exhibit 10.3


    Exhibit
      10.3

    FORM
      OF

    2006
      LONG TERM INCENTIVE PLAN

    INCENTIVE
      STOCK OPTION - EMPLOYEE

     

    Name:
      ___________________________________________

    No.
      of
      Option Shares: ______________________________

    Option
      Exercise Price per Share: $ _____________________

    Date
      of
      Grant: _____________________________________

    Scheduled
      Termination Date: _________________________

     

    You
      are
      hereby granted an option, effective as of the date hereof (the “Date of Grant”),
      to purchase • shares of Class A Common Stock (the “Common Stock”), no par value,
      of Numerex Corp. (the “Company”) at a price of $ • per share pursuant to the
      Company’s 2006 Long-Term Incentive Plan (as amended from time to time, the
“Plan”).

     

    Your
      option may first be exercised on and after one year from the Date of Grant,
      but
      not before that time. On and after one year and prior to two years from the
      Date
      of Grant, your option may be exercised for up to 25% of the total number of
      shares subject to the option minus the number of shares previously purchased
      by
      exercise of the option (as adjusted for any change in the outstanding shares
      of
      the Common Stock of the Company by reason of a stock dividend, stock split,
      combination of shares, recapitalization, merger, consolidation, transfer of
      assets, reorganization, conversion or what the Administrator deems in its sole
      discretion to be similar circumstances). Each succeeding year thereafter, your
      option may be exercised for up to an additional 25% of the total number of
      shares subject to the option minus the number of shares previously purchased
      by
      exercise of the option (as adjusted for any change in the outstanding shares
      of
      the Common Stock of the Company by reason of a stock dividend, stock split,
      combination of shares, recapitalization, merger, consolidation, transfer of
      assets, reorganization, conversion or what the Administrator deems in its sole
      discretion to be similar circumstances). Thus, this option is fully exercisable
      on and after 4 years after the date of grant, except if terminated earlier
      as
      provided herein. No fractional shares shall be issued or delivered. This option
      shall terminate and is not exercisable after ten years from the date of its
      grant (the “Scheduled Termination Date”), except if terminated earlier as
      hereafter provided.

     

    In
      the
      event of a “change of control” (as hereafter defined) of the Company, your
      option may, from and after the date of the change of control, and
      notwithstanding the foregoing paragraph, be exercised for up to 100% of the
      total number of shares then subject to the option minus the number of shares
      previously purchased upon exercise of the option (as adjusted for stock
      dividends, stock splits, combinations of shares and what the Administrator
      deems
      in its sole discretion to be similar circumstances). A “change of control” means
      a change of control of the Company of a nature that would be required to be
      reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or in
      response to any similar item on any similar schedule or form) promulgated under
      the Securities Exchange Act of 1934, as amended (the “Exchange Act”), whether or
      not the Company is then subject to such reporting requirement; provided,
      however, that without limitation, a Change of Control shall be deemed to have
      occurred if:

     

     

    1.  after
      the
      date hereof, any person, excluding employee benefit plans of the Company,
      becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the
      Exchange Act), directly or indirectly, of securities of the Company representing
      twenty percent (20%) or more of the combined voting power of the Company’s then
      outstanding securities, provided, however, that such an acquisition of
      beneficial ownership representing between twenty percent (20%) and forty percent
      (40%), inclusive, of such voting power shall not be considered a change of
      control if the Board approves such acquisition either prior to or immediately
      after its occurrence;

     

    2.  the
      Company consummates a merger, consolidation, share exchange, or other
      reorganization or transaction of the Company (a “Fundamental Transaction”) with
      any other corporation, other than a Fundamental Transaction that results 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) at least fifty-one percent
      (51%)
      of the combined voting power immediately after such Fundamental Transaction
      of
      (x) the Company’s outstanding securities or (y) the surviving entity’s
      outstanding securities;

     

    3.  the
      shareholders of the Company approve a plan of complete liquidation or winding-up
      of the Company or an agreement for the sale or disposition (in one transaction
      or a series of transactions) of all or substantially all of the Company’s
      assets; or

     

    4.  as
      a
      result of a proxy contest, individuals who prior to the conclusion thereof
      constituted the Board (including for this purpose any new director whose
      election or nomination for election by the Company’s shareholders in connection
      with such proxy contest was approved by a vote of at least two-thirds (2/3)
      of
      the directors then still in office who were directors prior to such proxy
      contest) cease to constitute at least a majority of the Board (excluding any
      Board seat that is vacant or otherwise unoccupied).

     

    Notwithstanding
      anything to the contrary herein, a divestiture or spin-off of a Company
      subsidiary corporation shall not by itself constitute a “change of
      control.”

     

    You
      may
      exercise your option by giving written notice to the Secretary of the Company
      on
      forms supplied by the Company at its then principal executive office,
      accompanied by payment of the option price for the total number of shares you
      specify that you wish to purchase. The payment may be in any of the following
      forms: (a) cash, which may be evidenced by a check; (b) (unless
      prohibited by the Administrator) certificates representing shares of Common
      Stock of the Company, which will be valued by the Secretary of the Company
      at
      the fair market value per share of the Company’s Common Stock (as determined in
      accordance with the Plan) on the date of delivery of such certificates to the
      Company, accompanied by an assignment of the stock to the Company;
      (c) (unless prohibited by the Administrator) any combination of cash and
      Common Stock of the Company valued as provided in clause (b); or
      (d) delivery to the Company of a properly executed exercise notice and
      irrevocable instructions to a registered securities broker promptly to deliver
      to the Company cash equal to the option price for that portion of the option
      being exercised. Any assignment of stock shall be in a form and substance
      satisfactory to the Secretary of the Company, including guarantees of
      signature(s) and payment of all transfer taxes if the Secretary deems such
      guarantees necessary or desirable.

     

    Your
      option will, to the extent not previously exercised by you, terminate three
      months after the date on which your employment by the Company or a Company
      subsidiary corporation is terminated (whether such termination is voluntary
      or
      involuntary) other than by reason of disability as defined in Section 22(e)(3)
      of the Internal Revenue Code of 1986, as amended (the “Code”), and the
      regulations thereunder, or death. After the date your employment is terminated,
      you may exercise this option only for the number of shares that you had a right
      to purchase and did not purchase on the date your employment terminated. If
      you
      are employed by a Company subsidiary corporation, your employment shall be
      deemed to have terminated on the date your employer ceases to be a Company
      subsidiary corporation, unless you are on that date transferred to the Company
      or another Company subsidiary corporation. Your employment shall not be deemed
      to have terminated if you are transferred from the Company to a Company
      subsidiary corporation, or vice versa, or from one Company subsidiary
      corporation to another Company subsidiary corporation.

     

    Upon
      your
      death during employment by the Company or a Company subsidiary corporation,
      your
      executor or administrator, as the case may be, may, at anytime within one year
      after the date of your death (but in no event later than the Scheduled
      Termination Date), exercise the option as to any shares which you had a right
      to
      purchase and did not purchase during your lifetime. If your employment with
      the
      Company or a Company parent or subsidiary corporation is terminated by reason
      of
      your becoming disabled (within the meaning of Section 22(e)(3) of the Code
      and the regulations thereunder), you or your legal guardian or custodian may
      at
      any time within one year after the date of such termination (but in no event
      later than the Scheduled Termination Date), exercise the option as to any shares
      which you had a right to purchase and did not purchase prior to such
      termination. Your executor, administrator, guardian or custodian must present
      proof of his authority satisfactory to the Company prior to being allowed to
      exercise this option.

     

    In
      the
      event of any change in the outstanding shares of the Common Stock of the Company
      by reason of a stock dividend, stock split, combination of shares,
      recapitalization, merger, consolidation, transfer of assets, reorganization,
      conversion or what the Administrator deems in its sole discretion to be similar
      circumstances, the number and kind of shares subject to this option and the
      option price of such shares shall be appropriately adjusted in a manner to
      be
      determined in the sole discretion of the Administrator.

    


    This
      option is not transferable otherwise than by will or the laws of descent and
      distribution, and is exercisable during your lifetime only by you, including,
      for this purpose, your legal guardian or custodian in the event of disability.
      Until the option price has been paid in full pursuant to due exercise of this
      option and the purchased shares are delivered to you, you do not have any rights
      as a shareholder of the Company. The Company reserves the right not to deliver
      to you the shares purchased by virtue of the exercise of this option during
      any
      period of time in which the Company deems, in its sole discretion, that such
      delivery would violate a federal, state, local or securities exchange rule,
      regulation or law.

     

    Notwithstanding
      anything to the contrary contained herein, this option is not exercisable until
      all the following events occur and during the following periods of
      time:

     

    (a)  Until
      the
      Plan pursuant to which this option is granted is approved by the shareholders
      of
      the Company in the manner prescribed by the Code and the regulations
      thereunder;

     

    (b)  Until
      this option and the optioned shares are approved and/or registered with such
      federal, state and local regulatory bodies or agencies and securities exchanges
      as the Company may deem necessary or desirable; or 

     

    (c)  During
      any period of time in which the Company deems that the exercisability of this
      option, the offer to sell the shares optioned hereunder, or the sale thereof,
      may violate a federal, state, local or securities exchange rule, regulation
      or
      law, or may cause the Company to be legally obligated to issue or sell more
      shares than the Company is legally entitled to issue or sell.

     

    It
      is the
      intention of the Company and you that this option shall, if possible, be an
      “Incentive Stock Option” as that term is used in Section 422 of the Code and the
      regulations thereunder; provided, however, that to the extent that, during
      any
      calendar year, the option becomes exercisable for the first time with respect
      to
      shares of Common Stock having an aggregate fair market value in excess of the
      limit imposed by Section 422(d) of the Code, (i) the option shall be treated
      as
      a nonqualified stock option and not as an incentive stock option to the extent
      required by Section 422(d) of the Code, and (ii) upon any exercise of the
      option, you shall be required to designate the extent to which, if any, the
      exercise of the option is with respect that portion of the option that is a
      nonqualified stock option pursuant to the preceding clause (i). If, as of the
      same date, you exercise the option with respect to a portion of the option
      that
      is an incentive stock option and with respect to a portion of the option that
      is
      a nonqualified stock option, the Company shall issue separate certificates
      to
      you representing (A) those shares of Common Stock that were acquired pursuant
      to
      the exercise of an incentive stock option (which shares shall be identified
      on
      the Company's stock transfer records as such), and (B) those shares that were
      acquired pursuant to the exercise of a nonqualified stock option.

    


    You
      hereby agree to notify the Company in writing within 30 days after the date
      of
      any disposition of shares of Common Stock acquired upon exercise of the option
      within two (2) years after the Date of Grant or within one (1) year after such
      shares were transferred to you, which notice shall state the number of shares
      sold or transferred, the date the shares were sold or transferred, and the
      sale
      price.

    


    Notices
      hereunder shall be mailed or delivered to the Company at its principal place
      of
      business and shall be mailed or delivered to you at the address on file with
      the
      Company or, in either case, at such other address as one party may subsequently
      furnish to the other party in writing.

    


    The
      Company’s obligation to issue or deliver shares of Common Stock upon the
      exercise of the option shall be subject to the satisfaction of any applicable
      federal, state and local tax withholding requirements. You may satisfy any
      such
      withholding obligation by any of the following means or by a combination of
      such
      means: (a) tendering a cash payment; (b) authorizing the Company to withhold
      shares of Common Stock from the shares otherwise issuable to you upon exercise
      of the option; or (c) delivering to the Company already-owned and unencumbered
      shares of Common Stock. Shares of Common Stock that are withheld or delivered
      to
      satisfy applicable withholding taxes shall be valued at their Fair Market Value
      on the date the withholding tax obligation arises, and in no event shall the
      aggregate Fair Market Value of the shares of Common Stock withheld and/or
      delivered exceed the minimum amount of taxes required to be withheld in
      connection with exercise of the option.

    


    Neither
      the grant of the Option evidenced by this Agreement nor any term or provision
      of
      this Agreement shall constitute or be evidence of any understanding, express
      or
      implied, on the part of the Company to employ or retain you for any
      period.

    


    This
      option shall be subject to the terms of the Plan in effect on the date this
      option is granted, which terms are hereby incorporated herein by reference
      and
      made a part hereof. In the event of any conflict between the terms of this
      option and the terms of the Plan in effect on the date of this option, the
      terms
      of the Plan shall govern. This option constitutes the entire understanding
      between the Company and you with respect to the subject matter hereof and no
      amendment, modification or waiver of this option, in whole or in part, shall
      be
      binding upon the Company unless in writing and signed by the President of the
      Company. This option and the performances of the parties hereunder shall be
      construed in accordance with and governed by the laws of the Commonwealth of
      Pennsylvania.

    



    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    Please
      sign the copy of this option and return it to the Company’s Secretary, thereby
      indicating your understanding of and agreement with its terms and
      conditions.

     

                                    NUMEREX
      CORP.

    


    


                                
      _____________________


                                    By:  Alan
      B.
      Catherall

                                    Chief
      Financial
      Officer

    


    I
      hereby
      acknowledge receipt of a copy of the foregoing stock option and, having read
      it
      hereby signify my understanding of, and my agreement with, its terms and
      conditions.

    


    


    


    _____________________________

    (Signature) (Date)

    


    Address:

    


    _________________________________

    _________________________________

    _________________________________