RELATED GROUP OF PERSONS (OTHER THAN THE CORPORATION OR A
PERSON THAT DIRECTLY OR INDIRECTLY CONTROLS, IS CONTROLLED BY, OR IS UNDER
COMMON CONTROL WITH, THE CORPORATION), OF BENEFICIAL OWNERSHIP (WITHIN THE
MEANING OF RULE 13D-3 OF THE 1934 ACT) OF SECURITIES POSSESSING MORE THAN FIFTY
PERCENT (50%) OF THE TOTAL COMBINED VOTING POWER OF THE CORPORATION'S
OUTSTANDING SECURITIES PURSUANT TO A TENDER OR EXCHANGE OFFER MADE DIRECTLY TO
THE CORPORATION'S SHAREHOLDERS, OR
(II)
A CHANGE IN THE COMPOSITION OF THE BOARD
OVER A PERIOD OF THIRTY-SIX (36) CONSECUTIVE MONTHS OR LESS SUCH THAT A MAJORITY
OF THE BOARD MEMBERS CEASES, BY REASON OF ONE OR MORE CONTESTED ELECTIONS FOR
BOARD MEMBERSHIP, TO BE COMPRISED OF INDIVIDUALS WHO EITHER (A) HAVE BEEN BOARD
MEMBERS CONTINUOUSLY SINCE THE BEGINNING OF SUCH PERIOD OR (B) HAVE BEEN ELECTED
OR NOMINATED FOR ELECTION AS BOARD MEMBERS DURING SUCH PERIOD BY AT LEAST A
MAJORITY OF THE BOARD MEMBERS DESCRIBED IN CLAUSE (A) WHO WERE STILL IN OFFICE
AT THE TIME THE BOARD APPROVED SUCH ELECTION OR NOMINATION.
D.
COMMON STOCK SHALL MEAN THE CORPORATION'S
COMMON STOCK.
E.
CODE SHALL MEAN THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED.
F.
CORPORATE TRANSACTION SHALL MEAN EITHER
OF THE FOLLOWING SHAREHOLDER APPROVED TRANSACTIONS TO WHICH THE CORPORATION IS A
PARTY:
(I)
A MERGER OR CONSOLIDATION IN WHICH
SECURITIES POSSESSING MORE THAN FIFTY PERCENT (50%) OF THE TOTAL COMBINED VOTING
POWER OF THE CORPORATION'S OUTSTANDING SECURITIES ARE TRANSFERRED TO A PERSON OR
PERSONS DIFFERENT FROM THE PERSONS HOLDING THOSE SECURITIES IMMEDIATELY PRIOR TO
SUCH TRANSACTION, OR
(II)
THE SALE, TRANSFER OR OTHER DISPOSITION OF
ALL OR SUBSTANTIALLY ALL OF THE CORPORATION'S ASSETS IN COMPLETE LIQUIDATION OR
DISSOLUTION OF THE CORPORATION.
G.
CORPORATION SHALL MEAN ITERIS, INC.
(FORMERLY KNOWN AS ODETICS ITS, INC.), A CALIFORNIA CORPORATION, AND ANY
SUCCESSOR CORPORATION TO ALL OR SUBSTANTIALLY ALL OF THE ASSETS OR VOTING STOCK
OF ITERIS, INC. WHICH SHALL BY APPROPRIATE ACTION ADOPT THE PLAN.
A-1
H.
DISCRETIONARY OPTION GRANT PROGRAM SHALL
MEAN THE DISCRETIONARY OPTION GRANT PROGRAM IN EFFECT UNDER THE PLAN.
I.
EMPLOYEE SHALL MEAN AN INDIVIDUAL WHO
IS IN THE EMPLOY OF THE CORPORATION (OR ANY PARENT OR SUBSIDIARY), SUBJECT TO
THE CONTROL AND DIRECTION OF THE EMPLOYER ENTITY AS TO BOTH THE WORK TO BE
PERFORMED AND THE MANNER AND METHOD OF PERFORMANCE.
J.
EXERCISE DATE SHALL MEAN THE DATE ON
WHICH THE CORPORATION SHALL HAVE RECEIVED WRITTEN NOTICE OF THE OPTION EXERCISE.
K.
FAIR MARKET VALUE PER SHARE OF COMMON
STOCK ON ANY RELEVANT DATE SHALL BE DETERMINED IN ACCORDANCE WITH THE FOLLOWING
PROVISIONS:
(I)
IF THE COMMON STOCK IS AT THE TIME
TRADED ON THE NASDAQ NATIONAL MARKET, THEN THE FAIR MARKET VALUE SHALL BE DEEMED
EQUAL TO THE CLOSING SELLING PRICE PER SHARE OF COMMON STOCK ON THE DATE IN
QUESTION, AS SUCH PRICE IS REPORTED ON THE NASDAQ NATIONAL MARKET.
IF THERE IS
NO CLOSING SELLING PRICE FOR THE COMMON STOCK ON THE DATE IN QUESTION, THEN THE
FAIR MARKET VALUE SHALL