below Threshold	Threshold	Target	Maximum
Compounded Annual Growth Rate of Total Net Sales	< 5.00%	5.00%	7.50%	10.00%
Vested Percentage of Restricted Stock	0%	50.00%	100.00%	150.00%

Unless the Committee or the Board otherwise determines in its sole discretion, for purposes of calculating the CAGR (A) net sales of the Company derived from acquisitions shall be included and (B) divestitures of subsidiaries or businesses of the Company shall not affect the 2009 total net sales of the Company.

ROIC

< 9.00%

9.00% to

< 11.00%

11.00% to

< 14.00

Equal to or greater

than 14.00%

Modifier

0.6

0.8

1.0

1.2

ROIC equals the average of the Annual Fiscal ROIC for 2010, 2011 and 2012. Annual Fiscal ROIC is defined as net operating profit after tax (“NOPAT”) for the fiscal period divided by Invested Capital where (1) NOPAT equals Income from Operations of the Company for the fiscal period multiplied by (1-budgeted tax rate for the fiscal period) and (2) Invested Capital equals total assets, less cash and cash equivalents, current and long-term investments and marketable securities, and non-interest-bearing current liabilities, and which is calculated as the average Invested Capital reflected on five balance sheet dates (the ending balance for the prior fiscal year and the ending balance for all four fiscal quarters. “Income from Operations” means the consolidated operating income of the Company for the fiscal year, adjusted to remove non-recurring charges and for acquisitions as described in this subsection.

Changes in accounting principles shall be consistently applied.

Exhibit 10.8

S TOCK A PPRECIATION R IGHTS A GREEMENT

This STOCK APPRECIATION RIGHTS AGREEMENT (this “SAR Agreement”), dated as of <<Insert Grant Date as determined under Equity Grant Approval Process >> (the “Grant Date”), is between ZEBRA TECHNOLOGIES CORPORATION , a Delaware corporation (the “Company”), and <<Insert SAR Recipient’s Name>> (the “Participant”), relating to a stock appreciation right granted under the 2006 Zebra Technologies Corporation Incentive Compensation Plan (the “Plan”). Capitalized terms used in this SAR Agreement without definitions shall have the meanings ascribed to such terms in the Plan.

1. Grant of Stock Appreciation Right .

(a)

(b)

(c)

Nontransferability . The SAR shall be nontransferable, except by will or the laws of descent and distribution, or as otherwise permitted under the Plan.

2. Vesting of the SAR .

(a)

General Vesting Rule . Prior to the Expiration Date, 100% of the SAR shall become and be exercisable on the earlier of (i) the one-year anniversary of <<insert the Grant Date for annual awards or the Board member effective date >> and (ii) immediately prior to the next annual meeting of stockholders at which directors are to be elected (the “Vesting Date”) ; provided, however, except as otherwise provided for under this SAR Agreement, the Participant must remain a member of the Board of Directors of the Company (the “Board”) continuously through the Vesting Date.

(b)

Additional Vesting Rules . Notwithstanding Section 2(a) hereof, the SAR shall be subject to the following additional vesting rules in the following circumstances:

(i)

Death or Disability . Notwithstanding Section 2(a) hereof, in the event the Participant’s service on the Board is terminated due to the Participant’s death or Disability, any unvested portion of the SAR as of the date of such Participant’s termination of service shall immediately become fully vested and exercisable and, along with any unexercised vested portion of the SAR, shall remain exercisable until the earlier of:

(A)

the Expiration Date; or

(B)

one (1) year after the date of the Participant’s termination of service on the Board due to the Participant’s death or Disability.

In the event of the Participant’s death, the Participant’s beneficiary or estate may exercise the vested SAR.

(ii)

Retirement . In the event the Participant’s service on the Board is terminated due to Retirement, any unexercised vested portion of the SAR as of the date of the Participant’s termination of service on the Board shall remain exercisable until the earlier of:

(A)

the Expiration Date; or

(B)

one (1) year after the date of the Participant’s termination of service on the Board due to Retirement.

For purposes of this SAR Agreement, “Retirement” means the Participant’s voluntary termination of service on the Board after attaining either:

•

age fifty-five (55) with ten (10) or more complete years of service on the Board; or

•

age sixty-five (65).

(iii)

Other Termination of Service on the Board . In the event the Participant’s service on the Board is terminated for any reason other than as provided in Section 2(b)(i) or (ii) hereof, the unexercised vested portion of the SAR as of the date of such Participant’s termination shall remain exercisable until the earlier of:

(A)

the Expiration Date; or

(B)

ninety (90) days after the date of the Participant’s termination of service on the Board.

3. Exercise of SAR .

(a)

Notice of Exercise . Prior to the Expiration Date, the vested portion of the SAR may be exercised, in whole or in part, by delivering written notice to the Company in accordance with Section 7(j) hereof and in such form as the Company may require from time to time. Such notice of exercise shall specify the number of SAR Shares to be exercised.

(b)

Payment . As of the date of exercise of the SAR, the Company shall settle the exercised portion of the SAR as provided in Section 7.5 of the Plan. The amount of the payment for each SAR Share exercised shall equal (i) the Fair Market Value of a share of Stock on the date of exercise, less (ii) the SAR Price for each such exercised SAR Share. The exercised SAR shall be settled in whole shares of Stock, and cash for the value of a fractional share of Stock.

(c)

Payment of Taxes . If the Company is obligated to withhold an amount on account of any tax imposed as a result of the exercise of the SAR, the Participant shall be required to remit such amount to the Company, as provided in Section 17.1 of the Plan. Alternatively, subject to Committee approval, the Participant may elect to withhold a portion of the SAR exercise payment equal to the minimum statutory tax that would be imposed on the exercise, as provided under Section 17.2 of the Plan. The Participant acknowledges and agrees that the Participant is responsible for the tax consequences associated with the grant of the SAR and its exercise.

(d)

Death Prior to Exercise . In the event of the Participant’s death prior to the exercise of any vested portion of the SAR, the Participant’s beneficiary or estate may exercise the vested SAR.

4. Compliance with Federal and State Law . The Company reserves the right to delay the Participant’s exercise of any portion of the SAR if (a) the Company’s issuance of Stock upon such exercise would violate any applicable federal or state securities laws or any other applicable laws or regulations, or (b) the Company reasonably determines that payment of such SAR portion would not be deductible under Code Section 162(m). The Participant may not sell or otherwise dispose of any portion of the SAR in violation of any applicable law. The Company may postpone issuing and delivering any Stock in payment for the exercise of such portion of the SAR for so long as the Company reasonably determines to be necessary to satisfy the following:

(i)

(ii)

its receiving proof it considers satisfactory that a person seeking to exercise the SAR after the Participant’s death is entitled to do so;

(iii)

Participant complying with any requests for representations under the Plan; and

(iv)

Participant complying with any federal, state, or local tax withholding obligations.

5. Change in Control . Subject to Section 15 of the Plan:

6. Confidentiality, Non-Solicitation and Non-Compete . The Participant agrees to, understands and acknowledges the following:

(a)

(i)

(ii)

inventions, designs, methods, discoveries, works of authorship, creations, improvements or ideas developed or otherwise produced, acquired or used by the Company and/or a Subsidiary;

(iii)

the Company’s or Subsidiary’s proprietary programs, processes or software, consisting of, but not limited to, computer programs in source or object code and all related documentation and training materials, including all upgrades, updates, improvements, derivatives and modifications thereof and including programs and documentation in incomplete stages of design or research and development;

(iv)

(v)

The Company and its Subsidiaries devote significant financial, human and other resources to the development of their products, customer base and the general goodwill associated with their business, and the Company and its Subsidiaries diligently maintain the secrecy and confidentiality of their Confidential Information. Each and every component of the Confidential Information is sufficiently secret to derive economic value from its not being generally known to other persons. While serving on the Board and thereafter, the Participant will hold in the strictest confidence and not use in any manner which is detrimental to the Company or its Subsidiaries or disclose to any individual or entity any Confidential Information, except as may be required by the Company or its Subsidiaries in connection with the Participant’s service on the Board.

All Company Materials are and will be the sole property of the Company and/or Subsidiary. The Participant agrees that during and after his or her service on the Board, the Participant will not remove any Company Materials from the business premises of the Company or a Subsidiary or deliver any Company Materials to any person or entity outside the Company or a Subsidiary, except as the Participant is required to do so in connection with performing the duties as a member of the Board. The Participant further agrees that, immediately upon the termination of his or her service on the Board for any reason, or during the Participant’s tenure as a member of the Board if so requested by the Company, the Participant will return all Company Materials and other physical property, and any reproduction thereof, excepting only the Participant’s copy of this Agreement. For purposes of this SAR Agreement, “Company Materials” means documents or other media or tangible items that contain or embody Confidential Information or any other information concerning the business, operations or future/strategic plans of the Company and/or any Subsidiary, whether such documents have been prepared by the Participant or by others.

(b)

(i)

breaches or violates Section 6(a) of this SAR Agreement; or

(ii)

employs, recruits or solicits for employment any person who is (or was within the six (6) months prior to the date the Participant’s service on the Board terminated) an employee of the Company and/or any Subsidiary;

(iii)

accepts employment, serves on the board of directors of, or engages in a competing business that may require contact, solicitation, interference or diverting of any of the Company’s or any Subsidiary’s customers, or that may result in the disclosure, divulging, or other use of Confidential Information or Company Materials acquired during the Participant’s service on the Board; or

(iv)

solicits or encourages any customer, vendor or potential customer or vendor of the Company or any Subsidiary with whom the Participant had contact while serving on the Board to terminate or otherwise alter his, her or its relationship with the Company. The Participant understands that any person or entity with whom the Participant contacted during the twelve (12) months prior to the date of the Participant’s termination of service on the Board for the purpose of soliciting sales from such person or entity shall be regarded as a “potential customer” of the Company to whom the Company or a Subsidiary has a protectable proprietary interest;

(c)

Remedies for Violation .

(i)

Injunctive Action . The Participant acknowledges that if he or she violates the terms of this Section 6, the injury that would be suffered by the Company and/or a Subsidiary as a result of a breach of the provisions of this SAR Agreement (including any provision of Section 6(a) or (b) hereof) would be irreparable and that an award of monetary damages to the Company and/or a Subsidiary for such a breach would be an inadequate remedy. Consequently, the Company and/or its Subsidiary will have the right, in addition to any other rights it may have, to obtain injunctive relief to restrain any breach or threatened breach or otherwise to specifically enforce any provision of this SAR Agreement, and the Company and/or a Subsidiary will not be obligated to post bond or other security in seeking such relief. Without limiting the Company’s or Subsidiary’s rights under this Section 6(c) (or Sections 6(a) or (b) hereof) or any other remedies of the Company or a Subsidiary, if the Participant breaches any of the provisions of Section 6(a) or (b) hereof, the Company will have the right to cancel this SAR Agreement.

(ii)

Attorneys’ Fees; Set-off Right . In addition to the rights available to the Company and its Subsidiaries under Section 6(c)(i) hereof, if the Participant violates the terms of this Section 6 at any time, the Company shall be entitled to reimbursement from the Participant of any fees and expenses (including attorneys’ fees) incurred by or on behalf of the Company or any Subsidiary in enforcing the Company’s or a Subsidiary’s rights under this Section 6. By accepting this SAR grant, the Participant hereby consents to a deduction from any amounts the Company or any Subsidiary owes to the Participant from time to time (including amounts owed to the Participant as wages or other compensation, fringe benefits, or vacation pay, as well as any other amounts owed to the Participant by the Company or any Subsidiary), unless such amount is subject to Section 409A of the Code, to the extent of any amounts that the Participant owes the Company under this Section 6. In addition to any injunctive relief sought

under Section 6(c)(i) hereof and whether or not the Company or any Subsidiary elects to make any set-off in whole or in part, if the Company or any Subsidiary does not recover by means of set-off the full amount the Participant owes to the Company or any Subsidiary, calculated as set forth in this Section 6(c)(ii), the Participant agrees to immediately pay the unpaid balance to the Company or any Subsidiary.

(d)

(e)

7. Miscellaneous Provisions .

(a)

No Service or Employment Rights . No provision of this SAR Agreement or of the SAR granted hereunder shall give the Participant any right to continue to serve on the Board or in the service or employ of the Company or any Subsidiary, create any inference as to the length of employment or service of the Participant, affect the right of the Company or any Subsidiary to terminate the employment or service of the Participant, with or without Cause, or give the Participant any right to participate in any employee welfare or benefit plan or other program (other than the Plan) of the Company or any Subsidiary.

(b)

(c)

(d)

(e)

(f)

(g)

Use of Personal Data . By executing this SAR Agreement, the Participant acknowledges and agrees to the collection, use, processing and transfer of certain personal data, including his or her name, compensation, nationality, job title, position, and details of all past Awards and current Awards outstanding under the Plan (“Data”), for the purpose of managing and administering the Plan. The Participant is not obliged to consent to such collection, use, processing and transfer of personal data, but a refusal to provide such consent may affect his or her ability to participate in the Plan. The Company, or its Subsidiaries, may transfer Data among themselves or to third parties as necessary for the purpose of implementation, administration and management of the Plan. These various recipients of Data may be located elsewhere throughout the world. The Participant authorizes these various recipients of Data to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing the Plan. The Participant may, at any time, review Data with respect to the Participant and require any necessary amendments to such Data. The Participant may withdraw his or her consent to use Data herein by notifying the Company in writing; however, the Participant understands that by withdrawing his or her consent to use Data, the Participant may affect his or her ability to participate in the Plan.

(h)

Severability . In the event that any provision of this SAR Agreement (including, without limitations, the provisions of Section 6 hereof) are held to be unenforceable under applicable law to any extent, such provision(s) shall, to that extent, be excluded from this SAR Agreement and the balance of the SAR Agreement shall be interpreted as if such provision(s) were so excluded to that extent and shall be enforceable in accordance with its terms.

(i)

(j)

(k)

Counterparts . This SAR Agreement may be signed in counterparts, each of which shall be an original, but both of which shall constitute but one and the same instrument.

(l)

(m)

(n)

Entire Agreement. This SAR Agreement, together with the Plan, constitutes the entire obligation of the parties hereto with respect to the subject matter hereof and shall supersede any prior expressions of intent or understanding with respect to this transaction.

(o)

Amendment . Any amendment to this SAR Agreement shall be in writing and signed by an executive officer of the Company or the Director of Compensation and Benefits.

(p)

Headings . The headings contained in this SAR Agreement are for reference purposes only and shall not affect the meaning or interpretation of this SAR Agreement.


ZEBRA TECHNOLOGIES CORPORATION						PARTICIPANT

By:						Signed:
Name: Joanne Townsend						Name: <<Insert Recipient’s Name>>
Title: Vice President, Human Resources

Exhibit 10.9

S TOCK A PPRECIATION R IGHTS A GREEMENT

This STOCK APPRECIATION RIGHTS AGREEMENT (this “SAR Agreement”), dated as of May 29, 2009 (the “Grant Date”), is between ZEBRA TECHNOLOGIES CORPORATION , a Delaware corporation (the “Company”), and <<Insert SAR Recipient’s Name>> (the “Participant”), relating to a stock appreciation right granted under the 2006 Zebra Technologies Corporation Incentive Compensation Plan (the “Plan”). Capitalized terms used in this SAR Agreement without definitions shall have the meanings ascribed to such terms in the Plan.

1.	Grant of Stock Appreciation Right .

(a)

(b)

(c)

Nontransferability . The SAR shall be nontransferable, except by will or the laws of descent and distribution, or as otherwise permitted under the Plan.

2.	Vesting of the SAR .

(a)

General Vesting Rule . Prior to the Expiration Date, the SAR shall become and be exercisable as follows:


Grant Date Anniversary		Percentage of SAR that Becomes Exercisable
Prior to the first anniversary of the Grant Date		0%
On or after the first anniversary of the Grant Date		100%

provided, however, except as otherwise provided for under this SAR Agreement, the Participant must remain a member of the Board of Directors of the Company (the “Board”) continuously through the applicable vesting date.

(b)

Death or Disability . Notwithstanding the provisions of Section 2(a) hereof, in the event the Participant’s service on the Board is terminated due to the Participant’s death or Disability, any unvested portion of the SAR as of the date of such Participant’s termination of service shall immediately become fully vested and exercisable and, along with any unexercised vested portion of the SAR, shall remain exercisable until the earlier of:

(i)

the Expiration Date; or

(ii)

one (1) year after the date of the Participant’s termination of service on the Board due to the Participant’s death or Disability.

In the event of the Participant’s death, the Participant’s beneficiary or estate may exercise the vested SAR.

(c)

(i)

the Expiration Date; or

(ii)

one (1) year after the date of the Participant’s termination of service on the Board due to Retirement.

For purposes of this SAR Agreement, “Retirement” means the Participant’s voluntary termination of service on the Board after attaining either:

•

age fifty-five (55) with ten (10) or more complete years of service on the Board; or

•

age sixty-five (65).

(d)

Other Termination of Service on the Board . In the event the Participant’s service on the Board is terminated for any reason other than as provided in Section 2(b) or (c) hereof, the unexercised vested portion of the SAR as of the date of such Participant’s termination shall remain exercisable until the earlier of:

(i)

the Expiration Date; or

(ii)

ninety (90) days after the date of the Participant’s termination of service on the Board.

(e)

Change in Control Vesting . Subject to the provisions of Section 15 of the Plan, if a Change in Control occurs, 100% of the remaining unvested portion of the SAR shall be immediately vested and exercisable upon such Change in Control and, along with the unexercised vested portion of the SAR, shall remain exercisable through the Expiration Date.

3.	Exercise of SAR .

(a)

Notice of Exercise . Prior to the Expiration Date, the vested portion of the SAR may be exercised, in whole or in part, by delivering written notice to the Company in accordance with Section 7(k) hereof and in such form as the Committee may require from time to time. Such notice of exercise shall specify the number of SAR Shares to be exercised.

(b)

(c)

Alternatively, subject to Committee approval, the Participant may elect to withhold a portion of the SAR exercise payment equal to the minimum statutory tax that would be imposed on the exercise, as provided under Section 17.2 of the Plan. The Participant acknowledges and agrees that the Participant is responsible for the tax consequences associated with the grant of the SAR and its exercise.

(d)

Death Prior to Exercise . In the event of the Participant’s death prior to the exercise of any vested portion of the SAR, the Participant’s beneficiary or estate may exercise the vested SAR.

(i)

(ii)

its receiving proof it considers satisfactory that a person seeking to exercise the SAR after the Participant’s death is entitled to do so;

(iii)

Participant complying with any requests for representations under the Plan; and

(iv)

Participant complying with any federal, state, or local tax withholding obligations.

Changes in Company’s Capital Structure . As may be determined to be appropriate and equitable by the Committee, in its complete and sole discretion, to prevent dilution or enlargement of rights, the Committee shall make or authorize to be made an adjustment in the number and class of SAR Shares and/or the SAR Price to prevent dilution or enlargement of rights, as a result of the following:

(i)

any adjustment, recapitalization, reorganization or other changes in the Company’s capital structure or its business; or

(ii)

any merger or consolidation of the Company; or

(iii)

any issuance of bonds, debentures, preferred or prior preference stock ahead of or affecting the Company’s Stock or the rights thereof; or

(iv)

the dissolution or liquidation of the Company; or

(v)

any sale or transfer of all or any part of the Company’s assets or business; or

(vi)

any other corporate act or proceeding, whether of a similar character or otherwise.

6.	Confidentiality, Non-Solicitation and Non-Compete . The Participant agrees to, understands and acknowledges the following:

(a)

any and all financial, technical, commercial or other information concerning the business and affairs of the Company and/or a Subsidiary that is confidential and proprietary to the Company and/or a Subsidiary, including without limitation:

(i)

(ii)

inventions, designs, methods, discoveries, works of authorship, creations, improvements or ideas developed or otherwise produced, acquired or used by the Company and/or a Subsidiary;

(iii)

(iv)

(v)

The Company and its Subsidiaries devote significant financial, human and other resources to the development of their products, customer base and the general goodwill associated with their business, and the Company and its Subsidiaries diligently maintain the secrecy and confidentiality of their Confidential Information. Each and every component of the Confidential Information is sufficiently secret to derive economic value from its not being generally known to other persons. While serving on the Board and thereafter, the Participant will hold in the strictest confidence and not use in any manner which is detrimental to the Company or its Subsidiaries or disclose to any individual or entity any Confidential Information, except as may be required by the Company or its Subsidiaries in connection with the Participant’s service on the Board.

return all Company Materials and other physical property, and any reproduction thereof, excepting only the Participant’s copy of this Agreement. For purposes of this SAR Agreement, “Company Materials” means documents or other media or tangible items that contain or embody Confidential Information or any other information concerning the business, operations or future/strategic plans of the Company and/or any Subsidiary, whether such documents have been prepared by the Participant or by others.

(b)

Non-Solicitation and Non-Compete . For the period beginning on the date hereof and ending twelve (12) months following the Participant’s termination of service on the Board, the Participant will not directly or indirectly:

(i)

employ, recruit or solicit for employment any person who is (or was within the six (6) months prior to the date the Participant’s service on the Board terminated) an employee of the Company and/or any Subsidiary;

(ii)

accept employment, serve on the board of directors of, or engage in a competing business that may require contact, solicitation, interference or diverting of any of the Company’s or any Subsidiary’s customers, or that may result in the disclosure, divulging, or other use of Confidential Information or Company Materials acquired during the Participant’s service on the Board; or

(iii)

solicit or encourage any customer, vendor or potential customer or vendor of the Company or any Subsidiary with whom the Participant had contact while serving on the Board to terminate or otherwise alter his, her or its relationship with the Company. The Participant understands that any person or entity with whom the Participant contacted during the twelve (12) months prior to the date of the Participant’s termination of service on the Board for the purpose of soliciting sales from such person or entity shall be regarded as a “potential customer” of the Company to whom the Company or a Subsidiary has a protectable proprietary interest.

(c)

Remedies for Violation .

(i)

Injunctive Action . The Participant acknowledges that if he or she violates the terms of this Section 6, the injury that would be suffered by the Company and/or a Subsidiary as a result of a breach of the provisions of this SAR Agreement (including any provision of Section 6(a) or (b) hereof) would be irreparable and that an award of monetary damages to the Company and/or a Subsidiary for such a breach would be an inadequate remedy. Consequently, the Company and/or its Subsidiary will have the right, in addition to any other rights it may have, to obtain injunctive relief to restrain any breach or threatened breach or otherwise to specifically enforce any provision of this SAR Agreement, and the Company and/or a Subsidiary will not be obligated to post bond or other security in seeking such relief. Without limiting the Company’s or Subsidiary’s rights under this Section 6(c) (or Sections 6(a) or (b) hereof) or any other remedies of the Company or a Subsidiary, if the Participant breaches any of the provisions of Section 6(a) or (b) hereof, the Company will have the right to cease making any payments otherwise due to the Participant under this SAR Agreement.

(ii)

Forfeiture of the SAR and Repayment . In addition to the rights available to the Company and its Subsidiaries under Section 6(c)(i) hereof, if the Participant violates the terms of this Section 6 at any time, the Participant, without any further action by the Company or the Participant, shall forfeit, as of the first day of any such violation, all right, title and interest to this SAR, any Stock or cash received from the exercise of the SAR, and any net proceeds received by the Participant pursuant to any sales of any such Stock prior to, on or after such date, and the Company shall have the right to issue a stop transfer order and other appropriate instructions to its transfer agent with respect to this SAR, and the Company further shall be entitled to reimbursement from the Participant of any fees and expenses (including attorneys’ fees) incurred by or on behalf of the Company or any Subsidiary in enforcing the Company’s or a Subsidiary’s rights under this Section 6. By accepting this SAR grant, the Participant hereby consents to a deduction from any amounts the Company or any Subsidiary owes to the Participant from time to time (including amounts owed to the Participant as wages or other compensation, fringe benefits, or vacation pay, as well as any other amounts owed to the Participant by the Company or any Subsidiary), unless such amount is subject to Section 409A of the Code, to the extent of any amounts that the Participant owes the Company under this Section 6. In addition to any injunctive relief sought under Section 6(c)(i) hereof and whether or not the Company or any Subsidiary elects to make any set-off in whole or in part, if the Company or any Subsidiary does not recover by means of set-off the full amount the Participant owes to the Company or any Subsidiary, calculated as set forth in this Section 6(c)(ii), the Participant agrees to immediately pay the unpaid balance to the Company or any Subsidiary.

(d)

Enforceability of Restrictive Covenants . The scope and duration of the restrictive covenants contained in this SAR Agreement are reasonable and necessary to protect a legitimate, protectable interest of the Company and its Subsidiaries. However, if one or more provisions of this SAR Agreement are held to be unenforceable under applicable law to any extent, such provision(s) shall, to that extent, be excluded from this SAR Agreement and the balance of the SAR Agreement shall be interpreted as if such provision(s) were so excluded to that extent and shall be enforceable in accordance with its terms.

(e)

7.	Miscellaneous Provisions .

(a)

(b)

(c)

(d)

Investment Representation and Agreement . The Committee may require the Participant to furnish to the Company, prior to the issuance of any Stock upon the exercise of all or any part of this SAR, an agreement (in such form as the Committee may specify) in which the Participant represents that the Stock acquired by him or her upon exercise are being acquired for investment and not with a view to the sale or distribution thereof.

(e)

(f)

(g)

No Vested Right In Future Awards . the Participant acknowledges and agrees (by executing this SAR Agreement) that the granting of the SAR under this SAR Agreement is made on a fully discretionary basis by the Company and that this SAR Agreement does not lead to a vested right to further SAR awards in the future.

(h)

Subsidiaries, may transfer Data among themselves or to third parties as necessary for the purpose of implementation, administration and management of the Plan. These various recipients of Data may be located elsewhere throughout the world. The Participant authorizes these various recipients of Data to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing the Plan. The Participant may, at any time, review Data with respect to the Participant and require any necessary amendments to such Data. The Participant may withdraw his or her consent to use Data herein by notifying the Company in writing; however, the Participant understands that by withdrawing his or her consent to use Data, the Participant may affect his or her ability to participate in the Plan.

(i)

Severability . In the event that any provision of this SAR Agreement shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of this SAR Agreement, and this SAR Agreement shall be construed and enforced as if the illegal or invalid provision had not been included.

(j)

(k)

(l)

Counterparts . This SAR Agreement may be signed in two counterparts, each of which shall be an original, but both of which shall constitute but one and the same instrument.

(m)

(n)

(o)

Entire Agreement. This SAR Agreement, together with the Plan, constitutes the entire obligation of the parties hereto with respect to the subject matter hereof and shall supersede any prior expressions of intent or understanding with respect to this transaction.

(p)

Amendment . Any amendment to this SAR Agreement shall be in writing and signed by the Company.

(q)

Headings . The headings contained in this SAR Agreement are for reference purposes only and shall not affect the meaning or interpretation of this SAR Agreement.


ZEBRA TECHNOLOGIES CORPORATION		PARTICIPANT

By:		Signed:
Name:	Michael C. Smiley	Name: <<Insert Stock Recipient’s Name>>
Title:	Chief Financial Officer & Treasurer

Exhibit 10.10

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “ Agreement ”) is made and entered into by and between Zebra Technologies Corporation, a Delaware corporation (the “ Employer ”), and Anders Gustafsson (the “ Executive ”), to be effective as of May 6, 2010.

RECITALS

WHEREAS, the Employer and the Executive are parties to an employment agreement effective September 4, 2007 (the “ Effective Date ”), as amended on each of November 16, 2007, December 30, 2008, and March 7, 2009 (the “ Current Employment Agreement ”);

WHEREAS, the Employer desires to (1) restate the Current Employment Agreement as one agreement and to amend the Current Employment Agreement, (2) correct an administrative error that was included in Paragraph 4.C(2) of the Current Employment Agreement upon the execution of the March 7, 2009 amendment to the Current Employment Agreement, and (3) continue to employ the Executive to provide services for the benefit of the Employer and its affiliates;

WHEREAS, the Executive desires to so restate and amend the Current Employment Agreement and desires to continue to provide services for the benefit of the Employer and its affiliates, including leading the senior management team of the Employer and, as such, will continue, under the direction of the Employer’s Board of Directors (the “ Board ”), to oversee the creation and implementation of the Employer’s business plan; and

WHEREAS, in the course of employment with the Employer, the Executive has had and will continue to have access to certain confidential information that relates to or will relate to the business of the Employer and its affiliates, and the Employer desires that any such information not be disclosed to other parties or otherwise used for unauthorized purposes.

NOW, THEREFORE, in consideration of the above premises and the following mutual covenants and conditions, the parties agree as follows:

1. Employment . The Executive shall continue his employment on the following terms and conditions.

A. Chief Executive Officer; At-Will Employee . The Employer shall continue to employ the Executive as its Chief Executive Officer (“ CEO ”). The Executive understands and agrees that he is an at-will employee, and the Executive and the Employer can, and shall have the right to, terminate the employment relationship at any time for any or no reason, with or without notice, and with or without cause, subject to the payment provisions contained in Paragraph 7 of this Agreement. Nothing contained in this Agreement or any other agreement shall alter the at-will relationship.

B. Board of Directors . The Employer covenants and agrees that as long as the Executive remains employed as the CEO of the Employer, he will continue to be slated as a nominee for a director of the Employer. In the event that the Executive ceases to be employed by the Employer for any reason, the Executive shall tender his resignation from the Board, effective on the date his employment is terminated.

2. Duties . The Executive shall work for the Employer in a full-time capacity. The Executive shall, during the term of his employment, have the duties, responsibilities, powers, and authority customarily associated with the position of CEO. The Executive shall solely report to, and follow the direction of, the Board. The Executive shall diligently, competently, and faithfully perform all duties, and shall devote his entire business time, energy, attention, and skill to the performance of duties for the Employer or its affiliates and will use his best efforts to promote the interests of the Employer. It shall not be considered a violation of the foregoing for the Executive to serve on business, industry, civic, religious or charitable boards or committees, so long as such service is in compliance with the Employer’s Corporate Governance Guidelines, the Board is provided notice of such service and, in the reasonable determination of a majority of the Board’s independent directors, such service does not individually or in the aggregate significantly interfere with the performance of the Executive’s responsibilities as an employee of the Employer in accordance with this Agreement.

3. Executive Loyalty . Subject to the terms of this Agreement, the Executive shall devote all of his time, attention, knowledge, and skill solely and exclusively to the business and interests of the Employer, and the Employer shall be entitled to all benefits and profits arising from or incident to any and all work, services, and advice of the Executive. The Executive expressly agrees that during the term of his employment, he shall not engage, directly or indirectly, as a partner, officer, director, member, manager, stockholder, advisor, agent, employee, or in any other form or capacity, in any other business similar to that of the Employer. The foregoing notwithstanding, and except as otherwise set forth in Paragraph 8, and provided that none of the following reflects poorly on the Employer or, in the reasonable determination of a majority of the Board’s independent directors, individually or in the aggregate significantly interferes with the performance of the Executive’s responsibilities as an employee of the Employer in accordance with this Agreement, nothing herein contained shall be deemed to prevent the Executive from (1) otherwise managing his personal investments and financial affairs, or (2) investing his money in the capital stock or other securities of any corporation whose stock or securities are publicly-owned or are regularly traded on any public exchange, so long as (a) the Executive does not beneficially own stock in any such corporation if more than five percent (5%) of the Employer’s annual sales are to such corporation or if the Employer’s products comprise more than five percent (5%) of such corporation’s annual sales, or (b) the Executive does not beneficially own more than one percent (1%) of the outstanding capital stock of any such corporation.

4. Compensation .

A. Base Salary . So long as the Executive is employed by the Employer, the Employer shall pay the Executive a gross base salary at an annual rate of $700,000 (the “ Base Salary ”), commencing on the Effective Date, payable in substantially equal installments in accordance with the Employer’s payroll policy from time to time in effect. The Executive’s Base Salary shall be subject to any payroll or other deductions as may be required to be made pursuant to law, government order, or by agreement with, or consent of, the Executive. Subject to the provisions contained in Paragraph 6D, changes to the Base Salary may be made at the discretion of the Board or the Compensation Committee of the Board (the “ Compensation Committee ”).

B. Performance Bonus . The Executive shall be eligible to earn a performance bonus under the Employer’s Management Bonus Plan (the “ Bonus ”) upon the attainment of certain performance measures. The Board or the Compensation Committee shall set the performance targets for a given year, with input from the Executive, and the final performance targets shall be established in the sole discretion of the Board or the Compensation Committee. The Bonus shall be targeted at one hundred percent (100%) of the Executive’s Base Salary (the “ Target Bonus ”), with an opportunity to earn a bonus of up to two hundred percent (200%) of such Base Salary for exceptional performance, with the actual Bonus earned to be calculated on that portion of the Executive’s Base Salary actually earned during the calendar year for which the Bonus is calculated. The Bonus, if any, for a given year (the “ Bonus Year ”) shall be paid in the following year and on or before March 15 of such year, provided, and except as otherwise set forth in Paragraph 7B, the Executive must be employed by the Employer and in good standing as of the date that the Bonus is paid to earn any Bonus for the Bonus Year.

C. Equity . For years beginning on and after January 1, 2008, the Executive may granted under and pursuant to the terms of the 2006 Zebra Technologies Corporation Incentive Compensation Plan, as may be amended from time to time (the “ 2006 Incentive Compensation Plan ”), an annual equity or other equity award (an “ Annual Equity Award ”), all as determined by the Board or the Compensation Committee. Upon the date of any such grant, the Employer shall provide the Executive with an award agreement which shall describe the terms and conditions of the Annual Equity Award.

D. Long-Term Equity . This Section intentionally left blank.

E. Employee Benefits . During the term of the Executive’s employment, the Employer shall:

(1) include the Executive in any life insurance, disability insurance, medical, dental or health insurance, vacation (of not less than four (4) weeks accrued pro rata in each calendar year), savings, pension and retirement plans and other benefit plans or programs (including, if applicable, any excess benefit or supplemental executive retirement plans) maintained by the Employer for the benefit of its executive officers;

(2) include the Executive in such perquisites as the Employer may establish from time to time that are commensurate with his position and at least comparable to those received by other executive officers of the Employer and

(3) include financial and administrative assistance in relocating the Executive’s primary residence to Vernon Hills, Illinois or the surrounding area, pursuant to the terms of the Employer’s standard corporate relocation policy and the terms attached hereto as Exhibit A .

5. Expenses . While employed by the Employer, the Executive shall be entitled to receive prompt reimbursement for all reasonable and necessary business expenses incurred by the Executive, in accordance with the practices and policies applicable to other executive officers of the Employer, including professional and service company dues, journal subscriptions, educational seminars, conferences, and symposiums and as required by the Internal Revenue Service to qualify as ordinary and necessary business expenses under the Internal Revenue Code of 1986, as amended (the “ Code ”). The Executive shall be entitled to receive prompt reimbursement for travel expenses incurred in connection with the performance of his duties under this Agreement. To receive reimbursement, the Executive shall submit to the Employer such vouchers or expense statements that reasonably evidence expenses incurred in accordance with the Employer’s travel and expense reimbursement policy.

6. Termination . The Executive’s services shall terminate upon the first to occur of the following events:

A. Death or Disability . Upon the Executive’s date of death or the date the Executive is given written notice that he has been determined to be disabled by the Employer. For purposes of this Agreement, the Executive shall be deemed to be disabled if the Executive, as a result of illness or incapacity, shall be unable to perform substantially his required duties for a period of one hundred eighty (180) consecutive days; provided, however, that if the Executive, after being unable to perform substantially his required duties for a period of less than one hundred eighty (180) consecutive days as a result of illness or incapacity returns to active duty for less than thirty (30) days, the period of such active duty will be disregarded in determining whether the 180 consecutive day threshold has been accumulated (although it will not be accumulated as part of the 180 day period). A termination of the Executive’s employment by the Employer for disability shall be communicated to the Executive by written notice and shall be effective on the tenth (10th) business day after receipt of such notice by the Executive, unless the Executive returns to full-time performance of his duties before such tenth (10th) business day.

B. Cause Termination . On the date the Board provides the Executive with written notice that he is being terminated for Cause. For purposes of this Agreement, and as determined by the Board in its sole discretion, the Executive shall be deemed terminated for “ Cause ” if the Board terminates the Executive after the Executive:

(1) shall have committed, been indicted of, or been convicted of, or admitted, plea bargained, entered a plea of no contest or nolo contendere to, any felony of any kind or a misdemeanor, or violated any laws, involving fraud, dishonesty or an act of moral turpitude;

(2) shall have materially breached this Agreement or any exhibits to this Agreement;

(3) shall have materially violated any written Employer policy, regardless of whether within or outside the scope of his authority;

(4) shall have committed willful or intentional misconduct, gross negligence, or dishonest, fraudulent or unethical behavior, or other conduct involving serious moral turpitude in the performance of his duties hereunder;

(5) shall have failed or refused to materially comply (to the best of his ability) with a specific direction of the Board, unless the Executive reasonably and in good faith believes such specific direction to be unlawful (in which case the Employer’s termination of the Executive’s employment shall not be for Cause under this provision); or

(6) engages in any conduct which breaches his fiduciary duty to the Employer, which materially injures the integrity, character or reputation of the Employer or which impugns Executive’s own integrity, character or reputation so as to cause Executive to be unfit to act in the capacity of CEO of the Employer.

A termination of employment by the Employer for Cause under subparagraphs 6B(2), (3), (4), (5) or (6) shall be effectuated by the Board giving the Executive written notice of the termination within thirty (30) days of the event constituting Cause, or such longer period as the parties may agree, setting forth in reasonable detail the specific conduct of the Executive that constitutes Cause, the specific provisions of this Agreement on which the Employer relies and, to the extent such Cause is susceptible to cure, providing the Executive with a thirty (30) day cure period. If such Cause is susceptible to cure and the Executive fails to remedy the condition within such thirty (30) day cure period, the Employer may terminate the Executive’s employment within thirty (30) days after the expiration of the cure period, and if the Employer fails to so terminate the Executive’s employment, any subsequent termination based upon the identical underlying facts and circumstances shall not constitute a termination for Cause under this subparagraph 6B.

C. Employer Termination . On the date the Employer terminates the Executive’s employment for any reason, other than a reason otherwise set forth in this Paragraph 6.

D. Good Reason Termination . On the date the Executive terminates his employment for Good Reason. The term “ Good Reason ” means the occurrence of any one of the following:

(1) demotion of the Executive by the Employer to a lesser position (including a material diminution in the status of the Executive’s responsibilities, authorities, powers or duties taken as a whole) or assignment to the Executive of any duties materially inconsistent with his position, status or responsibilities under this Agreement;

(2) material breach of any provision of this Agreement by the Employer; or

(3) decrease in Base Salary as in effect on the Effective Date (unless such decrease is applied on a proportionally equal basis to all executive officers of the Employer) (an “ Applicable Decrease ”), but only if the Executive terminates his employment with the Employer as a result of an Applicable Decrease within fifteen (15) business days of the later of (i) the effective date of the Applicable Decrease, or (ii) the Executive’s actual knowledge of Applicable Decrease (“ Applicable Decrease Date ”). For clarification purposes, should the Executive fail to terminate his employment with the Employer within fifteen (15) business days of the Applicable Decrease Date, such termination shall not constitute termination of employment by the Executive for Good Reason under this provision.

A termination of employment by the Executive for Good Reason under subparagraph 6D(1) or (2) shall be effectuated by giving the Employer written notice of the termination within thirty (30) days of the event constituting Good Reason, setting forth in reasonable detail the specific conduct of the Employer that constitutes Good Reason and the specific provisions of this Agreement on which Executive relies and providing the Employer with a thirty (30) day period during which it may remedy the condition constituting Good Reason. If the Employer fails to remedy the condition within such thirty (30) day period, the Executive must terminate his employment within thirty (30) days after the expiration of the cure period, and if the Executive fails to so terminate his employment, any subsequent termination based upon the same underlying facts shall not constitute a termination for Good Reason under this subparagraph 6D.

E. Resignation . On the date the Executive terminates his employment for any reason (other than Good Reason), provided that the Executive shall give the Board sixty (60) days written notice prior to such date of his intention to terminate such employment. The Board may, in its sole discretion, waive such sixty (60) day notice requirement.

7. Compensation Upon Termination .

A. Final Payments . If the Executive’s services are terminated pursuant to Paragraph 6, the Executive shall be entitled to his salary through his final date of active employment plus any accrued but unused vacation pay. The Executive also shall be entitled to any benefits mandated under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“ COBRA ”) or required under the terms of any death, insurance, or retirement plan, program, or agreement provided by the Employer and to which the Executive is a party or in which the Executive is a participant, including, but not limited to, any short-term or long-term disability plan or program, if applicable.

B. Severance Benefits .

(1) In addition to the salary and benefits described in Paragraph 7A, if the Executive’s employment is terminated pursuant to Paragraphs 6C or 6D, the Executive shall be entitled to the following: (i) the continuation of his Base Salary at the annual salary rate then in effect (before any reduction under Paragraph 6D(3) which is made on a proportionally equal basis to all executive officers and which is made within the one (1) year period preceding the date the Executive’s employment is terminated), for a period of two years following the termination of the Executive’s employment (the “ Severance Period ”), payable in accordance with the Employer’s payroll policy from time to time in effect and subject to the limitations imposed under subparagraph 7B(3); (ii) a pro-rata portion of the Bonus for the year in which the Executive’s employment terminates, if such Bonus would have been earned had the Executive been employed and in good

standing as of the date the Bonus otherwise is paid to other senior level executives of the Employer, and payable at the time the Bonus otherwise is paid to other senior level executives of the Employer; (iii) the Bonus attributable to the calendar year prior to the calendar year in which the Executive’s employment terminates, if such Bonus would have been earned had the Executive been employed and in good standing as of the date the Bonus otherwise is paid to other senior level executives of the Employer, and provided such Bonus had not yet been paid in accordance with the timing provisions set forth in Paragraph 4B, and payable at the time the Bonus otherwise is paid to other senior level executives of the Employer; (iv) a payment equal to one hundred percent (100%) of the Target Bonus (before any reduction under Paragraph 6D(3) which is made on a proportionally equal basis to all executive officers and which is made within the one (1) year period preceding the date the Executive’s employment is terminated), based upon the Base Salary for such year, to be paid at the same time that performance bonuses are generally paid by the Employer to its executives for the year in which such termination occurs; (v) the Executive shall immediately and fully vest in any unvested shares subject to the Initial Option and any Annual Equity Awards; and (vi) continued coverage of the Executive and his dependents in the medical and dental insurance plans sponsored by the Employer, as mandated by COBRA, which may continue to the extent required by applicable law and the Employer shall pay for such coverage, at the same rate the Employer pays for health insurance coverage for its active employees under its group health plan (with the Executive required to pay for any employee-paid portion of such coverage), through the earlier of (a) the last day of the Severance Period or (b) the date the Executive becomes eligible for coverage under another group health plan that does not impose preexisting condition limitations on the Executive’s coverage, provided, however, that nothing herein shall be construed to extend the period of time over which such COBRA continuation coverage may be provided to the Executive and his dependents beyond that mandated by law and, provided further, that the Executive shall be required to pay the entire cost of such COBRA continuation coverage for any time following the last day of the Severance Period.

(2) The foregoing notwithstanding, if at any time within one hundred twenty (120) days immediately preceding or one (1) year immediately following a “Change in Control,” the Executive’s employment is terminated pursuant to Paragraph 6C or 6D, the Executive shall be entitled to the following compensation, in lieu of any payments otherwise set forth in Paragraph 7B(1) above, and payable within sixty (60) days following the later of the Change in Control or the termination, subject, however, to the limitations imposed under subparagraph 7B(3): two (2.0) times the Executive’s Base Salary at the annual rate then in effect (before any reduction under Paragraph 6D(3) which is made on a proportionally equal basis to all executive officers and which is made within the one (1) year period preceding the date the Executive’s employment is terminated) and two (2.0) times the Target Bonus (before any reduction under Paragraph 6D(3) which is made on a proportionally equal basis to all executive officers and which is made within the one (1) year period preceding the date the Executive’s employment is terminated), based upon the Base Salary for such year. In addition, the Executive

shall immediately and fully vest in any unvested shares subject to the Initial Option and any Annual Equity Awards. The vesting of any shares subject to the Long-Term Incentive Restricted Stock Grant and the Long-Term Incentive Stock Option Grant which are unvested as of the date of the Change in Control shall be accelerated upon such a termination of employment and shall vest as follows:


Date of Change in Control		Percentage of Unvested That Vest
Prior to the First Anniversary of the Effective Date		100%

On or after the First Anniversary of the Effective Date, but prior to the Second Anniversary of the Effective Date		80%

On or after the Second Anniversary of the Effective Date, but prior to the Third Anniversary of the Effective Date		60%

On or after the Third Anniversary of the Effective Date, but prior to the Fourth Anniversary of the Effective Date		40%

On or after the Fourth Anniversary of the Effective Date, but prior to the Fifth Anniversary of the Effective Date		20%

In addition, upon the termination of the Executive’s employment as set forth in this subparagraph 7B(2) the Executive and his dependents shall be offered continued coverage under the Employer’s group health plan on the same terms as described above in subparagraph 7B(1)(vi) and shall be entitled to the Bonus, if any, set forth in subparagraphs 7(B)(1)(ii) and (iii) above.

(3) Notwithstanding the foregoing, if the Executive is a “specified employee” as such term is defined under Section 409A of the Code and the regulations and guidance promulgated thereunder, any payments described in this Paragraph 7B or Paragraph 7C to the extent applicable shall be delayed for a period of six (6) months following the Executive’s separation of employment to the extent and up to an amount necessary to ensure such payments are not subject to the penalties and interest under Section 409A of the Code. The payments to be made under this Paragraph 7B shall be further conditioned upon the Executive’s execution of an agreement acceptable to the Employer that (i) waives any rights

the Executive may otherwise have against the Employer, and (ii) releases the Employer from actions, suits, claims, proceedings and demands related to the period of employment and/or the termination of employment. For purposes of this Paragraph 7B, “ Change in Control ” shall be as defined under the 2006 Incentive Compensation Plan, as in effect on the Effective Date, which definition is incorporated herein by reference; provided, however, the definition of Change in Control as set forth herein is not intended to be broader than the definition of a “change in control event” as defined by reference to the regulations under Section 409A of the Code, and the payments described in Paragraph 7B(2) shall not be payable unless the applicable Change in Control constitutes a change in control event in accordance with Section 409A of the Code and the regulations and guidance promulgated thereunder.

(4) Each installment of Base Salary and Bonus paid under Paragraph 7B is designated as a separate payment for purposes of the short-term deferral rules under Treasury Regulation Section 1.409A-1(b)(4)(i)(F) and the exemption for involuntary terminations under separation pay plans under Treasury Regulation Section 1.409A-1(b)(9)(iii). As a result, the following payments are intended to be exempt from Section 409A of the Internal Revenue Code: (1) payments that are made on or before the 15 ^th day of the third month of the calendar year following the calendar year in which the Executive terminates employment, and (2) subsequent payments made on or before the last day of the second calendar year following the year of the Executive’s termination that do not exceed the lesser of two times the Executive’s annual rate of pay in the year prior to the Executive’s termination or two times the limit under Section 401(a)(17) of the Internal Revenue Code then in effect.

C. Excise Tax . If it shall be determined that any payment to the Executive pursuant to this Agreement or any other payment or benefit from the Employer, any affiliate, any shareholder of the Employer or any other person would be subject to the excise tax imposed by Section 4999 of the Code because such payment equals or exceeds three times the “ Base Amount ” (as defined under Section 280G of the Code) by an amount in excess of ten percent (10%) of such three times the Base Amount, then the Executive shall receive a Tax Gross-Up Payment (as defined below) with respect to all such excise taxes. “ Tax Gross-Up Payment ” means an amount payable to the Executive such that, after payment of Taxes (as defined below) on such amount there remains a balance sufficient to pay the Taxes being reimbursed. “ Taxes ” means the incremental United States federal, state and local income, excise and other taxes payable by the Executive with respect to any applicable item of income. Any Tax Gross-Up Payment shall be paid no later than the end of Executive’s taxable year following the taxable year in which Executive remits such Taxes to the applicable taxing authority. If it shall be determined that any payment to the Executive pursuant to this Agreement or any other payment or benefit from the Employer, any affiliate, any shareholder of the Employer or any other person would be subject to the excise tax imposed by Section 4999 of the Code because such payment exceeds three times the Base Amount by an amount equal to ten percent (10%) or less of such three times the Base Amount, then the amount of any payments hereunder which shall be paid to the Executive shall be reduced to an amount equal to one dollar less than three times the Base Amount. In the event that the amount of payments to be reduced is payable over more than one taxable year of Executive, the payments to be made the furthest from the date on which the reduction is made shall be reduced first until the payment limit is reached.

8. Restrictive Covenants .

A. Confidentiality .

(1) Confidential Information . The Executive understands that the Employer possesses Confidential Information which is important to its business, the Employer devotes significant financial, human and other resources to the development of its products, its customer base and the general goodwill associated with its business and the Employer diligently maintains the secrecy and confidentiality of its Confidential Information. For purposes of this Agreement, Confidential Information is information that was or will be developed, created, or discovered by or on behalf of the Employer, or which became or will become known by, or was or is conveyed to the Employer, which has commercial value in the Employer’s business. “ Confidential Information ” means any and all financial, technical, commercial or other information concerning the business and affairs of the Employer that is confidential and proprietary to the Employer, including without limitation, (i) information relating to the Employer’s past and existing customers and vendors and development of prospective customers and vendors, including specific customer product requirements, pricing arrangements, payment terms, customer lists and other similar information; (ii) inventions, designs, methods, discoveries, works of authorship, creations, improvements or ideas developed or otherwise produced, acquired or used by the Employer; (iii) the Employer’s proprietary programs, processes or software, consisting of but not limited to, computer programs in source or object code and all related documentation and training materials, including all upgrades, updates, improvements, derivatives and modifications thereof and including programs and documentation in incomplete stages of design or research and development; (iv) the subject matter of the Employer’s patents, design patents, copyrights, trade secrets, trademarks, service marks, trade names, trade dress, manuals, operating instructions, training materials, and other industrial property, including such information in incomplete stages of design or research and development; and (v) other confidential and proprietary information or documents relating to the Employer’s products, business and marketing plans and techniques, sales and distribution networks and any other information or documents which the Employer reasonably regards as being confidential.

(2) Employer Materials . Executive understands that the Employer possesses or will possess Employer Materials which are important to its business. For purposes of this Agreement, “ Employer Materials ” are documents or other media or tangible items that contain or embody Confidential Information or any other information concerning the business, operations or future/strategic plans of the Employer, whether such documents have been prepared by the Executive or by others.

(3) Treatment of Confidential Information and Employer Property . In consideration of the Executive’s employment by the Employer, the compensation received by the Executive from the Employer, and the Employer’s agreement to give Executive access to certain Confidential Information, the Executive agrees as follows:

(a) All Confidential Information and trade secret rights, and other intellectual property and rights (collectively “ Rights ”) in connection therewith will be the sole property of the Employer. At all times, both during the Executive’s employment by the Employer and after its termination for any reason, Executive will keep in confidence and trust and will not use or disclose any Confidential Information or anything relating to it without the prior written consent of the Board, except as may be necessary and appropriate in the ordinary course of performing the Executive’s duties to the Employer.

(b) All Employer Materials will be the sole property of the Employer. The Executive agrees that during the Executive’s employment by the Employer, the Executive will not remove any Employer Materials from the business premises of the Employer or deliver any Employer Materials to any person or entity outside the Employer, except in connection with performing the duties of his employment. The Executive further agrees that, immediately upon the termination of the Executive’s employment by the Executive or by the Employer for any reason, or during the Executive’s employment if so requested by the Employer, the Executive will return all Employer Materials, apparatus, equipment and other physical property, or any reproduction of such property, excepting only the Executive’s copy of this Agreement.

B. Noncompetition and Nonsolicitation . While employed by the Employer and for a period of twenty-four (24) consecutive months following the date of termination of employment for any reason, the Executive will not directly or indirectly:

(1) Contact, solicit, interfere with or divert any of the Employer’s customers;

(2) Accept employment or engage in a competing business, or engage in any activity that may result in the disclosure, divulging or otherwise use of Confidential Information acquired during Executive’s employment with the Employer; and

(3) Solicit any person who is employed by the Employer for the purpose of encouraging that employee to join the Executive as a partner, agent, employee, contractor or otherwise in any business activity.

In the event of any breach of this subparagraph B, the Executive agrees that the twenty-four (24) month restricted period shall be tolled during the time of such breach.

C. Nondisparagement . While employed by the Employer and indefinitely thereafter, the Executive shall refrain from (1) making any false statement about the Employer, and (2) all conduct, verbal or otherwise, that disparages or damages or could disparage or damage the reputation, goodwill, or standing in the community of the Employer or any of its subsidiaries, affiliates, or parents or any of their officers, directors, employees and stockholders, or that could have a deleterious effect upon the Employer’s or any of its subsidiaries’, affiliates’, or parents’ business, provided, however, that nothing contained in this Paragraph 8C or any other paragraph of this Agreement shall preclude the Executive from making any statement in good faith that is required by law or order of any court or regulatory commission.

D. Forfeitures . In the event that the Executive breaches any of the restrictions in this Paragraph 8, he shall forfeit all of the applicable payments and benefits under this Agreement, including but not limited to such payments and benefits pursuant to Paragraph 7 (except those contained in Paragraph 7A or as otherwise prohibited by law), and the Employer shall have the right to recapture and seek repayment of any such applicable payments and benefits under this Agreement. The Employer and the Executive acknowledge that the remedy set forth hereunder is not to be considered a form of liquidated damages and the forfeiture, recapture or repayment shall not be the exclusive remedy hereunder.

E. Intellectual Property . The Employer has adopted a policy on Inventions intended to encourage research and inventions by its executives, to appraise and determine relative rights and equities of all parties concerned, to facilitate patent applications, licensing, and the generation of royalties, if any, and to provide a uniform procedure in patent matters when the Employer has a right or equity. “ Inventions ” includes all improvements, inventions, designs, formulas, works of authorship, trade secrets, technology, computer programs, compositions, ideas, processes, techniques, know-how and data, whether or not patentable, made or conceived or reduced to practice or developed by the Executive, either alone or jointly with others, during the term of the Executive’s employment, including during any period prior to the date of this Agreement.

(1) Ownership and Assignment . Except as defined in this Agreement, all Inventions which the Executive makes, conceives, reduces to practice or develops (in whole or in part, either alone or jointly with others) during his employment will be the sole property of the Employer to the maximum extent permitted by law. The Executive agrees to assign such Inventions and all Rights in them to the Employer. Exemptions from this Agreement to assign may be authorized in those circumstances where the mission of the Employer is better served by such action, provided that overriding obligations to other parties are met and such exemptions are not inconsistent with other Employer policies. Further, the Executive may petition the Employer for license to make, market or sell a particular Invention. The Employer may release patent rights to the inventor in those circumstances when:

(a) the Employer provides the Executive with notification in writing that it elects not to file a patent application and the inventor is prepared to do so at his expense, or

(b) at the Employer’s discretion, the equity of the situation indicates that such release should be given, provided in either case that no further research or development to develop that invention will be conducted involving Employer support or facilities, and provided further that a shop right is granted to the Employer and, at the Employer’s discretion, the Employer shall have a royalty-free, assignable license to the Invention and any intellectual property rights related to it.

The provisions of Paragraph 8E(1) do not apply to an Invention for which no equipment, supplies, facility, or trade secret information of the Employer was used and which was developed entirely on the Executive’s own time, unless (a) the Invention relates (1) to the business of the Employer, or (2) to the Employer’s actual or demonstrably anticipated research or development, or (b) the Invention results from any work performed by the Executive for the Employer.

(2) Disclosure to the Employer . The Executive promptly will disclose in writing to the Board, with a copy to the General Counsel of the Employer, or to any persons designated by the Board, all Inventions. The Executive also will disclose to the General Counsel of the Employer all things that would be Inventions if made during the term of the Executive’s employment, conceived, reduced to practice, or developed by the Executive within six months after the termination of his employment with the Employer, unless the Executive can demonstrate that the Invention has been conceived and first reduced to practice by the Executive following the termination of his employment with the Employer. Such disclosures will be received by the Employer in confidence (to the extent they are not assigned in this Paragraph and do not extend the assignment made in this Paragraph.) The Executive will not disclose Inventions to any person outside the Employer unless requested to do so by the Board or the General Counsel of the Employer.

(3) Assistance with Rights . The Executive agrees to perform, during and after employment, all acts deemed necessary or desirable by the Employer to permit and assist it, at the Employer’s expense, in obtaining, maintaining, defending and enforcing Rights with respect to such Inventions and improvements in any and all countries. Such acts may include, but are not limited to, execution of documents and assistance or cooperation in legal proceedings. The Executive agrees to execute such declarations, assignments, or other documents as may be necessary in the course of Invention evaluation, patent prosecution, or protection of patent or analogous property rights, to assure that title in such Inventions will be held by the Employer or by such other parties designated by the Employer as may be appropriate under the circumstances. The Executive irrevocably designates and appoints the Employer and its duly authorized officers and agents, as his agents and attorneys-in-fact to act for and on the Executive’s behalf and instead of the Executive, to execute and file any documents and to do all other lawfully permitted acts to further the above purposes with the same legal force and effect as if executed by the Executive.

(4) Moral Rights . Any assignment of copyright pursuant to this Agreement includes all rights of paternity, integrity, disclosure and withdrawal and any other rights that may be known as or referred to as “moral rights” (collectively “ Moral Rights ”). To the extent such Moral Rights cannot be assigned under applicable law and to the extent the following is allowed by the laws in the various countries where Moral Rights exist, Executive hereby waives such Moral Rights and consents to any action of the Employer that would violate such Moral Rights in the absence of such consent. The Executive will confirm any such waivers and consents from time to time as requested by the Employer.

F. No Conflicts . The execution and delivery of this Agreement by the Executive does not conflict with, or result in a breach of or constitute a default under, any agreement or contract, whether oral or written, to which the Executive is a party or by which the Executive may be bound. In addition, the Executive has informed the Employer of, and provided the Employer with copies of, any non-competition, confidentiality, work-for-hire or similar agreements to which the Executive is subject or may be bound.

G. Disclosure . The Executive acknowledges and agrees that the scope described above is necessary and reasonable in order to protect the Employer in the conduct of its business and that, if the Executive becomes employed by another employer, he shall be required to disclose the existence of this Paragraph 8 to such employer and the Executive hereby consents to and the Employer is hereby given permission to disclose the existence of this Paragraph 8 to such employer.

H. Market Information . The Executive acknowledges that he may become aware of “material” nonpublic information relating to the Employer’s vendors, suppliers, alliance and/or joint venture partners, customers, or competitors (each, a “ Business Partner ”) whose stocks are publicly traded. The Executive acknowledges that he is prohibited by law as well as by Employer policy from trading in the shares of such Business Partners while in possession of such information or directly or indirectly disclosing such information to any other persons so that they may trade in these shares. For purposes of this Paragraph H, “material” information may include any information, positive or negative, which might be of significance to an investor in determining whether to purchase, sell or hold the stock of publicly traded customers. Information may be significant for this purpose even if it would not alone determine the investor’s decision. Examples include a potential business acquisition, internal financial information that departs in any way from what the market would expect, the acquisition or loss of a major contract, or an important financing transaction.

I. Unauthorized Material . The Employer does not wish to incorporate any unlicensed or unauthorized material into its products or services or those of its subsidiaries. Therefore, the Executive agrees that he will not knowingly disclose to the Employer, use in the Employer’s business, or cause the Employer to use, any information or material which is confidential or proprietary to any third party including, but not limited to, any former employer, competitor or client, unless the Employer has a right to receive and use such information. The Executive will not incorporate into his work any material which is subject to the copyrights of any third party unless the Employer has a written agreement with such third party or otherwise has the right to receive and use such information.

J. Injunctive Relief . It is agreed that any breach or anticipated or threatened breach of any of the Executive’s covenants contained in this Paragraph 8 will result in irreparable harm and continuing damages to the Employer and its business and that the Employer’s remedy at law for any such breach or anticipated or threatened breach will be inadequate and, accordingly, in addition to any and all other remedies that may be available to the Employer at law or in equity in such event, any court of competent jurisdiction may issue a decree of specific performance or issue a temporary and permanent injunction, without the necessity of the Employer posting bond or furnishing other security and without proving special damages or irreparable injury, enjoining and restricting the breach, or threatened breach, of any such covenant, including, but not limited to, any injunction restraining the Executive from disclosing, in whole or part, any Confidential Information. The Executive further agrees to pay all of the Employer’s costs and expenses, including reasonable attorneys’ and accountants’ fees, incurred in successfully enforcing such covenants.

9. Notices . Any and all notices required in connection with this Agreement shall be deemed adequately given only if in writing and (a) personally delivered, or sent by first class, registered or certified mail, postage prepaid, return receipt requested, or by recognized overnight courier, (b) sent by facsimile, provided a hard copy is mailed on that date to the party for whom such notices are intended, or (c) sent by other means at least as fast and reliable as first class mail. A written notice shall be deemed to have been given to the recipient party on the earlier of (a) the date it shall be delivered to the address required by this Agreement; (b) the date delivery shall have been refused at the address required by this Agreement; (c) with respect to notices sent by mail or overnight courier, the date as of which the Postal Service or overnight courier, as the case may be, shall have indicated such notice to be undeliverable at the address required by this Agreement; or (d) with respect to a facsimile, the date on which the facsimile is sent and receipt of which is confirmed. Any and all notices referred to in this Agreement, or which either party desires to give to the other, shall be addressed to his residence in the case of the Executive, or, if to the Employer, to:

General Counsel

Zebra Technologies Corporation

475 Half Day Road, Suite 500

Lincolnshire, IL 60069

Either party may from time to time designate a new address by notice given in accordance with this Paragraph 9.

10. Waiver of Breach. A waiver by either party of a breach of any provision of this Agreement by the other party shall not operate or be construed as a waiver or estoppel of any subsequent breach by such other party. No waiver shall be valid unless in writing and signed by an authorized officer of the Employer or by the Executive, as the case may be.

11. Assignment . The Executive acknowledges that the services to be rendered by him are unique and personal. Accordingly, the Executive may not assign any of his duties or obligations under this Agreement. This Agreement shall be binding upon and inure to the benefit of the Executive, his estate and beneficiaries. The rights and obligations of the Employer under this Agreement shall inure to the benefit of and shall be binding upon the successors and assigns of the Employer.

12. Entire Agreement . This Agreement and the equity award agreements referred to herein sets forth the entire and final agreement and understanding of the parties and contains all of the agreements made between the parties with respect to the subject matter hereof. This Agreement supersedes the Employment Agreement dated as of September 4, 2007 and the amendments thereto dated November 16, 2007, December 30, 2008 and March 7, 2009 and any and all other agreements, either oral or in writing, between the parties hereto, with respect to the subject matter hereof. No change or modification of this Agreement shall be valid unless in writing and signed by the Employer and the Executive.

13. Severability . If any provision of this Agreement shall be found invalid or unenforceable for any reason, in whole or in part, then such provision shall be deemed modified, restricted, or reformulated to the extent and in the manner necessary to render the same valid and enforceable, or shall be deemed excised from this Agreement, as the case may require, and this Agreement shall be construed and enforced to the maximum extent permitted by law, as if such provision had been originally incorporated herein as so modified, restricted, or reformulated or as if such provision had not been originally incorporated herein, as the case may be. The parties further agree to seek a lawful substitute for any provision found to be unlawful; provided, that, if the parties are unable to agree upon a lawful substitute, the parties desire and request that a court or other authority called upon to decide the enforceability of this Agreement modify those restrictions in this Agreement that, once modified, will result in an agreement that is enforceable to the maximum extent permitted by the law in existence at the time of the requested enforcement.

14. Headings . The headings in this Agreement are inserted for convenience only and are not to be considered a construction of the provisions hereof.

15. Execution of Agreement . This Agreement may be executed in several counterparts, each of which shall be considered an original, but which when taken together, shall constitute one agreement.

16. Recitals . The recitals to this Agreement are incorporated herein as an integral part hereof and shall be considered as substantive and not precatory language.

17. Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Illinois, without reference to its conflict of law provisions. Furthermore, the Executive agrees and consents to submit to personal jurisdiction in the state of Illinois in any state or federal court of competent subject matter jurisdiction situated in Lake or Cook County, Illinois. The Executive further agrees that the sole and exclusive venue for any suit arising out of, or seeking to enforce, the terms of this Agreement shall be in a state or federal court of competent subject matter jurisdiction situated in Lake or Cook County, Illinois. In addition, the Executive waives any right to challenge in another court any judgment entered by such Lake or Cook County court or to assert that any action instituted by the Employer in any such court is in the improper venue or should be transferred to a more convenient forum . Further, the Executive waives any right he may otherwise have to a trial by jury in any action to enforce the terms of this Agreement.

18. Indemnification. The Employer shall obtain and maintain for the Executive directors’ and officers’ liability insurance coverage and shall indemnify the Executive to the extent permitted under the Employer’s By-Laws and/or Certificate of Incorporation.

19. No Mitigation. The Executive shall have no obligation or duty to seek subsequent employment or engagement as an employee (including self-employment) or as a consultant or otherwise mitigate the Employer’s obligation under this Agreement. Payments and benefits due under Paragraph 7 of this Agreement shall not be reduced by any compensation earned by the Executive as an employee or consultant from any employment or consulting arrangement after the Executive’s termination of employment.

IN WITNESS WHEREOF , the parties have set their signatures on the date set forth below.


ZEBRA TECHNOLOGIES CORPORATION:		EXECUTIVE:

By:	/s/ Joanne Townsend	By:	/s/ Anders Gustafsson
	Joanne Townsend		Anders Gustafsson

Date signed: May 6, 2010		Date signed: May 6, 2010

EXHIBIT A

House-hunting Trip

The Employer will pay for two round trip airfare and lodging costs and related expenses for your spouse to Chicago, IL, in accordance with the usual parameters of the Employer’s travel policies.

Temporary Housing

The Employer will pay for up to three months temporary living accommodation in a full service corporate apartment.

Temporary Transportation Allowance

The Employer will pay for the cost of one rental car, and associated necessary rental costs, excluding the cost of gasoline, for a maximum period of three months.

Moving of Household Goods and Personal Effects

The Employer will cover the costs associated with the shipment of your personal effects from London and Santa Clara to the Chicago area, including one car from California, as well as airfreight for a reasonable amount of personal effects. These shipments will be handled by the Sterling Relocation/MI Group.

Temporary Storage

The Employer will pay for the storage and insurance of two forty-foot containers for your household goods and personal effects to a maximum of 6-9 months.

Home Purchase Assistance

The Employer shall pay for the costs associated with the purchase of a home in the Chicago area, supported by receipts in respect of the following items:

¨	Closing costs (excluding pre-paid points), upon the submission of receipts

¨	Loan origination fees

¨	Credit report

¨	Appraisal fees, Escrow fees, and Recording fees

¨	Title insurance

¨	Property inspection

¨	Pest inspection (if required)

¨	Property tax service fees

Taxation

In the event that any of the above items are taxable, the Employer agrees to reimburse the tax that you have to pay on such items. In addition to the extent that this reimbursement is subject to tax the Employer will increase the amount of payment by such additional amount (the “Gross Up”) as is necessary to ensure that the net amount reimbursed to you (after taking account of the tax) is equal to the amount that you would have been reimbursed if the payment had not been subject to tax.


		Exhibit 10.11

LOGO

May 6, 2010

Mr. Anders Gustafsson

Chief Executive Officer

Zebra Technologies Corporation

475 Half Day Road, Suite 500

Lincolnshire, IL 60061

Re:	Stock Option Agreement dated April 24, 2008, Stock Appreciation Rights Agreement dated May 7, 2009 and Restricted Stock Agreement dated May 7, 2009

Dear Anders:

Reference is hereby made to your Non-Qualified Stock Option Agreement dated as of April 24, 2008 (the “Option Agreement”), your Stock Appreciation Rights Agreement dated as of May 7, 2009 (the “SAR Agreement”), and your Restricted Stock Agreement dated as of May 7, 2009 (the “Restricted Stock Agreement”). This letter agreement amends the Option Agreement, the SAR Agreement and the Restricted Stock Agreement as follows:

1.	The proviso at the end of Section 2(a) of the Option Agreement is hereby deleted in its entirety and replaced with the following:

“provided, however, except as otherwise provided for under this Option Agreement or the Employment Agreement between the Company and the Participant effective as of September 4, 2007, as amended (the “Employment Agreement”), the Participant must remain employed by the Company or any Subsidiary continuously through the applicable vesting dates.”

2.	The last sentence of Section 2(d) of the Option Agreement is hereby deleted in its entirety and replaced with the following:

“‘Cause’ shall have the meaning assigned to it in the Participant’s Employment Agreement.”

Section 2(e) of the Option Agreement is hereby amended by adding the clause “vesting of the Participant’s Option Shares shall be governed by the Employment Agreement and” immediately prior to the clause “any unexercised, vested Option Shares as of the date of Participant’s termination of employment shall remain exercisable until the earlier of:”

4.	The proviso at the end of Section 2(a) of the SAR Agreement is hereby deleted in its entirety and replaced with the following:

“provided, however, except as otherwise provided for under this SAR Agreement or the Employment Agreement between the Company and the Participant effective as of September 4, 2007, as amended (the “Employment Agreement”), the Participant must remain employed by the Company or any Subsidiary continuously through the applicable vesting dates.”

Confidential Section 5 – Compensation Committee April 2010 – CEO Employment Agreement

LOGO

Mr. Anders Gustafsson

May 6, 2010

Page 2

5.	The last sentence of Section 2(d) of the SAR Agreement is hereby deleted in its entirety and replaced with the following:

“‘Cause’ shall have the meaning assigned to it in the Participant’s Employment Agreement.”

Section 2(e) of the SAR Agreement is hereby amended by adding the clause “vesting of the SAR shall be governed by the Employment Agreement and” immediately prior to the clause “the unexercised vested portion of the SAR as of the date of such Participant’s termination of employment shall remain exercisable until the earliest of:”

7.	The last sentence of Section 2(a) of the Restricted Stock Agreement is hereby deleted in its entirety and replaced with the following:

“The Period of Restriction with respect to the Restricted Stock shall begin on the Grant Date and shall end on the third anniversary of the Grant Date; provided, however, except as otherwise provided for under this Stock Agreement or the Employment Agreement between the Company and the Participant effective as of September 4, 2007, as amended (the “Employment Agreement”), the Participant must remain employed by the Company or any Subsidiary continuously through the Period of Restriction.”

8.	The last sentence of Section 2(b)(i) of the Restricted Stock Agreement is hereby deleted in its entirety and replaced with the following:

“‘Good Reason’ shall have the meaning assigned to it in the Participant’s Employment Agreement.”

9.	The last sentence of Section 2(b)(ii) of the Restricted Stock Agreement is hereby deleted in its entirety and replaced with the following:

“‘Cause’ shall have the meaning assigned to it in the Participant’s Employment Agreement.”

10.	Defined terms not otherwise defined in this Letter Agreement shall have the meanings set forth in the Option Agreement, SAR Agreement or Restricted Stock Agreement, as applicable.

Confidential Section 5 – Compensation Committee April 2010 – CEO Employment Agreement

LOGO

Mr. Anders Gustafsson

May 6, 2010

Page 3

11.	All other provisions of the Option Agreement, SAR Agreement and Restricted Stock Agreement shall remain unchanged.

Very truly yours,

/s/ Joanne Townsend

Joanne Townsend

Vice President, Human Resources

Acknowledged and Agreed:

/s/ Anders Gustafsson

Anders Gustafsson



Date:		May 6, 2010

Confidential Section 5 – Compensation Committee April 2010 – CEO Employment Agreement

LOGO

Exhibit 31.1

CERTIFICATION

I, Anders Gustafsson, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Zebra Technologies Corporation;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and the internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this quarterly report based on such evaluation; and

d) Disclosed in this quarterly report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Exhibit 31.2

CERTIFICATION

I, Michael C. Smiley, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Zebra Technologies Corporation;

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: May 6, 2010	By:	/s/ Michael C. Smiley
		Michael C. Smiley
		Chief Financial Officer

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Zebra Technologies Corporation (Zebra) on Form 10-Q for the period that ended April 3, 2010, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Anders Gustafsson, Chief Executive Officer of Zebra, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of Zebra.

A signed original of this written statement required by Section 906, or another document authenticating, acknowledging or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Zebra and will be retained by Zebra and furnished to the Securities and Exchange Commission or its staff upon request.


Date: May 6, 2010	By:	/s/ Anders Gustafsson
		Anders Gustafsson
		Chief Executive Officer

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Zebra Technologies Corporation (Zebra) on Form 10-Q for the period that ended April 3, 2010, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Michael C. Smiley, Chief Financial Officer of Zebra, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of Zebra.


Date: May 6, 2010	By:	/s/ Michael C. Smiley
		Michael C. Smiley
		Chief Financial Officer

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