a5925473ex10_2.htm


    Exhibit
10.2

    


    VALPEY-FISHER
CORPORATION

    


    1999
STOCK OPTION PLAN,

    


    AS
AMENDED


    


    
      	
                    
                1.

              

            	
                    
                PURPOSE

              

            


    

    


    The Plan
is intended to expand and improve the profitability and prosperity of MATEC
Corporation for the benefit of its stockholders by permitting the Corporation to
grant to officers and other key employees of, and consultants and advisers to,
the Corporation and its Subsidiaries, options to purchase shares of the
Corporation's Common Stock. These grants are intended to provide additional
incentive to such persons by offering them a greater stake in the Corporation's
continued success. The Plan is also intended as a means of reinforcing the
commonality of interest between the Corporation's stockholders and such persons,
and as an aid in attracting and retaining the services of individuals of
outstanding and specialized skills.

    


    


    
      	
              2.

            	
              DEFINITIONS

            


    

    


    For Plan
purposes, except where the context otherwise indicates, the following terms
shall have the meanings which follow:

    


    (a)    "Agreement"
shall mean a written instrument executed and delivered on behalf of the
Corporation which specifies the terms and conditions of a Stock Option granted
to a Participant.

    


    (b)    "Beneficiary"
shall mean the person or persons who may be designated by a Participant from
time to time in writing to the Committee, to receive, if the Participant dies,
any Option exercise rights held by the Participant.

    


    (c)    "Board" shall
mean the Board of Directors of the Corporation.

    


    (d)    "Code" shall
mean the Internal Revenue Code of 1986, as it may be amended from time to time,
and the rules and regulations promulgated thereunder.

    


    (e)    "Committee"
shall mean a Committee of the Board composed of two or more persons which shall
be designated by the Board to administer the Plan. Each member of the Committee,
while serving as such, shall be a member of the Board and shall be a
"non-employee director" within the meaning of Rule 16b-3 under the Securities
Exchange Act of 1934.

    


    (f)    "Common
Stock" shall mean the Common Stock of the Corporation having a par value of
$0.05 per share.

    


    (g)    "Corporation"
shall mean MATEC Corporation, a Maryland corporation.

    


    (h)    "Employee"
shall mean any person who is employed by the Corporation or any Subsidiary
corporation.

    


    (i)    "Exercise
Price" shall mean the per share price for which a Participant upon exercise of a
Stock Option may purchase a share of Common Stock.

    
      
         

      

      
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    (j)    "Fair Market
Value" shall mean the value of a share of Common Stock to be determined by, and
in accordance with procedures established by, the Committee. Such fair market
value shall be deemed conclusive upon the determination of the Committee made in
good faith. The preceding notwithstanding, so long as the Common Stock is listed
on a national stock exchange, the "Fair Market Value" shall mean with respect to
any given day, the mean between the highest and lowest reported sales prices of
the Common Stock on the principal national stock exchange on which the Common
Stock is listed, or if such exchange was closed on such day or if it was open
but the Common Stock was not traded on such day, then on the next preceding day
that the Common Stock was traded on such exchange, as reported by a responsible
reporting service.

    


    (k)    "Incentive
Stock Option" shall mean a Stock Option which is intended to meet and comply
with the terms and conditions for an "incentive stock option" as set forth in
Section 422 of the Code, or any other form of tax qualified stock option which
may be incorporated and defined in the Code as it may from time to time be
amended.

    


    (l)    "Non-Qualified
Option" shall mean a Stock Option which does not meet the requirements of
Section 422 of the Code or the terms of which provide that it will not be
treated as an Incentive Stock Option.

    


    (m)    "Participant"
shall mean any person who is granted a Stock Option under the Plan.

    


    (n)    "Plan" shall
mean the MATEC Corporation 1999 Stock Option Plan as set forth herein and as
amended from time to time.

    


    (o)    "Stock
Option" or "Option" shall mean a right to purchase a stated number of shares of
Common Stock subject to such terms and conditions as are set forth in the Plan
and an Agreement.

    


    (p)    "Subsidiary
corporation" or "Subsidiary" shall mean any corporation which is a "subsidiary
corporation" of the Corporation as defined in Section 424(f) of the
Code.

    


    


    
      	
              3.

            	
              ADMINISTRATION

            


    

    


    (q)    The Committee
shall administer the Plan and, accordingly, it shall have full power to grant
Stock Options under the plan, to construe and interpret the Plan, and to
establish rules and regulations and perform all other acts it believes
reasonable and proper, including the authority to delegate responsibilities to
others to assist in administering the Plan.

    


    (r)    The
determination of those eligible to receive Stock Options, and the amount, type
and terms and conditions of each Stock Option shall rest in the sole discretion
of the Committee, subject to the provisions of the Plan.

    


    (s)    The Committee
may permit the voluntary surrender of all or a portion of any Option granted
under the Plan to be conditioned upon the granting to the Participant of a new
Option for the same or a different number of shares as the Option surrendered,
or may require such voluntary surrender as a condition precedent to a grant of a
new Option to such Participant. Such new Option shall be exercisable at the
price, during the period and in accordance with any other terms or conditions
specified by the Committee at the time the new Option is granted, all determined
in accordance with the provisions of the Plan without regard to the price,
period of exercise, or any other terms or conditions of the Option
surrendered.


    
      
         

      

      
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              4.

            	
              COMMON STOCK
      LIMITS

            


    

    


    The total
number of shares of Common Stock which may be issued on exercise of Stock
Options shall not exceed 100,000 shares, subject to adjustment in accordance
with Paragraph 9 of the Plan. Shares issued under the Plan may be, in whole or
in part, as determined by the Committee, authorized but unissued or treasury
shares of Common Stock. If any Options granted under the Plan shall expire or
terminate without having been exercised, the shares subject to such Options
shall be added back to the number of shares of Common Stock which may be issued
on exercise of Stock Options.

    


    


    
      	
              5.

            	
              ELIGIBILITY FOR
      PARTICIPATION

            


    

    


    (t)    Consistent
with Plan objectives, the following persons shall be eligible to become
Participants in the Plan: officers and other key Employees and consultants and
advisers to the Corporation or any Subsidiary corporation, provided that members
of the Board who are not Employees shall not be eligible.

    


    (u)    The foregoing
subparagraph (a) notwithstanding, Incentive Stock Options shall be granted only
to officers and other key Employees, and no Incentive Stock Options shall be
granted to an Employee who owns more than 10% of the Common Stock determined in
accordance with the provisions of Section 422(b)(6) of the Code, unless the
Option meets the requirements of Section 422(c)(5) of the Code.

    


    (v)    Options shall
be granted to consultants and advisers only for bona fide services rendered
other than in connection with the offer or sale of securities.

    


    


    
      	
              6.

            	
              STOCK OPTIONS -TERMS
      AND CONDITIONS

            


    

    


    All Stock
Options granted under the Plan shall be evidenced by Agreements which shall
contain such provisions as shall be required by the Plan together with such
other provisions as the Committee may prescribe, including the following
provisions:

    


    (w)    Price:  The
Committee shall establish the Exercise Price, provided, however, that in the
case of an Incentive Stock Option the Exercise Price shall not be less than the
Fair Market Value of a share of Common Stock on the date of the grant of the
Option. 

    


    (x)    Period:  The
Committee shall establish the term of any Option awarded under the Plan,
provided, however, that no Option shall be' exercisable after the expiration of
10 years from the date of the grant of the Option. 

    


    (y)    Time of
Exercise:  The Committee shall establish the time or times at
which an Option, or portion thereof, shall be exercisable. The Committee,
subsequent to the grant of an Option, may accelerate the date or dates on which
the Option may be exercisable. 

    


    (z)    Exercise:  An
Option, or portion thereof, shall be exercised by delivery or a written notice
of exercise to the Corporation together with payment of the full purchase price
of the shares as to which the Option is exercised ("Purchase Price"). Payment
may be made: 

    


    (i)    in United
States dollars by good check, bank draft or money order payable to the order of
the Corporation, or

    


    (ii)    at the
discretion of the Committee by the transfer to the Corporation of shares of
Common Stock owned by the Participant having an aggregate Fair Market Value on
the date of exercise equal to the Purchase Price or the portion thereof being so
paid, or

    


    
      
         

      

      
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    (iii)    at the
discretion of the Committee and subject to any restrictions or conditions as it
deems appropriate (including any restrictions as may be set forth in Rule 16b-3
under the Securities Exchange Act of 1934), by electing to have the Corporation
withhold from the shares issuable upon exercise of the Option such number of
shares of Common Stock as shall have an aggregate Fair Market Value on the date
of exercise equal to the Purchase Price or the portion thereof being so paid,
or

    


    (iv)    at the
discretion of the Committee by a combination of (i) and (ii) or (i) and (iii)
above.

    


    The
Committee shall determine the procedures for the use of Common Stock in payment
of the Purchase Price and may impose such limitations and prohibitions on such
use as it deems appropriate.

    


    (aa)              Special
Rules for Incentive Stock Options: Notwithstanding any other provisions of the
Plan, with respect to Incentive Stock Options granted under the Plan (in
addition to any other provisions specifically made applicable to Incentive Stock
Options), the following provisions will apply:

    


    (i)           To
the extent that the aggregate Fair Market Value (determined at the time of
grant) of the shares of Common Stock with respect to which Incentive Stock
Options (whether granted hereunder or pursuant to any other plan of the
Corporation or a Subsidiary) are first exercisable by a Participant during any
calendar year exceeds $1 00,000 (or such other limit as may be in effect from
time to time under the Code), such Options shall be treated as Non-Qualified
Options.

    


    (ii)           Any
Participant who disposes of shares of Common Stock acquired on the exercise of
an Incentive Stock Option by sale or exchange either (a) within two years after
the date of the grant of the Option under which such shares were acquired or (b)
within one year after the acquisition of such shares, shall notify the
Corporation in writing of such disposition and of the amount realized upon such
disposition promptly after the disposition.

    


    


    
      	
              7.

            	
              TERMINATION OF
      EMPLOYMENT

            


    

    


    If a
Participant holding an Option shall cease to be employed (or in the case of a
Participant who is not an Employee, shall cease to be engaged) by the
Corporation or any Subsidiary corporation by reason of death or any other reason
other than voluntary quitting, discharge for cause or permanent and total
disability as defined in Section 22(e)(3) of the Code (hereinafter called a
"Disability"), as determined by the Committee, such Participant (or, if
applicable, such Participant's Beneficiary or legal representative) may, but
only within the three months next succeeding such cessation of employment or
engagement, exercise such Option to the extent that such Participant would have
been entitled to do so on the date of such cessation of employments or
engagements. If a Participant holding an Option voluntarily quits or is
discharged for cause, such Option shall terminate on the date of cessation of
employment or engagement.


    


    
      	
              8.

            	
              DISABILITY

            


    

    


    If a
Participant holding an Option shall cease to be employed (or, in the case of a
Participant who is not an Employee, cease to be engaged) by the Corporation or
any Subsidiary corporation by reason of a Disability, the Option shall be
exercisable by such Participant or such Participant's duly appointed guardian or
other legal representative, to the extent that such Participant would have been
entitled to do so on the date of such cessation of employment, but only within
one year following such cessation of employment due to said
Disability.


    
      
         

      

      
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              9.

            	
              ADJUSTMENTS

            


    

    


    If in the event of a
recapitalization, stock split, stock combination, stock dividend, exchange of
shares, or a change in the corporate structure or shares of the Company, or
similar event, the Board of Directors upon recommendation of the Committee shall
make appropriate adjustments in the kind or number of shares which may be issued
upon exercise of Options and in the kind or number of shares issuable upon
exercise of Options theretofore granted and in the exercise price of such
options. The Board of Directors may also make appropriate adjustments in the
event of any distribution of assets to stockholders other than an ordinary
dividend.  Adjustments, if any, and any determinations or
interpretations, including any determination of whether a distribution is other
than an ordinary dividend, made by the Board shall be final, binding and
conclusive.

    


    


    
      	
              10.

            	
              MERGER, CONSOLIDATION
      OR SALE OF ASSETS

            


    

    


    If the
Corporation shall be a party to a merger or consolidation or shall sell
substantially all its assets, each outstanding Option shall pertain and apply to
the securities and/or property which a holder of the number of shares of Common
Stock subject to the Option immediately prior to such merger, consolidation, or
sale of assets would be entitled to receive in such merger, consolidation or
sale of assets.

    


    


    
      	
              11.

            	
              AMENDMENT AND
      TERMINATION OF PLAN

            


    

    


    (bb)    The Board,
without further approval of the stockholders, may at any time, and from time to
time, suspend or terminate the Plan in whole or in part or amend it from time to
time in such respects as the Board may deem appropriate and in the best
interests of the Corporation; provided, however, that no such amendment shall be
made, without approval of the stockholders, to the extent such approval is
required by applicable law, regulation or rule, or which would:

    


    (i)    modify the
eligibility requirements for participation in the Plan; or

    


    (ii)    increase the
total number of shares of Common Stock which may be issued pursuant to Stock
Options, except as is for in accordance with Paragraph 9 of the
Plan.

    


    (cc)    No amendment,
suspension or termination of this Plan shall, without the Participant's consent,
alter or impair any of the rights or obligations under any Stock Option
theretofore granted to the Participant under the Plan.

    


    (dd)    The Board may
amend the Plan, subject to the limitations cited above, in such manner as it
deems necessary to permit the granting of Stock Options meeting the requirements
of future amendments the Plan.

    


    


    
      	
              12.

            	
              GOVERNMENT AND OTHER
      REGULATIONS

            


    

    


    The
granting of Stock Options under the Plan and the obligation of the Corporation
to issue or transfer and deliver shares for Stock Options exercised under the
Plan shall be subject to all applicable laws, regulations, rules and orders
which shall then be in effect.

    
      
         

      

      
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              13.

            	
              MISCELLANEOUS
      PROVISIONS

            


    

    


    (ee)    Rights to
Continued Employment:  No person shall have any claim or right
to be granted a Stock Option under the Plan, and the grant of an Option under
the Plan shall not be construed as giving any Participant the right to be
retained in the employ of the Corporation or any Subsidiary corporation (or to
be otherwise retained in the case of a Participant who is not an Employee) and
the Corporation expressly reserves the right at any time to dismiss a
Participant with or without cause, free of any liability or any claim under the
Plan, except as provided herein or in an Agreement. 

    


    (ff)    Who Shall
Exercise:  Except as provided by the Plan, an Incentive Stock
Option shall be exercisable during the lifetime of the Participant to whom it is
granted only by such Participant, and it may be exercised only if such
Participant has been in the continuous employ of the Corporation or any
Subsidiary corporation from the date of grant of the Option to the date of its
exercise. 

    


    (gg)    Non-Transferability:
No right or interest of any Participant in the Plan or an Agreement shall be
assignable or transferable except by will or the laws of descent and
distribution, and no right or interest of any Participant shall be liable for,
or subject to, any lien, obligation or liability of such Participant; provided
that in the discretion of the Committee a Non-Qualified Option may be made
transferable and assignable on such terms and conditions as the Committee shall
in its discretion determine. 

    


    (hh)    Withholding
Taxes: The Corporation may require a payment to cover applicable
withholding for income and employment taxes in connection with a Stock Option.


    


    (ii)    Rights as
Stockholder: A Participant as such shall not have any of the rights or
privileges of a holder of Common Stock until such time as shares of Common Stock
are issued or are transferred to the Participant upon exercise of an Option.


    


    (jj)    Plan
Expenses:  Any expenses of administering this Plan shall be
borne by the Corporation.

    


    (kk)    Legal
Considerations:  The Corporation shall not be required to
issue, transfer or deliver shares of Common Stock upon exercise of Options until
all applicable legal, listing or registration requirements, as determined by
legal counsel, have been satisfied, and any necessary or appropriate written
representations have been given by the Participant. 

    


    (ll)    Other
Plans:  Nothing contained herein shall prevent the Corporation
from establishing other incentive and benefit plans in which Participants in the
Plan may also participate.

    


    (mm)    No
Warranty of Tax Effect:  Except as may be contained in any
Agreement, no opinion shall be deemed to be expressed or warranties made as to
the effect for federal, state or local tax purposes of any grants hereunder.


    


    (nn)    Construction
of Plan:  The validity, construction, interpretation,
administration and effect of the Plan and of its rules and regulations, and
rights relating to the Plan, shall be determined in accordance with the laws of
the State of Maryland. 

    


    


    
      	
              14.

            	
              STOCKHOLDER APPROVAL
      -TERM OF PLAN

            


    

    


    Upon
approval by the stockholders of the Corporation, the Plan shall become
unconditionally effective as of March 30,1999. No Option shall be granted after
March 29, 2009, provided, however, that the Plan and all outstanding Options
granted under the Plan prior to such date shall remain in effect until the
applicable Options have expired. If the stockholders shall not approve the Plan,
the Plan shall not be effective and any and all actions taken prior thereto
shall be null and void or shall, if necessary, be deemed to have been fully
rescinded.

     

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