Exhibit 10.1

THE COMTECH TELECOMMUNICATIONS CORP.

2000 STOCK INCENTIVE PLAN

AMENDED AND RESTATED

(EFFECTIVE OCTOBER 9, 2006)

 

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TABLE OF CONTENTS               

 

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          ARTICLE I PURPOSE   1   ARTICLE II DEFINITION   1     2.1  
“Acquisition Event”   1     2.2   “Affiliate”   1     2.3   “Award”   2     2.4
  “Board”   2     2.5   “Cause”   2     2.6   “Change in Control”   2     2.7  
“Code”   2     2.8   “Committee”   2     2.9   “Common Stock”   3     2.10  
“Company”   3     2.11   “Consultant”   3     2.12   “Detrimental Activity”   3
    2.13   “Disparagement”   4     2.14   “Disability”   4     2.15   “Effective
Date”   4     2.16   “Eligible Employee”   4     2.17   “Exchange Act”   4    
2.18   “Family Member”   4     2.19   “Fair Market Value”   4     2.20  
“Foreign Jurisdiction”   5     2.21   “Incentive Stock Option”   5     2.22  
“Limited Stock Appreciation Right”   5     2.23   “Non-Employee Director”   5  
  2.24   “Non-Qualified Stock Option”   5     2.25   “Non-Tandem Stock
Appreciation Right”   5     2.26   “Other Stock-Based Award”   5     2.27  
“Parent”   5     2.28   “Participant”   5     2.29   “Performance Criteria”   6
    2.30   “Performance Cycle”   6     2.31   “Performance Goal”   6     2.32  
“Performance Period”   6     2.33   “Performance Share”   6     2.34  
“Performance Unit”   6     2.35   “Performance Unit Cycle”   6     2.36   “Plan”
  6     2.37   “Reference Stock Option”   6     2.38   “Restricted Stock”   6  
  2.39   “Restriction Period”   6     2.40   “Retirement”   6  

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  2.41   “Rule 16b-3”   6       2.42   “Section 162(m) of the Code”   7      
2.43   “Section 409A of the Code”   7       2.44   “Securities Act”   7      
2.45   “Stock Appreciation Right”   7       2.46   “Stock Option”   7       2.47
  “Subsidiary”   7       2.48   “Tandem Stock Appreciation Right”   7       2.49
  “Ten Percent Stockholder”   7       2.50   “Termination of Consultancy”   7  
    2.51   “Termination of Directorship”   7       2.52   “Termination of
Employment”   7       2.53   “Transfer”   8     ARTICLE III ADMINISTRATION   8  
    3.1   The Committee   8       3.2   Grants of Awards   8       3.3  
Guidelines   9       3.4   Decisions Final   10       3.5   Reliance on Counsel
  10       3.6   Procedures   10       3.7   Designation of
Consultants/Liability   10     ARTICLE IV SHARE AND OTHER LIMITATIONS   11      
4.1   Shares   11       4.2   Changes   13       4.3   Minimum Purchase Price  
14       4.4   Assumption of Awards   15     ARTICLE V ELIGIBILITY   15      
5.1   General Eligibility   15       5.2   Incentive Stock Options   15      
5.3   Non-Employee Directors   15     ARTICLE VI STOCK OPTIONS   15       6.1  
Stock Options   15       6.2   Grants   15       6.3   Terms of Stock Options  
16     ARTICLE VII STOCK APPRECIATION RIGHTS   18       7.1   Tandem Stock
Appreciation Rights   18       7.2   Terms and Conditions of Tandem Stock
Appreciation Rights   18       7.3   Non-Tandem Stock Appreciation Rights   20  
    7.4   Terms and Conditions of Non-Tandem Stock Appreciation Rights   20    
  7.5   Limited Stock Appreciation Rights   21     ARTICLE VIII RESTRICTED STOCK
  21       8.1   Awards of Restricted Stock   21       8.2   Awards and
Certificates   22       8.3   Restrictions and Conditions on Restricted Stock
Awards   22     ARTICLE IX PERFORMANCE SHARES   24       9.1   Award of
Performance Shares   24    

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  9.2   Terms and Conditions   24   ARTICLE X CASH INCENTIVE AWARDS AND
PERFORMANCE UNITS   26     10.1   Cash Incentive Awards   26     10.2   Awards
of Performance Units   26     10.3   Terms and Conditions   27   ARTICLE XI
OTHER STOCK-BASED AWARDS   28     11.1   Other Awards   28     11.2   Terms and
Conditions   29   ARTICLE XII NON-TRANSFERABILITY AND TERMINATION OF
EMPLOYMENT/CONSULTANCY   30     12.1   Non-Transferability   30     12.2  
Termination of Employment or Termination of Consultancy   30   ARTICLE XIII
NON-EMPLOYEE DIRECTOR STOCK OPTION GRANTS   32     13.1   Stock Options   32    
13.2   Grants   32     13.3   Non-Qualified Stock Options   32     13.4   Terms
of Stock Options   33     13.5   Termination of Directorship   34     13.6  
Acceleration of Exercisability   34     13.7   Changes   34   ARTICLE XIV CHANGE
IN CONTROL PROVISIONS   35     14.1   Benefits   35     14.2   Change in Control
  36   ARTICLE XV TERMINATION OR AMENDMENT OF PLAN   37   ARTICLE XVI UNFUNDED
PLAN   38     16.1   Unfunded Status of Plan   38   ARTICLE XVII GENERAL
PROVISIONS   38     17.1   Legend   38     17.2   Other Plans   39     17.3  
Right to Employment/Consultancy   39     17.4   Withholding of Taxes   39    
17.5   Listing and Other Conditions   39     17.6   Governing Law   40     17.7
  Construction   40     17.8   Other Benefits   40     17.9   Costs   40    
17.10       No Right to Same Benefits   40     17.11       Death/Disability   40
    17.12       Section 16(b) of the Exchange Act   40     17.13       Section
409A of the Code   40     17.14       Severability of Provisions   41     17.15
      Headings and Captions   41   ARTICLE XVIII EFFECTIVE DATE OF PLAN   41  
ARTICLE XIX TERM OF PLAN   41  

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THE COMTECH TELECOMMUNICATIONS CORP.

 

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2000 STOCK INCENTIVE PLAN   

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AMENDED AND RESTATED

(EFFECTIVE OCTOBER 9, 2006)

ARTICLE I

PURPOSE

                The purpose of The Comtech Telecommunications Corp. 2000 Stock
Incentive Plan is to enhance the profitability and value of the Company for the
benefit of its stockholders by enabling the Company: (i) to offer employees of,
and Consultants to, the Company and its Affiliates stock-based incentives and
other equity interests in the Company and cash-based incentive Awards, thereby
creating a means to attract, retain, motivate and reward such individuals and,
through awards with a value based on the value of Company stock, to strengthen
the mutuality of interests between such individuals and the Company’s
stockholders; and (ii) to make equity based awards to Non-Employee Directors,
thereby creating a means to attract, retain and reward such Non-Employee
Directors and strengthen the mutuality of interests between Non-Employee
Directors and the Company’s stockholders.

ARTICLE II

DEFINITIONS

                For purposes of this Plan, the following terms shall have the
following meanings:

 

                                2.1             “Acquisition Event” has the
meaning set forth in Section 4.2(d).    
                              2.2             “Affiliate” means each of the
following: (i) any Subsidiary; (ii) any Parent; (iii) any corporation, trade or
business (including, without limitation, a partnership or limited liability
company) which is directly or indirectly controlled 50% or more (whether by
ownership of stock, assets or an equivalent ownership interest or voting
interest) by the Company or one of its Affiliates; and (iv) any other entity in
which the

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Company or any of its Affiliates has a material equity interest and which is
designated as an “Affiliate” by resolution of the Committee.
   
                              2.3             “Award” means any award under this
Plan of any: (i) Stock Option; (ii) Stock Appreciation Right; (iii) Restricted
Stock; (iv) Performance Share; (v) Performance Unit; (vi) Other Stock-Based
Award; (vii) other award providing benefits similar to (i) through (vi) designed
to meet the requirements of a Foreign Jurisdiction; or (viii) cash incentive
Award awarded under Section 10.1. An Award other than a cash incentive Award is
referred to as an “Equity Award.”
                                  2.4             “Board” means the Board of
Directors of the Company.    
                              2.5             “Cause” means, with respect to a
Participant’s Termination of Employment or Termination of Consultancy: (i) in
the case where there is no employment agreement, consulting agreement, change in
control agreement or similar agreement in effect between the Company or an
Affiliate and the Participant at the time of the grant of the Award (or where
there is such an agreement but it does not define “cause” (or words of like
import)), termination due to a Participant’s commission of a fraud or a felony
in connection with his or her duties as an employee of the Company or an
Affiliate, willful misconduct or any act of disloyalty, dishonesty, fraud,
breach of trust or confidentiality as to the Company or an Affiliate or any
other act which is intended to cause or may reasonably be expected to cause
economic or reputational injury to the Company or an Affiliate; or (ii) in the
case where there is an employment agreement, consulting agreement, change in
control agreement or similar agreement in effect between the Company or an
Affiliate and the Participant at the time of the grant of the Award that defines
“cause” (or words of like import), as defined under such agreement; provided,
however, that with regard to any agreement that conditions “cause” on occurrence
of a change in control, such definition of “cause” shall not apply until a
change in control actually takes place and then only with regard to a
termination thereafter. With respect to a Participant’s Termination of
Directorship, “cause” shall mean an act or failure to act that constitutes cause
for removal of a director under applicable Delaware law.
   
                              2.6             “Change in Control” has the
meaning set forth in Article XIII or Article XIV, as applicable.
   
                              2.7             “Code” means the Internal Revenue
Code of 1986, as amended. Any reference to any section of the Code shall also be
a reference to any successor provision.
   
                              2.8             “Committee” means:  (a) with
respect to the application of this Plan to Eligible Employees and Consultants, a
committee or subcommittee of the Board appointed from time to time by the Board,
which committee or subcommittee shall consist of two or more Non-Employee
Directors, each of whom is intended to be, to the extent required by Rule 16b-3,
a “non-employee director” as defined in Rule 16b-3 and, to the extent required
by Section 162(m) of the Code and any regulations thereunder, an “outside
director” as defined under Section 162(m) of the Code; provided, however, that

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if and to the extent that no Committee exists which has the authority to
administer this Plan, the functions of the Committee shall be exercised by the
Board and all references herein to the Committee shall  be deemed to be
references to the Board; and (b) with respect to the application of this Plan to
Non-Employee Directors, the Board.
   
                              2.9             “Common Stock” means the common
stock, $.10 par value per share, of the Company.
   
                              2.10            “Company” means Comtech
Telecommunications Corp., a Delaware corporation, and its successors by
operation of law.
   
                              2.11            “Consultant” means any advisor or
consultant to the Company or its Affiliates.
   
                              2.12            “Detrimental
Activity” means (a) the disclosure to anyone outside the Company or its
Affiliates, or the use in any manner other than in the furtherance of the
Company’s or its Affiliate’s business, without written authorization from the
Company, of any confidential information or proprietary information, relating to
the business of the Company or its Affiliates, acquired by a Participant prior
to the Participant’s Termination; (b) activity while employed that results, or
if known could result, in the Participant’s Termination that is classified by
the Company as a Termination for Cause; (c) any attempt, directly or indirectly,
to solicit, induce or hire (or the identification for solicitation, inducement
or hire) any non-clerical employee of the Company or its Affiliates to be
employed by, or to perform services for, the Participant or any person or entity
with which the Participant is associated (including, but not limited to, due to
the Participant’s employment by, consultancy for, equity interest in, or
creditor relationship with such person or entity) or any person or entity from
which the Participant receives direct or indirect compensation or fees as a
result of such solicitation, inducement or hire (or the identification for
solicitation, inducement or hire) without, in all cases, written authorization
from the Company; (d) any attempt, directly or indirectly, to solicit in a
competitive manner any current or prospective customer of the Company or its
Affiliates without, in all cases, written authorization from the
Company; (e) the Participant’s Disparagement, or inducement of others to do so,
of the Company or its Affiliates or their past and present officers, directors,
employees or products; (f) without written authorization from the Company, the
rendering of services for any organization, or engaging, directly or indirectly,
in any business, which is competitive with the Company or its Affiliates, or
which organization or business, or the rendering of services to such
organization or business, is otherwise prejudicial to or in conflict with the
interests of the Company or its Affiliates, or (g) breach of any agreement
between the Participant and the Company or an Affiliate (including, without
limitation, any employment agreement or non-competition or non-solicitation
agreement). Unless otherwise determined by the Committee at grant, Detrimental
Activity shall not be deemed to occur after the end of the one-year period
following the Participant’s Termination. For purposes of subsections (a), (c),
(d) and (f) above, the Chief Executive Officer and the General Counsel of the
Company shall each have authority to provide the Participant with written
authorization to engage in the activities contemplated thereby

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and no other person shall have authority to provide the Participant with such
authorization.
     
                        2.13             “Disparagement” means making comments
or statements to the press, the Company’s or its Affiliates’ employees,
consultants or any individual or entity with whom the Company or its Affiliates
has a business relationship which would adversely affect in any manner: the
conduct of the business of the Company or its Affiliates (including, without
limitation, any products or business plans or prospects), or the business
reputation of the Company or its Affiliates, or any of their products, or their
past or present officers, directors or employees.
   
                         2.14             “Disability” means, with respect to an
Eligible Employee, Consultant or Non-Employee Director, a permanent and total
disability, as determined by the Committee in its sole discretion, provided that
in no event shall any disability that is not a permanent and total disability,
as defined in Section 22(e)(3) of the Code, shall be treated as a Disability. A
Disability shall only be deemed to occur at the time of the determination by the
Committee of the Disability. Notwithstanding the foregoing, for Awards that are
subject to Section 409A of the Code, Disability shall mean that a Participant is
disabled under Section 409A(a)(2)(C)(i) of the Code.
   
                         2.15             “Effective Date” means the effective
date of this Plan as defined in Article XVIII.
   
                          2.16             “Eligible Employee” means each
employee of the Company or an Affiliate.
   
                          2.17              “Exchange Act” means the Securities
Exchange Act of 1934, as amended. Any references to any section of the Exchange
Act shall also be a reference to any successor provision.
   
                          2.18              “Family Member” shall mean “family
member” as defined in Section A1(a)(5) of the general instructions of Form S-8.
   
                          2.19              “Fair Market Value” means, unless
otherwise required by any applicable provision of the Code or any regulations
issued thereunder, as of any date, the last sales price for the Common Stock or
the average of trading prices for Common Stock on the applicable date, as
specified by the Committee: (i) as reported on the principal national securities
exchange on which it is then traded or The Nasdaq Stock Market LLC or (ii) if
not traded on any such national securities exchange or The Nasdaq Stock Market
LLC as quoted on an automated quotation system sponsored by the National
Association of Securities Dealers, Inc. If the Common Stock is not readily
tradable on a national securities exchange, The Nasdaq Stock Market LLC or any
automated quotation system sponsored by the National Association of Securities
Dealers, Inc., its Fair Market Value shall be set in good faith by the
Committee. Notwithstanding anything herein to the contrary, “Fair Market Value”
means the price for Common Stock set by the Committee in good faith based on
reasonable methods set forth under Section 422 of the Code and the regulations
thereunder including, without limitation, a method utilizing the average of

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prices of the Common Stock reported on the principal national securities
exchange on which it is then traded during a reasonable period designated by the
Committee. For purposes of the grant of any Stock Option or Stock Appreciation
Right, the applicable date shall be the date of grant of the Stock Option or
Stock Appreciation Right (which must be at or after the date on which such grant
is duly authorized) or, if so specified by the Committee, the latest trading
date for which the last sales price or average trading price is available at the
time of grant, provided that for purposes of the exercise of any Stock Option or
Stock Appreciation Right, the applicable date shall be the date a notice of
exercise is received by the Secretary of the Company or, if not a day on which
the applicable market is open, the next day that it is open. For purposes of the
conversion of a Performance Unit to shares of Common Stock for reference
purposes, the applicable date shall be the date determined by the Committee in
accordance with Section 10.2
   
                              2.20           “Foreign Jurisdiction” means any
jurisdiction outside of the United States including, without limitation,
countries, states, provinces and localities.
   
                              2.21            “Incentive Stock Option” means any
Stock Option awarded to an Eligible Employee under this Plan intended to be and
designated as an “Incentive Stock Option” within the meaning of Section 422 of
the Code.
   
                              2.22            “Limited Stock Appreciation
Right” means an Award of a limited Tandem Stock Appreciation Right or a
Non-Tandem Stock Appreciation Right made pursuant to Section 7.5 of this Plan.
   
                              2.23            “Non-Employee Director” means a
director of the Company who is not an active employee of the Company or an
Affiliate and who is not an officer, director or employee of the Company or any
Affiliate.
   
                              2.24            “Non-Qualified Stock Option” means
any Stock Option awarded under this Plan that is not an Incentive Stock Option.
   
                              2.25            “Non-Tandem Stock Appreciation
Right” means a Stock Appreciation Right entitling a Participant to receive an
amount in cash or Common Stock (as determined by the Committee in its sole
discretion) equal to the excess of: (i) the Fair Market Value of a share of
Common Stock as of the date such right is exercised, over (ii) the aggregate
exercise price of such right.
   
                              2.26            “Other Stock-Based Award” means an
Award of Common Stock and other Awards made pursuant to Article XI that are
valued in whole or in part by reference to, or are payable in or otherwise based
on, Common Stock, including, without limitation, an Award valued by reference to
performance of an Affiliate.
   
                              2.27            “Parent” means any parent
corporation of the Company within the meaning of Section 424(e) of the Code.
   
                              2.28            “Participant” means any Eligible
Employee or Consultant to whom an Award has been made under this Plan and each
Non-Employee Director of the Company; provided, however, that a Non-Employee
Director shall be a Participant for

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purposes of the Plan solely with respect to awards of Stock Options pursuant to
Article XIII.
                                    2.29            “Performance Criteria” has
the meaning set forth in Exhibit A.      
                              2.30            “Performance Cycle” has the
meaning set forth in Section 10.1.      
                              2.31            “Performance Goal” means the
objective performance goals established by the Committee in accordance with
Section 162(m) of the Code and based on one or more Performance Criteria.
   
                              2.32            “Performance Period” has the
meaning set forth in Section 9.1.
   
                              2.33            “Performance Share” means an Award
made pursuant to Article IX of this Plan of the right to receive Common Stock
or, as determined by the Committee in its sole discretion, cash of an equivalent
value at the end of the Performance Period or thereafter.
   
                              2.34            “Performance Unit” means an Award
made pursuant to Article X of this Plan of the right to receive a fixed dollar
amount, payable in cash or Common Stock (or a combination of both) as determined
by the Committee in its sole discretion, at the end of a specified Performance
Unit Cycle or thereafter.
   
                              2.35            “Performance Unit Cycle” has the
meaning set forth in Section 10.2.
   
                              2.36            “Plan” means The Comtech
Telecommunications Corp. 2000 Stock Incentive Plan.
   
                              2.37            “Reference Stock Option” has the
meaning set forth in Section 7.1.
   
                              2.38            “Restricted Stock” means an Award
of shares of Common Stock under this Plan that is subject to restrictions under
Article VIII.
   
                              2.39            “Restriction Period” has the
meaning set forth in Section 8.3(a) with respect to Restricted Stock.
   
                              2.40            “Retirement” means a Termination
of Employment or Termination of Consultancy other than a termination for Cause
or due to death or Disability by a Participant at or after age 65 or such
earlier date after age 50 as may be approved by the Committee with regard to
such Participant. With respect to a Participant’s Termination of Directorship,
Retirement shall mean the failure to stand for reelection or the failure to be
reelected at or after a Participant has attained age 65 or, with the consent of
the Board, before age 65 but after age 50.
   
                              2.41            “Rule 16b-3” means Rule 16b-3
under Section 16(b) of the Exchange Act as then in effect or any successor
provisions.

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                              2.42            “Section 162(m) of the Code” means
Section 162(m) of the Code and any Treasury regulations thereunder.
     
                              2.43            “Section 409A of the Code” means
Section 409A of the Code and any Treasury regulations thereunder.
     
                              2.44            “Securities Act” means the
Securities Act of 1933, as amended. Any reference to any section of the
Securities Act shall also be a reference to any successor provision.
     
                              2.45            “Stock Appreciation Right” or
“SAR” means the right pursuant to an Award granted under Article VII.
   
                              2.46            “Stock Option” or “Option” means
any option to purchase shares of Common Stock granted to Eligible Employees or
Consultants under Article VI or to Non-Employee Directors under Article XIII.
   
                              2.47            “Subsidiary” means any subsidiary
corporation of the Company within the meaning of Section 424(f) of the Code.
   
                              2.48            “Tandem Stock Appreciation
Right” means a Stock Appreciation Right entitling the holder to surrender to the
Company all (or a portion) of a Stock Option in exchange for an amount in cash
or Common Stock (as determined by the Committee in its sole discretion) equal to
the excess of: (i) the Fair Market Value, on the date such Stock Option (or such
portion thereof) is surrendered, of the Common Stock covered by such Stock
Option (or such portion thereof), over (ii) the aggregate exercise price of such
Stock Option (or such portion thereof).
   
                              2.49            “Ten Percent Stockholder” means a
person owning stock possessing more than 10% of the total combined voting power
of all classes of stock of the Company, its Subsidiaries or its Parent.
   
                              2.50            “Termination of
Consultancy” means, with respect to a Consultant, that the Consultant is no
longer acting as a consultant to the Company or an Affiliate. In the event an
entity shall cease to be an Affiliate, there shall be deemed a Termination of
Consultancy of any individual who is not otherwise a Consultant to the Company
or another Affiliate at the time the entity ceases to be an Affiliate. In the
event that a Consultant becomes an Eligible Employee upon the termination of his
consultancy, the Committee, in its sole and absolute discretion, may determine
that no Termination of Consultancy shall be deemed to occur until such time as
such Consultant is no longer a Consultant or an Eligible Employee.
   
                              2.51            “Termination of
Directorship” means, with respect to a Non-Employee Director, that the
Non-Employee Director has ceased to be a director of the Company.
   
                              2.52            “Termination of
Employment” means: (i) a termination of employment (for reasons other than a
military or personal leave of absence granted by the

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Company) of a Participant from the Company and its Affiliates; or (ii) when an
entity which is employing a Participant ceases to be an Affiliate, unless the
Participant otherwise is, or thereupon becomes, employed by the Company or
another Affiliate. In the event that an Eligible Employee becomes a Consultant
upon the termination of his employment, the Committee, in its sole and absolute
discretion, may determine that no Termination of Employment shall be deemed to
occur until such time as such Eligible Employee is no longer an Eligible
Employee or a Consultant.
     
                              2.53            “Transfer” means anticipate,
alienate, attach, sell, assign, pledge, encumber, charge, hypothecate or
otherwise transfer and “Transferred” has a correlative meaning.
 

ARTICLE III

ADMINISTRATION

 

 
                              3.1           The Committee.  The Plan shall be
administered and interpreted by the Committee. If for any reason the appointed
Committee does not meet the requirements of Rule 16b-3 or Section 162(m) of the
Code, such noncompliance with the requirements of Rule 16b-3 and Section 162(m)
of the Code shall not affect the validity of Awards, grants, interpretations or
other actions of the Committee.
   
                              3.2           Grants of Awards.  The Committee
shall have full authority to grant to Eligible Employees and Consultants,
pursuant to the terms of this Plan: (i) Stock Options; (ii) Tandem Stock
Appreciation Rights and Non-Tandem Stock Appreciation Rights; (iii) Restricted
Stock; (iv) Performance Shares; (v) Performance Units; (vi) Other Stock-Based
Awards; (vii) other awards providing benefits similar to (i) through (vi)
designed to meet the requirements of Foreign Jurisdictions; and (viii) cash
incentive Awards under Section 10.1. All Equity Awards shall be granted by,
confirmed by, and subject to the terms of, a written agreement executed by the
Company and the Participant. In particular, the Committee shall have the
authority:
 

 
               (a)           to select the Eligible Employees and Consultants to
whom Awards may from time to time be granted hereunder;
   
               (b)           to determine whether and to what extent Awards,
including any combination of two or more Awards, are to be granted hereunder to
one or more Eligible Employees or Consultants;
   
               (c)           to determine, in accordance with the terms of this
Plan, the number of shares of Common Stock to be covered by each Equity Award
granted hereunder;
   
               (d)           to determine the terms and conditions, not
inconsistent with the terms of this Plan, of any Award granted hereunder
(including, but not limited to, the exercise or purchase price (if any), any
restriction or limitation, any vesting schedule or acceleration thereof and any
forfeiture restrictions or waiver thereof,

8

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regarding any Award and the shares of Common Stock relating thereto, based on
such factors, if any, as the Committee shall determine, in its sole discretion);
     
             (e)           to determine whether and under what circumstances a
Stock Option may be settled in cash, Common Stock and/or Restricted Stock under
Section 6.3(d) or, with respect to Stock Options granted to Non-Employee
Directors, Section 13.4(d);
     
             (f)           to the extent permitted by law, to determine whether,
to what extent and under what circumstances to provide loans (which shall bear
interest at the rate the Committee shall provide) to Eligible Employees and
Consultants in order to exercise Stock Options under this Plan or to purchase
Awards under this Plan (including shares of Common Stock);
   
             (g)           to determine whether a Stock Option is an Incentive
Stock Option or Non-Qualified Stock Option, whether a Stock Appreciation Right
is a Tandem Stock Appreciation Right or Non-Tandem Stock Appreciation Right or
whether an Award is intended to satisfy Section 162(m) of the Code;
   
             (h)           to determine whether to require an Eligible Employee
or Consultant, as a condition of the granting of any Award, not to sell or
otherwise dispose of shares of Common Stock acquired pursuant to the exercise of
an Option or an Award for a period of time as determined by the Committee, in
its sole discretion, following the date of the acquisition of such Option or
Award;
   
             (i)            to modify, extend or renew an Award, subject to
Article XV herein, provided, however, that if an Award is modified, extended or
renewed and thereby deemed to be the issuance of a new Award under the Code or
the applicable accounting rules, the exercise price of an Award may continue to
be the original exercise price even if less than the Fair Market Value of the
Common Stock at the time of such modification, extension or renewal; provided
further, however, that such Award may be restructured to comply with Section
409A of the Code to avoid any adverse tax consequences, to the extent
applicable; and
   
             (j)            to offer to buy out an Option previously granted,
based on such terms and conditions as the Committee shall establish and
communicate to the Participant at the time such offer is made.
 

 
                           3.3           Guidelines.  Subject to Article XV
hereof, the Committee shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing this Plan and perform
all acts, including the delegation of its administrative responsibilities, as it
shall, from time to time, deem advisable; to construe and interpret the terms
and provisions of this Plan and any Award issued under this Plan (and any
agreements relating thereto); and to otherwise supervise the administration of
this Plan. The Committee may correct any defect, supply any omission or
reconcile any inconsistency in this Plan or in any agreement relating thereto in
the manner and to the extent it shall deem necessary to effectuate the purpose
and intent of this Plan. The

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Committee may adopt special guidelines and provisions for persons who are
residing in, or subject to, the taxes of, Foreign Jurisdictions to comply with
applicable tax and securities laws and may impose any limitations and
restrictions that it deems necessary to comply with the applicable tax and
securities laws of such Foreign Jurisdictions. To the extent applicable, this
Plan is intended to comply with Section 162(m) of the Code and the applicable
requirements of Rule 16b-3 and shall be limited, construed and interpreted in a
manner so as to comply therewith.
     
                            3.4           Decisions Final.  Any decision,
interpretation or other action made or taken in good faith by or at the
direction of the Company, the Board or the Committee (or any of its members)
arising out of or in connection with this Plan shall be within the absolute
discretion of all and each of them, as the case may be, and shall be final,
binding and conclusive on the Company and all employees and Participants and
their respective heirs, executors, administrators, successors and assigns.
   
                            3.5           Reliance on Counsel. The Company, the
Board or the Committee may consult with legal counsel, who may be counsel for
the Company or other counsel, with respect to its obligations or duties
hereunder, or with respect to any action or proceeding or any question of law,
and shall not be liable with respect to any action taken or omitted by it in
good faith pursuant to the advice of such counsel.
   
                            3.6           Procedures.  If the Committee is
appointed, the Board shall designate one of the members of the Committee as
chairman and the Committee shall hold meetings, subject to the By-Laws of the
Company, at such times and places as it shall deem advisable. A majority of the
Committee members shall constitute a quorum. All determinations of the Committee
shall be made by a majority of its members. Any decision or determination
reduced to writing and signed by all the Committee members in accordance with
the By-Laws of the Company, shall be fully as effective as if it had been made
by a vote at a meeting duly called and held. The Committee shall keep minutes of
its meetings and shall make such rules and regulations for the conduct of its
business as it shall deem advisable.
 

                              3.7           Designation of
Consultants/Liability.  

 
             (a)           The Committee may designate employees of the Company
and professional advisors to assist the Committee in the administration of this
Plan and may grant authority to officers to execute agreements or other
documents on behalf of the Committee.
   
             (b)           The Committee may employ such legal counsel,
consultants and agents as it may deem desirable for the administration of this
Plan and may rely upon any opinion received from any such counsel or consultant
and any computation received from any such consultant or agent. Expenses
incurred by the Committee in the engagement of any such counsel, consultant or
agent shall be paid by the Company. The Committee, its members and any employee
of the Company designated pursuant to paragraph (a) above shall not be liable
for any action or determination made in good faith with respect to this Plan. To
the

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maximum extent permitted by applicable law, no officer of the Company or member
or former member of the Committee shall be liable for any action or
determination made in good faith with respect to this Plan or any Award granted
under it. To the maximum extent permitted by applicable law or the Certificate
of Incorporation or By-Laws of the Company and to the extent not covered by
insurance, each officer and member or former member of the Committee shall be
indemnified and held harmless by the Company against any cost or expense
(including reasonable fees of counsel reasonably acceptable to the Company) or
liability (including any sum paid in settlement of a claim with the approval of
the Company), and advanced amounts necessary to pay the foregoing at the
earliest time and to the fullest extent permitted, arising out of any act or
omission to act in connection with this Plan, except to the extent arising out
of such officer’s, member’s or former member’s own fraud or bad faith. Such
indemnification shall be in addition to any rights of indemnification the
officers, directors or members or former officers, directors or members may have
under applicable law or under the Certificate of Incorporation or By-Laws of the
Company or any Affiliate. Notwithstanding anything else herein, this
indemnification will not apply to the actions or determinations made by an
individual with regard to Awards granted to him or her under this Plan.

 

ARTICLE IV

SHARE AND OTHER LIMITATIONS

 

                              4.1           Shares.  

 
             (a)           General Limitation. The aggregate number of shares of
Common Stock which may be issued or used for reference purposes under this Plan
or with respect to which Equity Awards may be granted shall not exceed 5,737,500
shares of Common Stock (subject to any increase or decrease pursuant to Section
4.2) with respect to all types of Equity Awards, plus 1,986,603 shares of Common
Stock relating to outstanding awards assumed by this Plan under Section 4.4 and
awards available for grant under the Comtech Telecommunications Corp. 1993
Incentive Stock Option Plan, as amended (the “1993 Plan”), for a total of
7,724,103 shares of Common Stock. The shares of Common Stock available under
this Plan may be either authorized and unissued Common Stock or Common Stock
held in or acquired for the treasury of the Company. If any Stock Option or
Stock Appreciation Right granted under this Plan expires, terminates or is
canceled for any reason without having been exercised in full or, with respect
to Stock Options, the Company repurchases any Stock Option, the number of shares
of Common Stock underlying such unexercised or repurchased Stock Option or any
unexercised Stock Appreciation Right shall again be available for the purposes
of Equity Awards under this Plan. If any shares of Restricted Stock, Performance
Shares or Performance Units awarded under this Plan to a Participant are
forfeited or repurchased by the Company for any reason, the number of forfeited
or repurchased shares of Restricted Stock, Performance

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Shares or Performance Units shall again be available for the purposes of Equity
Awards under this Plan. If a Tandem Stock Appreciation Right is granted or a
Limited Stock Appreciation Right is granted in tandem with a Stock Option, such
grant shall only apply once against the maximum number of shares of Common Stock
which may be issued under this Plan. In determining the number of shares of
Common Stock available for Equity Awards, if Common Stock has been exchanged by
a Participant as full or partial payment of exercise price or withholding taxes,
or if the number shares of Common Stock otherwise deliverable has been reduced
for the payment of exercise price or withholding taxes, the number of shares of
Common Stock exchanged as payment for the payment of exercise price or
withholding taxes, or reduced, shall again be available for purposes of Equity
Awards under this Plan.
   
             (b)           Individual Participant Limitations. (i) The maximum
number of shares of Common Stock subject to any Award of Stock Options, Stock
Appreciation Rights, Performance Shares or shares of Restricted Stock for which
the grant of such Award or the lapse of the relevant Restriction Period is
subject to the attainment of Performance Goals in accordance with Section
8.3(a)(ii) herein which may be granted under this Plan during any fiscal year of
the Company to each Eligible Employee or Consultant shall be 225,000 shares per
type of Award (which shall be subject to any increase or decrease pursuant to
Section 4.2), provided that the maximum number of shares of Common Stock for all
types of Equity Awards does not exceed 225,000 (which shall be subject to any
increase or decrease pursuant to Section 4.2) during any fiscal year of the
Company. If a Tandem Stock Appreciation Right is granted or a Limited Stock
Appreciation Right is granted in tandem with a Stock Option, it shall apply
against the Eligible Employee’s or Consultant’s individual share limitations for
both Stock Appreciation Rights and Stock Options.
 

 
              (ii)           There are no annual individual Eligible Employee or
Consultant share limitations on Restricted Stock for which the grant of such
Award or the lapse of the relevant Restriction Period is not subject to
attainment of Performance Goals in accordance with Section 8.3(a)(ii) hereof.
   
              (iii)          The maximum value at grant of Performance Units
which may be granted under this Plan during any fiscal year of the Company to
each Eligible Employee or Consultant shall be $100,000. Each Performance Unit
shall be referenced to one share of Common Stock and shall be charged against
the available shares under this Plan at the time the unit value measurement is
converted to a referenced number of shares of Common Stock in accordance with
Section 10.2.
   
              (iv)          The individual Participant limitations set forth in
this Section 4.1(b)(i) – (iv) shall be cumulative; that is, to the extent that
shares of Common Stock for which Equity Awards are permitted to be granted to an
Eligible Employee or a Consultant during a fiscal year are not covered

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by an Award to such Eligible Employee or Consultant in a fiscal year, the number
of shares of Common Stock available for Equity Awards to such Eligible Employee
or Consultant shall automatically increase in the subsequent fiscal years during
the term of the Plan until used.
     
              (v)           The maximum potential amount earnable under all cash
incentive Awards granted under this Plan for any fiscal year of the Company to
each Eligible Employee shall be such Eligible Employee’s “Annual Limit,” which
in each fiscal year shall be $4 million plus the amount of the Eligible Person’s
unused Annual Limit as of the close of the previous fiscal year. This limitation
is separate and not affected by the number of Awards granted during such fiscal
year subject to the limitations under Section 4.1(b)(i) – (iv). For this
purpose, (i) the potential amount earnable means the maximum amount potentially
payable, without regard to whether it is to be paid currently or on a deferred
basis or continues to be subject to any service requirement or other
non-performance condition, (ii) a Participant’s Annual Limit is used to the
extent an amount may be potentially earned or paid under a cash incentive Award,
regardless of whether such amount is in fact earned or paid, and (iii) a cash
incentive Award is “granted” for the earliest fiscal year included in the
Performance Cycle for that Award, regardless of whether the terms of the Award
do or do not create a legal right on the part of the Participant ultimately to
receive a payment with respect to such Award.
 

                               4.2           Changes.  

 
              (a)           The existence of this Plan and the Awards granted
hereunder shall not affect in any way the right or power of the Board or the
stockholders of the Company to make or authorize any adjustment,
recapitalization, reorganization or other change in the Company’s capital
structure or its business, any merger or consolidation of the Company or any
Affiliate, any issue of bonds, debentures, preferred or prior preference stock
ahead of or affecting Common Stock, the dissolution or liquidation of the
Company or any Affiliate, any sale or transfer of all or part of the assets or
business of the Company or any Affiliate or any other corporate act or
proceeding.
   
              (b)           Subject to the provisions of Section 4.2(d), in the
event of any such change in the capital structure or business of the Company by
reason of any stock split, reverse stock split, stock dividend, combination or
reclassification of shares, recapitalization, or other change in the capital
structure of the Company, merger, consolidation, spin-off, reorganization,
partial or complete liquidation, issuance of rights or warrants to purchase any
Common Stock or securities convertible into Common Stock, or any other corporate
transaction or event having an effect similar to any of the foregoing and
effected without receipt of consideration by the Company, then the aggregate
number and kind of shares which thereafter may be issued under this Plan, the
number and kind of shares or other property

13

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(including cash) to be issued upon exercise of an outstanding Stock Option or
other Awards granted under this Plan and the purchase price thereof shall be
appropriately adjusted consistent with such change in such manner as the
Committee may deem equitable to prevent substantial dilution or enlargement of
the rights granted to, or available for, Participants under this Plan, and any
such adjustment determined by the Committee in good faith shall be final,
binding and conclusive on the Company and all Participants and employees and
their respective heirs, executors, administrators, successors and assigns.
     
              (c)           Fractional shares of Common Stock resulting from any
adjustment in Options or Awards pursuant to Section 4.2(a) or (b) shall be
aggregated until, and eliminated at, the time of exercise by rounding-down for
fractions less than one-half and rounding-up for fractions equal to or greater
than one-half. No cash settlements shall be made with respect to fractional
shares eliminated by rounding. Notice of any adjustment shall be given by the
Committee to each Participant whose Award has been adjusted and such adjustment
(whether or not such notice is given) shall be effective and binding for all
purposes of this Plan.
   
              (d)           In the event of a merger or consolidation in which
the Company is not the surviving entity or in the event of any transaction that
results in the acquisition of substantially all of the Company’s outstanding
Common Stock by a single person or entity or by a group of persons and/or
entities acting in concert, or in the event of the sale or transfer of all or
substantially all of the Company’s assets (all of the foregoing being referred
to as “Acquisition Events”), then the Committee may, in its sole discretion,
terminate all outstanding Stock Options and Stock Appreciation Rights, effective
as of the date of the Acquisition Event, by delivering notice of termination to
each Participant at least 30 days prior to the date of consummation of the
Acquisition Event, in which case during the period from the date on which such
notice of termination is delivered to the consummation of the Acquisition Event,
each such Participant shall have the right to exercise in full all of his or her
Stock Options and Stock Appreciation Rights that are then outstanding (without
regard to any limitations on exercisability otherwise contained in the Stock
Option or Award Agreements), but any such exercise shall be contingent upon and
subject to the occurrence of the Acquisition Event, and, provided that, if the
Acquisition Event does not take place within a specified period after giving
such notice for any reason whatsoever, the notice and exercise pursuant thereto
shall be null and void.
 

 
               If an Acquisition Event occurs but the Committee does not
terminate the outstanding Stock Options and Stock Appreciation Rights pursuant
to this Section 4.2(d), then the provisions of Section 4.2(b) shall apply.
   
                             4.3           Minimum Purchase Price.
Notwithstanding any provision of this Plan to the contrary, if authorized but
previously unissued shares of Common Stock are issued under this Plan, such
shares shall not be issued for a consideration which is less than as permitted
under applicable law.

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                             4.4           Assumption of Awards. Awards that
were granted prior to the Effective Date under the (i) Comtech
Telecommunications Corp. 1982 Incentive Stock Option Plan (the “1982 Plan”), and
(ii) the 1993 Plan, shall be transferred and assumed by this Plan as of the
Effective Date. Notwithstanding the foregoing, such Awards shall continue to be
governed by the terms of the applicable agreement in effect prior to the
Effective Date.
 

ARTICLE V

ELIGIBILITY

 

 
                             5.1           General Eligibility. All Eligible
Employees and Consultants and prospective employees of and Consultants to the
Company and its Affiliates are eligible to be granted Non-Qualified Stock
Options, Stock Appreciation Rights, Restricted Stock, Performance Shares,
Performance Units, Other Stock-Based Awards, awards providing benefits similar
to each of the foregoing designed to meet the requirements of Foreign
Jurisdictions under this Plan, and cash incentive Awards. Eligibility for the
grant of an Award and actual participation in this Plan shall be determined by
the Committee in its sole discretion. The vesting and exercise of Awards granted
to a prospective employee or Consultant are conditioned upon such individual
actually becoming an Eligible Employee or Consultant.
   
                             5.2           Incentive Stock Options. All Eligible
Employees of the Company, its Subsidiaries and its Parent (if any) are eligible
to be granted Incentive Stock Options under this Plan. Eligibility for the grant
of an Award and actual participation in this Plan shall be determined by the
Committee in its sole discretion.
   
                             5.3           Non-Employee Directors. Non-Employee
Directors are only eligible to receive an Award of Stock Options in accordance
with Article XIII of the Plan.

 

ARTICLE VI

STOCK OPTIONS

 

 
                             6.1           Stock Options.  Each Stock Option
granted hereunder shall be one of two types: (i) an Incentive Stock Option
intended to satisfy the requirements of Section 422 of the Code; or (ii) a
Non-Qualified Stock Option.
   
                             6.2           Grants.  The Committee shall have the
authority to grant to any Eligible Employee one or more Incentive Stock Options,
Non-Qualified Stock Options or both types of Stock Options (in each case with or
without Stock Appreciation Rights). To the extent that any Stock Option does not
qualify as an Incentive Stock Option (whether because of its provisions or the
time or manner of its exercise or otherwise), such Stock Option or the portion
thereof which does not qualify, shall constitute a separate Non-Qualified Stock
Option. The Committee shall have the authority to grant any Consultant one or
more Non-Qualified Stock Options (with or without Stock

15

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Appreciation Rights). Notwithstanding any other provision of this Plan to the
contrary or any provision in an agreement evidencing the grant of a Stock Option
to the contrary, any Stock Option granted to an Eligible Employee of an
Affiliate (other than an Affiliate which is a Parent or a Subsidiary) shall be a
Non-Qualified Stock Option.
     
                            6.3          Terms of Stock Options. Stock Options
granted under this Plan shall be subject to the following terms and conditions,
and shall be in such form and contain such additional terms and conditions, not
inconsistent with the terms of this Plan, as the Committee shall deem desirable:
 

 
              (a)           Exercise Price.  The exercise price per share of
Common Stock purchasable under an Incentive Stock Option or a Stock Option
intended to be “performance-based” for purposes of Section 162(m) of the Code
shall be determined by the Committee at the time of grant, but shall not be less
than 100% of the Fair Market Value of the share of Common Stock at the time of
grant; provided, however, that if an Incentive Stock Option is granted to a Ten
Percent Stockholder, the exercise price shall be no less than 110% of the Fair
Market Value of the Common Stock. The exercise price per share of Common Stock
purchasable under a Non-Qualified Stock Option shall be determined by the
Committee; provided, that if the exercise price is less than 100% of the Fair
Market Value of the Common Stock at the time of grant it is intended that such
Award will be structured to comply with Section 409A of the Code, to the extent
applicable.
   
              (b)           Stock Option Term.  The term of each Stock Option
shall be fixed by the Committee; provided, however, that no Stock Option shall
be exercisable more than 10 years after the date such Stock Option is granted;
and further provided that the term of an Incentive Stock Option granted to a Ten
Percent Stockholder shall not exceed 5 years.
   
              (c)           Exercisability.  Stock Options shall be exercisable
at such time or times and subject to such terms and conditions as shall be
determined by the Committee at grant. If the Committee provides, in its
discretion, that any Stock Option is exercisable subject to certain limitations
(including, without limitation, that such Stock Option is exercisable only in
installments or within certain time periods), the Committee may waive such
limitations on the exercisability at any time at or after grant in whole or in
part (including, without limitation, waiver of the installment exercise
provisions or acceleration of the time at which such Stock Option may be
exercised), based on such factors, if any, as the Committee shall determine, in
its sole discretion.
   
              (d)           Method of Exercise. Subject to whatever installment
exercise and waiting period provisions apply under subsection (c) above, Stock
Options may be exercised in whole or in part at any time and from time to time
during the Stock Option term by giving written notice of exercise to the
Secretary of the Company specifying the number of shares to be purchased. Such
notice shall be accompanied by payment in full of the purchase price as
follows: (i) in cash or by

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check, bank draft or money order payable to the order of the Company; (ii) to
the extent permitted by law, if the Common Stock is traded on a national
securities exchange, The Nasdaq Stock Market LLC or quoted on a national
quotation system sponsored by the National Association of Securities Dealers,
through a “cashless exercise” procedure whereby the Participant delivers
irrevocable instructions to a broker satisfactory to the Company to deliver
promptly to the Company an amount equal to the purchase price; or (iii) on such
other terms and conditions as may be acceptable to the Committee (including,
without limitation, the relinquishment of Stock Options or by payment in full or
in part in the form of Common Stock owned by the Participant (and for which the
Participant has good title free and clear of any liens and encumbrances) based
on the Fair Market Value of the Common Stock on the payment date as determined
by the Committee). No shares of Common Stock shall be issued until payment
therefore, as provided herein, has been made or provided for.
   
              (e)           Incentive Stock Option Limitations. To the extent
that the aggregate Fair Market Value (determined as of the time of grant) of the
Common Stock with respect to which Incentive Stock Options are exercisable for
the first time by an Eligible Employee during any calendar year under this Plan
and/or any other stock option plan of the Company, any Subsidiary or any Parent
exceeds $100,000, such Options shall be treated as Non-Qualified Stock Options.
In addition, if an Eligible Employee does not remain employed by the Company,
any Subsidiary or any Parent at all times from the time an Incentive Stock
Option is granted until 3 months prior to the date of exercise thereof (or such
other period as required by applicable law), such Stock Option shall be treated
as a Non-Qualified Stock Option. Should any provision of this Plan not be
necessary in order for the Stock Options to qualify as Incentive Stock Options,
or should any additional provisions be required, the Committee may amend this
Plan accordingly, without the necessity of obtaining the approval of the
stockholders of the Company.
   
              (f)           Form, Modification, Extension and Renewal of Stock
Options. Subject to the terms and conditions and within the limitations of this
Plan, Stock Options shall be evidenced by such form of agreement or grant as is
approved by the Committee, and the Committee may (i) modify, extend or renew
outstanding Stock Options granted under this Plan; provided that the rights of a
Participant are not reduced without his consent; provided further, that any such
modification, extension or renewal is intended to be structured to comply with
Section 409A of the Code, to the extent applicable, and (ii) accept the
surrender of outstanding Stock Options (up to the extent not theretofore
exercised) and authorize the granting of new Stock Options in substitution
therefor (to the extent not theretofore exercised). Notwithstanding the
foregoing, an outstanding Option may not be modified to reduce the exercise
price thereof nor may a new Option at a lower price be substituted for a
surrendered Option (other than adjustments or substitutions in accordance with
Section 4.2), unless such action is approved by the stockholders of the Company.

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              (g)           Other Terms and Conditions. Stock Options may
contain such other provisions, which shall not be inconsistent with any of the
terms of this Plan, as the Committee shall deem appropriate including, without
limitation, permitting “reloads” such that the same number of Stock Options are
granted as the number of Stock Options exercised, shares used to pay for the
exercise price of Stock Options or shares used to pay withholding taxes
(“Reloads”). With respect to Reloads, the exercise price of the new Stock Option
shall be the Fair Market  Value on the date of the “reload” and the term of the
Stock Option shall be the same as the remaining term of the Stock Options that
are exercised, if applicable, or such other exercise price and term as
determined by the Committee.
   
              (h)           Detrimental Activity. Unless otherwise determined by
the Committee at grant, (i) in the event the Participant engages in Detrimental
Activity prior to any exercise of the Stock Option, all Stock Options (whether
vested or unvested) held by the Participant shall thereupon terminate and
expire, (ii) as a condition of the exercise of a Stock Option, the Participant
shall be required to certify (or shall be deemed to have certified) at the time
of exercise in a manner acceptable to the Company that the Participant is in
compliance with the terms and conditions of the Plan and that the Participant
has not engaged in, and does not intend to engage in, any Detrimental Activity,
and (iii) in the event the Participant engages in Detrimental Activity during
the one year period following the later of (x) Participant’s Termination of
Employment or (y) the date the Stock Option is exercised, that any Stock Options
shall be immediately forfeited (whether or not then vested) and the Company
shall be entitled to recover from the Participant at any time within one year
after the later of (x) or (y), and the Participant shall pay over to the
Company, an amount equal to any gain realized as a result of the exercise of any
Stock Options (whether at the time of exercise or thereafter).

 

ARTICLE VII

STOCK APPRECIATION RIGHTS

 

 
                             7.1           Tandem Stock Appreciation Rights.
Stock Appreciation Rights may be granted in conjunction with all or part of any
Stock Option (a “Reference Stock Option”) granted under this Plan (“Tandem Stock
Appreciation Rights”). In the case of a Non-Qualified Stock Option, such rights
may be granted either at or after the time of the grant of such Reference Stock
Option. In the case of an Incentive Stock Option, such rights may be granted
only at the time of the grant of such Reference Stock Option. Consultants shall
not be eligible for a grant of Tandem Stock Appreciation Rights granted in
conjunction with all or part of an Incentive Stock Option.
   
                             7.2           Terms and Conditions of Tandem Stock
Appreciation Rights. Tandem Stock Appreciation Rights shall be subject to such
terms and conditions, not inconsistent with the provisions of this Plan, as
shall be determined from time to time by the Committee, including Article XII
and the following:

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              (a)           Term.  A Tandem Stock Appreciation Right or
applicable portion thereof granted with respect to a Reference Stock Option
shall terminate and no longer be exercisable upon the termination or exercise of
the Reference Stock Option, except that, unless otherwise determined by the
Committee, in its sole discretion, at the time of grant, a Tandem Stock
Appreciation Right granted with respect to less than the full number of shares
covered by the Reference Stock Option shall not be reduced until and then only
to the extent the exercise or termination of the Reference Stock Option causes
the number of shares covered by the Tandem Stock Appreciation Right to exceed
the number of shares remaining available and unexercised under the Reference
Stock Option.
   
              (b)           Exercisability.  Tandem Stock Appreciation Rights
shall be exercisable only at such time or times and to the extent that the
Reference Stock Options to which they relate shall be exercisable in accordance
with the provisions of Article VI and this Article VII.
   
              (c)           Method of Exercise. A Tandem Stock Appreciation
Right may be exercised by a Participant by surrendering the applicable portion
of the Reference Stock Option. Upon such exercise and surrender, the Participant
shall be entitled to receive an amount determined in the manner prescribed in
this Section 7.2. Stock Options which have been so surrendered, in whole or in
part, shall no longer be exercisable to the extent the related Tandem Stock
Appreciation Rights have been exercised.
   
              (d)           Payment.  Upon the exercise of a Tandem Stock
Appreciation Right, a Participant shall be entitled to receive up to, but no
more than, an amount in Common Stock equal in value to the excess of the Fair
Market Value of one share of Common Stock over the option price per share
specified in the Reference Stock Option, multiplied by the number of shares in
respect of which the Tandem Stock Appreciation Right shall have been exercised.
   
              (e)           Deemed Exercise of Reference Stock Option. Upon the
exercise of a Tandem Stock Appreciation Right, the Reference Stock Option or
part thereof to which such Stock Appreciation Right is related shall be deemed
to have been exercised for the purpose of the limitation set forth in Article IV
of this Plan on the number of shares of Common Stock to be issued under this
Plan.
   
              (f)           Detrimental Activity. Unless otherwise determined by
the Committee at grant, (i) in the event the Participant engages in Detrimental
Activity prior to any exercise of Tandem Stock Appreciation Rights, all Tandem
Stock Appreciation Rights (whether vested or unvested) held by the Participant
shall thereupon terminate and expire, (ii) as a condition of the exercise of a
Tandem Stock Appreciation Right, the Participant shall be required to certify
(or shall be deemed to have certified) at the time of exercise in a manner
acceptable to the Company that the Participant is in compliance with the terms
and conditions of the Plan and that the Participant has not engaged in, and does
not intend to engage in, any Detrimental Activity, and (iii) in the event the
Participant

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engages in Detrimental Activity during the one year period following the later
of (x) Participant’s Termination of Employment or (y) the date the Tandem Stock
Appreciation Right is exercised, that any Tandem Stock Appreciation Rights shall
be immediately forfeited (whether or not then vested) and the Company shall be
entitled to recover from the Participant at any time within one year after the
later of (x) or (y), and the Participant shall pay over to the Company, an
amount equal to any gain realized as a result of the exercise (whether at the
time of exercise or thereafter).
 

 
                            7.3           Non-Tandem Stock Appreciation Rights.
Non-Tandem Stock Appreciation Rights may also be granted without reference to
any Stock Option granted under this Plan.
   
                            7.4           Terms and Conditions of Non-Tandem
Stock Appreciation Rights. Non-Tandem Stock Appreciation Rights shall be subject
to such terms and conditions, not inconsistent with the provisions of this Plan,
as shall be determined from time to time by the Committee, including Article XII
and the following:
 

 
              (a)           Term.  The term of each Non-Tandem Stock
Appreciation Right shall be fixed by the Committee, but shall not be greater
than ten (10) years after the date the right is granted.
   
              (b)           Exercisability.  Non-Tandem Stock Appreciation
Rights shall be exercisable at such time or times and subject to such terms and
conditions as shall be determined by the Committee at grant. If the Committee
provides, in its discretion, that any such right is exercisable subject to
certain limitations (including, without limitation, that it is exercisable only
in installments or within certain time periods), the Committee may waive such
limitation on the exercisability at any time at or after grant in whole or in
part (including, without limitation, waiver of the installment exercise
provisions or acceleration of the time at which rights may be exercised), based
on such factors, if any, as the Committee shall determine, in its sole
discretion.
   
              (c)           Method of Exercise. Subject to whatever installment
exercise and waiting period provisions apply under subsection (b) above,
Non-Tandem Stock Appreciation Rights may be exercised in whole or in part at any
time and from time to time during the term, by giving written notice of exercise
to the Company specifying the number of Non-Tandem Stock Appreciation Rights to
be exercised.
   
              (d)           Payment.  Upon the exercise of a Non-Tandem Stock
Appreciation Right a Participant shall be entitled to receive, for each right
exercised, up to, but no more than, an amount in cash and/or Common Stock (as
chosen by the Committee in its sole discretion at grant, or thereafter if no
rights of a Participant are reduced) equal in value to the excess of the Fair
Market Value of one share of Common Stock on the date the right is exercised
over the Fair Market Value of one share of Common Stock on the date the right
was awarded to the Participant;

20

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provided, that if payment is made in cash such payment shall be structured to
comply with Section 409A of the Code, to the extent applicable.
     
              (e)           Detrimental Activity. Unless otherwise determined by
the Committee at grant, (i) in the event the Participant engages in Detrimental
Activity prior to any exercise of Non-Tandem Stock Appreciation Rights, all
Non-Tandem Stock Appreciation Rights (whether vested or unvested) held by the
Participant shall thereupon terminate and expire, (ii) as a condition of the
exercise of a Tandem Stock Appreciation Right, the Participant shall be required
to certify (or shall be deemed to have certified) at the time of exercise in a
manner acceptable to the Company that the Participant is in compliance with the
terms and conditions of the Plan and that the Participant has not engaged in,
and does not intend to engage in, any Detrimental Activity, and (iii) in the
event the Participant engages in Detrimental Activity during the one year period
following the later of (x) Participant’s Termination of Employment or (y) the
date the Non-Tandem Stock Appreciation Right is exercised, that any Non-Tandem
Stock Appreciation Rights shall be immediately forfeited (whether or not then
vested) and the Company shall be entitled to recover from the Participant at any
time within one year after the later of (x) or (y), and the Participant shall
pay over to the Company, an amount equal to any gain realized as a result of the
exercise (whether at the time of exercise or thereafter).
 

 
                             7.5           Limited Stock Appreciation Rights.
The Committee may, in its sole discretion, grant a Tandem Stock Appreciation
Right or a Non-Tandem Stock Appreciation Right as a Limited Stock Appreciation
Right. Limited Stock Appreciation Rights may be exercised only upon the
occurrence of a Change in Control or such other event as the Committee may, in
its sole discretion, designate at the time of grant or thereafter. Upon the
exercise of limited Stock Appreciation Rights, except as otherwise provided in
an Award agreement, the Participant shall receive in cash or Common Stock, as
determined by the Committee, an amount equal to the amount (i) set forth in
Section 7.2(d) with respect to Tandem Stock Appreciation Rights, or (ii) set
forth in Section 7.4(d) with respect to Non-Tandem Stock Appreciation Rights, as
applicable.

 

ARTICLE VIII

RESTRICTED STOCK

 

 
                             8.1           Awards of Restricted Stock. Shares of
Restricted Stock may be issued to Eligible Employees or Consultants either alone
or in addition to other Awards granted under this Plan. The Committee shall
determine the eligible persons to whom, and the time or times at which, grants
of Restricted Stock will be made, the number of shares to be awarded, the price
(if any) to be paid by the recipient (subject to Section 8.2), the time or times
within which such Awards may be subject to forfeiture, the vesting schedule and
rights to acceleration thereof, and all other terms and conditions of the
Awards. The Committee may condition the grant or vesting of Restricted Stock
upon the attainment of specified performance goals, including established
Performance Goals in

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accordance with Section 162(m) of the Code, or such other factors as the
Committee may determine, in its sole discretion.
     
                            8.2           Awards and Certificates. An Eligible
Employee or Consultant selected to receive Restricted Stock shall not have any
rights with respect to such Award, unless and until such Participant has
delivered to the Company a fully executed copy of the applicable Award agreement
relating thereto and has otherwise complied with the applicable terms and
conditions of such Award. Further, such Award shall be subject to the following
conditions:
 

 
              (a)           Purchase Price.  The purchase price of Restricted
Stock shall be fixed by the Committee. Subject to Section 4.3, the purchase
price for shares of Restricted Stock may be zero to the extent permitted by
applicable law, and, to the extent not so permitted, such purchase price may not
be less than par value.
   
              (b)           Acceptance.  Awards of Restricted Stock must be
accepted within a period of 90 days (or such shorter period as the Committee may
specify at grant) after the Award date by executing a Restricted Stock Award
agreement and by paying whatever price (if any) the Committee has designated
thereunder.
   
              (c)           Legend.  Each Participant receiving shares of
Restricted Stock shall be issued a stock certificate in respect of such shares
of Restricted Stock, unless the Committee elects to use another system, such as
book entries by the transfer agent, as evidencing ownership of shares of
Restricted Stock. Such certificate shall be registered in the name of such
Participant, and shall bear an appropriate legend referring to the terms,
conditions, and restrictions applicable to such Award, substantially in the
following form:
   
              “The anticipation, alienation, attachment, sale, transfer,
assignment, pledge, encumbrance or charge of the shares of stock represented
hereby are subject to the terms and conditions (including forfeiture) of The
Comtech Telecommunications Corp. 2000 Stock Incentive Plan (the “Plan”) and an
Agreement entered into between the registered owner and the Company dated
_______. Copies of such Plan and Agreement are on file at the principal office
of the Company.”
   
              (d)           Custody.  The Committee may require that any stock
certificates evidencing such shares be held in custody by the Company until the
restrictions thereon shall have lapsed and that, as a condition to the grant of
such Award of Restricted Stock, the Participant shall have delivered a duly
signed stock power, endorsed in blank, relating to the Common Stock covered by
such Award.
 

 
                             8.3           Restrictions and Conditions on
Restricted Stock Awards. Shares of Restricted Stock awarded pursuant to this
Plan shall be subject to Article XII and the following restrictions and
conditions:
 

 
              (a)           Restriction Period; Vesting and Acceleration of
Vesting. (i) The Participant shall not be permitted to Transfer shares of
Restricted Stock awarded

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under this Plan during the period or periods set by the Committee (the
“Restriction Period”) commencing on the date of such Award, as set forth in the
Restricted Stock Award agreement and such agreement shall set forth a vesting
schedule and any events which would accelerate vesting of the shares of
Restricted Stock. Within these limits, based on service, attainment of
Performance Goals pursuant to Section 8.3(a)(ii) below and/or such other factors
or criteria as the Committee may determine in its sole discretion, the Committee
may provide for the lapse of such restrictions in installments in whole or in
part, or may accelerate the vesting of all or any part of any Restricted Stock
Award and/or waive the deferral limitations for all or any part of any
Restricted Stock Award.
   
                              (ii)           Objective Performance Goals,
Formulae or Standards. If the grant of shares of Restricted Stock or the lapse
of restrictions is based on the attainment of Performance Goals, the Committee
shall establish the Performance Goals and the applicable vesting percentage of
the Restricted Stock Award applicable to each Participant or class of
Participants in writing prior to the beginning of the applicable fiscal year or
at such later date as otherwise determined by the Committee and while the
outcome of the Performance Goals are substantially uncertain. Such Performance
Goals may incorporate provisions for disregarding (or adjusting for) changes in
accounting methods, corporate transactions (including, without limitation,
dispositions and acquisitions) and other similar type events or circumstances.
With regard to a Restricted Stock Award that is intended to comply with Section
162(m) of the Code, to the extent any such provision would create impermissible
discretion under Section 162(m) of the Code or otherwise violate Section 162(m)
of the Code, such provision shall be of no force or effect. The applicable
Performance Goals shall be based on one or more of the Performance Criteria set
forth in Exhibit A hereto.
   
              (b)           Rights as Stockholder. Except as provided in this
subsection (b) and subsection (a) above and as otherwise determined by the
Committee, the Participant shall have, with respect to the shares of Restricted
Stock, all of the rights of a holder of shares of Common Stock of the Company
including, without limitation, the right to receive any dividends, the right to
vote such shares and, subject to and conditioned upon the full vesting of shares
of Restricted Stock, the right to tender such shares. The Committee may, in its
sole discretion, determine at the time of grant that the payment of dividends
shall be deferred until, and conditioned upon, the expiration of the applicable
Restriction Period.
   
              (c)           Lapse of Restrictions. If and when the Restriction
Period expires without a prior forfeiture of the Restricted Stock subject to
such Restriction Period, the certificates for such shares shall be delivered to
the Participant. All legends shall be removed from said certificates at the time
of delivery to the Participant except as otherwise required by applicable law.
   
              (d)           Detrimental Activity. Unless otherwise determined by
the Committee at grant, each Award of Restricted Stock shall provide that in the

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event the Participant engages in Detrimental Activity prior to, or during the
one year period following the later of Termination of Employment or any vesting
of Restricted Stock, the Committee may direct (at any time within one year
thereafter) that all unvested Restricted Stock shall be immediately forfeited to
the Company and that the Participant shall pay over to the Company an amount
equal to the gain realized at the time of vesting of any Restricted Stock.
   

ARTICLE IX

PERFORMANCE SHARES

 

 
                             9.1           Award of Performance Shares.
Performance Shares may be awarded either alone or in addition to other Awards
granted under this Plan. The Committee shall, in its sole discretion, determine
the Eligible Employees and Consultants to whom and the time or times at which
such Performance Shares shall be awarded, the duration of the period (the
“Performance Period”) during which, and the conditions under which, a
Participant’s right to Performance Shares will be vested and the other terms and
conditions of the Award in addition to those set forth in Section 9.2.
   
               Each Performance Share awarded shall be referenced to one share
of Common Stock. Except as otherwise provided herein, the Committee shall
condition the right to payment of any Performance Share Award upon the
attainment of objective Performance Goals established pursuant to Section 9.2(c)
below and such other non-performance based factors or criteria as the Committee
may determine in its sole discretion.
   
                             9.2           Terms and Conditions.  A Participant
selected to receive Performance Shares shall not have any rights with respect to
such Awards, unless and until such Participant has delivered a fully executed
copy of a Performance Share Award agreement evidencing the Award to the Company
and has otherwise complied with the following terms and conditions:
 

 
              (a)           Earning of Performance Share Award.  At the
expiration of the applicable Performance Period, the Committee shall determine
the extent to which the Performance Goals established pursuant to Section 9.2(c)
are achieved and the percentage of each Performance Share Award that has been
earned.
   
              (b)           Payment.  Following the Committee’s determination in
accordance with subsection (a) above, shares of Common Stock or, as determined
by the Committee in its sole discretion, the cash equivalent of such shares
shall be delivered to the Participant, in an amount equal to such Participant’s
earned Performance Share Award. Notwithstanding the foregoing, except as may be
set forth in the agreement covering the Award, the Committee may, in its sole
discretion and in accordance with Section 162(m) of the Code, award an amount
less than the earned Performance Share Award and/or subject the payment of all
or part of any Performance Share Award to additional vesting and forfeiture
conditions as it deems appropriate.

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              (c)           Objective Performance Goals, Formulae or Standards.
The Committee shall establish the objective Performance Goals for the earning of
Performance Shares based on a Performance Period applicable to each Participant
or class of Participants in writing prior to the beginning of the applicable
Performance Period or at such later date as permitted under Section 162(m) of
the Code and while the outcome of the Performance Goals are substantially
uncertain. Such Performance Goals may incorporate, if and only to the extent
permitted under Section 162(m) of the Code, provisions for disregarding (or
adjusting for) changes in accounting methods, corporate transactions (including,
without limitation, dispositions and acquisitions) and other similar type events
or circumstances. To the extent any such provision would create impermissible
discretion under Section 162(m) of the Code or otherwise violate Section 162(m)
of the Code, such provision shall be of no force or effect. The applicable
Performance Goals shall be based on one or more of the Performance Criteria set
forth in Exhibit A hereto.
   
              (d)           Dividends and Other Distributions. At the time of
any Award of Performance Shares, the Committee may, in its sole discretion,
award an Eligible Employee or Consultant the right to receive the cash value of
any dividends and other distributions that would have been received as though
the Eligible Employee or Consultant had held each share of Common Stock
referenced by the earned Performance Share Award from the last day of the first
year of the Performance Period until the actual distribution to such Participant
of the related share of Common Stock or cash value thereof. Such amounts, if
awarded, shall be paid to the Participant as and when the shares of Common Stock
or cash value thereof are distributed to such Participant and, at the discretion
of the Committee, may be paid with interest from the first day of the second
year of the Performance Period until such amounts and any earnings thereon are
distributed. The applicable rate of interest shall be determined by the
Committee in its sole discretion; provided, however, that for each fiscal year
or part thereof, the applicable interest rate shall not be greater than a rate
equal to the four-year U.S. Government Treasury rate on the first day of each
applicable fiscal year.
   
              (e)           Detrimental Activity. Unless otherwise determined by
the Committee at grant, each Award of Performance Shares shall provide that in
the event the Participant engages in Detrimental Activity prior to, or during
the one year period following the later of Termination of Employment or any
vesting of Performance Shares, the Committee may direct (at any time within one
year thereafter) that all unvested Performance Shares shall be immediately
forfeited to the Company and that the Participant shall pay over to the Company
an amount equal to the gain realized at the time of vesting of any Performance
Shares.

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ARTICLE X

CASH INCENTIVE AWARDS AND PERFORMANCE UNITS

 

 
                             10.1          Cash Incentive Awards. Cash incentive
Awards may be awarded either alone or in addition to other Awards granted under
this Plan. The Committee shall, in its sole discretion, determine the Eligible
Employees and Consultants to whom and the time or times at which such cash
incentive Awards shall be awarded, the duration of the period (the “Performance
Cycle”) during which, and the conditions under which, a Participant shall earn
the cash incentive Award and the other terms and conditions of the Award in
addition to those set forth in Section 10.3. Cash incentive Awards granted with
a Performance Cycle of one year shall be designated as “Annual Incentive
Awards.”

 

 
                Cash incentive Awards shall be awarded in a dollar amount or a
formula that will ultimately yield a dollar amount, as determined by the
Committee. Except as otherwise provided herein, the Committee shall condition
the right to payment of any cash incentive Award upon the attainment of at least
one objective Performance Goal established pursuant to Section 10.3(a) and such
other factors or criteria as the Committee may determine in its sole discretion.
   
                Cash incentive Awards under this Section 10.1 may be settled and
paid only if stockholders of the Company previously have approved the amendment
and restatement of the Plan containing the authorization of cash incentive
Awards in this Section 10.1.
   
                             10.2          Awards of Performance Units.
Performance Units may be awarded either alone or in addition to other Awards
granted under this Plan. The Committee shall, in its sole discretion, determine
the Eligible Employees and Consultants to whom and the time or times at which
such Performance Units shall be awarded, the duration of the period (the
“Performance Unit Cycle”) during which, and the conditions under which, a
Participant’s right to Performance Units will be vested and the other terms and
conditions of the Award in addition to those set forth in Section 10.3.
   
                Performance Units shall be awarded in a dollar amount determined
by the Committee and shall be converted for purposes of calculating growth in
value to a referenced number of shares of Common Stock based on the Fair Market
Value of shares of Common Stock at the close of trading on the first business
day following the announcement of the annual financial results of the Company
for the fiscal year of the Company immediately preceding the fiscal year of the
commencement of the relevant Performance Unit Cycle, provided that the Committee
may provide that the minimum price for such conversion shall be the Fair Market
Value on the date of grant.
   
                Each Performance Unit shall be referenced to one share of Common
Stock. Except as otherwise provided herein, the Committee shall condition the
right to payment of any Performance Unit Award upon the attainment of objective
Performance Goals established pursuant to Section 10.3(a) and such other
non-performance based factors or criteria as the Committee may determine in its
sole discretion. The cash value of any fractional Performance Unit Award
subsequent to conversion to shares of Common Stock

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shall be treated as a dividend or other distribution under Section 10.3(e) to
the extent any portion of the Performance Unit Award is earned.
     
                            10.3        Terms and Conditions. The cash incentive
Awards or Performance Units awarded pursuant to this Article 10 shall be subject
to the following terms and conditions:
 

 
              (a)           Performance Goals.  The Committee shall establish
the objective Performance Goal or Goals for the earning of cash incentive Awards
or Performance Units based on a Performance Cycle or Performance Unit Cycle
applicable to each Participant or class of Participants in writing prior to the
beginning of the applicable Performance Cycle or Performance Unit Cycle or at
such later date as permitted under Section 162(m) of the Code and while the
outcome of the Performance Goal or Goals is substantially uncertain. Such
Performance Goals may incorporate, if and only to the extent permitted under
Section 162(m) of the Code, provisions for disregarding (or adjusting for)
changes in accounting methods, corporate transactions (including, without
limitation, dispositions and acquisitions) and other similar type events or
circumstances. To the extent any such provision would create impermissible
discretion under Section 162(m) of the Code or otherwise violate Section 162(m)
of the Code, such provision shall be of no force or effect. The applicable
Performance Goals shall be based on one or more of the Performance Criteria set
forth in Exhibit A hereto.
   
              (b)           Vesting.  At the expiration of the Performance Cycle
or Performance Unit Cycle, the Committee shall determine and certify in writing
the extent to which the Performance Goals have been achieved, and the
corresponding extent to which a cash incentive Award or a Performance Unit has
been earned in respect of each Participant.
   
              (c)           Payment.  Subject to the applicable provisions of
the Award agreement and this Plan, at the expiration of the Performance Cycle or
Performance Unit Cycle or any vesting period extending beyond the Performance
Cycle or Performance Unit Cycle, cash or, with respect to Performance Units,
shares of Common Stock (as the Committee may determine in its sole discretion at
grant, or thereafter if no rights of a Participant are reduced), shall be
delivered to the Participant in payment of any earned and vested cash incentive
Award or any earned and vested Performance Units covered by the Performance Unit
Award. Notwithstanding the foregoing, except as may be set forth in the
agreement covering the Award, the Committee may, in its sole discretion, and to
the extent applicable and permitted under Section 162(m) of the Code, award an
amount less than the earned cash incentive Award or earned Performance Unit
Award and/or subject the payment of all or part of any such Award to additional
vesting and forfeiture conditions or conditions mandating the deferral of
settlement of the Award as it deems appropriate. If an Award is deferred such
Award shall not increase (between the date on which the Award is credited to any
deferred compensation program applicable to such Participant and the payment

27

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date) by an amount that would result in such deferral being deemed as an
“increase in the amount of compensation” under Section 162(m) of the Code.
     
              (d)           Accelerated Vesting. Based on service, performance
and/or such other factors or criteria, if any, as the Committee may determine,
the Committee may, at or after grant, accelerate the date of earning or vesting
of all or any part of any cash incentive Award or Performance Unit Award and/or
waive the deferral limitations for all or any part of such Award.
     
              (e)           Dividends and Other Distributions. At the time of
any Award of Performance Units, the Committee may, in its sole discretion, award
an Eligible Employee or Consultant the right to receive the cash value of any
dividends and other distributions that would have been received as though the
Eligible Employee or Consultant had held each share of Common Stock referenced
by the earned Performance Unit Award from the last day of the first year of the
Performance Cycle or Performance Unit Cycle until the actual distribution to
such Participant of the related share of Common Stock or cash value thereof.
Such amounts, if awarded, shall be paid to the Participant as and when the
shares of Common Stock or cash value thereof are distributed to such Participant
and, at the discretion of the Committee, may be paid with interest from the
first day of the second year of the Performance Cycle or Performance Unit Cycle
until such amounts and any earnings thereon are distributed. The applicable rate
of interest shall be determined by the Committee in its sole discretion;
provided, however, that for each fiscal year or part thereof, the applicable
interest rate shall not be greater than a rate equal to the four-year U.S.
Government Treasury rate on the first day of each applicable fiscal year.
   
              (f)           Detrimental Activity. Unless otherwise determined by
the Committee at grant, each Award of Performance Units shall provide that in
the event the Participant engages in Detrimental Activity prior to, or during
the one year period following the later of Termination of Employment or any
vesting of Performance Units, the Committee may direct (at any time within one
year thereafter) that all unvested Performance Units shall be immediately
forfeited to the Company and that the Participant shall pay over to the Company
an amount equal to the gain realized at the time of vesting of any Performance
Units which had vested in the period referred to above.

 

ARTICLE XI

OTHER STOCK-BASED AWARDS

 

 
                             11.1          Other Awards.  Other Stock-Based
Awards may be granted either alone or in addition to or in tandem with Stock
Options, Stock Appreciation Rights, Restricted Stock, Performance Shares or
Performance Units.

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               Subject to the provisions of this Plan, the Committee shall have
authority to determine the persons to whom and the time or times at which such
Awards shall be made, the number of shares of Common Stock to be awarded
pursuant to such Awards, and all other conditions of the Awards. The Committee
may also provide for the grant of Common Stock under such Awards upon the
completion of a specified performance period.
     
                            11.2          Terms and Conditions. Other
Stock-Based Awards made pursuant to this Article XI shall be subject to the
following terms and conditions:

     
              (a)           Non-Transferability. Subject to the applicable
provisions of the Award agreement and this Plan, shares of Common Stock subject
to Awards made under this Article XI may not be Transferred prior to the date on
which the shares are issued, or, if later, the date on which any applicable
restriction, performance or deferral period lapses.
     
              (b)           Dividends.  Unless otherwise determined by the
Committee at the time of Award, subject to the provisions of the Award agreement
and this Plan, the recipient of an Award under this Article XI shall be entitled
to receive, currently or on a deferred basis, dividends or dividend equivalents
with respect to the number of shares of Common Stock covered by the Award, as
determined at the time of the Award by the Committee, in its sole discretion.
   
              (c)           Vesting.  Any Award under this Article XI and any
Common Stock covered by any such Award shall vest or be forfeited to the extent
so provided in the Award agreement, as determined by the Committee, in its sole
discretion.
   
              (d)           Waiver of Limitation. The Committee may, in its sole
discretion, waive in whole or in part any or all of the limitations imposed
hereunder (if any) with respect to any or all of an Award under this Article XI.
   
              (e)           Price.  Common Stock or Other Stock-Based Awards
issued on a bonus basis under this Article XI may be issued for no cash
consideration; Common Stock or Other Stock-Based Awards purchased pursuant to a
purchase right awarded under this Article XI shall be priced as determined by
the Committee. Subject to Section 4.3, the purchase price of shares of Common
Stock or Other Stock-Based Awards may be zero to the extent permitted by
applicable law, and, to the extent not so permitted, such purchase price may not
be less than par value. The purchase of shares of Common Stock or Other
Stock-Based Awards may be made on either an after-tax or pre-tax basis, as
determined by the Committee; provided, however, that if the purchase is made on
a pre-tax basis, such purchase shall be made pursuant to a deferred compensation
program established by the Committee, which will be deemed a part of this Plan.
   
              (f)           Detrimental Activity. Other Stock-Based Awards under
this Article XI and any Common Stock covered by any such Award shall be
forfeited

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in the event the Participant engages in Detrimental Activity under such
conditions set forth by the Committee in the Award agreement.

 

ARTICLE XII

NON-TRANSFERABILITY AND TERMINATION
OF EMPLOYMENT/CONSULTANCY

 

 
                             12.1          Non-Transferability. No Stock Option,
Stock Appreciation Right, Performance Unit, Performance Share or Other
Stock-Based Award shall be Transferable by the Participant otherwise than by
will or by the laws of descent and distribution. All Stock Options and all Stock
Appreciation Rights shall be exercisable, during the Participant’s lifetime,
only by the Participant. Tandem Stock Appreciation Rights shall be Transferable,
to the extent permitted above, only with the underlying Stock Option. Shares of
Restricted Stock under Article VIII may not be Transferred prior to the date on
which shares are issued, or, if later, the date on which any applicable
restriction, performance or deferral period lapses. No Award shall, except as
otherwise specifically provided by law or herein, be Transferable in any manner,
and any attempt to Transfer any such Award shall be void, and no such Award
shall in any manner be liable for or subject to the debts, contracts,
liabilities, engagements or torts of any person who shall be entitled to such
Award, nor shall it be subject to attachment or legal process for or against
such person. Notwithstanding the foregoing, the Committee may determine at the
time of grant or thereafter, that a Non-Qualified Stock Option that is otherwise
not transferable pursuant to this Section 12.1 is transferable to a Family
Member in whole or in part and in such circumstances, and under such conditions,
as specified by the Committee. A Non-Qualified Stock Option that is transferred
to a Family Member pursuant to the preceding sentence may not be subsequently
transferred otherwise than by will or by the laws of descent and distribution.
   
                            12.2          Termination of Employment or
Termination of Consultancy. The following rules apply with regard to the
Termination of Employment or Termination of Consultancy of a Participant:
 

 
              (a)           Rules Applicable to Stock Options and Stock
Appreciation Rights. Unless otherwise determined by the Committee at grant or,
if no rights of the Participant are reduced, thereafter:
   
                             (i)           Termination by Reason of Death,
Disability or Retirement. If a Participant’s Termination of Employment or
Termination of Consultancy is by reason of death, Disability or Retirement, all
Stock Options and Stock Appreciation Rights held by such Participant may be
exercised, to the extent exercisable at the Participant’s Termination of
Employment or Termination of Consultancy, by the Participant (or, in the case of
death, by the legal representative of the Participant’s estate) at any time
within a period of one year from the date of such Termination of Employment or
Termination of Consultancy, but in no event beyond the expiration of the stated
terms of such

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Stock Options and Stock Appreciation Rights; provided, however, that, in the
case of Retirement, if the Participant dies within such exercise period, all
unexercised Stock Options and Non-Tandem Stock Appreciation Rights held by such
Participant shall thereafter be exercisable, to the extent to which they were
exercisable at the time of death, for a period of one year from the date of such
death, but in no event beyond the expiration of the stated term of such Stock
Options and Non-Tandem Stock Appreciation Rights.
     
                             (ii)           Involuntary Termination Without
Cause. If a Participant’s Termination of Employment or Termination of
Consultancy is by involuntary termination without Cause, all Stock Options and
Stock Appreciation Rights held by such Participant may be exercised, to the
extent exercisable at Termination of Employment or Termination of Consultancy,
by the Participant at any time within a period of 90 days from the date of such
Termination of Employment or Termination of Consultancy, but in no event beyond
the expiration of the stated term of such Stock Options and Stock Appreciation
Rights.
     
                             (iii)          Voluntary Termination. If a
Participant’s Termination of Employment or Termination of Consultancy is
voluntary (other than a voluntary termination described in Section
12.2(a)(iv)(B) below), all Stock Options and Stock Appreciation Rights held by
such Participant may be exercised, to the extent exercisable at Termination of
Employment or Termination of Consultancy, by the Participant at any time within
a period of 30 days from the date of such Termination of Employment or
Termination of Consultancy, but in no event beyond the expiration of the stated
terms of such Stock Options and Stock Appreciation Rights. Notwithstanding the
foregoing, effective for Stock Options and Stock Appreciation Rights granted on
or after October 19, 2000, if a Participant’s Termination of Employment or
Termination of Consultancy is voluntary, all Stock Options and Stock
Appreciation Rights held by such Participant shall thereupon terminate and
expire as of the date of such Termination of Employment or Termination of
Consultancy.
   
                             (iv)          Termination for Cause. If a
Participant’s Termination of Employment or Termination of Consultancy (A) is for
Cause or (B) is a voluntary termination (as provided in subsection (iii) above)
within 90 days after an event which would be grounds for a Termination of
Employment or Termination of Consultancy for Cause, all Stock Options and Stock
Appreciation Rights held by such Participant shall thereupon terminate and
expire as of the date of such Termination of Employment or Termination of
Consultancy.
   
              (b)          Rules Applicable to Restricted Stock. Subject to the
applicable provisions of the Restricted Stock Award agreement and this Plan,
upon a Participant’s Termination of Employment or Termination of Consultancy for
any reason during the relevant Restriction Period, all Restricted Stock still
subject to restriction will vest or be forfeited in accordance with the terms
and conditions established by the Committee at grant or thereafter.

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              (c)           Rules Applicable to Performance Shares and
Performance Units. Subject to the applicable provisions of the Award agreement
and this Plan, upon a Participant’s Termination of Employment or Termination of
Consultancy for any reason during the Performance Period, the Performance Unit
Cycle or other period or restriction as may be applicable for a given Award, the
Performance Shares or Performance Units in question will vest (to the extent
applicable and to the extent permissible under Section 162(m) of the Code) or be
forfeited in accordance with the terms and conditions established by the
Committee at grant or thereafter.
   
              (d)           Rules Applicable to Other Stock-Based Awards.
Subject to the applicable provisions of the Award agreement and this Plan, upon
a Participant’s Termination of Employment or Termination of Consultancy for any
reason during any period or restriction as may be applicable for a given Award,
the Other Stock-Based Awards in question will vest or be forfeited in accordance
with the terms and conditions established by the Committee at grant or
thereafter.
   

ARTICLE XIII

NON-EMPLOYEE DIRECTOR STOCK OPTION GRANTS

 

 
                             13.1         Stock Options.  The terms of this
Article XIII shall apply only to Stock Options granted to Non-Employee
Directors.
   
                             13.2         Grants. Without further action by the
Board or the stockholders of the Company, each Non-Employee Director shall,
subject to the terms of the Plan, be granted:
 

 
                (a)           Stock Options to purchase 4,500 shares of Common
Stock as of the date the Non-Employee Director begins service as a Non-Employee
Director on the Board (subject to increase or decrease pursuant to Section 4.2),
provided that the Non-Employee Director began service on or after the Effective
Date; and
   
                (b)           In addition to Stock Options granted pursuant to
(a) above, Stock Options: (i) to purchase 12,500 shares of Common Stock as of
the August 1 of each year (subject to increase or decrease pursuant to Section
4.2), commencing August 1, 2005, provided he or she has not, as of such day,
experienced a Termination of Directorship and provided further that he or she
has been a Non-Employee Director for at least six months as of such August 1
date; and (ii) to purchase 4,500 shares of Common Stock as of November 6, 2000,
3,375 shares of Common Stock as of November 1, 2001, 3,750 shares of Common
Stock as of November 3, 2003 and 3,750 shares of Common Stock as of August 2,
2004.
 

 
                              13.3         Non-Qualified Stock Options. Stock
Options granted under this Article XIII shall be Non-Qualified Stock Options.

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                              13.4         Terms of Stock Options. Stock Options
granted under this Article XIII shall be subject to the following terms and
conditions, and shall be in such form and contain such additional terms and
conditions, not inconsistent with the terms of this Plan, as the Board shall
deem desirable:
   

 
                (a)           Stock Option Price. The Stock Option price per
share of Common Stock purchasable under a Stock Option shall equal 100% of the
Fair Market Value of the share of Common Stock at the time of grant.
     
                (b)           Stock Option Term.  The term of each Stock Option
granted (i) prior to August 1, 2005 shall be ten (10) years and (ii) on or after
August 1, 2005 shall be five (5) years.
     
                (c)           Exercisability. Stock Options granted to
Non-Employee Directors pursuant to Section 13.2 shall vest and become
exercisable (i) on the first anniversary of date of grant for Stock Options
granted prior to August 1, 2005 and (ii) in installments over a three (3) year
period, commencing on the date of grant for Stock Options granted on or after
August 1, 2005, at the rate of 25% effective on the first and second
anniversaries of the date of grant and 50% on the third anniversary of the date
of grant; provided that in any event the Stock Option may become vested only
during the continuance of his or her service as a director of the Company.
   
                (d)           Method of Exercise. Subject to whatever waiting
period provisions apply under subsection (c) above, Stock Options may be
exercised in whole or in part at any time and from time to time during the Stock
Option term, by giving written notice of exercise to the Company specifying the
number of shares to be purchased. Such notice shall be accompanied by payment in
full of the purchase price as follows: (i) in cash or by check, bank draft or
money order payable to the Company; (ii) to the extent permitted by law, if the
Common Stock is traded on a national securities exchange, through a “cashless
exercise” procedure whereby the Participant delivers irrevocable instructions to
a broker satisfactory to the Company to deliver promptly to the Company an
amount equal to the purchase price; or (iii) such other arrangement for the
satisfaction of the purchase price, as the Board may accept. If and to the
extent determined by the Board in its sole discretion at or after grant, payment
in full or in part may also be made in the form of Common Stock owned by the
Participant (and for which the Participant has good title free and clear of any
liens and encumbrances) based on the Fair Market Value of the Common Stock on
the payment date. No shares of Common Stock shall be issued until payment, as
provided herein, therefore has been made or provided for.
   
                (e)           Form, Modification, Extension and Renewal of Stock
Options. Subject to the terms and conditions and within the limitations of the
Plan, a Stock Option shall be evidenced by such form of agreement or grant as is
approved by the Board, and the Board may modify, extend or renew outstanding
Stock Options
 

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  granted under the Plan (provided that the rights of a Participant are not
reduced without his consent).

     
                              13.5         Termination of Directorship. The
following rules apply with regard to Stock Options upon the Termination of
Directorship:
 

 
                (a)           Termination of Directorship by Reason of Death,
Disability or Otherwise Ceasing to be a Director. Except as otherwise provided
herein, upon the Termination of Directorship by reason of death, Disability,
resignation, failure to stand for reelection or failure to be reelected or
otherwise, all outstanding Stock Options exercisable and not exercised shall
remain exercisable to the extent exercisable on such date of Termination of
Directorship by the Participant or, in the case of death, by the Participant’s
estate or by the person given authority to exercise such Stock Options by his or
her will or by operation of law, at any time prior to the expiration of the
stated term of such Stock Option.
     
                (b)           Cancellation of Options. Except as provided in
Section 13.6, no Stock Options that were not exercisable as of the date of
Termination of Directorship shall thereafter become exercisable upon a
Termination of Directorship for any reason or no reason whatsoever, and such
Stock Options shall terminate and become null and void upon a Termination of
Directorship. If a Non-Employee Director’s Termination of Directorship is for
Cause, all Stock Options held by the Non-Employee Director shall thereupon
terminate and expire as of the date of termination.
 

 
                              13.6          Acceleration of Exercisability. All
Stock Options granted to a Non-Employee Director and not previously exercisable
shall become fully exercisable upon such Director’s death, and all Stock Options
granted to Non-Employee Directors and not previously exercisable shall become
fully exercisable immediately upon a Change in Control (as defined in Section
14.2).
 

                                13.7         Changes.  

 
                (a)           The Awards to a Non-Employee Director shall be
subject to Sections 4.2(a), (b) and (c) of the Plan and this Section 13.7, but
shall not be subject to Section 4.2(d).
   
                (b)           If the Company shall not be the surviving
corporation in any merger or consolidation, or if the Company is to be dissolved
or liquidated, then, unless the surviving corporation assumes the Stock Options
or substitutes new Stock Options which are determined by the Board in its sole
discretion to be substantially similar in nature and equivalent in terms and
value for Stock Options then outstanding, upon the effective date of such
merger, consolidation, liquidation or dissolution, any unexercised Stock Options
shall expire without additional compensation to the holder thereof; provided,
that, the Board shall deliver notice to each Non-Employee Director at least 30
days prior to the date of consummation of such merger, consolidation,
dissolution or liquidation which

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would result in the expiration of the Stock Options and during the period from
the date on which such notice of termination is delivered to the consummation of
the merger, consolidation, dissolution or liquidation, such Participant shall
have the right to exercise in full, effective as of such consummation, all Stock
Options that are then outstanding (without regard to limitations on exercise
otherwise contained in the Stock Options) but contingent on occurrence of the
merger, consolidation, dissolution or liquidation, and, provided that, if the
contemplated transaction does not take place within a 90 day period after giving
such notice for any reason whatsoever, the notice, accelerated vesting and
exercise shall be null and void and, if and when appropriate, new notice shall
be given as aforesaid.

 

ARTICLE XIV

CHANGE IN CONTROL PROVISIONS

 

 
                             14.1         Benefits.  In the event of a Change in
Control of the Company, except as otherwise provided by the Committee upon the
grant of an Award, the Participant shall be entitled to the following benefits:

     
                (a)           Except to the extent provided in the applicable
Award agreement, the Participant’s employment agreement with the Company or an
Affiliate, as approved by the Committee, or other written agreement approved by
the Committee (as such agreement may be amended from time to time), (i) Equity
Awards granted and not previously exercisable shall become exercisable upon a
Change in Control, (ii) restrictions to which any shares of Restricted Stock
granted prior to the Change in Control are subject shall lapse upon a Change in
Control, and (iii) the conditions required for vesting of any unvested
Performance Units and/or Performance Shares shall be deemed to be satisfied upon
a Change in Control.
   
                (b)           The Committee, in its sole discretion, may provide
for the purchase of any Stock Option by the Company or an Affiliate for an
amount of cash equal to the excess of the Change in Control Price (as defined
below) of the shares of Common Stock covered by such Stock Options, over the
aggregate exercise price of such Stock Options. For purposes of this Section
14.1, Change in Control Price shall mean the higher of (i) the highest price per
share of Common Stock paid in any transaction related to a Change in Control of
the Company, or (ii) the highest Fair Market Value per share of Common Stock at
any time during the sixty (60) day period preceding a Change in Control.
   
                (c)           Notwithstanding anything to the contrary herein,
unless the Committee provides otherwise at the time a Stock Option is granted
hereunder or thereafter, no acceleration of exercisability shall occur with
respect to such Stock Options if the Committee reasonably determines in good
faith, prior to the occurrence of the Change in Control, that the Stock Options
shall be honored or assumed, or new rights substituted therefore (each such
honored, assumed or
 

 

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substituted stock option hereinafter called an “Alternative Option”), by a
Participant’s employer (or the parent or a subsidiary of such employer)
immediately following the Change in Control, provided that any such Alternative
Option must meet the following criteria:
 

 
                (i)            the Alternative Option must be based on stock
which is traded on an established securities market, or which will be so traded
within 30 days of the Change in Control;
   
                (ii)           the Alternative Option must provide such
Participant with rights and entitlements substantially equivalent to or better
than the rights, terms and conditions applicable under such Stock Option,
including, but not limited to, an identical or better exercise schedule; and
   
                (iii)          the Alternative Option must have economic value
substantially equivalent to the value of such Stock Option (determined at the
time of the Change in Control).

 

 
               For purposes of Incentive Stock Options, any assumed or
substituted Stock Option shall comply with the requirements of Treasury
Regulation § 1.424-1 (and any amendments thereto).
   
                (d)           Notwithstanding anything else herein, the
Committee may, in its sole discretion, provide for accelerated vesting of an
Award or accelerated lapsing of restrictions on shares of Restricted Stock at
any time.
 

 
                              14.2         Change in Control.  A “Change in
Control” shall be deemed to have occurred:
 

 
                (a)           upon any “person” as such term is used in Sections
13(d) and 14(d) of the Exchange Act (other than the Company, any trustee or
other fiduciary holding securities under any employee benefit plan of the
Company, or any company owned, directly or indirectly, by the stockholders of
the Company in substantially the same proportions as their ownership of Common
Stock of the Company), becoming the owner (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company representing
30% or more of the combined voting power of the Company’s then outstanding
securities;
   
                (b)            during any period of two (2) consecutive years,
individuals who at the beginning of such period constitute the Board of
Directors, and any new director (other than a director designated by a person
who has entered into an agreement with the Company to effect a transaction
described in paragraph (a), (c), or (d) of this section) or a director whose
initial assumption of office occurs as a result of either an actual or
threatened election contest (as such term is used in Rule 14a-11 of Regulation
14A promulgated under the Exchange Act) or other actual or threatened
solicitation of proxies or consents by or on behalf of a person other than the
Board of Directors of the Company whose election by the Board of Directors or
nomination for election by the Company’s stockholders was approved

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by a vote of at least two-thirds of the directors then still in office who
either were directors at the beginning of the two-year period or whose election
or nomination for election was previously so approved, cease for any reason to
constitute at least a majority of the Board of Directors;
     
                (c)           upon a merger or consolidation of the Company with
any other corporation, other than a merger or consolidation which would result
in the voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) more than 50% of the combined
voting power of the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation; provided, however,
that a merger or consolidation effected to implement a recapitalization of the
Company (or similar transaction) in which no person (other than those covered by
the exceptions in (a) above) acquires more than 50% of the combined voting power
of the Company’s then outstanding securities shall not constitute a Change in
Control of the Company; or
     
                (d)           upon approval by the stockholders of the Company
of a plan of complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the Company’s assets
other than the sale or disposition of all or substantially all of the assets of
the Company to a person or persons who beneficially own, directly or indirectly,
at least 50% or more of the combined voting power of the outstanding voting
securities of the Company at the time of the sale.

 

ARTICLE XV

TERMINATION OR AMENDMENT OF PLAN

                Notwithstanding any other provision of this Plan, the Board or
the Committee may at any time, and from time to time, amend, in whole or in
part, any or all of the provisions of this Plan (including any amendment deemed
necessary to ensure that the Company may comply with any regulatory requirement
referred to in Article XVII), or suspend or terminate it entirely, retroactively
or otherwise; provided, however, that, unless otherwise required by law or
specifically provided herein, the rights of a Participant with respect to Awards
granted prior to such amendment, suspension or termination, may not be impaired
without the consent of such Participant and, provided further, without the
approval of the shareholders of the Company in accordance with the laws of the
State of Delaware, to the extent required by the applicable provisions of Rule
16b-3 or Section 162(m) of the Code, or, to the extent applicable to Incentive
Stock Options, Section 422 of the Code, no amendment may be made which would
(i) increase the aggregate number of shares of Common Stock that may be issued
under this Plan; (ii) increase the maximum individual Participant limitations
for a fiscal year under Section 4.1(b); (iii) change the classification of
employees or Consultants eligible to receive Awards under this Plan;
(iv) decrease the minimum option price of any Stock Option or Stock Appreciation
Right; (v) extend the maximum option period under Section 6.3; (vi) materially

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alter the Performance Criteria for the Award of Restricted Stock, Performance
Units, Performance Shares or cash incentive Awards as set forth in Exhibit A; or
(vii) require stockholder approval in order for this Plan to continue to comply
with the applicable provisions of Section 162(m) of the Code or, to the extent
applicable to Incentive Stock Options, Section 422 of the Code. In no event may
this Plan be amended without the approval of the stockholders of the Company in
accordance with the applicable laws of the State of Delaware to increase the
aggregate number of shares of Common Stock that may be issued under this Plan,
decrease the minimum exercise price of any Stock Option or Stock Appreciation
Right, or to make any other amendment that would require stockholder approval
under the rules of any exchange or system on which the Company’s securities are
listed or traded at the request of the Company.

                The Committee may amend the terms of any Award theretofore
granted, prospectively or retroactively, but, subject to Article IV above or as
otherwise specifically provided herein, no such amendment or other action by the
Committee shall impair the rights of any holder without the holder’s consent.

 

ARTICLE XVI

UNFUNDED PLAN

 

 
                               16.1         Unfunded Status of Plan. This Plan
is intended to constitute an “unfunded” plan for incentive and deferred
compensation. With respect to any payments as to which a Participant has a fixed
and vested interest but which are not yet made to a Participant by the Company,
nothing contained herein shall give any such Participant any rights that are
greater than those of a general creditor of the Company.

 

ARTICLE XVII

GENERAL PROVISIONS

 

 
                               17.1         Legend.  The Committee may require
each person receiving shares pursuant to an Award under this Plan to represent
to and agree with the Company in writing that the Participant is acquiring the
shares without a view to distribution thereof. In addition to any legend
required by this Plan, the certificates for such shares may include any legend
which the Committee deems appropriate to reflect any restrictions on Transfer.
   
                All certificates for shares of Common Stock delivered under this
Plan shall be subject to such stock transfer orders and other restrictions as
the Committee may deem advisable under the rules, regulations and other
requirements of the Securities and Exchange Commission, any stock exchange upon
which the Common Stock is then listed or any national securities association
system upon whose system the Common Stock is then quoted, any applicable Federal
or state securities law, and any applicable corporate law, and the Committee may
cause a legend or legends to be put on any such certificates to make appropriate
reference to such restrictions.

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                               17.2         Other Plans.  Nothing contained in
this Plan shall prevent the Board from adopting other or additional compensation
arrangements, subject to stockholder approval if such approval is required; and
such arrangements may be either generally applicable or applicable only in
specific cases.
   
                               17.3         Right to Employment/Consultancy.
Neither this Plan nor the grant of any Award hereunder shall give any
Participant or other employee or Consultant any right with respect to
continuance of employment or Consultancy by the Company or any Affiliate, nor
shall they be a limitation in any way on the right of the Company or any
Affiliate by which an employee is employed or a Consultant is retained to
terminate his employment or Consultancy at any time.
     
                               17.4         Withholding of Taxes. The Company
shall have the right to deduct from any payment to be made to a Participant, or
to otherwise require, prior to the issuance or delivery of any shares of Common
Stock or the payment of any cash hereunder, payment by the Participant of, any
Federal, state or local taxes required by law to be withheld. Upon the vesting
of Restricted Stock, or upon making an election under Code Section 83(b), a
Participant shall pay all required withholding to the Company.
   
                Any such withholding obligation with regard to any Participant
may be satisfied, subject to the consent of the Committee, by reducing the
number of shares of Common Stock otherwise deliverable or by delivering shares
of Common Stock already owned. Any fraction of a share of Common Stock required
to satisfy such tax obligations shall be disregarded and the amount due shall be
paid instead in cash by the Participant.
 

                                17.5          Listing and Other Conditions.  

 
                (a)           As long as the Common Stock is listed on a
national securities exchange or system sponsored by a national securities
association, the issue of any shares of Common Stock pursuant to an Award shall
be conditioned upon such shares being listed on such exchange or system. The
Company shall have no obligation to issue such shares unless and until such
shares are so listed, and the right to exercise any Stock Option with respect to
such shares shall be suspended until such listing has been effected.
   
                (b)           If at any time counsel to the Company shall be of
the opinion that any sale or delivery of shares of Common Stock pursuant to an
Award is or may in the circumstances be unlawful or result in the imposition of
excise taxes on the Company under the statutes, rules or regulations of any
applicable jurisdiction, the Company shall have no obligation to make such sale
or delivery, or to make any application or to effect or to maintain any
qualification or registration under the Securities Act or otherwise with respect
to shares of Common Stock or Awards, and the right to exercise any Stock Option
shall be suspended until, in the opinion of said counsel, such sale or delivery
shall be lawful or will not result in the imposition of excise taxes on the
Company.

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                (c)           Upon termination of any period of suspension under
this Section 17.5, any Award affected by such suspension which shall not then
have expired or terminated shall be reinstated as to all shares available before
such suspension and as to shares which would otherwise have become available
during the period of such suspension, but no such suspension shall extend the
term of any Stock Option.
 

 
                              17.6         Governing Law.  This Plan shall be
governed and construed in accordance with the laws of the State of Delaware
(regardless of the law that might otherwise govern under applicable Delaware
principles of conflict of laws).
   
                              17.7         Construction.  Wherever any words are
used in this Plan in the masculine gender they shall be construed as though they
were also used in the feminine gender in all cases where they would so apply,
and wherever any words are used herein in the singular form they shall be
construed as though they were also used in the plural form in all cases where
they would so apply.

     
                              17.8         Other Benefits.  No Award payment
under this Plan shall be deemed compensation for purposes of computing benefits
under any retirement plan of the Company or its subsidiaries nor affect any
benefits under any other benefit plan now or subsequently in effect under which
the availability or amount of benefits is related to the level of compensation,
unless otherwise specifically stated in such other benefit plan.
   
                              17.9         Costs.  The Company shall bear all
expenses included in administering this Plan, including expenses of issuing
Common Stock pursuant to any Awards hereunder.
   
                              17.10       No Right to Same Benefits. The
provisions of Awards need not be the same with respect to each Participant, and
such Awards to individual Participants need not be the same in subsequent years.
   
                              17.11       Death/Disability.  The Committee may
in its discretion require the transferee of a Participant to supply it with
written notice of the Participant’s death or Disability and to supply it with a
copy of the will (in the case of the Participant’s death) or such other evidence
as the Committee deems necessary to establish the validity of the transfer of an
Award. The Committee may also require that the agreement of the transferee to be
bound by all of the terms and conditions of this Plan.
   
                              17.12       Section 16(b) of the Exchange Act. All
elections and transactions under this Plan by persons subject to Section 16 of
the Exchange Act involving shares of Common Stock are intended to comply with
any applicable exemptive condition under Rule 16b-3. The Committee may establish
and adopt written administrative guidelines, designed to facilitate compliance
with Section 16(b) of the Exchange Act, as it may deem necessary or proper for
the administration and operation of this Plan and the transaction of business
thereunder.
   
                              17.13       Section 409A of the Code. This Plan is
intended to comply with the applicable requirements of Section 409A of the Code
and shall be limited, construed

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and interpreted in a manner so as to comply therewith. Notwithstanding anything
herein to the contrary, any provision in this Plan that is inconsistent with
Section 409A of the Code shall be deemed to be amended to comply with Section
409A of the Code and to the extent such provision cannot be amended to comply
therewith, such provision shall be null and void.
     
                              17.14         Severability of Provisions. If any
provision of this Plan shall be held invalid or unenforceable, such invalidity
or unenforceability shall not affect any other provisions hereof, and this Plan
shall be construed and enforced as if such provisions had not been included.
   
                              17.15         Headings and Captions. The headings
and captions herein are provided for reference and convenience only, shall not
be considered part of this Plan, and shall not be employed in the construction
of this Plan.
 

ARTICLE XVIII

EFFECTIVE DATE OF PLAN

               The Plan was originally adopted by the Board, and effective on
October 19, 1999, subject to approval by the stockholders of the Company (which
was obtained at the stockholders meeting held on December 14, 1999). The Plan
was thereafter amended and restated in accordance with the requirements of the
laws of the State of Delaware. The Board approved this amendment and restatement
of the Plan on October 9, 2006 and the amendments contained herein shall become
effective on October 9, 2006, subject to approval of the provisions of this Plan
adding a cash incentive Award and re-approval of the Performance Criteria for
performance-based Equity Awards by the stockholders of the Company in accordance
with the requirements of the laws of the State of Delaware or such later date as
provided in the adopting resolution. If the stockholders of the Company do not
approve the amendments that are subject to stockholder approval at the
stockholder meeting to be held on December 5, 2006, the Plan as it was in effect
prior to such amendment and restatement will remain in effect and such amendment
and restatement shall be deemed null and void and of no effect; provided Awards
(other than Stock Options and Stock Appreciation Rights) shall not qualify as
“performance-based” for purposes of Section 162(m) of the Code.

ARTICLE XIX

TERM OF PLAN

               No Award shall be granted pursuant to this Plan on or after the
tenth anniversary of the date this Plan was initially adopted, but Awards
granted prior to such tenth anniversary may extend beyond that date. The
foregoing notwithstanding, cash incentive Awards may be granted under Section
10.1 until the date of the Annual Meeting of Stockholders in the fifth year
after the year in which the amendment and restatement of the Plan that included
the authorization of cash incentive Awards was approved by the Company’s
stockholders (even if this deadline extends past the date at which other Awards
may be granted under the Plan).

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EXHIBIT A

PERFORMANCE CRITERIA

                Performance Goals established for purposes of conditioning the
grant of an Award of Restricted Stock based on performance or the vesting of
performance-based Awards of Restricted Stock, Performance Units, Performance
Shares and/or cash incentive Awards shall be based on one or more of the
following performance criteria (“Performance Criteria”): (i) the attainment of
certain target levels of, or a specified percentage increase in, revenues,
income before income taxes and extraordinary items, net income, income before
income tax and stock based compensation expense, earnings before income tax,
earnings before interest, taxes, depreciation and amortization or a combination
of any or all of the foregoing; (ii) the attainment of certain target levels of,
or a percentage increase in, after-tax or pre-tax profits including, without
limitation, that attributable to continuing and/or other operations; (iii) the
attainment of certain target levels of, or a specified increase in, operational
cash flow; (iv) the achievement of a certain level of, reduction of, or other
specified objectives with regard to limiting the level of increase in, all or a
portion of, the Company’s bank debt or other long-term or short-term public or
private debt or other similar financial obligations of the Company, which may be
calculated net of such cash balances and/or other offsets and adjustments as may
be established by the Committee; (v) the attainment of target levels of or a
specified percentage increase in earnings per share or earnings per share from
continuing operations; (vi) the attainment of certain target levels of, or a
specified increase in return on capital employed or return on invested capital;
(vii) the attainment of certain target levels of, or a percentage increase in,
after-tax or pre-tax return on stockholders’ equity; (viii) the attainment of
certain target levels of, or a specified increase in, economic value added
targets based on a cash flow return on investment formula; (ix) the attainment
of certain target levels of or specified increases in the fair market value of
the shares of the Company’s common stock; and (x) the growth in the value of an
investment in the Company’s common stock assuming the reinvestment of dividends.
For purposes of item (i) above, “extraordinary items” shall mean all items of
gain, loss or expense for the fiscal year determined to be extraordinary or
unusual in nature or infrequent in occurrence or related to a corporate
transaction (including, without limitation, a disposition or acquisition) or
related to a change in accounting principle, all as determined in accordance
with standards established by Opinion No. 30 of the Accounting Principles Board.
The Committee may specify that specific items of income or expense may be
included or excluded from the calculation of achievement of any of the foregoing
Performance Criteria.

                In addition, such Performance Criteria may be based upon the
attainment of specified levels of Company (or subsidiary, division or other
operational unit of the Company) performance under one or more of the measures
described above relative to the performance of other corporations. To the extent
permitted under Code Section 162(m), but only to the extent permitted under Code
Section 162(m) (including, without limitation, compliance with any requirements
for stockholder approval), the Committee may: (i) designate additional business
criteria on which the Performance Criteria may be based or (ii) adjust, modify
or amend the aforementioned business criteria.

 

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