Exhibit 10.1.3



     STOCKHOLDERS AGREEMENT


     among


     BREED TECHNOLOGIES, INC.


     and


     CERTAIN OF ITS STOCKHOLDERS


     dated as of October 30, 1997










                                                                 

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     STOCKHOLDERS AGREEMENT

     TABLE OF CONTENTS

ARTICLE 1.

Definitions

Section 1.1.  Defined Terms  1

ARTICLE 2.

Board of Directors; Management

Section 2.1.               Composition of Board..............................  5
Section 2.2.               Frequency of Meetings; Quorum...................... 5
Section 2.3.               Audit Committee.................................... 5
Section 2.4.               Notice of Board Meetings; Attendance Right......... 5
Section 2.5.               Actions by the Board..............................  6
Section 2.6.               Special Consent Rights............................. 6
Section 2.7.               Litigation......................................... 6
Section 2.8.               Stockholders' Authorization........................ 6
Section 2.9.               Confidentiality...................................  7
Section 3.1.               Legend............................................. 7
Section 3.2.               Right of First Refusal on Transfers by Breed Holders
                              or Siemens Holders.............................  9
Section 3.3.               Right of First Refusal on Sales by the Company.... 10
Section 3.4.               Tag-Along Right................................... 11
Section 3.5.               Standstill........................................ 12
Section 3.6.               Waiver of Dividend................................ 12

ARTICLE 4.
Miscellaneous

Section 4.1.               Breed Holders' Stock Ownership.................... 13
Section 4.2.               Amendment and Modification........................ 13
Section 4.3.               Survival of Representations and Warranties........ 13
Section 4.4.               Successors and Assigns; Entire Agreement.......... 13
Section 4.5.               Separability...................................... 14
Section 4.6.               Notices........................................... 14
Section 4.7.               Governing Law..................................... 15
Section 4.8.               Headings and Counterparts......................... 15
Section 4.9.               Further Assurances; Assignment.................... 15
Section 4.10.              Termination....................................... 15
Section 4.11.              Remedies.......................................... 15
Section 4.12.              Pronouns.......................................... 16
Section 4.13.              Release of Siemens................................ 16
Section 4.14.              Consent to Jurisdiction........................... 16
Section 4.15.              Waiver of Jury Trial; Trial Costs................. 16
SCHEDULES

                                                                 

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Schedule A.                Breed Holders
Schedule 3.3.              Proposed Issuances
Schedule 4.1.              Nationsbank Arrangements

STOCKHOLDERS AGREEMENT

     THIS  STOCKHOLDERS  AGREEMENT (this  "Agreement"),  dated as of October 30,
1997, is made by and among Breed Technologies, Inc., a Delaware corporation (the
"Company");  Allen K. Breed,  Johnnie  Cordell  Breed,  A. Breed,  L.P., a Texas
limited   partnership   and  J.  Breed,   L.P.,  a  Texas  limited   partnership
(individually,  a "Breed Holder" and  collectively,  the "Breed  Holders");  and
Siemens  Aktiengesellschaft,  a company  organized under the laws of the Federal
Republic of Germany ("Siemens").

     WHEREAS,  pursuant to a Stock Purchase  Agreement,  dated as of October 14,
1997, by and between the Company and Siemens (the "Stock  Purchase  Agreement"),
at a closing held on the date of this  Agreement,  Siemens  purchased  4,883,227
shares (the "Series A Preference Shares"),  each representing one one-thousandth
(1/1,000)  of a share of the  Company's  1997  Series A  Non-Voting  Convertible
Preferred  Stock, par value $.001 per share (the "Preferred  Stock"),  which are
convertible at any time after issuance, at the option of the holder, into shares
of the Company's  Common Stock,  par value $.01 per share (the "Common  Stock");
and

     WHEREAS,  the Breed  Holders,  Siemens and the Company  desire to set forth
certain  agreements  regarding their future  relationships  and their rights and
obligations with respect to the shares of the Series A Preference Shares and the
Common Stock held by them, now or in the future;

     NOW,  THEREFORE,  in  consideration  of the premises and the  covenants and
agreements contained herein, and for other good and valuable consideration,  the
receipt and  sufficiency of which hereby are  acknowledged,  and intending to be
legally bound, the parties hereto agree as follows:

     ARTICLE 1

     Definitions

     Section 1.1 Defined Terms. As used in this  Agreement,  the following terms
shall have the respective meanings set forth below:

     "Affiliate"  shall  mean,  with  respect to any  Person,  any other  Person
directly or indirectly controlling,  controlled by, or under common control with
such Person.

     "Beneficially  Own" shall mean,  with  respect to any  security,  having or
sharing  the power to direct  or  control  the  voting  or  disposition  of such
security.

     "Beneficial  Owner" shall mean, with respect to any security,  a Person who
Beneficially Owns such security,  and "Beneficial Ownership" has a corresponding
meaning.

     "Board"  shall mean the  Company's  board of directors as duly  constituted
from time to time.

     "Business  Day" shall mean a day other  than a  Saturday,  Sunday or day on
which  commercial  banks in New York City are permitted or required by law to be
closed for the conduct of regular banking business.

     "By-Laws" shall mean the bylaws of the Company, as in effect as of the date
of this Agreement and as subsequently  amended in accordance with the provisions
of this Agreement.

                                                                 

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     "Charter" shall mean the Certificate of Incorporation of the Company, as in
effect  as of the  date  of  this  Agreement  and  as  subsequently  amended  in
accordance with the provisions of this Agreement.

     "Controlled  Subsidiary" shall mean, as to any Person,  any other Person of
which the first Person  Beneficially  Owns (directly or  indirectly)  securities
entitling the holder to cast 50% or more of the votes in the election or removal
of directors (or persons holding similar positions) of the second Person.

     "Corporate Affiliate" shall mean, as to any Person, any other Person (other
than a natural person) (i) that directly or indirectly  Beneficially Owns all or
substantially  all of the common equity of the first Person (any such Person,  a
"Parent"),  or (ii) of which all or  substantially  all of the common  equity is
directly or indirectly  Beneficially Owned by the first Person or by a Parent of
the first Person.

     "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.

     "Exempt  Transfer" shall mean any direct or indirect Transfer of Beneficial
Ownership of Common Stock made:

     (i) in any transaction  that has been approved by the  affirmative  vote of
(a) directors constituting a majority of the Board and (b) the Siemens Director;

     (ii) to any  Corporate  Affiliate of the  transferor  (or to any  Corporate
Affiliate  of any other  Person to whom an Exempt  Transfer  would be  otherwise
permitted hereunder); provided, that if on a later date such Corporate Affiliate
ceases to be such a Corporate  Affiliate of the transferor (or of another Person
to whom an Exempt Transfer would otherwise be permitted  hereunder),  a Transfer
(which shall not  constitute  an Exempt  Transfer) of the amount of Common Stock
originally  transferred  to such  transferee  Person  shall  be  deemed  to have
occurred on such later date;

     (iii) to a Person that is a Stockholder immediately prior to the Transfer;

     (iv) by  Transfer  of shares of common  stock of  Siemens  or any direct or
indirect parent company of Siemens; or

     (v) pursuant to the Make-Whole Agreement.

     "GAAP" shall mean U.S. generally accepted accounting principles.

     "Incentive  Arrangement"  shall mean any plan,  arrangement,  agreement  or
program  with or for the benefit of any one or more  natural  persons who are or
are to become  employees of the Company or any of its  subsidiaries  and that is
intended  to induce  one or more  such  persons  to enter  into or remain in the
employment of the Company or any of its  subsidiaries or to incentives or reward
any such person,  including without  limitation stock options,  stock grants and
restricted stock plans.

     "Joint Venture" shall mean the joint venture relationship to be established
pursuant to the Memorandum of Understanding.

     "Joint  Venture  Documents"  shall mean the agreement (or series of related
agreements) contemplated by the Memorandum of Understanding.

     "Make-Whole Agreement" shall mean the Make-Whole Agreement,  dated the same
date as this Agreement, by and between the Company and Siemens.


                                                                 

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     "Memorandum of  Understanding"  shall mean the memorandum of  understanding
between the Company and Siemens, dated October 14, 1997, with respect to a joint
venture between the parties or their affiliates.

     "Person" shall mean any individual, partnership, firm, corporation, limited
liability  company,  association,  joint venture,  trust or other entity, or any
government or political  subdivision  or agency,  department or  instrumentality
thereof.

     "Registration   Rights  Agreement"  shall  mean  the  Registration   Rights
Agreement, dated the same date as this Agreement, by and between the Company and
Siemens.

     "Relevant Date" shall mean, as to any transaction or agreement or series of
related  transactions  or agreements,  the date the  transaction or agreement or
series of related transactions or agreements is approved by the Board or, if the
transaction or agreement or series of related  transactions or agreements is not
presented to the Board for approval, the date on which the Company first becomes
contractually  bound to proceed with the  transaction  or agreement or series of
related transactions or agreements.

     "Securities  Act"  shall  mean  the  Securities  Act of 1933,  as  amended.

"Siemens Holder" shall mean, as of any date, Siemens and any Corporate Affiliate
of Siemens that owns Common Stock on that date.

     "Stockholder"  shall mean any Person who or which is a Siemens  Holder or a
Breed Holder.

     "Transfer"  shall mean any sale,  assignment or other outright  transfer of
Beneficial  Ownership of any securities  (including through a direct or indirect
holding company) and any pledge, hypothecation or similar deposit. "Transferred"
shall have a correlative meaning.

     In addition, the following terms are defined elsewhere in the Agreement:

         "Agreement"................................................... Preamble
         "Breed Holder"................................................ Preamble
         "Common Stock"................................................ Recitals
         "Company"..................................................... Preamble
         "Confidential Information"............................   Section 2.9(a)
         "First Offer Price"...................................   Section 3.2(a)
         "Issuance"............................................   Section 3.3(a)
         "Maximum Purchase"....................................   Section 3.4(c)
         "Offered Securities"..................................   Section 3.2(a)
         "Offering Stockholder"................................   Section 3.2(a)
         "Participating Stockholder"...........................   Section 3.4(b)
         "Participation Notice"................................   Section 3.4(b)
         "Pre-emption Notice"..................................   Section 3.3(a)
         "Pre-emption Option"..................................   Section 3.3(b)
         "Preferred Stock"............................................. Recitals
         "Proposed Sale Amounts"...............................   Section 3.4(c)
         "Purchaser"...........................................   Section 3.2(a)
         "Series A Election Right".............................   Section 2.1(a)
         "Series A Preference Shares".................................. Recitals
         "Siemens...................................................... Preamble
         "Siemens Director"....................................   Section 2.1(a)
         "Special Consent Rights"..............................   Section 2.6
         "Stock Purchase Agreement".................................... Recitals

                                                                 

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         "Tag-Along Notice"....................................   Section 3.4(b)
         "Tag-Along Right".....................................   Section 3.4(a)
         "Transfer Notice".....................................   Section 3.2(a)


     ARTICLE 2.

     Board of Directors; Management

     Section 2.1. Composition of Board.

     (a) The holders of the Series A Preference Shares have the right,  pursuant
to the Certificate of Designations  with respect thereto,  to elect one director
to the Board  following the occurrence of certain events (the "Series A Election
Right").  At any time the Series A Election Right is not currently  exercisable,
the  Stockholders  will vote  their  shares of Common  Stock and take such other
corporate action in their respective  capacities as stockholders as is necessary
and  appropriate  such  that,  effective  as of the date of this  Agreement  and
thereafter so long as this Agreement  remains in effect,  the Board will consist
of not more than eleven  persons,  of whom one will be designated by the Siemens
Holders. Any director designated by the Siemens Holders pursuant to this Article
2 or elected pursuant to the Series A Election Right is hereinafter  referred to
as a "Siemens Director."

     (b) The Stockholders  shall vote their shares and take such other corporate
action as is necessary and appropriate to ensure that, subject to the provisions
of the  Certificate  of  Designations  with  respect to the Series A  Preference
Shares,  (i) the Siemens  Holders  shall be able to remove any Siemens  Director
and, in the event of any such removal or of the death, incapacity or resignation
of a Siemens  Director,  shall have the right to appoint a replacement  for that
director;  (ii) a  Siemens  Director  may be  removed  (other  than for  willful
misconduct) only with the consent of the Siemens Holders;  and (iii) the Siemens
Holders  shall be  exclusively  entitled to nominate all  successors  to Siemens
Director.

     Section 2.2.  Frequency of Meetings;  Quorum. The Board shall meet at least
once each  quarter.  A quorum for a Board  meeting  shall be a  majority  of the
Directors, present in person, by telephone or video conference.

     Section 2.3. Audit Committee. So long as Section 2.1 remains in effect, the
Stockholders shall take such action as may be necessary and appropriate to cause
their  respective  Board  representatives  to appoint and  maintain in effect an
audit committee of the Board,  of which the Siemens  Director shall be a member.
Through the audit  committee,  representatives  of Siemens  will be permitted to
consult with appropriate  personnel of the Company and with  representatives  of
the Company's  independent  auditor  regarding the scope of the annual audit and
the terms of the auditors' engagement.

     Section 2.4. Notice of Board Meetings; Attendance Right.

     (a) Written  notice of Board  meetings  must be given to all  directors  at
least two Business Days prior to each meeting,  specifying in reasonable  detail
the  business to be  conducted.  Notice may be given by  telecopier,  messenger,
registered  mail or  overnight  courier  service  and will be deemed  given when
received.

     (b) The Siemens  Director  shall have the right,  with respect to any Board
meeting solely that such Director does not attend, to designate a representative
to attend the Board meeting in the capacity of an observer only.

     Section 2.5.  Actions by the Board.  Except as  otherwise  provided in this
Agreement,  the  affirmative  vote of a majority of the  directors  present at a
meeting at which a quorum is present, or the unanimous written consent, shall be
required on all actions required to be taken by the Board.

                                                                 

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     Section 2.6.  Special  Consent  Rights.  Notwithstanding  the provisions of
Section 2.5, the affirmative  vote of the Siemens Director shall be necessary to
effect  any of the  following  actions by the  Company or any of its  Controlled
Subsidiaries:

     (a) the conduct or  operation  (other  than (i) through the Joint  Venture,
(ii) through  Hamlin  Incorporated  or VTI Hamlin OY, except with respect to the
design,  manufacture  and marketing of full  electronic  crash sensors and (iii)
through  Artistic  Analytical  Methods,  Inc.  in the  conduct  of its  existing
business)  of any  business  comprising  in whole  or in part  the  development,
selling,  design,  manufacturing  or marketing of  electronic  components in the
field of automotive safety restraint systems.

     (b)  discontinuation  of any material line of business in which the Company
is engaged at the date of this Agreement and which is material to the operations
of the Joint Venture; and

     (c) use of the Siemens and any other trade  names,  marks or other  similar
intellectual property rights of Siemens,  except only to the extent specifically
permitted in the Joint Venture Documents.

     The parties  acknowledge and agree that the provisions of Section 2.6 shall
not impose any restrictions of any kind or nature on the business and activities
of any  stockholder of the Company,  including any future parent  corporation of
the Company, except only for any such business or activity conducted through the
Company or its Controlled Subsidiaries.

     Section 2.7.  Litigation.  Siemens  shall be  consulted  about any material
products liability litigation or regulatory  proceeding involving the Company in
which Siemens is not a named party.  The Company shall provide  prompt notice to
Siemens regarding all such matters.

     Section 2.8. Stockholders' Authorization.  The Company, the Siemens Holders
and the Breed Holders will take all actions legally  permitted or required to be
taken by them (including without limitation amending the Charter) to ensure that
the Company shall at all times have  available for issuance the number of shares
of Common  Stock  that may be  issuable  by the  Company  under  the  Make-Whole
Agreement.  The Breed Holders will vote their shares of Common Stock in favor of
any proposal presented to the Company's  stockholders for approval,  pursuant to
the  requirements of Delaware Law or the New York Stock Exchange,  of any aspect
of the transactions contemplated by this Agreement.

     Section 2.9. Confidentiality.

     (a) Each  Siemens  Holder  agrees  that it will not,  except to the  extent
required  by law or legal  process,  and it will  cause  each of its  Affiliates
(regardless  of whether  such Person is an Affiliate on the date hereof) not to,
use or  disclose or reveal to any person not  authorized  to receive the same by
the Company any trade secret or other confidential or proprietary information of
the  Company,  including,  without  limitation,  any  employee  salaries,  sales
figures, business terms of material contracts, business opportunities,  customer
lists,   cost  of  product  lists  or  distributor  lists   (collectively,   the
"Confidential  Information");  provided, however, that information shall only be
deemed to be  Confidential  Information  if it is disclosed by Breed only to the
designee (or observer) of Siemens to the Board of Directors of Breed as a result
of such  person's  position on or with  respect to the Board of  Directors;  and
provided,  further,  that the  parties  hereto  acknowledge  and  agree  that if
established by clear and convincing  evidence the following  shall not be deemed
Confidential  Information:  (i)  Confidential  Information  which  is  now in or
hereafter  enters  the  public  domain  without  a breach of this  Agreement  by
Siemens;  (ii)  Confidential  Information  known to Siemens prior to the time of
disclosure by the Breed or independently  developed by Siemens  personnel who do
not  have  access  to  the  Confidential  Information;   or  (iii)  Confidential
Information  disclosed  in good  faith  to  Siemens  by a third  person  legally
entitled to disclose the same to Siemens.

     (b) The  foregoing  shall not  prohibit  or  restrict  (i)  disclosures  to
directors, officers or employees of Siemens

                                                                 

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     or its Affiliates  provided they are advised of the confidential  nature of
such information and are under obligations to protect such information;  or (ii)
use or disclosure of such  Information by Siemens or its Affiliates in enforcing
or exercising Siemens' rights under this Agreement,  the Stockholders Agreement,
the Registration Rights Agreement,  and the Make-Whole Agreement or with respect
to the Joint Venture.

     (c) Siemens  agrees that in the event of the breach of this  Section 2.9 by
it, Breed would be irreparably injured and be without an adequate remedy at law.
In the event of such a breach,  or threatened or attempted  breach of any of the
provisions hereof, Breed shall be entitled to, in addition to any other remedies
which are made available to it at law or in equity, a temporary and/or permanent
injunction  and a  decree  for the  specific  performance  of the  terms of this
Section 2.9 without  being  required  to furnish a bond or other  security.  The
obligations  under this Section 2.9 shall survive any  termination or expiration
of this Agreement.


     ARTICLE 3

     Liquidity; Transfer Restrictions

     Section 3.1. Legend.

     (a) Each certificate representing any of the shares of Common Stock held by
a party to this  Agreement  (other than the  Company)  shall bear the  following
legend in addition to any other legend required under applicable law:

     THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS  AMENDED,  OR ANY STATE  SECURITIES  ACT AND MAY NOT BE  TRANSFERRED  WITHOUT
REGISTRATION  UNDER  SUCH ACTS OR AN  OPINION OF  COUNSEL,  SATISFACTORY  TO THE
COMPANY, THAT SUCH REGISTRATION IS NOT REQUIRED.

     THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND
CONDITIONS OF A STOCKHOLDERS  AGREEMENT BY AND AMONG THE COMPANY AND THE HOLDERS
SPECIFIED  THEREIN, A COPY OF WHICH AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICE
OF THE COMPANY.  THE SALE,  TRANSFER OR OTHER  DISPOSITION OF THE SECURITIES ARE
SUBJECT TO THE TERMS OF SUCH AGREEMENT AND THE SECURITIES ARE TRANSFERABLE  ONLY
UPON PROOF OF COMPLIANCE THEREWITH.

     (b) Prior to any proposed  Transfer of any Common Stock by a Person subject
to the  restrictions  contained in this Article 3, the holder  thereof (i) shall
give written  notice to the Company and the other  Stockholders  describing  the
manner and circumstances of the proposed Transfer,  (ii) unless otherwise agreed
by the Company,  shall deliver a written opinion of legal counsel,  addressed to
the Company and the transfer agent,  if other than the Company,  and in form and
substance  satisfactory to the Company and the transfer agent, if other than the
Company,  to the effect that the proposed Transfer of the shares of Common Stock
may be effected  without  registration  under the  Securities Act and applicable
state  securities laws and (iii) shall furnish the Company with such evidence as
the Company  reasonably may request that the proposed  Transfer will comply with
all applicable  requirements of this Article 3. Each certificate  evidencing the
shares of Common  Stock  transferred  shall bear the legend set forth in Section
3.1(a),  except that such certificate shall not bear the first paragraph of such
legend if the opinion of counsel referred to above is to the further effect that
such legend is not required in order to establish  compliance with any provision
of the Securities Act or applicable state securities laws.

     (c) A  notation  will be made in the  appropriate  transfer  records of the
Company with respect to the restrictions on Transfer of the Securities  referred
to in this Agreement.


                                                                 

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     (d) It shall be a condition  precedent  to any Transfer of shares of Common
Stock (including an Exempt Transfer) made while this Agreement is in effect by a
Person party to or otherwise  bound by this Agreement to any Person who is not a
party to this  Agreement  that such  Person  agree in writing to be bound by the
obligations of such Person's transferor under this Agreement.  If the transferee
acquires its shares  pursuant to an Exempt  Transfer and acquires all the shares
Beneficially  Owned by the  transferor,  upon  execution  and  delivery  of that
agreement the transferee will succeed to the rights of the transferor under this
Agreement  and, in the case of a Transfer by Siemens,  the  transferee's  rights
will apply to all shares of Common Stock held by Siemens Holders.

     Section  3.2.  Right of First  Refusal  on  Transfers  by Breed  Holders or
Siemens Holders.

     (a) If at any  time  prior  to the  third  anniversary  of the date of this
Agreement (i) any one or more Breed Holders,  acting  individually or as a group
or (ii) any one or more Siemens Holders,  acting individually or as a group (any
such  Person or Persons  described  in the  preceding  clauses  (i) and (ii) are
hereinafter referred to as an "Offering Stockholder"),  shall desire directly or
indirectly  to Transfer  any of the shares of Common Stock owned by the Offering
Stockholder  other than in an Exempt Transfer,  such Offering  Stockholder shall
first give written  notice  thereof (the  "Transfer  Notice") to (x) the Siemens
Holders (if the Offering  Stockholder  is one or more Breed  Holders) or (y) the
Breed  Holders  and the  Company  (if the  Offering  Stockholder  is one or more
Siemens Holders) (any such recipient of a Transfer Notice, a "Purchaser"), which
Transfer  Notice  shall  state  the  Offering  Stockholder's  desire  to  make a
Transfer,  the number of shares of Common Stock proposed to be Transferred  (the
"Offered  Securities"),  and the price,  which  shall be all cash and payable in
full at the closing of the sale (the "First  Offer  Price"),  which the Offering
Stockholder proposes to be paid for the Offered Securities.

     (b) Upon  receipt of the  Transfer  Notice,  the  Purchaser  shall have the
irrevocable and exclusive  option to purchase all, but not less than all, of the
Offered  Securities at the First Offer Price. The Purchaser's  option under this
Section shall be  exercisable by giving a written notice of exercise (i), if the
proposed  sale is to be  pursuant  to Rule 144  under  the  Securities  Act,  10
Business  Days after the  Transfer  Notice is received or (ii),  if the proposed
sale is not to be pursuant to Rule 144 under the Securities  Act, within 30 days
after the Transfer Notice is received.

     (c) If the  Purchaser  does not exercise its option to purchase the Offered
Securities  at the First Offer Price after  receipt of a Transfer  Notice  given
pursuant to this Section,  then the Offering Stockholder who has duly given such
Transfer  Notice  shall be entitled,  for a period of 180 days  beginning on the
earlier  of (i) the third  day  after the last date for the  giving of a written
notice of exercise by the Purchaser pursuant to paragraph (b) of this Section or
(ii) the date the Offering  Stockholder  shall have received written notice from
the Purchaser stating that the Purchaser does not intend to exercise the options
granted under this Section, to enter into definitive agreements to sell all (but
not less than all) of the Offered  Securities,  at an all cash price equal to or
greater  than (x) the  First  Offer  Price or (y) if the sale is  pursuant  to a
registered public offering,  90% of the First Offer Price; subject,  however, to
the provisions of Section 3.3.

     (d) If the  Purchaser  does not exercise its (or their)  option to purchase
all of the  Offered  Securities  at the  First  Offer  Price  and  the  Offering
Stockholder  desiring  to  Transfer  shall not have  entered  into a  definitive
agreement to Transfer all of the Offered Securities before the expiration of the
180-day  period  described in paragraph  (c) of this  Section,  then no Transfer
subject  to this  Section  (including  Transfers  of any  securities  that  were
previously deemed Offered  Securities) by such Offering  Stockholder  thereafter
shall be consummated  unless all of the provisions of this Section 3.2 are again
complied with.

     (e) If the  Purchaser  exercises its or their option to purchase all of the
Offered  Securities  at the First Offer Price,  the Offering  Stockholder  shall
convey good and valid title to those shares to the Purchaser,  free and clear of
all liens,  encumbrances,  security  interests,  restrictions and adverse claims
whatsoever  (other than restrictions  imposed pursuant to this Agreement),  at a
time and place specified by the Purchaser in its exercise notice, not later than
30 days after the date of the exercise  notice,  by  delivering to the Purchaser
against payment therefor  certificates for those shares,  duly endorsed in blank
or with  stock  powers  attached.  If the  Offering  Stockholder  is one or more
Siemens Holders and

                                                                 

<PAGE>



     the Company  exercises its option to purchase  pursuant to Section 3.2, the
Company  shall  purchase all the Offered  Securities  regardless  of whether any
Breed Holder also elects to exercise. If more than one stockholder exercises its
option  pursuant to Section 3.2,  subject to the  preceding  sentence  each such
stockholder shall purchase a number of Offered  Securities equal to the total of
the Offered Securities  multiplied by a fraction,  the numerator of which is the
number of shares of Common  Stock  owned of record by that  stockholder  and the
denominator  of which is the number of shares of Common Stock owned of record by
all stockholders who exercised options.  If the Purchaser is one or more Siemens
Holders,  the closing of the purchase  shall be delayed  until all  governmental
permits,  approvals,  notices and waiting periods  (including without limitation
those required  pursuant to applicable  antitrust or competition laws) have been
obtained or given or have expired.  Each of the Company, the Siemens Holders and
the Breed  Holders shall  cooperate,  in complying  with,  and promptly take all
actions required pursuant to, such requirements.

     Section 3.3. Right of First Refusal on Sales by the Company.

     (a) If the Company  shall at any time desire to issue and sell,  or to sell
from treasury (any such sale or issuance and sale being hereafter  refined to as
an "Issuance"),  at any time prior to the fifth  anniversary of the date of this
Agreement, shares of Common Stock or securities convertible into or exchangeable
for shares of Common  Stock,  other than an  Issuance  pursuant to (x) a merger,
consolidation,  acquisition  or  business  consolidation  of or with  any  other
Person; (y) an Incentive Arrangement;  or (z) any proposed Issuance set forth or
described on Schedule 3.3 hereto,  the Company  shall first give written  notice
thereof (the "Pre-emption Notice") to Siemens as early as reasonably practicable
prior to the  proposed  Issuance,  which  Pre-emption  Notice  shall  state  the
Company's  desire to effect  an  Issuance,  the  number  and type of  securities
proposed to be sold in the Issuance and the price at which the Company  proposes
to effect the Issuance.

     (b)  Upon  receipt  of the  Pre-emption  Notice,  Siemens  shall  have  the
irrevocable and exclusive  option for a period of 45 days,  exercisable in whole
but not in part (the "Pre-emption  Option"), to purchase the number of shares of
Common Stock specified in the Pre-emption Notice.

     (c) If Siemens  does not exercise its  Pre-emption  Option  within the time
period specified in the preceding paragraph,  the Company shall be entitled, for
a period of 270 days  beginning  on the last day of that  period,  to effect the
Issuance described in the Pre-emption Notice, at a price per share not less than
the price  specified in the  Pre-emption  Notice (or, in the case of an Issuance
proposed to be effected  through a firm commitment  underwriting  pursuant to an
effective registration statement under the Securities Act, less than 90% of that
price).  If the Issuance is not completed  during that period,  no such Issuance
may be  effected  unless all of the  provisions  of this  Section  3.3 are again
complied with.

     (d) If Siemens exercises its Pre-emption  Option,  the purchase and sale of
shares  shall be completed at a closing held (x) on the same date as the balance
of the  Issuance  or (y) if the  Pre-emption  Option is in respect of the entire
Issuance,  at a time and place  specified by the Company by written notice given
at least ten days in  advance,  which  shall be not more than 45 days  after the
date of Siemens' notice of exercise.  At the closing,  the Company shall deliver
to Siemens,  against payment of the purchase price,  certificates for the shares
being purchased,  conveying good and valid title to those shares, free and clear
of all liens, encumbrances,  security interests, restrictions and adverse claims
whatsoever (other than restrictions imposed pursuant to this Agreement).

     Section 3.4. Tag-Along Right.

     (a) Except in the case of an Exempt Transfer,  if any of the Breed Holders,
acting  individually  or as a group,  elect to  Transfer  a number  of shares of
Common Stock that carries  voting power in excess of the voting power carried by
the shares of Capital Stock then Beneficially Owned by the Siemens Holders, each
Siemens Holder shall have the right (a "Tag-Along Right") to participate in such
transaction by including in such sale up to 100% of such Siemens Holder's shares
of Stock and the Breed Holders electing to Transfer shares shall comply with the
requirements of this Section 3.4.

                                                                 

<PAGE>



     (b) In addition to  complying  with the  requirements  of Section  3.2, the
Breed Holders must deliver to all Siemens Holders a written notice (a "Tag-Along
Notice") of their  intention to sell shares in a  transaction  subject to a Tag-
Along Right at least 45 days prior to effecting any such sale  transaction.  The
Tag-Along  Notice  shall set forth in  reasonable  detail the  specifics  of the
proposed sale transaction.  Any Siemens Holder desiring to participate in such a
sale (a "Participating  Stockholder") must deliver to the Breed Holders,  within
30 days of receiving  the Tag-Along  Notice,  written  notice (a  "Participation
Notice") of such  holder's  desire to  participate  in the Breed  Holders'  sale
transaction.  The  Participation  Notice shall specify the number of shares such
Siemens Holder wishes to have included in that sale transaction.

     (c) If the maximum number of shares that the transferee is willing  acquire
on the terms specified in the Tag- Along Notice (the "Maximum Purchase") is less
than the  aggregate of (i) the number of shares to be  transferred  by the Breed
Holders as described in the Tag-Along Notice plus (ii) the number of shares that
the Siemens  Holders wish to include in the  transaction,  as described in their
respective Participation Notices, the number of shares to be sold by each of the
selling Breed Holders and each Siemens  Holder that duly exercised its Tag-Along
Right  shall be  reduced  from  the  numbers  each of them  wishes  to sell,  as
specified in the respective  Tag-Along  Notices and  Participation  Notices (the
"Proposed Sale Amounts"),  to an aggregate amount equal to the Maximum Purchase,
by reducing  each  Proposed Sale Amount to an amount equal to the product of (x)
such  Proposed  Sale Amount and (y) a fraction,  the  numerator  of which is the
Maximum  Purchase and the  denominator of which is the aggregate of all Proposed
Sale Amounts. (d) The Breed Holders shall provide each Participating Stockholder
with such  information  and  instructions  as shall be  necessary  to enable the
Participating  Stockholder to  participate  in the sale  transaction on the same
terms as the Breed Holders,  and each Participating  Stockholder shall cooperate
in such  transaction  by  providing  the Breed  Holders all  materials,  such as
executed purchase and sale agreements and stock transfer  documentation,  as the
Breed Holders reasonably shall require.

     (e) The Breed Holders shall take all reasonable  steps  necessary to ensure
that  the  purchaser  is  required  to  deliver  any  consideration  due  to any
Participating  Stockholder on the same date as such consideration is required to
be delivered to the Breed Holders.

     Section 3.5. Standstill.

     (a) Each Siemens Holder hereby agrees that, until the third  anniversary of
the date of this Agreement,  without the prior consent of the Board,  and except
as set forth in Section 3.5(b), neither it nor any of its Affiliates (regardless
or  whether  such  person or entity is an  Affiliate  on the date  hereof)  will
acquire,  offer to acquire,  or agree to acquire,  directly  or  indirectly,  by
purchase or otherwise,  any Common Stock or direct or indirect rights or options
to acquire any Common Stock.

     (b) The provisions of Section 3.5(a) shall not apply to  acquisitions  made
(i) at any time (x) after a Person not affiliated with Siemens or a Breed Holder
has made a public  announcement of an intent to seek to acquire,  by a tender or
exchange  offer,  merger or other  means,  Beneficial  Ownership  of a number of
shares of Common Stock that, together with any Common Stock already Beneficially
Owned by such  Person,  would equal or exceed 50% of the shares of Common  Stock
then  outstanding  and (y)  prior  to the  time  such  Person  has made a public
announcement  of the  cancellation  of that  intent;  (ii) at any time  that any
Person or group of Persons  (determined in accordance  with Section  13(d)(3) of
the Exchange Act), other than the Breed Holders,  is the Beneficial Owner of 20%
or more of the shares of Common  Stock then  outstanding;  or (iii)  pursuant to
Article 3.

     Section 3.6. Waiver of Dividend.  Notwithstanding  anything to the contrary
contained  in the  Certificate  of  Designations  with  respect  to the Series A
Preference Shares,  the Siemens Holders,  for themselves and their successors in
interest,  hereby  irrevocably  waive any right to receive  dividends (i) at any
time pursuant to Section 2(a) of such Certificate of Designations, if and to the
extent that,  on or prior to December 15,  1997,  Siemens and the Company  shall
have executed and delivered  definitive  documentation with respect to the Joint
Venture and (ii) pursuant to Section 2(a)

                                                                 

<PAGE>



     of such  Certificate  of  Designations  following  the  termination  of the
Make-Whole Agreement.

     ARTICLE 4.

     Miscellaneous

     Section 4.1. Breed Holders' Stock  Ownership.  The Breed Holders  represent
and warrant that as of the  execution  and delivery of this  Agreement,  each of
them is the record and beneficial owner,  free and clear of all liens,  security
interests and similar encumbrances,  except in favor of Nationsbank on the terms
summarized  on Schedule  4.1 hereto of the number of shares of Common  Stock set
forth opposite such Person's name on Schedule A hereto.

     Section 4.2. Amendment and Modification.

     (a) This Agreement may be amended or modified,  or any provision hereof may
be waived, provided that such amendment,  modification or waiver is set forth in
writing  executed  by (i) the  Company,  (ii) the Siemens  Holders,  (iii) Breed
Holders holding a majority of the  outstanding  shares of Common Stock then held
by all Breed Holders, and (iv) in the case of any amendment which materially and
adversely affects any Breed Holder differently from any other Breed Holder, such
Breed  Holder.  No course of dealing  or course of conduct  between or among any
Person having any interest in this Agreement will be deemed effective to modify,
amend or waive any part of this  Agreement or any rights or  obligations  of any
Person under or by reason of this Agreement.

     (b) No failure  or delay by any party in  exercising  any  right,  power or
privilege  hereunder  shall operate as a waiver  thereof nor shall any single or
partial  exercise  thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege.  The rights and remedies herein
provided  shall be  cumulative  and not  exclusive  of any  rights  or  remedies
provided by law.

     Section   4.3.   Survival   of   Representations   and   Warranties.    All
representations,   warranties,  covenants  and  agreements  set  forth  in  this
Agreement  will survive the  execution  and delivery of this  Agreement  and the
closing and the consummation of the transactions contemplated hereby.

     Section 4.4. Successors and Assigns;  Entire Agreement.  This Agreement and
all of the  provisions  hereof shall be binding upon and inure to the benefit of
the parties hereto and, except as provided herein,  their respective  successors
and  assigns.  This  Agreement,  the  Stock  Purchase  Agreement  and the  other
agreements  referred  to herein  and  therein  together  set  forth  the  entire
agreement and understanding  between the parties as to the subject matter hereof
and merges and supersedes all prior  discussions,  agreements and understandings
of any and every nature among them.

     Section  4.5.  Separability.  In the  event  that  any  provision  of  this
Agreement or the application of any provision  hereof is declared to be illegal,
invalid or otherwise  unenforceable  by a court of competent  jurisdiction,  the
remainder of this Agreement shall not be affected.

     Section 4.6. Notices.

     (a) All  notices  provided  for or  permitted  hereunder  shall  be made in
writing by hand-delivery,  telecopier or air courier overnight  delivery service
to the other at the  following  addresses  (or at such other address as shall be
specified in a notice given by any party to the others in  accordance  with this
Section):

         If to the Company to:

         Breed Technologies, Inc.
         5300 Old Tampa Highway

                                                                 

<PAGE>



         Lakeland, Florida  33811
         Attention:  Charles J. Speranzella, Jr.
         and
         General Counsel
         Telecopier:  (941) 668-6016

         If to Siemens or any Siemens Holder:

         Siemens Aktiengesellschaft
         Legal Department ZFR3
         Werner-von-Siemens Strasse 50
         D-91052 Erlangen
         Germany
         Attention:  Counsel for Automotive Systems Group
         Telecopier:  011-49-9131-729001

         with a copy to:

         Siemens Corporation
         1301 Avenue of the Americas
         New York, New York  10019
         Attention:        General Counsel
         Telecopier:  (212) 258-4945

     If to the Breed Holders,  to their addresses as listed from time to time in
the books of the Company.

     (b) All  such  notices  shall be  deemed  to have  been  duly  given:  when
delivered by hand, if personally  delivered;  upon receipt, if received prior to
5:00 p.m.  local time on a Business Day (and  otherwise  on the next  succeeding
Business Day), if telecopied;  and on the next Business Day, if timely delivered
to an air courier guaranteeing overnight delivery.

     Section 4.7.  Governing Law. The validity,  performance,  construction  and
effect of this  Agreement is governed by and shall be  construed  in  accordance
with the  internal  laws of the  State of  Delaware,  without  giving  effect to
principles of conflicts of law.

     Section 4.8. Headings and Counterparts.  The headings in this Agreement are
for  convenience  of  reference  only and  shall not  constitute  a part of this
Agreement  nor shall  they  affect its  meaning,  construction  or effect.  This
Agreement may be executed in two or more  counterparts and by the parties hereto
in separate  counterparts,  each of which when so executed shall be deemed to be
an original,  and all of which taken together shall  constitute one and the same
instrument.

     Section 4.9. Further Assurances; Assignment. Each party shall cooperate and
take such action as may be  reasonably  requested  by another  party in order to
carry out the  provisions  and purposes of this  Agreement and the  transactions
contemplated hereby. Notwithstanding anything in this Agreement to the contrary,
this  Agreement is not  assignable by a Siemens Holder without the prior written
consent of each other party to this  Agreement and any  attempted  assignment in
violation  of  this  provision  shall  be null  and  void.  Notwithstanding  the
foregoing,  any Siemens Holder may assign this Agreement to any of its Corporate
Affiliates.

     Section 4.10. Termination.  Unless sooner terminated in accordance with its
terms,  this Agreement shall terminate upon the earlier to occur of (i) the date
on which the Siemens Holders first  collectively  Beneficially Own less than the
number of shares of Common Stock issued or issuable  pursuant to the  conversion
of the shares of Series A Preference

                                                                 

<PAGE>



     Shares acquired by Siemens  pursuant to the Stock Purchase  Agreement (such
number to be  ratably  adjusted  to  reflect  the  impact of  recapitalizations,
reverse stock splits and similar  transactions)  or (ii) the delivery of a First
Make-Whole  Notice (as such term is defined in the Make-Whole  Agreement).  If a
party hereto ceases to own any shares of Common Stock, such party will no longer
be deemed to be a Stockholder  for purposes of this Agreement and there shall be
no liability on the part of any such party,  except for liabilities arising from
a breach of this Agreement prior to such termination.  Following  termination of
this  Agreement,  the parties shall have no further  obligations  or liabilities
hereunder   except  for  obligations  or  liabilities   accrued  prior  to  such
termination.

     Section  4.11.  Remedies.  In the  event of a breach  by any  party to this
Agreement of its  obligations  under this  Agreement,  any party injured by such
breach,  in addition to being  entitled to exercise  all rights  granted by law,
including recovery of damages,  will be entitled to specific  performance of its
rights  under this  Agreement.  The parties  agree that the  provisions  of this
Agreement shall be specifically enforceable, it being agreed by the parties that
the remedy at law, including monetary damages, for breach of such provision will
be inadequate  compensation  for any loss and that any defense in any action for
specific  performance  that a remedy at law would be adequate is waived.  In the
event of any breach of this  Agreement by any party hereto,  each such breaching
party agrees to indemnify the persons to whom a  representation  and warranty is
given or an obligation is owed under this  Agreement for all damages,  costs and
expenses (including reasonable attorneys' fees) actually incurred as a result of
any such breach.

     Section 4.12. Pronouns. Whenever the context may require, any pronouns used
herein shall be deemed also to include the  corresponding  neuter,  masculine or
feminine forms.

     Section  4.13.  Release  of  Siemens.  If  Siemens  assigns  its rights and
obligations under this Agreement pursuant to Section 4.9, the Company for itself
and its  Affiliates,  and the Breed  Holders so long as Siemens  Corporation  is
subject to the jurisdiction of the Federal,  state or local courts of the United
States with  respect to claims or disputes  relating  to this  Agreement  or the
transactions  contemplated hereby,  hereby irrevocably and unconditionally waive
and release all rights and claims that any of them may have  following  the time
that  Siemens no longer owns of record any  capital  stock of the Company to the
effect that  Siemens is or has been at any time subject to the  jurisdiction  of
the Federal,  state or local courts of the United  States with respect to claims
or disputes relating to this Agreement.

     Section 4.14. Consent to Jurisdiction. Subject to the provisions of Section
4.13,  the Company,  each Breed Holder and each Siemens  Holder hereby agrees to
submit to the exclusive  jurisdiction of the U.S. Federal courts in the Southern
District of the State of New York,  and  consents  that  service of process with
respect to all such courts may be made by registered  mail to such person at the
address of such  person set forth in Section  4.6 with  respect to any  disputes
arising out of this Agreement.

     Section 4.15.  Waiver of Jury Trial;  Trial Costs. The Company,  for itself
and its Corporate  Affiliates,  each Breed Holder and each Siemens Holder hereby
irrevocably  waives  all  right to trial by jury in any  action,  proceeding  or
counterclaim  (whether based on contract,  tort or otherwise)  arising out of or
relating to the actions of the Company,  any Breed Holder or any Siemens  Holder
pursuant to this Agreement in the  negotiation,  administration,  performance or
enforcement thereof. The party in whose favor a final judgment is rendered shall
be entitled to reasonable costs and reasonable attorneys' fees.


     IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day
and year first above written. BREED TECHNOLOGIES, INC.

                                By:
                                Name:
                                Title:


                                                                 

<PAGE>



                                BREED HOLDERS:

                                Allen K. Breed

                                Johnnie Cordell Breed

                                A. BREED, L.P.
                                By:
                                General Partner

                                J. BREED, L.P.
                                By:
                                General Partner

                                SIEMENS AKTIENGESELLSCHAFT
                                By:
                                Name:
                                Title:
                                By:
                                Name:
                                Title:

                                                                 

<PAGE>



Schedule A to
Stockholders Agreement

     STOCK OWNERSHIP OF BREED FAMILY AND AFFILIATES


     Number of Shares of Record Holder Common Stock Owned

                  J. Breed, L.P.                                       8,477,750

                  A. Breed, L.P.                                       8,477,750

                  Allen K. Breed and
                  Johnnie C. Breed, jointly                                  100


                                                                      16,955,600