As adopted February 9, 2007,
For Shareholder Approval May 18, 2007
EMS TECHNOLOGIES, INC.
2007 STOCK INCENTIVE PLAN
TABLE OF CONTENTS

              Page
ARTICLE I DEFINITIONS
    1  
(a) “Award”
    1  
(b) “Board”
    1  
(c) “Code”
    1  
(d) “Committee”
    1  
(e) “Company”
    1  
(f) “Director”
    1  
(g) “Disinterested Person”
    1  
(h) “Employee”
    1  
(i) “Employer”
    2  
(j) “Fair Market Value”
    2  
(k) “Grantee”
    3  
(l) “ISO”
    3  
(m) “1934 Act”
    3  
(n) “Officer”
    3  
(o) “Option”
    3  
(p) “Option Agreement”
    3  
(q) “Optionee”
    3  
(r) “Option Price”
    4  
(s) “Parent”
    4  
(t) “Plan”
    4  
(u) “Purchasable”
    4  
(v) “Qualified Domestic Relations Order”
    4  
(w) “Restricted Stock”
    4  
(x) “Restriction Agreement”
    4  
(y) “Stock”
    4  
(z) “Subsidiary”
    4  
 
       
ARTICLE II THE PLAN
    5  
Section 2.1 Name
    5  
Section 2.2 Purpose
    5  
Section 2.3 Effective Date
    5  
Section 2.4 Termination Date
    5  

 

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TABLE OF CONTENTS (Cont’d)

              Page
ARTICLE III ELIGIBILITY
    5  
 
       
ARTICLE IV ADMINISTRATION
    5  
Section 4.1 Duties and Powers of the Committee
    5  
Section 4.2 Interpretation; Rules
    6  
Section 4.3 No Liability
    6  
Section 4.4 Majority Rule
    6  
Section 4.5 Company Assistance
    7  
 
       
ARTICLE V SHARES OF STOCK SUBJECT TO PLAN
    7  
Section 5.1 Limitations
    7  
Section 5.2 Antidilution
    7  
 
       
ARTICLE VI OPTIONS
    9  
Section 6.1 Types of Options Granted
    9  
Section 6.2 Option Grant and Agreement
    9  
Section 6.3 Optionee Limitations
    9  
Section 6.4 Certain Limitation
    10  
Section 6.5 Option Price
    11  
Section 6.6 Exercise Period
    11  
Section 6.7 Option Exercise
    11  
Section 6.8 Nontransferability of Option
    12  
Section 6.9 Termination of Employment
    13  
Section 6.10 Employment Rights
    13  
Section 6.11 Certain Successor Options
    14  
Section 6.12 Conditions to Issuing Option Stock
    14  
Section 6.13 Automatic Option Grants to Certain Directors
    14  
 
       
ARTICLE VII RESTRICTED STOCK
    16  
Section 7.1 Awards of Restricted Stock
    16  
Section 7.2 Non-Transferability
    16  
Section 7.3 Lapse of Restrictions
    16  
Section 7.4 Termination of Employment
    17  
Section 7.5 Treatment of Dividends
    17  
Section 7.6 Delivery of Shares
    17  
Section 7.7 Payment of Withholding Taxes
    18  
 
       
ARTICLE VIII TERMINATION, AMENDMENT AND MODIFICATION OF PLAN
    18  
 
       
ARTICLE IX MISCELLANEOUS
    19  
Section 9.1 Replacement or Amended Grants
    19  
Section 9.2 Forfeiture for Competition
    19  
Section 9.3 Plan Binding on Successors
    19  
Section 9.4 Headings Not a Part of Plan
    19  

 

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EMS TECHNOLOGIES, INC.
2007 STOCK INCENTIVE PLAN
ARTICLE I
DEFINITIONS
           As used herein, the following terms have the meanings hereinafter set
forth unless the context clearly indicates to the contrary:
     (a) “Award” shall mean a grant of Restricted Stock.
     (b) “Board” shall mean the Board of Directors of the Company.
     (c) “Code” shall mean the United States Internal Revenue Code of 1986, as
amended, including effective date and transition rules (whether or not
codified). Any reference herein to a specific section or sections of the Code
shall be deemed to include a reference to any corresponding provision of future
law.
     (d) “Committee” shall mean a committee of at least two Directors appointed
from time to time by the Board, having the duties and authority set forth herein
in addition to any other authority granted by the Board; provided, however, that
with respect to any Options or Awards granted to an individual who is also an
Officer or Director, the Committee shall consist of at least two Non-Employee
Directors (who need not be members of the Committee with respect to Options or
Awards granted to any other individuals), and all authority and discretion shall
be exercised by such Non-Employee Directors, and references herein to the
“Committee” shall mean such Non-Employee Directors insofar as any actions or
determinations of the Committee shall relate to or affect Options or Awards made
to or held by any Officer or Director.
     (e) “Company” shall mean EMS Technologies, Inc., a Georgia corporation.
     (f) “Director” shall mean a member of the Board.
     (g) “Employee” shall mean any employee of the Company or any Subsidiary of
the Company.

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     (h) “Employer” shall mean the corporation that employs a Grantee.
     (i) “Fair Market Value” of the shares of Stock on any date shall mean
(i) the closing sales price, regular way, or in the absence thereof the mean of
the last reported bid and asked quotations, on such date on the exchange having
the greatest volume of trading in the shares during the thirty-day period
preceding such date (or if such exchange was not open for trading on such date,
the next preceding date on which it was open); or
(ii) if there is no price as specified in (i), the final reported sales price,
or if not reported in the following manner, the mean of the closing high bid and
low asked prices, in the over-the-counter market for the shares as reported by
the National Association of Securities Dealers Automatic Quotation System or, if
not so reported, then as reported by the National Quotation Bureau Incorporated,
or if such organization is not in existence, by an organization providing
similar services, on such date (or if such date is not a date for which such
system or organization generally provides reports, then on the next preceding
date for which it does so); or
(iii) if there also is no price as specified in (ii), the price determined by
the Committee by reference to bid-and-asked quotations for the shares provided
by members of an association of brokers and dealers registered pursuant to
subsection 15(b) of the 1934 Act, which members make a market in the shares, for
such recent dates as the Committee shall determine to be appropriate for fairly
determining current market value; or
(iv) if there also is no price as specified in (iii), the amount determined in
good faith by the Committee based on such relevant facts, which may

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include opinions of independent experts, as may be available to the Committee.
     (j) “Grantee” shall mean an Employee, former employee or other person who
is an Optionee or who has received an Award of Restricted Stock.
     (k) “ISO” shall mean an Option that complies with and is subject to the
terms, limitations and conditions of Code section 422 and any regulations
promulgated with respect thereto.
     (l) “1934 Act” shall mean the Securities Exchange Act of 1934, as amended
from time to time.
     (m) “Non-Employee Director” shall have the meaning set forth for such term
or corresponding concept in Rule 16b-3 under the 1934 Act, as the same may be in
effect from time to time, or in any successor rule thereto, and shall be
determined for all purposes under the Plan according to interpretative or
“no-action” positions with respect thereto issued by the Securities and Exchange
Commission or its staff; provided, however, that to the extent it is determined
and intended that Options qualify as “performance-based compensation” within the
meaning of section 162(m) of the Code, a person shall be a “Non-Employee
Director” only if he or she is also an “outside director” within the meaning of
such section 162(m).
     (n) “Officer” shall mean a person who constitutes an officer of the Company
for the purposes of Section 16 of the 1934 Act, as determined by reference to
such Section 16 and to the rules, regulations, judicial decisions, and
interpretative or “no-action” positions with respect thereto of the Securities
and Exchange Commission or its staff, as the same may be in effect or set forth
from time to time.
     (o) “Option” shall mean a contractual right to purchase Stock granted
pursuant to the provisions of Article VI hereof.
     (p) “Option Agreement” shall mean an agreement between the Company and an
Optionee setting forth the terms of an Option.
     (q) “Optionee” shall mean a person to whom an Option has been granted
hereunder.

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     (r) “Option Price” shall mean the price at which an Optionee may purchase a
share of Stock pursuant to an Option.
     (s) “Parent”, when used with respect to any subject corporation, shall mean
any other corporation that owns stock possessing 50% or more of the total
combined voting power of all classes of stock of the subject corporation or that
owns such stock of another corporation in an unbroken chain of corporations
having such ownership of the stock of another corporation and ending with the
subject corporation.
     (t) “Plan” shall mean the 2007 Stock Incentive Plan of the Company.
     (u) “Purchasable,” when used to describe Stock, shall refer to Stock that
may be purchased by an Optionee under the terms of this Plan on or after a
certain date specified in the applicable Option Agreement.
     (v) “Qualified Domestic Relations Order” shall have the meaning set forth
in the Code or in the Employee Retirement Income Security Act of 1974, as
amended, or the rules and regulations promulgated under the Code or such Act.
     (w) “Restricted Stock” shall mean Stock issued, subject to restrictions, to
an Employee pursuant to Article VII hereof.
     (x) “Restriction Agreement” shall mean the agreement setting forth the
terms of an Award, and executed by a Grantee as provided in Section 7.1 hereof.
     (y) “Stock” shall mean the $.10 par value common stock of the Company or,
in the event that the outstanding shares of such stock are hereafter changed
into or exchanged for shares of a different class of stock or securities of the
Company or some other corporation, such other stock or securities.
     (z) “Subsidiary”, when used with respect to any subject corporation, shall
mean any other corporation as to which the subject corporation is a Parent.

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ARTICLE II
THE PLAN
     2.1 Name. This plan shall be known as the “EMS Technologies, Inc. 2007
Stock Incentive Plan.”
     2.2 Purpose. The purpose of the Plan is to advance the interests of the
Company, its shareholders, and any Subsidiary of the Company, by offering
certain Employees and Directors an opportunity to acquire or increase their
proprietary interests in the Company. Options and Awards will promote the growth
and profitability of the Company and any Subsidiary of the Company, because
Grantees will be provided with an additional incentive to achieve the Company’s
objectives through participation in its success and growth.
     2.3 Effective Date. The Plan shall become effective on the date of its
approval by vote of a majority of the shares of the Company represented at a
meeting of the shareholders at which a quorum is present.
     2.4 Termination Date. No further Options or Awards shall be granted
hereunder on or after the tenth anniversary of the date on which the Plan
becomes effective, but all Options or Awards granted prior to that time shall
remain in effect in accordance with their terms.
ARTICLE III
ELIGIBILITY
     The persons eligible to participate in this Plan shall consist only of
Directors and those Employees whose participation the Committee determines is in
the best interests of the Company. However, no ISO’s may be granted, and no
Options or Awards may be granted to any Director or Officer. Persons who are not
Employees but who serve as directors of any Subsidiary of the Company shall also
be eligible to participate in this Plan, and references herein to “Employee”
shall be deemed to include any such persons to the extent appropriate for him or
her to become a Grantee.
ARTICLE IV
ADMINISTRATION
     4.1 Duties and Powers of the Committee. The Plan shall be administered by
the Committee. The Committee hold its meetings at such times and places as it
may determine. The Committee shall

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keep minutes of its meetings and shall make such rules and regulations for the
conduct of its business as it may deem necessary. The Committee shall have the
power to act by unanimous written consent in lieu of a meeting, and shall have
the right to meet telephonically. In administering the Plan, the Committee’s
actions and determinations shall be binding on all interested parties. The
Committee shall have the power to grant Options or Awards in accordance with the
provisions of the Plan. Subject to the provisions of the Plan, the Committee
shall have the discretion and authority to determine those individuals to whom
Options or Awards will be granted, the number of shares of Stock subject to each
Option or Award, such other matters as are specified herein, and any other terms
and conditions of an Option Agreement or Restriction Agreement; provided,
however, that the Committee may in its discretion delegate to the Chief
Executive Officer of the Company, solely with respect to Employees who are not
Officers, the authority to determine those individuals to whom Options will be
granted and the number of shares of Stock subject to each Option, on terms and
conditions and within maximum numbers of shares specified by the Committee. To
the extent not inconsistent with the provisions of the Plan, the Committee shall
have the authority to amend or modify an outstanding Option Agreement or
Restriction Agreement, or to waive any provision thereof, provided that the
Grantee consents to such action.
     4.2 Interpretation; Rules. Subject to the express provisions of the Plan,
the Committee also shall have complete authority to interpret the Plan, to
prescribe, amend and rescind rules and regulations relating to it, and to make
all other determinations necessary or advisable in the administration of the
Plan, including, without limitation, the amending or altering of any Options or
Awards granted hereunder as may be required to comply with or to conform to any
federal, state or local laws or regulations.
     4.3 No Liability. Neither any member of the Board nor any member of the
Committee shall be liable to any person for any act or determination made in
good faith with respect to the Plan or any Option or Award granted hereunder.
     4.4 Majority Rule. A majority of the members of the Committee shall
constitute a quorum, and any action taken by a majority at a meeting at which a
quorum is present, or any action taken without a meeting evidenced by a writing
executed by all the members of the Committee, shall constitute the action of the
Committee.

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     4.5 Company Assistance. The Company shall supply full and timely
information to the Committee on all matters relating to eligible persons, their
employment, death, retirement, disability or other termination of employment,
and such other pertinent facts as the Committee may require. The Company shall
furnish the Committee with such clerical and other assistance as is necessary in
the performance of its duties.
ARTICLE V
SHARES OF STOCK SUBJECT TO PLAN
     5.1 Limitations. Shares subject to an Option or issued as an Award may be
either authorized and unissued shares or shares issued and later acquired by the
Company. Subject to any antidilution adjustment pursuant to the provisions of
Section 5.2 hereof, the maximum number of shares of Stock that may be issued
hereunder shall be 2,000,000 (of which a maximum of 350,000 shares may be issued
as Restricted Stock). Shares (i) covered by any unexercised portion of an Option
that has terminated for any reason, or (ii) covered by any forfeited portion of
an Award (except any portion as to which the Grantee has received, and not
forfeited, dividends or other benefits of ownership other than voting rights),
may each again be optioned or awarded under the Plan, and such shares shall not
be considered as having been optioned or issued in computing the number of
shares of Stock remaining available for option or award hereunder.
     5.2 Antidilution.
     (a) In the event that the outstanding shares of Stock are changed into or
exchanged for a different number or kind of shares or other securities of the
Company by reason of merger, consolidation, reorganization, recapitalization,
reclassification, combination or exchange of shares, stock split or stock
dividend, or in the event that any spin-off, spin-out or other distribution of
assets materially affects the price of the Company’s stock:
     (i) The aggregate number and kind of shares of Stock for which Options or
Awards may be granted hereunder shall be adjusted proportionately by the
Committee; and
     (ii) The rights of Optionees (concerning the number of shares subject to
Options and the Option Price) under

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outstanding Options and the rights of the holders of Awards (concerning the
terms and conditions of the lapse of any then-remaining restrictions), shall be
adjusted proportionately by the Committee.
     (b) If the Company shall be a party to any reorganization in which it does
not survive, involving merger, consolidation, or acquisition of the stock or
substantially all the assets of the Company, the Committee, in its discretion,
may:
     (i) notwithstanding other provisions hereof, declare that all Options
granted under the Plan shall become exercisable immediately notwithstanding the
provisions of the respective Option Agreements regarding exercisability, that
all such Options shall terminate a specified period of time after the Committee
gives written notice of the immediate right to exercise all such Options and of
the decision to terminate all Options not exercised within such period, and that
all then-remaining restrictions pertaining to Awards under the Plan shall
immediately lapse; or
     (ii) notify all Grantees that all Options or Awards granted under the Plan
shall be assumed by the successor corporation or substituted on an equitable
basis with options or restricted stock issued by such successor corporation.
     (c) If the Company is to be liquidated or dissolved in connection with a
reorganization described in paragraph 5.2(b), the provisions of such paragraph
shall apply. In all other instances, the adoption of a plan of dissolution or
liquidation of the Company shall, notwithstanding other provisions hereof, cause
all then-remaining restrictions pertaining to Awards under the Plan to lapse,
and shall cause every Option outstanding under the Plan to terminate to the
extent not exercised prior to the adoption of the plan of dissolution or
liquidation by the shareholders, provided that, notwithstanding other provisions
hereof, the Committee may declare all Options granted under the Plan to be
exercisable at any time on or before the fifth business day following such
adoption notwithstanding the provisions of the respective Option Agreements
regarding exercisability.
     (d) The adjustments described in paragraphs (a) through

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(c) of this Section 5.2, and the manner of their application, shall be
determined solely by the Committee, and any such adjustment may provide for the
elimination of fractional share interests. The adjustments required under this
Article V shall apply to any successors of the Company and shall be made
regardless of the number or type of successive events requiring such
adjustments.
ARTICLE VI
OPTIONS
     6.1 Types of Options Granted. Within the limitations provided herein,
Options may be granted to one Employee at one or several times or to different
Employees at the same time or at different times, in either case under different
terms and conditions, as long as the terms and conditions of each Option are
consistent with the provisions of the Plan. Without limitation of the foregoing,
Options may be granted subject to conditions based on the financial performance
of the Company or any other factor the Committee deems relevant.
     6.2 Option Grant and Agreement. Each Option granted or modified hereunder
shall be evidenced (a) by either minutes of a meeting or a written consent of
the Committee, and (b) by a written Option Agreement executed (or otherwise
agreed to in form satisfactory to the Committee) by the Company and the
Optionee. The terms of the Option, including the Option’s duration, time or
times of exercise, exercise price, whether the Option is intended to be an ISO,
and whether the Option is transferable under paragraph 6.8(b), shall be stated
in the Option Agreement. Separate Option Agreements shall be used for Options
intended to be ISO’s and those not so intended, but any failure to use such
separate Agreements shall not invalidate, or otherwise adversely affect the
Optionee’s rights under and interest in, the Options evidenced thereby.
     6.3 Optionee Limitations. The Committee shall not grant an ISO to any
person who, at the time the ISO would be granted:
     (a) is not an Employee; or
     (b) owns or is considered to own stock possessing more than 10% of the
total combined voting power of all classes of stock of the Employer, or any
Parent or Subsidiary of the

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Employer; provided, however, that this limitation shall not apply if at the time
an ISO is granted the Option Price is at least 110% of the Fair Market Value of
the Stock subject to such Option and such Option by its terms would not be
exercisable after the expiration of five years from the date on which the Option
is granted. For the purpose of this paragraph (b), a person shall be considered
to own (i) the stock owned, directly or indirectly, by or for his brothers and
sisters (whether by the whole or half blood), spouse, ancestors and lineal
descendants, (ii) the stock owned, directly or indirectly, by or for a
corporation, partnership, estate, or trust in proportion to such person’s stock
interest, partnership interest or beneficial interest therein, and (iii) the
stock which such person may purchase under any outstanding options of the
Employer or of any Parent or Subsidiary of the Employer.
     6.4 Certain Limitations
     (a) Limitation on Number of Shares. No Optionee shall be granted, during
any calendar year, Options to purchase in excess of 50,000 shares of stock.
     (b) $100,000 Limitation on ISO’s. Except as provided below, the Committee
shall not grant an ISO to, or modify the exercise provisions of outstanding
ISO’s held by, any person who, at the time the ISO is granted (or modified),
would thereby receive or hold any incentive stock options (as described in Code
section 422) of the Employer and any Parent or Subsidiary of the Employer, such
that the aggregate Fair Market Value (determined as of the respective dates of
grant or modification of each option) of the stock with respect to which such
incentive stock options are exercisable for the first time during any calendar
year is in excess of $100,000; provided, that the foregoing restriction on
modification of outstanding ISO’s shall not preclude the Committee from
modifying an outstanding ISO if, as a result of such modification and with the
consent of the Optionee, such Option no longer constitutes an ISO; and provided
that, if the $100,000 limitation described in this Section 6.4 is exceeded, an
Option that otherwise qualifies as an ISO shall be treated as an ISO up to the
limitation and the excess shall be treated as an Option not qualifying as an
ISO. The preceding sentence shall be applied by taking options intended to be
ISO’s into account in the order in which they were granted.

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     6.5 Option Price. The Option Price under each Option shall be determined by
the Committee. However, the Option Price shall not be less than the Fair Market
Value of the Stock on the date that the Option is granted (or, in the case of an
ISO that is subsequently modified, on the date of such modification).
     6.6 Exercise Period. The period for the exercise of each Option granted
hereunder shall be determined by the Committee, but the Option Agreement with
respect to each Option intended to be an ISO shall provide that such Option
shall not be exercisable after a date not more than ten years from the date of
grant (or modification) of the Option. In addition, no Option granted to an
Employee who is also an Officer or Director shall be exercisable prior to the
expiration of six months from the date such Option is granted, other than in the
case of the death or disability of such Employee.
     6.7 Option Exercise.
     (a) Unless otherwise provided in the Option Agreement, an Option may be
exercised at any time or from time to time during the term of the Option as to
any or all whole shares that have become Purchasable under the provisions of the
Option, but not at any time as to less than 100 shares unless the remaining
shares that have become so Purchasable are less than 100 shares. The Committee
shall have the authority to prescribe in any Option Agreement that the Option
may be exercised only in accordance with a vesting schedule during the term of
the Option.
     (b) An Option shall be exercised by (i) delivery to the Treasurer of the
Company at its principal office of written notice of exercise with respect to a
specified number of shares of Stock, and (ii) payment to the Company at that
office of the full amount of the Option Price for such number of shares.
     (c) The Option Price shall be paid in full upon the exercise of the Option.
The Committee may provide in an Option Agreement that, in lieu of cash, all or
any portion of the Option Price may be paid by (i) tendering to the Company
shares of Stock duly endorsed for transfer and owned by the Optionee, or
(ii) delivering to the Company an attestation of the Optionee’s then-current
ownership of a number of shares equal to the number thereby authorized to be
withheld by the

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Company from the shares otherwise deliverable upon exercise of the Option, in
each case to be credited against the Option Price at the Fair Market Value of
such shares on the date of exercise (however, no fractional shares may be so
transferred, and the Company shall not be obligated to make any cash payments in
consideration of any excess of the aggregate Fair Market Value of shares
transferred over the aggregate Option Price).
     (d) In addition to and at the time of payment of the Option Price, the
Optionee shall pay to the Company in cash the full amount of any federal, state
and local income, employment or other taxes required to be withheld from the
income of such Optionee as a result of such exercise. However, in the discretion
of the Committee any Option Agreement may provide that all or any portion of
such tax obligations, together with additional taxes not exceeding the actual
additional taxes to be owed by the Optionee as a result of such exercise, may,
upon the irrevocable election of the Optionee, be paid by (i) tendering to the
Company whole shares of Stock duly endorsed for transfer and owned by the
Optionee, (ii) delivering to the Company an attestation of the Optionee’s
then-current ownership of a number of shares equal to the number thereby
authorized to be withheld by the Company from the shares otherwise deliverable
upon exercise of the Option, or (iii) authorizing the Company to withhold shares
of Stock otherwise issuable upon exercise of the Option, in either case in that
number of shares having a Fair Market Value on the date of exercise equal to the
amount of such taxes thereby being paid, in all cases subject to such
restrictions as the Committee may from time to time determine, including any
such restrictions as may be necessary or appropriate to satisfy the conditions
of the exemption set forth in Rule 16b-3 under the 1934 Act.
     (e) The holder of an Option shall not have any of the rights of a
shareholder with respect to the shares of Stock subject to the Option until such
shares have been issued upon exercise of the Option.
     6.8 Nontransferability of Option.
     (a) Except as provided in paragraph 6.8(b), no Option or any rights therein
shall be transferable by an Optionee other than by will or the laws of descent
and distribution. During

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the lifetime of an Optionee, an Option granted to that Optionee shall be
exercisable only by such Optionee, by such Optionee’s guardian or other legal
representative, should one be appointed, or by such Optionee’s transferee
permitted under paragraph 6.8(b).
     (b) The Committee may, in its discretion, provide that all or a portion of
an Option (other than an ISO) may be transferred by the Optionee to (i) the
spouse, children or grandchildren of the Optionee (“Immediate Family Member”),
(ii) a trust or trusts for the exclusive benefit of such Immediate Family
Members, or (iii) a partnership in which the Optionee and or such Immediate
Family Members are the only partners. Following transfer, any such Option shall
continue to be subject to the same terms and conditions as were applicable
immediately prior to transfer, including those terms and conditions governing
transfer and the effect on such Option of the termination of employment of the
Optionee. The Company shall have no obligation to any transferee to provide
notice of any termination of an Option as a result of termination of the
Optionee’s employment. The Committee may specify as a condition of any such
transfer the manner in which the Optionee shall remain responsible for the
payment of taxes required to be withheld as a result of the exercise of such
transferred Option.
     6.9 Termination of Employment. The Committee shall have the power to
specify, with respect to the Options granted to any particular Optionee, the
effect upon such Optionee’s right to exercise an Option of the termination of
such Optionee’s employment under various circumstances, which effect may include
(but is not limited to) immediate or deferred termination of such Optionee’s
rights under an Option, or acceleration of the date at which an Option may be
exercised in full. With respect to an ISO, such effects shall be consistent with
applicable requirements for treatment as an ISO.
     6.10 Employment Rights. Options granted under the Plan shall not be
affected by any change of employment so long as the Optionee continues to be an
Employee. Nothing in the Plan or in any Option Agreement shall confer on any
person any right to continue in the employ of the Company or any Subsidiary of
the Company, or shall interfere in any way with the right of the Company or any
such Subsidiary to terminate such person’s employment at any time.

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     6.11 Certain Successor Options. To the extent not inconsistent with the
terms, limitations and conditions of Code section 422, and any regulations
promulgated with respect thereto, an Option issued in respect of an option held
by an employee to acquire stock of any entity acquired, by merger or otherwise,
by the Company (or by any Subsidiary of the Company) may contain terms that
differ from those stated in this Article VI, but solely to the extent necessary
to preserve for any such employee the rights and benefits contained in such
predecessor option, or to satisfy the requirements of Code section 424(a).
     6.12 Conditions to Issuing Option Stock. The Company shall not be required
to issue or deliver any Stock upon the full or partial exercise of any Option
prior to fulfillment of all of the following conditions:
     (a) The admission of such shares to listing on all stock exchanges on which
the Stock is then listed;
     (b) The completion of any registration or other qualification of such
shares that the Company shall determine to be necessary or advisable under any
federal or state law or under the rulings or regulations of the Securities and
Exchange Commission or any other governmental regulatory body, or the Company’s
determination that an exemption is available from such registration or
qualification;
     (c) The obtaining of any approval or other clearance from any federal or
state governmental agency that the Company shall determine to be necessary or
advisable; and
     (d) The lapse of such reasonable period of time following exercise as shall
be appropriate for reasons of administrative convenience.
     Unless the shares of Stock covered by the Plan shall be the subject of an
effective registration statement under the Securities Act of 1933, as amended,
stock certificates issued and delivered to Optionees shall bear such restrictive
legends as the Company shall deem necessary or advisable pursuant to applicable
federal and state securities laws.
     6.13 Automatic Option Grants to Certain Directors.
     (a) Options for New Directors. Each person who is not an

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Employee, or an employee of any Parent of the Company, shall automatically, and
without any action of the Board or the Committee, be granted, on the first day
on which such person serves as a Director, an Option for the purchase of 15,000
shares (subject to automatic proportionate adjustment for stock splits or stock
dividends, and otherwise to proportionate adjustment by the Committee as
provided in Section 5.2). Each such Option shall become exercisable as to
one-fifth of the subject shares on the date that is six months after the date of
grant, and as to an additional one-fifth of the subject shares on each of the
first, second, third and fourth anniversaries of such six-month date.
     b) Additional Options for Continuing Service. Each person who at that time
is a member of the Board but who is not an Employee, or an employee of any
Parent of the Company, shall automatically and without any action of the Board
or the Committee, be granted, on each date on which such person is elected to a
new one-year term of service, an Option for the purchase of 5,000 shares
(subject to automatic proportionate adjustment for stock splits or stock
dividends, and otherwise to proportionate adjustment by the Committee as
provided in Section 5.2). Each such Option shall become exercisable on the date
that is six months after the date of grant.
     (c) Other Terms of Automatic Options. Each Option automatically granted
under this Section 6.13 shall not be an ISO, shall not include the right to
receive a Reload Option, and shall have an Option Price equal to the Fair Market
Value of the Stock on the date of grant. Each such Option shall become
immediately exercisable in the event a party other than the Company or any
Parent or Subsidiary of the Company purchases or otherwise acquires shares of
Stock pursuant to a tender offer or exchange offer for such shares, or any
person or group becomes the beneficial owner (for the purposes of
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended) of 50% or
more of the outstanding shares of the Stock. To the extent such an Option shall
have become exercisable, it shall be non-forfeitable and shall remain
exercisable until the sixth anniversary of its date of grant, but if the Grantee
ceases to be a Director for any reason, any portion of such Option that is not
at that time exercisable shall immediately terminate and shall not thereafter
become exercisable. The Option Price for each such Option may be paid in cash or
in the manners specified in the second sentence of paragraph 6.7(c) hereof. In
addition, any taxes related to the exercise of each such Option may be paid in
the manner contemplated in the second sentence of paragraph 6.7(d) hereof.

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ARTICLE VII
RESTRICTED STOCK
     7.1 Awards of Restricted Stock. The Committee may grant Awards of
Restricted Stock upon determination by the Committee, acting pursuant to the
delegation hereby of the Board’s authority to make such determinations, that the
value or other benefit to the Company of the services of a Grantee theretofore
performed or to be performed as a condition of the lapse of restrictions
applicable to such Restricted Stock, or the benefit to the Company of the
incentives created by the issuance thereof, is adequate consideration for the
issuance of such shares. Each such Award shall be governed by a Restriction
Agreement between the Company and the Grantee. Each Restriction Agreement shall
contain such restrictions, terms and conditions as the Committee shall, in its
discretion, determine, and may require that an appropriate legend be placed on
the certificates evidencing the subject Restricted Stock.
     Shares of Restricted Stock granted pursuant to an Award hereunder shall be
issued in the name of the Grantee as soon as reasonably practicable after the
Award is granted, provided that the Grantee has executed the Restriction
Agreement governing the Award, the appropriate blank stock powers and, in the
discretion of the Committee, an escrow agreement and any other documents which
the Committee may require as a condition to the issuance of such shares. If a
Grantee shall fail to execute the foregoing documents, within any time period
prescribed by the Committee, the Award shall be null and void. At the discretion
of the Committee, shares of Restricted Stock issued in connection with an Award
shall be held by the Company or deposited together with the stock powers with an
escrow agent designated by the Committee. Unless the Committee determines
otherwise and as set forth in the Restriction Agreement, upon issuance of such
shares, the Grantee shall have all of the rights of a shareholder with respect
to such shares, including the right to vote the shares and to receive all
dividends or other distributions paid or made with respect to them.
     7.2 Non-Transferability. Until any restrictions upon Restricted Stock
awarded to a Grantee shall have lapsed in a manner set forth in Section 7.3,
such shares of Restricted Stock shall not be transferable other than by will or
the laws of descent and distribution, or pursuant to a Qualified Domestic
Relations Order, nor shall they be delivered to the Grantee.
     7.3 Lapse of Restrictions. Restrictions upon Restricted

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Stock awarded hereunder shall lapse at such time or times (but, with respect to
any award to an Employee who is also a Director or Officer, not less than six
months after the date of the Award) and on such terms and conditions as the
Committee shall, in its discretion, determine at the time the Award is granted
or thereafter.
     7.4 Termination of Employment. The Committee shall have the power to
specify, with respect to each Award granted to any particular Employee, the
effect upon such Grantee’s rights with respect to such Restricted Stock of the
termination of such Grantee’s employment under various circumstances, which
effect may include (but is not limited to) immediate or deferred forfeiture of
such Restricted Stock or acceleration of the date at which any then-remaining
restrictions shall lapse.
     7.5 Treatment of Dividends. At the time an Award of Restricted Stock is
made the Committee may, in its discretion, determine that the payment to the
Grantee of any dividends, or a specified portion thereof, declared or paid on
such Restricted Stock shall be (i) deferred until the lapsing of the relevant
restrictions, and (ii) held by the Company for the account of the Grantee until
such time. In the event of such deferral, there shall be credited at the end of
each year (or portion thereof) interest on the amount of the account at the
beginning of the year at a rate per annum determined by the Committee. Payment
of deferred dividends, together with interest thereon, shall be made upon the
lapsing of restrictions imposed on such Restricted Stock, and any dividends
deferred (together with any interest thereon) in respect of Restricted Stock
shall be forfeited upon any forfeiture of such Restricted Stock.
     7.6 Delivery of Shares. Within a reasonable period of time following the
lapse of the restrictions on shares of Restricted Stock, the Committee shall
cause a stock certificate or certificates to be delivered to the Grantee with
respect to such shares. Such shares shall be free of all restrictions hereunder,
except that if the shares of stock covered by the Plan shall not be the subject
of an effective registration statement under the Securities Act of 1933, as
amended, such stock certificates shall bear such restrictive legends as the
Company shall deem necessary or advisable pursuant to applicable federal and
state securities laws.

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     7.7 Payment of Withholding Taxes.
     (a) The Restriction Agreement may authorize the Company to withhold from
compensation otherwise due to the Grantee the full amount of any federal, state
and local income, employment or other taxes required to be withheld from the
income of such Grantee as a result of the lapse of the restrictions on shares of
Restricted Stock, or otherwise as a result of the recognition of taxable income
with respect to an Award. At the time of and as a condition to the delivery of a
stock certificate or certificates pursuant to Section 7.6, the Grantee shall pay
to the Company in cash any balance owed with respect to such withholding
requirements.
     (b) In the discretion of the Committee, any Restriction Agreement may
provide that all or any portion of the tax obligations otherwise payable in the
manner set forth in paragraph 7.7(a), together with additional taxes not
exceeding the actual additional taxes to be owed by the Grantee with respect to
the Award, may, upon the irrevocable election of the Grantee, be paid by
tendering to the Company whole shares of Stock duly endorsed for transfer and
owned by the Grantee, or by authorizing the Company to withhold and cancel
shares of Stock otherwise deliverable pursuant to Section 7.6, in either case in
that number of shares having a Fair Market Value on the date that taxable income
is recognized equal to the amount of such taxes thereby being paid, in all cases
subject to such restrictions as the Committee may from time to time determine.
ARTICLE VIII
TERMINATION, AMENDMENT AND MODIFICATION OF PLAN
     The Board may at any time, (i) cause the Committee to cease granting
Options and Awards, (ii) terminate the Plan, or (iii) in any respect amend or
modify the Plan. However, the Board (unless its actions are approved or ratified
by the shareholders of the Company within twelve months of the date the Board
amends the Plan) may not amend the Plan to materially increase the number of
shares of Stock available under the Plan.
     No termination, amendment or modification of the Plan shall affect
adversely a Grantee’s rights under an Option Agreement or Restriction Agreement
without the consent of the Grantee or his or her legal representative.

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     From and after the first date on which an Option is automatically granted
pursuant to Section 6.13, the provisions of such Section 6.13 may not be amended
in any manner more frequently than once every six months, other than to comport
with changes in the Code, the Employee Retirement Income Security Act of 1974,
as amended, or the rules and regulations promulgated under the Code or such Act.
ARTICLE IX
MISCELLANEOUS
     9.1 Replacement or Amended Grants. At the sole discretion of the Committee,
and subject to the terms of the Plan, the Committee may modify outstanding
Options or Awards or accept the surrender of outstanding Options or Awards on
terms specified by the Committee, which terms may include the grant of new
Options or Awards in substitution for them. However, no modification of an
Option or Award shall adversely affect a Grantee’s rights under an Option
Agreement or Restriction Agreement without the consent of the Grantee or his or
her legal representative, and no modification of an existing Option, or grant of
a new Option in substitution for the surrender of an existing Option, shall be
at an Option Price lower than that of the existing Option at the time it was
first granted (as thereafter adjusted pursuant to Section 5.2).
     9.2 Forfeiture for Competition. If a Grantee provides services to a
competitor of the Company or any of its Subsidiaries, whether as an employee,
officer, director, independent contractor, consultant, agent or otherwise, such
services being of a nature that can reasonably be expected to involve the skills
and experience used or developed by the Grantee while a Director or an Employee,
then that Grantee’s rights under any Options outstanding hereunder shall be
forfeited and terminated, and any shares of Restricted Stock held by such
Grantee subject to remaining restrictions shall be forfeited, subject in each
case to a determination to the contrary by the Committee.
     9.3 Plan Binding on Successors. The Plan shall be binding upon the
successors of the Company.
     9.4 Headings Not a Part of Plan. Headings of Articles and Sections hereof
are inserted for convenience and reference, and do not constitute a part of the
Plan.

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