Document:

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                                                                  EXHIBIT 4.5

                            M-TRON INDUSTRIES, INC.

                       INTERNATIONAL HOLDER TRANSFER FORM

IMPORTANT: The number of Rights that may be transferred by the person whose
name appears on the label affixed to this form is the number indicated in the
top right-hand corner of the label.

THIS FORM SHOULD BE USED TO TRANSFER YOUR SUBSCRIPTION CERTIFICATE OR SOME OR
ALL OF YOUR RIGHTS.

For value received, ___ Rights to purchase shares of Class A common stock of
M-tron Industries, Inc. represented by Subscription Certificate No. ___
issued in the name of the undersigned and held by American Stock Transfer &
Trust Company for the account of the undersigned are hereby assigned to
(please print name, address to which a new subscription certificate should be
delivered and Social Security No. or Taxpayer ID No. of transferee in full):

Name:..........................................................

Address:.......................................................

 ...............................................................

 ...............................................................

 ...............................................................
           Social Security No. or Taxpayer ID No.

                                    IMPORTANT
                             RIGHTS HOLDER SIGN HERE

              .......................................................

              .......................................................
                           (Signature(s) of Holder(s))

              Dated ............................................, 2000

(Must be signed by the Rights holder(s) exactly as name(s) appear(s) on the
certificate(s) representing shares of common stock of Lynch Corporation as to
which the Rights have been distributed. If signature is by trustee(s),
executor(s), administrator(s), guardian(s), attorney(s), in-fact agent(s),
officer(s) of a corporation or another acting in a fiduciary or
representative capacity, please provide the following information. See
instructions.)

Name(s).........................................................................

 ................................................................................
                                 (Please Print)

Capacity........................................................................

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Address.........................................................................

 ................................................................................
                              (Including Zip Code)

Area Code and Telephone Number..................................................
                                     (Home)

 ................................................................................
                                   (Business)

Tax Identification or Social Security No........................................
                                            (Complete Substitute Form W-9)

                                      2<PAGE>

                                                                     EXHIBIT 4.6

                             M-TRON INDUSTRIES, INC.
                                 RIGHTS OFFERING
                 NOMINEE HOLDER OVER-SUBSCRIPTION EXERCISE FORM
                   PLEASE COMPLETE ALL APPLICABLE INFORMATION

---------------------------------------- ---------------------------------------
   BY MAIL OR HAND DELIVERY:                      BY OVERNIGHT COURIER:
---------------------------------------- ---------------------------------------
         American Stock                                 American Stock
    Transfer & Trust Company                       Transfer & Trust Company
         59 Maiden Lane                              Exchanges & Tenders
    New York, New York 10038                            59 Maiden Lane
                                                   New York, New York 10038
----------------------------------------- --------------------------------------

      THIS FORM IS TO BE USED ONLY BY NOMINEE HOLDERS TO EXERCISE THE
OVER-SUBSCRIPTION PRIVILEGE IN RESPECT OF RIGHTS THAT WERE EXERCISED AND
DELIVERED THROUGH THE FACILITIES OF A COMMON DEPOSITORY. ALL OTHER EXERCISES OF
OVER-SUBSCRIPTION PRIVILEGES MUST BE EFFECTED BY THE DELIVERY OF THE
SUBSCRIPTION CERTIFICATES.

      THE TERMS AND CONDITIONS OF THE RIGHTS OFFERING ARE SET FORTH IN THE
PROSPECTUS OF M-TRON INDUSTRIES, INC. (THE "COMPANY") DATED ____________ ,
2000 (THE "PROSPECTUS") AND ARE INCORPORATED HEREIN BY REFERENCE. COPIES OF
THE PROSPECTUS ARE AVAILABLE UPON REQUEST FROM THE COMPANY.

      VOID UNLESS RECEIVED BY THE SUBSCRIPTION AGENT WITH PAYMENT IN FULL BY
5:00 P.M., EASTERN STANDARD TIME, ON _____________, 2000, UNLESS EXTENDED BY
THE COMPANY (THE "EXPIRATION DATE").

1. The undersigned hereby certifies to the Subscription Agent that it is a
participant in The Depository Trust Company (the "Depository") and that it
has either: (i) exercised all of the rights and delivered such exercised
rights to the Subscription Agent by means of transfer to the Depository
Account of the Subscription Agent; or (ii) delivered to the Subscription
Agent a Notice of Guaranteed Delivery in respect of the exercise of the
rights and will deliver the rights called for in such Notice of Guaranteed
Delivery to the Subscription Agent by means of transfer to such Depository
Account of the Company.

2. The undersigned hereby exercises the over-subscription privilege to
purchase, to the extent available, shares of Class A Common Stock and
certifies to the Subscription Agent that such over-subscription privilege is
being exercised for the account or accounts of persons (which may include the
undersigned) on whose behalf all rights have been exercised.*

* PLEASE COMPLETE THE NOMINEE HOLDER CERTIFICATION FORM CONTAINING THE RECORD
DATE POSITION OF RIGHTS OWNED, THE NUMBER OF SHARES SUBSCRIBED FOR IN
CONNECTION WITH THE EXERCISE OF THE BASIC SUBSCRIPTION PRIVILEGE AND THE
NUMBER OF SHARES SUBSCRIBED FOR IN CONNECTION WITH THE EXERCISE OF THE
OVER-SUBSCRIPTION RIGHTS, IF APPLICABLE.

<PAGE>

3.    The undersigned understands that payment of the subscription price of
      $5.00 per share for each share of Class A common stock subscribed for
      pursuant to the over-subscription privilege must be received by the
      Subscription Agent on or before 5:00 p.m., Eastern Standard Time, on the
      Expiration Date, and represents that such payment, in the aggregate amount
      of $ ________ either (check appropriate box):

/ /   has been or is being delivered to the Subscription Agent pursuant to
      the Notice of Guaranteed Delivery referred to above, or

/ /   is being delivered to the Subscription Agent herewith, or

/ /   has been delivered separately to the Subscription Agent in the manner
      set forth below (check appropriate box and complete information
      relating thereto):

      / /    uncertified check

      / /    certified check

      / /    bank draft

      / /    money order

      / /    wire transfer

----------------------------------------------------
Depository Subscription Confirmation Number

---------------------------------------------------
Depository Participant Number

----------------------------------------------------
Contact Name

-----------------------------------------------------
Phone Number

                                             Dated:                      , 2000
                                                   ----------------------

-------------------------------------------------------------------------------
Name of Nominee Holder

-------------------------------------------------------------------------------
Address

-------------------------------------------------------------------------------
City                                State                              Zip Code

By:
   ---------------------------------------------

     Name:
          --------------------------------------

     Title:
           -------------------------------------<PAGE>

                                                                    EXHIBIT 10.1

                             2000 STOCK OPTION PLAN
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                             M-TRON INDUSTRIES, INC.

                             2000 STOCK OPTION PLAN

                                   ARTICLE I.

                                     PURPOSE

         The purpose of this M-tron Industries, Inc. 2000 Stock Option Plan (the
"Plan"), is to enhance the profitability and value of M-tron Industries, Inc.
(the "Company") for the benefit of its shareholders by enabling the Company to
offer certain employees and Consultants (as defined herein) of the Company and
its Subsidiaries (as defined herein) and non-employee directors of the Company
stock based incentives in the Company, thereby creating a means to raise the
level of stock ownership by employees, Consultants and non- employee directors
in order to attract, retain and reward such individuals and strengthen the
mutuality of interests between such individuals and the Company's shareholders.

                                   ARTICLE II.

                                   DEFINITIONS

         For purposes of this Plan, the following terms shall have the following
meanings:

                  2.1. "Board" shall mean the Board of Directors of the Company.

                  2.2. "Cause" shall mean, with respect to a Participant's
         Termination of Relationship, unless otherwise determined by the
         Committee at grant, willful misconduct in connection with the
         Participant's employment or consultancy or willful failure to perform
         his or her employment or consultancy responsibilities in the best
         interests of the Company (including, without limitation, breach by the
         Participant of any provision of any employment, nondisclosure,
         non-competition or other similar agreement between the Participant and
         the Company), as determined by the Committee, which determination shall
         be final, conclusive and binding. With respect to a Participant's
         Termination of Directorship, Cause shall mean an act or failure to act
         that constitutes "cause" for removal of a director under applicable
         Delaware law.

                  2.3. "Change in Control" shall have the meaning set forth in
         Article VIII.

                  2.4. "Code" shall mean the Internal Revenue Code of 1986, as
         amended. Any
<PAGE>

         reference to any section of the Code shall also be a reference to any
         successor provision.

                  2.5. "Committee" shall mean a committee or sub-committee of
         the Board appointed from time to time by the Board or such committee,
         as the case may be, which Committee shall consist solely of two or more
         directors who are both (i) non- employee directors as defined in Rule
         16b-3 (as defined herein) and (ii) outside directors as defined under
         Section 162(m) of the Code (as defined herein). If for any reason the
         appointed Committee does not meet the requirements of Rule 16b-3 or
         Section 162(m) of the Code, such noncompliance with the requirements of
         Rule 16b- 3 or Section 162(m) of the Code shall not affect the validity
         of the awards, grants, interpretations or other actions of the
         Committee. Notwithstanding the foregoing, with respect to grants of
         Options to non-employee directors and any action hereunder relating to
         Options held by non-employee directors, the Committee shall mean the
         Board. If and to the extent that no Committee exists which has the
         authority to administer the Plan, the functions of the Committee shall
         be exercised by the Board.

                  2.6. "Common Stock" means the Class A Common Stock, par value
         $0.01 per share, of the Company.

                  2.7. "Consultant" means any advisor or consultant to the
         Company or its Subsidiaries who is eligible pursuant to Article V to be
         granted Options under this Plan.

                  2.8. "Disability" shall mean total and permanent disability,
         as defined in Section 22(e)(3) of the Code.

                  2.9. "Effective Date" shall mean the effective date of the
         Plan as defined in Article XII.

                  2.10. "Eligible Employee" shall mean the employees of the
         Company and its Subsidiaries who are eligible pursuant to Article V to
         be granted Options under this Plan.

                  2.11. "Exchange Act" shall mean the Securities Exchange Act of
         1934.

                  2.12. "Fair Market Value" for purposes of this Plan, unless
         otherwise required by any applicable provision of the Code or any
         regulations issued thereunder, shall mean, as of any date, the last
         sales price reported for the Common Stock on the applicable date (i) as
         reported by the principal national securities exchange in the United
         States on which it is then traded, or (ii) if not traded on any such
         national securities exchange, as quoted on an automated quotation
         system sponsored by the National Association of Securities Dealers. If
         the Common Stock is not readily

                                       2
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         tradable on a national securities exchange or any system sponsored by
         the National Association of Securities Dealers, its Fair Market Value
         shall be set in good faith by the Committee. For purposes of the grant
         of any Option, the applicable date shall be the date for which the last
         sales price is available at the time of grant.

                  2.13. "Good Reason" shall mean, with respect to a
         Participant's Termination of Relationship, (i) if there is an
         employment agreement between the Company or a Subsidiary and the
         Participant in effect at the time of grant that defines "good reason"
         (or words of like import) a termination that is or would be deemed for
         "good reason" (or words of like import) as defined under such
         employment agreement at the time of grant, (ii) if there is an
         employment agreement between the Company or a Subsidiary and the
         Participant in effect at the time of grant that does not define "good
         reason" (or words of like import), a voluntary termination which is
         permitted under the terms of such employment agreement and which is at
         least ninety (90) days after the occurrence of an event which would be
         grounds for a termination by the Company that is or would be deemed for
         "cause" (or words of like import) as defined under such employment
         agreement at the time of grant, or (iii) if there is no employment
         agreement between the Company or a Subsidiary and the Participant in
         effect at the time of grant, a voluntary termination for any reason
         upon two (2) weeks' prior written notice to the Company, which is at
         least ninety (90) days after the occurrence of an event which would be
         grounds for a Termination of Relationship by the Company for Cause
         (without regard to any notice or cure period requirement).

                  2.14. "Incentive Stock Option" shall mean any Stock Option
         awarded under this Plan intended to be, and designated as, an
         "Incentive Stock Option" within the meaning of Section 422 of the Code.

                  2.15. "Non-Qualified Stock Option" shall mean any Stock Option
         awarded under this Plan that is not an Incentive Stock Option.

                  2.16. "Participant" shall mean the following persons to whom
         an Option has been granted pursuant to this Plan: Eligible Employees
         and Consultants of the Company or its Subsidiaries and non-employee
         directors of the Company.

                  2.17. "Retirement" with respect to a Participant's Termination
         of Relationship shall mean a Termination of Relationship without Cause
         from the Company and/or a Subsidiary by a Participant who has attained
         (i) at least age sixty-five (65); or (ii) such earlier date after age
         fifty-five (55) as approved by the Committee with regard to such
         Participant. With respect to a Participant's Termination of
         Directorship, Retirement shall mean the failure to stand for reelection
         or the failure to be reelected after a Participant has attained age
         sixty-five (65).

                  2.18. "Rule 16b-3" shall mean Rule 16b-3 under Section 16(b)
         of the

                                       3
<PAGE>

         Exchange Act as then in effect or any successor provisions.

                  2.19. "Section 162(m) of the Code" shall mean the exception
         for performance-based compensation under Section 162(m) of the Code and
         any Treasury regulations thereunder.

                  2.20. "Stock Option" or "Option" shall mean any option to
         purchase shares of Common Stock granted to Eligible Employees,
         Consultants or non-employee directors pursuant to Article VI.

                  2.21. "Subsidiary" shall mean any corporation that is defined
         as a subsidiary corporation in Section 424(f) of the Code.

                  2.22. "Ten Percent Shareholder" shall mean a person owning
         Common Stock of the Company possessing more than ten percent (10%) of
         the total combined voting power of all classes of stock of the Company
         as defined in Section 422 of the Code.

                  2.23. "Termination of Consultancy" shall mean (i) an
         individual is no longer acting as a Consultant to the Company or a
         Subsidiary; or (ii) when an entity which is retaining a Participant as
         a Consultant ceases to be a Subsidiary, unless the Participant
         thereupon is retained as a Consultant by the Company or another
         Subsidiary.

                  2.24. "Termination of Directorship" shall mean, with respect
         to a non- employee director, that the non-employee director has ceased
         to be a director of the Company for any reason.

                  2.25. "Termination of Employment" shall mean (i) a termination
         of service (for reasons other than a military or personal leave of
         absence granted by the Company) of a Participant from the Company and
         its Subsidiaries; or (ii) when an entity which is employing a
         Participant ceases to be a Subsidiary, unless the Participant thereupon
         becomes employed by the Company or another Subsidiary.

                  2.26. "Termination of Relationship" shall mean a Termination
         of Employment or a Termination of Consultancy, as applicable.

                  2.27. "Transfer" or "Transferred" shall mean anticipate,
         alienate, attach, sell, assign, pledge, encumber, charge or otherwise
         transfer.

                  2.28. "Withholding Election" shall have the meaning set forth
         in Section 11.4.

                                       4
<PAGE>

                                  ARTICLE III.

                                 ADMINISTRATION

         3.1. (A) THE COMMITTEE. Except as provided in Section 3.1(B), the Plan
shall be administered and interpreted by the Committee.

              (B) THE BOARD. In the case of awards to non-employee directors,
the Plan shall be administered and interpreted by the Board and all references
in the Plan to the Committee shall be deemed to refer to the Board.

         3.2. AWARDS. The Committee shall have full authority to grant Stock
Options, pursuant to the terms of this Plan. In particular, the Committee shall
have the authority:

                  (a) to select the Eligible Employees, Consultants and
         non-employee directors to whom Stock Options may from time to time be
         granted hereunder;

                  (b) to determine whether and to what extent Stock Options are
         to be granted hereunder to one or more Eligible Employees, Consultants
         or non-employee directors;

                  (c) to determine, in accordance with the terms of this Plan,
         the number of shares of Common Stock to be covered by each Stock Option
         granted to an Eligible Employee, Consultant or non-employee director;

                  (d) to determine the terms and conditions, not inconsistent
         with the terms of this Plan, of any Stock Option granted hereunder to
         an Eligible Employee, Consultant or non-employee director (including,
         but not limited to, the share price, any restriction or limitation, any
         vesting schedule or acceleration thereof, or any forfeiture
         restrictions or waiver thereof, and the shares of Common Stock relating
         thereto, based on such factors, if any, as the Committee shall
         determine, in its sole discretion);

                  (e) to determine whether and under what circumstances a Stock
         Option may be settled in cash and/or Common Stock under Subsection
         6.3(d);

                  (f) to determine whether, to what extent and under what
         circumstances to provide loans (which shall be on a recourse basis and
         shall bear a reasonable rate of interest) to Eligible Employees,
         Consultants or non-employee directors in order to exercise Options
         under the Plan; and

                  (g) to determine whether to require Eligible Employees,
         Consultants or non- employee directors, as a condition of the granting
         of any Option, to not sell or otherwise dispose of shares acquired
         pursuant to the exercise of an Option for a period

                                       5
<PAGE>

         of time as determined by the Committee, in its sole discretion,
         following the date of the acquisition of such Option.

         3.3. GUIDELINES. Subject to Article IX hereof, the Committee shall have
the authority to adopt, alter and repeal such administrative rules, guidelines
and practices governing this Plan and perform all acts, including the delegation
of its administrative responsibilities, as it shall, from time to time, deem
advisable; to construe and interpret the terms and provisions of this Plan and
any Option granted under this Plan (and any agreements relating thereto); and to
otherwise supervise the administration of this Plan. The Committee may correct
any defect, supply any omission or reconcile any inconsistency in this Plan or
in any agreement relating thereto in the manner and to the extent it shall deem
necessary to carry this Plan into effect, but only to the extent any such action
would be permitted under the applicable provisions of Rule 16b-3 (if any) and
the applicable provisions of Section 162(m) of the Code (if any). The Committee
may adopt special guidelines and provisions for persons who are residing in, or
subject to, the taxes of, countries other than the United States to comply with
applicable tax and securities laws. If and solely to the extent applicable, this
Plan is intended to comply with Rule 16b-3 and Section 162(m) of the Code and
shall be limited, construed and interpreted in a manner so as to comply
therewith.

         3.4. DECISIONS FINAL. Any decision, interpretation or other action made
or taken in good faith by or at the direction of the Company, the Board, or the
Committee (or any of its members) arising out of or in connection with the Plan
shall be within the absolute discretion of all and each of them, as the case may
be, and shall be final, conclusive and binding on the Company and all employees,
directors, consultants and Participants and their respective heirs, executors,
administrators, successors and assigns.

         3.5. RELIANCE ON COUNSEL. The Company, the Board or the Committee may
consult with legal counsel, who may be counsel for the Company or other counsel,
with respect to its obligations or duties hereunder, or with respect to any
action or proceeding or any question of law, and shall not be liable with
respect to any action taken or omitted by it in good faith pursuant to the
advice of such counsel.

         3.6. PROCEDURES. If the Committee is appointed, the Board shall
designate one of the members of the Committee as chairman and the Committee
shall hold meetings, subject to the By-Laws of the Company, at such times and
places as it shall deem advisable. A majority of the Committee members shall
constitute a quorum. All determinations of the Committee shall be made by a
majority of its members. Any decision or determination reduced to writing and
signed by all Committee members in accordance with the By-Laws of the Company
shall be fully effective as if it had been made by a vote at a meeting duly
called and held. The Committee shall keep minutes of its meetings and shall make
such rules and regulations for the conduct of its business as it shall deem
advisable.

         3.7. DESIGNATION OF ADVISORS -- LIABILITY.

                                       6
<PAGE>

                  (a) The Committee may designate employees of the Company and
         professional advisors to assist the Committee in the administration of
         the Plan and may grant authority to employees to execute agreements or
         other documents on behalf of the Committee.

                  (b) The Committee may employ such legal counsel, consultants
         and agents as it may deem desirable for the administration of the Plan
         and may rely upon any opinion received from any such counsel or
         consultant and any computation received from any such consultant or
         agent. Expenses incurred by the Committee or Board in the engagement of
         any such counsel, consultant or agent shall be paid by the Company. The
         Committee, its members and any person designated pursuant to paragraph
         (a) above shall not be liable for any action or determination made in
         good faith with respect to the Plan. To the maximum extent permitted by
         applicable law, no officer or former officer of the Company or member
         or former member of the Committee or of the Board shall be liable for
         any action or determination made in good faith with respect to the Plan
         or any Stock Option granted under it. To the maximum extent permitted
         by applicable law and the Certificate of Incorporation and By-Laws of
         the Company and to the extent not covered by insurance, each officer or
         former officer and member or former member of the Committee or of the
         Board shall be indemnified and held harmless by the Company against any
         cost or expense (including reasonable fees of counsel reasonably
         acceptable to the Company) or liability (including any sum paid in
         settlement of a claim with the approval of the Company), and advanced
         amounts necessary to pay the foregoing at the earliest time and to the
         fullest extent permitted, arising out of any act or omission to act in
         connection with the Plan, except to the extent arising out of such
         officer's or former officer's, member's or former member's own fraud or
         bad faith. Such indemnification shall be in addition to any rights of
         indemnification the officers, directors or members or former officers,
         directors or members may have under applicable law or under the
         Certificate of Incorporation or By-Laws of the Company or Subsidiary.
         Notwithstanding anything else herein, this indemnification will not
         apply to the actions or determinations made by an individual with
         regard to Stock Options granted to him or her under this Plan.

                                   ARTICLE IV.

                           SHARE AND OTHER LIMITATIONS

         4.1. SHARES.

                                       7
<PAGE>

                  (a) GENERAL LIMITATION. The aggregate number of shares of
         Common Stock which may be issued under this Plan with respect to which
         Stock Options may be granted shall not exceed 1,125,000 shares (subject
         to any increase or decrease pursuant to Section 4.2) which may be
         either authorized and unissued Common Stock or Common Stock held in or
         acquired for the treasury of the Company. If any Stock Option granted
         under this Plan expires, terminates or is canceled for any reason
         without having been exercised in full or the Company repurchases any
         Stock Option pursuant to Section 6.3(f), the number of shares of Common
         Stock underlying the repurchased Option, and/or the number of shares of
         Common Stock underlying any unexercised Option shall again be available
         for the purposes of Options under the Plan.

                  (b) INDIVIDUAL PARTICIPANT LIMITATIONS. The maximum number of
         shares of Common Stock subject to any Option which may be granted under
         this Plan to each Participant shall not exceed 250,000 shares (subject
         to any increase or decrease pursuant to Section 4.2) during each fiscal
         year of the Company.

         4.2. CHANGES.

                  (a) The existence of the Plan and the Options granted
         hereunder shall not affect in any way the right or power of the Board
         or the shareholders of the Company to make or authorize any adjustment,
         recapitalization, reorganization or other change in the Company's
         capital structure or its business, any merger or consolidation of the
         Company or Subsidiary, any issue of bonds, debentures, preferred or
         prior preference stock ahead of or affecting Common Stock, the
         dissolution or liquidation of the Company or Subsidiary, any sale or
         transfer of all or part of its assets or business or any other
         corporate act or proceeding.

                  (b) In the event of any such change in the capital structure
         or business of the Company by reason of any stock dividend or
         distribution, stock split or reverse stock split, recapitalization,
         reorganization, merger, consolidation, split-up, combination or
         exchange of shares, distribution with respect to its outstanding Common
         Stock or capital stock other than Common Stock, sale or transfer of all
         or part of its assets or business, reclassification of its capital
         stock, or any similar change affecting the Company's capital structure
         or business and the Committee determines an adjustment is appropriate
         under the Plan, the number and kind of shares or other property
         (including cash) to be issued upon exercise of an outstanding Option
         and the purchase price thereof as well as the number of shares reserved
         for issuance under the Plan and the maximum limit on options that may
         be granted to a Participant in any fiscal year, shall be appropriately
         adjusted consistent with such change in such manner as the Committee
         may deem equitable to prevent substantial dilution or enlargement of
         the rights granted to, or available for, Participants under this Plan
         or as otherwise necessary to reflect the change, and any such
         adjustment determined by the Committee shall be final, conclusive and
         binding on the Company and all Participants and employees and their

                                       8
<PAGE>

         respective heirs, executors, administrators, successors and assigns.

                  (c) Fractional shares of Common Stock resulting from any
         adjustment in Options pursuant to this Section 4 shall be aggregated
         until, and eliminated at, the time of exercise by rounding-down for
         fractions less than one-half (1/2) and rounding- up for fractions equal
         to or greater than one-half (1/2), provided, however, that fractions
         shall not be rounded up in the case of Incentive Stock Options. No cash
         settlements shall be made with respect to fractional shares eliminated
         by rounding. Notice of any adjustment shall be given by the Committee
         to each Participant whose Option has been adjusted and such adjustment
         (whether or not such notice is given) shall be effective and binding
         for all purposes of the Plan.

                  (d) In the event of a merger or consolidation in which the
         Company is not the surviving entity or in the event of any transaction
         that results in the acquisition of all or substantially all of the
         Company's outstanding Common Stock by a single person or entity or by a
         group of persons and/or entities acting in concert, or in the event of
         the sale or transfer of all or substantially all of the Company's
         assets (all of the foregoing being referred to as "Acquisition
         Events"), then the Committee may, in its sole discretion, terminate all
         outstanding Options of Eligible Employees, Consultants and non-employee
         directors, effective as of the date of the Acquisition Event, by
         delivering notice of termination to each such Participant at least
         twenty (20) days prior to the date of consummation of the Acquisition
         Event; provided, that during the period from the date on which such
         notice of termination is delivered to the consummation of the
         Acquisition Event, each such Participant shall have the right to
         exercise in full all of his or her Options that are then outstanding
         (without regard to any limitations on exercisability otherwise
         contained in the Option Agreement) but contingent on occurrence of the
         Acquisition Event, and, provided that, if the Acquisition Event does
         not take place within a specified period after giving such notice for
         any reason whatsoever, the notice and exercise shall be null and void.

                  If an Acquisition Event occurs, to the extent the Committee
         does not terminate the outstanding Options pursuant to this Section
         4.2(d), then the provisions of Section 4.2(b) shall apply.

                                   ARTICLE V.

                                   ELIGIBILITY

         All employees and Consultants of the Company and its Subsidiaries and
all non- employee directors of the Company are eligible to be granted Stock
Options under this Plan. Eligibility under this Plan shall be determined by the
Committee in its sole discretion.

                                       9
<PAGE>

                                   ARTICLE VI.

                               STOCK OPTION GRANTS

         6.1. OPTIONS. Each Stock Option granted hereunder shall be one of two
types: (i) an Incentive Stock Option intended to satisfy the requirements of
Section 422 of the Code or (ii) a Non-Qualified Stock Option.

         6.2. GRANTS. The Committee shall have the authority to grant to any
Eligible Employee one or more Incentive Stock Options, Non-Qualified Stock
Options, or both types of Stock Options. The Committee shall have the authority
to grant to any Consultant one or more Non-Qualified Stock Options. The Board
shall have the authority to grant to any non- employee director one or more
Non-Qualified Stock Options. To the extent that any Stock Option does not
qualify as an Incentive Stock Option (whether because of its provisions or the
time or manner of its exercise or otherwise), such Stock Option or the portion
thereof which does not qualify, shall constitute a separate Non-Qualified Stock
Option.

         6.3. TERMS OF OPTIONS. Options granted under this Plan shall be subject
to the following terms and conditions, and shall be in such form and contain
such additional terms and conditions, not inconsistent with the terms of this
Plan, as the Committee shall deem desirable:

                  (a) OPTION PRICE. The option price per share of Common Stock
         purchasable under an Incentive Stock Option shall be determined by the
         Committee at the time of grant but shall not be less than 100% of the
         Fair Market Value of the share of Common Stock at the time of grant;
         provided, however, if an Incentive Stock Option is granted to a Ten
         Percent Shareholder, the purchase price shall be no less than 110% of
         the Fair Market Value of the Common Stock. The purchase price of shares
         of Common Stock subject to a Non-Qualified Stock Option shall be
         determined by the Committee.

                  (b) OPTION TERM. The term of each Stock Option shall be fixed
         by the Committee, but no Stock Option shall be exercisable more than
         ten (10) years after the date the Option is granted, provided, however,
         the term of an Incentive Stock Option granted to a Ten Percent
         Shareholder may not exceed five (5) years.

                  (c) EXERCISABILITY. Stock Options shall be exercisable at such
         time or times and subject to such terms and conditions as shall be
         determined by the Committee at grant. If the Committee provides, in its
         discretion, that any Stock Option is exercisable subject to certain
         limitations (including, without limitation, that it is exercisable only
         in installments or within certain time periods), the Committee may
         waive such limitations on the exercisability at any time at or after
         grant in whole or in part (including, without limitation, that the
         Committee may waive the installment exercise provisions or

                                       10
<PAGE>

         accelerate the time at which Options may be exercised), based on such
         factors, if any, as the Committee shall determine, in its sole
         discretion.

                  (d) METHOD OF EXERCISE. Subject to whatever installment
         exercise and waiting period provisions apply under subsection (c)
         above, Stock Options may be exercised in whole or in part at any time
         during the Option term, by giving written notice of exercise to the
         Company specifying the number of shares to be purchased. Such notice
         shall be accompanied by payment in full of the purchase price in such
         form, or such other arrangement for the satisfaction of the purchase
         price, as the Committee may accept. If and to the extent determined by
         the Committee in its sole discretion at or after grant, payment in full
         or in part may also be made in the form of Common Stock withheld from
         the shares to be received on the exercise of a Stock Option hereunder
         or Common Stock owned by the Participant (and for which the Participant
         has good title free and clear of any liens and encumbrances) based on
         the Fair Market Value of the Common Stock on the payment date as
         determined by the Committee. No shares of Common Stock shall be issued
         until payment, as provided herein, therefor has been made or provided
         for and the Participant shall have none of the rights of a holder of
         shares of Common Stock until such shares of Common Stock have been
         issued.

                  (e) INCENTIVE STOCK OPTION LIMITATIONS. To the extent that the
         aggregate Fair Market Value (determined as of the time of grant) of the
         Common Stock with respect to which Incentive Stock Options are
         exercisable for the first time by an Eligible Employee during any
         calendar year under the Plan and/or any other stock option plan of the
         Company or any Subsidiary or parent corporation (within the meaning of
         Section 424(e) of the Code) exceeds $100,000, such Options shall be
         treated as Options which are not Incentive Stock Options.

                  Should the foregoing provision not be necessary in order for
         the Stock Options to qualify as Incentive Stock Options, or should any
         additional provisions be required, the Committee may amend the Plan
         accordingly, without the necessity of obtaining the approval of the
         shareholders of the Company.

                  (f) BUY OUT AND SETTLEMENT PROVISIONS. The Committee may at
         any time on behalf of the Company offer to buy out an Option previously
         granted, based on such terms and conditions as the Committee shall
         establish and communicate to the Participant at the time that such
         offer is made.

                  (g) FORM, MODIFICATION, EXTENSION AND RENEWAL OF OPTIONS.
         Subject to the terms and conditions and within the limitations of the
         Plan, an Option shall be evidenced by such form of agreement or grant
         as is approved by the Committee, and the Committee may modify, extend
         or renew outstanding Options granted under the Plan (provided that the
         rights of a Participant are not reduced without his consent), or accept
         the surrender of outstanding Options (up to the extent not theretofore
         exercised)

                                       11
<PAGE>

         and authorize the granting of new Options in substitution therefor (to
         the extent not theretofore exercised).

                  (h) OTHER TERMS AND CONDITIONS. Options may contain such other
         provisions, which shall not be inconsistent with any of the foregoing
         terms of the Plan, as the Committee shall deem appropriate including,
         without limitation, permitting "reloads" such that the same number of
         Options are granted as the number of Options exercised, shares used to
         pay for the exercise price of Options or shares used to pay withholding
         taxes ("Reloads"). With respect to Reloads, the exercise price of the
         new Stock Option shall be the Fair Market Value on the date of the
         Reload and the term of the Stock Option shall be the same as the
         remaining term of the Options that are exercised, if applicable, or
         such other exercise price and term as determined by the Committee.

         6.4. TERMINATION OF RELATIONSHIP. The following rules apply with regard
to Options upon the Termination of Relationship of a Participant:

                  (a) TERMINATION BY REASON OF DEATH. If a Participant's
         Termination of Relationship is by reason of death, any Stock Option
         held by such Participant, unless otherwise determined by the Committee
         at grant or, if no rights of the Participant's estate are reduced,
         thereafter, may be exercised, to the extent exercisable at the
         Participant's death, by the legal representative of the estate, at any
         time within a period of one (1) year from the date of such death, but
         in no event beyond the expiration of the stated term of such Stock
         Option.

                  (b) TERMINATION BY REASON OF DISABILITY. If a Participant's
         Termination of Relationship is by reason of Disability, any Stock
         Option held by such Participant, unless otherwise determined by the
         Committee at grant or, if no rights of the Participant are reduced,
         thereafter, may be exercised, to the extent exercisable at the
         Participant's termination, by the Participant (or the legal
         representative of the Participant's estate if the Participant dies
         after termination) at any time within a period of one (1) year from the
         date of such termination, but in no event beyond the expiration of the
         stated term of such Stock Option.

                  (c) TERMINATION BY REASON OF RETIREMENT. If a Participant's
         Termination of Relationship is by reason of Retirement, any Stock
         Option held by such Participant, unless otherwise determined by the
         Committee at grant, or, if no rights of the Participant are reduced,
         thereafter, shall be fully vested and may thereafter be exercised by
         the Participant at any time within a period of one (1) year from the
         date of such termination, but in no event beyond the expiration of the
         stated term of such Stock Option; provided, however, that, if the
         Participant dies within such exercise period, any unexercised Stock
         Option held by such Participant shall thereafter be exercisable, to the
         extent to which it was exercisable at the time of death, for a period
         of one (1) year (or such other period as the Committee may specify at
         grant or, if no rights of the

                                       12
<PAGE>

         Participant's estate are reduced, thereafter) from the date of such
         death, but in no event beyond the expiration of the stated term of such
         Stock Option.

                  (d) INVOLUNTARY TERMINATION WITHOUT CAUSE OR TERMINATION FOR
         GOOD REASON. If a Participant's Termination of Relationship is by
         involuntary termination without Cause or for Good Reason, any Stock
         Option held by such Participant, unless otherwise determined by the
         Committee at grant or, if no rights of the Participant are reduced,
         thereafter, may be exercised, to the extent exercisable at termination,
         by the Participant at any time within a period of ninety (90) days from
         the date of such termination, but in no event beyond the expiration of
         the stated term of such Stock Option.

                  (e) TERMINATION WITHOUT GOOD REASON. If a Participant's
         Termination of Relationship is voluntary but without Good Reason and
         such Termination of Relationship occurs prior to, or more than ninety
         (90) days after, the occurrence of an event which would be grounds for
         Termination of Relationship by the Company for Cause (without regard to
         any notice or cure period requirements), any Stock Option held by such
         Participant, unless otherwise determined by the Committee at grant or,
         if no rights of the Participant are reduced, thereafter, may be
         exercised, to the extent exercisable at termination, by the Participant
         at any time within a period of thirty (30) days from the date of such
         Termination of Relationship, but in no event beyond the expiration of
         the stated term of such Stock Option.

                  (f) OTHER TERMINATION. Unless otherwise determined by the
         Committee at grant or, if no rights of the Participant are reduced,
         thereafter, if a Participant's Termination of Relationship is for any
         reason other than death, Disability, Retirement, Good Reason
         involuntary termination without Cause or voluntary termination as
         provided in subsection (e) above, any Stock Option held by such
         Participant shall thereupon terminate and expire as of the date of
         termination, provided that (unless the Committee determines a different
         period upon grant or, if, no rights of the Participant are reduced,
         thereafter) in the event such termination is for Cause or is a
         voluntary termination without Good Reason or voluntary resignation
         within ninety (90) days after occurrence of an event which would be
         grounds for Termination of Relationship by the Company for Cause
         (without regard to any notice or cure period requirement), any Stock
         Option held by the Participant at the time of occurrence of the event
         which would be grounds for Termination of Relationship for Cause shall
         be deemed to have terminated and expired upon occurrence of the event
         which would be grounds for Termination of Relationship by the Company
         for Cause.

         6.5. TERMINATION OF DIRECTORSHIP. The following rules apply with regard
to Options upon the Termination of Directorship:

                  (a) DEATH, DISABILITY OR OTHERWISE CEASING TO BE A DIRECTOR
         OTHER THAN FOR

                                       13
<PAGE>

         CAUSE. Except as otherwise determined by the Committee at grant or, if
         no rights of the Participant are reduced, thereafter, upon the
         Termination of Directorship, on account of Disability, death,
         Retirement, resignation, failure to stand for reelection or failure to
         be reelected or otherwise other than as set forth in (b) below, all
         outstanding Options then exercisable and not exercised by the
         Participant prior to such Termination of Directorship shall remain
         exercisable, to the extent exercisable at the Termination of
         Directorship, by the Participant or, in the case of death, by the
         Participant's estate or by the person given authority to exercise such
         Options by his or her will or by operation of law, for a one (1) year
         period commencing on the date of the Termination of Directorship,
         provided that such one (1) year period shall not extend beyond the
         stated time of such Options.

                  (b) CAUSE. Upon removal, failure to stand for reelection or
         failure to be renominated for Cause, or if the Company obtains or
         discovers information after Termination of Directorship that such
         Participant had engaged in conduct that would have justified a removal
         for Cause during such directorship, all outstanding Options of such
         Participant shall immediately terminate and shall be null and void.

                  (c) CANCELLATION OF OPTIONS. No Options that were not
         exercisable during the period such person serves as a director shall
         thereafter become exercisable upon a Termination of Directorship for
         any reason or no reason whatsoever, and such Options shall terminate
         and become null and void upon a Termination of Directorship.

                                  ARTICLE VII.

                               NON-TRANSFERABILITY

         Except as authorized by the Committee, no Stock Option shall be
Transferable by the Participant otherwise than by will or by the laws of descent
and distribution, and all Stock Options shall be exercisable, during the
Participant's lifetime, only by the Participant. No Stock Option shall, except
as otherwise specifically provided by law or herein, be Transferable in any
manner, and any attempt to Transfer any such Option shall be void, and no such
Option shall in any manner be liable for or subject to the debts, contracts,
liabilities, engagements or torts of any person who shall be entitled to such
Option, nor shall it be subject to attachment or legal process for or against
such person.

                                       14
<PAGE>

                                  ARTICLE VIII.

                          CHANGE IN CONTROL PROVISIONS

         8.1. BENEFITS. In the event of a Change in Control of the Company (as
defined below), except as otherwise provided by the Committee upon the grant of
an Option, the Participant shall be entitled to the following benefits:

                  (a) Subject to paragraph (b) below, all outstanding Options of
         Participants granted prior to the Change in Control shall be fully
         vested and immediately exercisable in their entirety. The Committee, in
         its sole discretion, may provide for the purchase of any such Stock
         Options by the Company for an amount of cash equal to the excess of the
         Change in Control price (as defined below) of the shares of Common
         Stock covered by such Stock Options, over the aggregate exercise price
         of such Stock Options. For purposes of this Section 8.1, Change in
         Control price shall mean the higher of (i) the highest price per share
         of Common Stock paid in any transaction related to a Change in Control
         of the Company, or (ii) the highest Fair Market Value per share of
         Common Stock at any time during the sixty (60) day period preceding a
         Change in Control.

                  (b) Notwithstanding anything to the contrary herein, unless
         the Committee provides otherwise at the time an Option is granted to an
         Eligible Employee or Consultant hereunder or thereafter, no
         acceleration of exercisability shall occur with respect to such Option
         if the Committee reasonably determines in good faith, prior to the
         occurrence of the Change in Control, that the Options shall be honored
         or assumed, or new rights substituted therefor (each such honored,
         assumed or substituted option hereinafter called an "Alternative
         Option"), by such Participant's employer (or the parent or a subsidiary
         of such employer), or in the case of a Consultant, by the entity (or
         its parent or subsidiary) which retains the Consultant, immediately
         following the Change in Control, provided that any such Alternative
         Option must meet the following criteria:

                           (i) the Alternative Option must be based on stock
         which is traded on an established securities market, or which will be
         so traded within thirty (30) days of the Change in Control;

                           (ii) the Alternative Option must provide such
         Participant with rights and entitlements substantially equivalent to or
         better than the rights, terms and conditions applicable under such
         Option, including, but not limited to, an identical or better exercise
         schedule; and

                           (iii) the Alternative Option must have economic value
         substantially equivalent to the value of such Option (determined at the
         time of the Change in Control).

                                       15
<PAGE>

                  For purposes of Incentive Stock Options, any assumed or
         substituted Option shall comply with the requirements of Treasury
         regulation ss. 1.425-1 (and any amendments thereto).

         8.2. CHANGE IN CONTROL. A "Change in Control" shall be deemed to have
occurred:

                  (a) upon any "person" as such term is used in Sections 13(d)
         and 14(d) of the Exchange Act (other than the Company, any trustee or
         other fiduciary holding securities under any employee benefit plan of
         the Company, any company owned, directly or indirectly, by the
         shareholders of the Company in substantially the same proportions as
         their ownership of Common Stock of the Company), becoming the owner (as
         defined in Rule 13d-3 under the Exchange Act), directly or indirectly,
         of securities of the Company representing fifty percent (50%) or more
         of the combined voting power of the Company's then outstanding
         securities (including, without limitation, securities owned at the time
         of any increase in ownership);

                  (b) during any period of two consecutive years, a change in
         the composition of the Board of Directors of the Company such that the
         individuals who, as of the date hereof, comprise the Board (the
         "Incumbent Board") cease for any reason to constitute at least a
         majority of the Board; provided, however, for purposes of this
         subsection that any individual who becomes a member of an Incumbent
         Board subsequent to the date hereof whose election, or nomination for
         election by the Company's shareholders, was approved in advance or
         contemporaneously with such election by a vote of at least a majority
         of those individuals who are members of the Incumbent Board (or deemed
         to be such pursuant to this proviso) shall be considered as though such
         individual were a member of the Incumbent Board; but, provided further,
         that any such individual whose initial assumption of office occurs as a
         result of either an actual or threatened election contest (as such
         terms are used in Rule 14a- 11 of Regulation 14A promulgated under the
         Exchange Act) or other actual or threatened solicitation of proxies or
         consents by or on behalf of a Person other than the Board of Directors
         of the Company or actual or threatened tender offer for shares of the
         Company or similar transaction or other contest for corporate control
         (other than a tender offer by the Company) shall not be so considered
         as a member of the Incumbent Board;

                  (c) upon the merger or consolidation of the Company with any
         other corporation (other than a parent or subsidiary corporation within
         the meaning of Section 424(e) or 424(f) of the Code, respectively),
         other than a merger or consolidation which would result 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) more than
         fifty percent (50%) of the combined voting power of the voting
         securities of the Company or such surviving entity outstanding
         immediately after such merger or consolidation; or

                                       16
<PAGE>

                  (d) upon the shareholders' of the Company approval of a plan
         of complete liquidation of the Company or an agreement for the sale or
         disposition by the Company of all or substantially all of the Company's
         assets other than the sale of all or substantially all of the assets of
         the Company to a person or persons who beneficially own, directly or
         indirectly, at least fifty percent (50%) or more of the combined voting
         power of the outstanding voting securities of the Company at the time
         of the sale.

                                   ARTICLE IX.

                      TERMINATION OR AMENDMENT OF THE PLAN

         9.1. TERMINATION OR AMENDMENT. Notwithstanding any other provision of
this Plan, the Board may at any time, and from time to time, amend, in whole or
in part, any or all of the provisions of the Plan, or suspend or terminate it
entirely, retroactively or otherwise; provided, however, that, unless otherwise
required by law or specifically provided herein, the rights of a Participant
with respect to Options granted prior to such amendment, suspension or
termination, may not be impaired without the consent of such Participant and,
provided further, without the approval of the shareholders of the Company, if
and to the extent required or under the applicable provisions of Section 162(m)
of the Code or, with regard to Incentive Stock Options, Section 422 of the Code,
no amendment may be made which would (i) increase the maximum individual
Participant limitations under Section 4.1(b); (ii) change the classification of
employees eligible to receive Options under this Plan; (iii) extend the maximum
option period under Section 6.3; or (iv) require shareholder approval in order
for the Plan to continue to comply with the applicable provisions, if any, of
Section 162(m) of the Code or, with regard to Incentive Stock Options, Section
422 of the Code. In no event may the Plan be amended without the approval of the
shareholders of the Company in accordance with the applicable laws or other
requirements to increase the aggregate number of shares of Common Stock that may
be issued under the Plan or to make any other amendment that would require
shareholder approval under the rules of any exchange or system on which the
Company's securities are listed or traded at the request of the Company.

         The Committee may amend the terms of any Option theretofore granted,
prospectively or retroactively, but, subject to Article IV above or as otherwise
specifically provided herein, no such amendment or other action by the Committee
shall impair the rights of any holder without the holder's consent.

                                   ARTICLE X.

                                       17
<PAGE>

                                  UNFUNDED PLAN

         10.1. UNFUNDED STATUS OF PLAN. This Plan is intended to constitute an
"unfunded" plan for incentive compensation. With respect to any payments as to
which a Participant has a fixed and vested interest but which are not yet made
to a Participant by the Company, nothing contained herein shall give any such
Participant any rights that are greater than those of a general creditor of the
Company.

                                   ARTICLE XI.

                               GENERAL PROVISIONS

         11.1. LEGEND. The Committee may require each person receiving shares of
Common Stock pursuant to the exercise of a Stock Option under the Plan to
represent to and agree with the Company in writing that the Participant is
acquiring the shares without a view to distribution thereof. In addition to any
legend required by this Plan, the certificates for such shares may include any
legend which the Committee deems appropriate to reflect any restrictions on
Transfer.

         All certificates for shares of Common Stock delivered under the Plan
shall be subject to such stock transfer orders and other restrictions as the
Committee may deem advisable under the rules, regulations and other requirements
of the Securities and Exchange Commission, any stock exchange upon which the
Common Stock is then listed or any national securities association system upon
whose system the Common Stock is then quoted, any applicable Federal or state
securities law, and any applicable corporate law, and the Committee may cause a
legend or legends to be put on any such certificates to make appropriate
reference to such restrictions.

         11.2. OTHER PLANS. Nothing contained in this Plan shall prevent the
Board from adopting other or additional compensation arrangements, subject to
shareholder approval if such approval is required; and such arrangements may be
either generally applicable or applicable only in specific cases.

         11.3. NO RIGHT TO EMPLOYMENT/CONSULTANCY/DIRECTORSHIP. Neither this
Plan nor the grant of any Option hereunder shall give any Participant or other
individual any right with respect to continuance of employment or consultancy by
the Company or any Subsidiary, nor shall there be a limitation in any way on the
right of the Company or any Subsidiary by which an employee is employed or if a
consultant, retained, to terminate his employment or consultancy at any time.
Neither this Plan nor the grant of any Option hereunder shall impose any
obligation on the Company to retain any Participant as a director, nor shall it
impose on the part of any Participant any obligation to remain as a director of
the Company.

                                       18
<PAGE>

         11.4. WITHHOLDING OF TAXES. The Company shall have the right, if
necessary or desirable (as determined by the Company), to deduct from any
payment to be made to a Participant, or to otherwise require, prior to the
issuance or delivery of any shares of Common Stock or the payment of any cash
hereunder, payment by the Participant of, any Federal, state or local taxes
required by law to be withheld.

         The Committee may permit any such withholding obligation with regard to
any Participant to be satisfied by reducing the number of shares of Common Stock
otherwise deliverable or by delivering shares of Common Stock already owned. Any
fraction of a share of Common Stock required to satisfy such tax obligations
shall be disregarded and the amount due shall be paid instead in cash by the
Participant.

         11.5. LISTING AND OTHER CONDITIONS.

                  (a) As long as the Common Stock is listed on a national
         securities exchange or system sponsored by a national securities
         association, the issue of any shares of Common Stock pursuant to the
         exercise of an Option shall be conditioned upon such shares being
         listed on such exchange or system. The Company shall have no obligation
         to issue such shares unless and until such shares are so listed, and
         the right to exercise any Option with respect to such shares shall be
         suspended until such listing has been effected.

                  (b) If at any time counsel to the Company shall be of the
         opinion that any sale or delivery of shares of Common Stock pursuant to
         the exercise of an Option is or may in the circumstances be unlawful or
         result in the imposition of excise taxes on the Company under the
         statutes, rules or regulations of any applicable jurisdiction, the
         Company shall have no obligation to make such sale or delivery, or to
         make any application or to effect or to maintain any qualification or
         registration under the Securities Act of 1933, as amended, or otherwise
         with respect to shares of Common Stock, and the right to exercise any
         Option shall be suspended until, in the opinion of said counsel, such
         sale or delivery shall be lawful or will not result in the imposition
         of excise taxes on the Company.

                  (c) Upon termination of any period of suspension under this
         Section 11.5, any Option affected by such suspension which shall not
         then have expired or terminated shall be reinstated as to all shares
         available before such suspension and as to shares which would otherwise
         have become available during the period of such suspension, but no such
         suspension shall extend the term of any Option.

         11.6. GOVERNING LAW. This Plan shall be governed and construed in
accordance with the laws of the State of New York (regardless of the law that
might otherwise govern under applicable Delaware principles of conflict of
laws).

                                       19
<PAGE>

         11.7. CONSTRUCTION. Wherever any words are used in this Plan in the
masculine gender they shall be construed as though they were also used in the
feminine gender in all cases where they would so apply, and wherever any words
are used herein in the singular form they shall be construed as though they were
also used in the plural form in all cases where they would so apply.

         11.8. OTHER BENEFITS. No Stock Option granted under this Plan shall be
deemed compensation for purposes of computing benefits under any retirement plan
of the Company or its Subsidiaries nor affect any benefits under any other
benefit plan now or subsequently in effect under which the availability or
amount of benefits is related to the level of compensation.

         11.9. COSTS. The Company shall bear all expenses included in
administering this Plan, including expenses of issuing Common Stock pursuant to
the exercise of any Options hereunder.

         11.10. NO RIGHT TO SAME BENEFITS. The provisions of Options need not be
the same with respect to each Participant, and such Options to individual
Participants need not be the same in subsequent years.

         11.11. DEATH/DISABILITY. The Committee may in its discretion require
the transferee of a Participant to supply it with written notice of the
Participant's death or Disability and to supply it with a copy of the will (in
the case of the Participant's death) or such other evidence as the Committee
deems necessary to establish the validity of the transfer of an Option. The
Committee may also require that the agreement of the transferee to be bound by
all of the terms and conditions of the Plan.

         11.12. SECTION 16(B) OF THE EXCHANGE ACT. All elections and
transactions under the Plan by persons subject to Section 16 of the Exchange Act
involving shares of Common Stock are intended to comply with any applicable
exemptive condition under Rule 16b-3. To the extent applicable, the Committee
may establish and adopt written administrative guidelines, designed to
facilitate compliance with Section 16(b) of the Exchange Act, as it may deem
necessary or proper for the administration and operation of the Plan and the
transaction of business thereunder. For purposes of this paragraph, the Company
shall be deemed publicly held when and if the Company has a class of common
equity securities registered under Section 12 of the Exchange Act.

         11.13. SEVERABILITY OF PROVISIONS. If any provision of the Plan shall
be held invalid or unenforceable, such invalidity or unenforceability shall not
affect any other provisions hereof, and the Plan shall be construed and enforced
as if such provisions had not been included.

         11.14. HEADINGS AND CAPTIONS. The headings and captions herein are
provided for reference and convenience only, shall not be considered part of the
Plan, and shall not be employed in the construction of the Plan.

                                       20
<PAGE>

                                  ARTICLE XII.

                             EFFECTIVE DATE OF PLAN

         The Plan shall take effect upon adoption by the Board, but the Plan
(and any grants of Options made prior to the shareholder approval mentioned
herein) shall be subject to the requisite approval of the shareholders of the
Company. In the absence of such approval, such Options shall be null and void.

                                  ARTICLE XIII.

                                  TERM OF PLAN

         No Stock Option shall be granted pursuant to the Plan on or after the
tenth anniversary of the earlier of the date the Plan is adopted or the date of
shareholder approval, but Options granted prior to such tenth anniversary may
extend beyond that date.

                                  ARTICLE XIV.

                                  NAME OF PLAN

         This Plan shall be known as the M-tron Industries, Inc. 2000 Stock
Option Plan.

                                       21

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