Document:

exv4w1

 

Exhibit 4.1

2007 EMPLOYEE STOCK OPTION PLAN

OF

TRIO-TECH INTERNATIONAL

1. PURPOSES OF THE PLAN

     This 2007 Employee Stock Option Plan (the “Plan”) of Trio-Tech International, a California
corporation (the “Company”), is hereby established effective as of September 24, 2007, the date
that the Plan was approved and adopted by the Company’s Board of Directors. The purposes of the
Plan are to:

     (a) Encourage selected employees (including directors who are also employees), consultants and
advisers to improve operations and increase profits of the Company;

     (b) Encourage selected employees (including directors who are also employees), consultants and
advisers to accept or continue employment or association with the Company or its Affiliates; and

     (c) Increase the interest of selected employees (including directors who are also employees),
consultants and advisers in the Company’s welfare through participation in the growth in value of
the common stock of the Company (the “Common Stock”).

     Options granted under this Plan (“Options”) may be “incentive stock options” (“ISOs”) intended
to satisfy the requirements of Section 422 of the Internal Revenue Code of 1986, as amended (the
“Code”), or “nonqualified options” (“NQOs”). The Company shall have no liability to any optionee
hereunder with respect to the tax treatment of any Option granted and in effect under the Plan.
The Plan is designed to be exempt from Code Section 409A.

2. ELIGIBLE PERSONS

     Every person who at the date of grant of an Option is a full-time employee of the Company or
of any Affiliate (as defined below) of the Company is eligible to receive NQOs or ISOs under this
Plan. Every person who at the date of grant is a consultant to the Company or any Affiliate (as
defined below) of the Company is eligible to receive NQOs under this Plan. The term “Affiliate” as
used in the Plan means a parent or subsidiary corporation as defined in the applicable provisions
(currently Sections 424(e) and (f), respectively) of the Code. The term “employee” includes an
officer or director who is an employee of the Company. The term “consultant” includes persons
employed by, or otherwise affiliated with, a consultant.

 

 

3. STOCK SUBJECT TO THIS PLAN; MAXIMUM NUMBER OF GRANTS

     Subject to the provisions of Section 6.1.1 of the Plan, the total number of shares of stock
which may be issued under Options granted pursuant to this Plan shall not exceed 300,000 shares of
Common Stock. The shares covered by the portion of any grant under the Plan which expires
unexercised shall become available again for grants under the Plan. No eligible person shall be
granted Options during any twelve-month period covering more than 100,000 shares.

4. ADMINISTRATION

     (a) The Plan shall be administered by the Board of Directors of the Company (the “Board”) or
by a committee (the “Committee”) to which administration of the Plan, or of part of the Plan, is
delegated by the Board (in either case, the “Administrator”). The Board shall appoint and remove
members of the Committee in its discretion in accordance with applicable laws. If necessary in
order to comply with Rule 16b-3 promulgated by the Securities and Exchange Commission (“Rule
16b-3”), or any successor rule thereto, and Section 162(m) of the Code, the Committee shall, in the
Board’s discretion, be comprised solely of “non-employee directors” within the meaning of Rule
16b-3 and “outside directors” within the meaning of Section 162(m) of the Code. The foregoing
notwithstanding, the Administrator may delegate nondiscretionary administrative duties to such
employees of the Company as it deems proper and the Board, in its absolute discretion, may at any
time and from time to time exercise any and all rights and duties of the Administrator under the
Plan.

     (b) Subject to the other provisions of this Plan, the Administrator shall have the authority,
in its discretion: (i) to grant Options; (ii) to determine the fair market value of the Common
Stock subject to Options; (iii) to determine the exercise price of Options granted; (iv) to
determine the persons to whom, and the time or times at which, Options shall be granted, and the
number of shares subject to each Option; (v) to interpret this Plan; (vi) to prescribe, amend, and
rescind rules and regulations relating to this Plan; (vii) to determine the terms and provisions of
each Option granted (which need not be identical), including but not limited to, the time or times
at which Options shall vest and be exercisable; (viii) with the consent of the optionee, to modify,
amend, terminate or replace any Option; (ix) to defer (with the consent of the optionee) the
exercise date of any Option; (x) to authorize any person to execute on behalf of the Company any
instrument evidencing the grant of an Option; and (xi) to make all other determinations deemed
necessary or advisable for the administration of this Plan. The Administrator may delegate
nondiscretionary administrative duties to such employees of the Company as it deems proper.

     (c) All questions of interpretation, implementation, and application of this Plan shall be
determined by the Administrator. Such determinations shall be final and binding on all persons.

5. GRANTING OF OPTIONS; OPTION AGREEMENT

     (a) No Options shall be granted under this Plan after ten years from the date of adoption of
this Plan by the Board and, if not sooner terminated by action of the Company’s Board of Directors,
the Plan shall terminate automatically as of such tenth anniversary date.

 

 

     (b) Each Option shall be evidenced by a written stock option agreement, in form satisfactory
to the Administrator, executed by the Company and the person to whom such Option is granted;
provided, however, that the failure by the Company, the optionee, or both to execute such an
agreement shall not invalidate the granting of an Option in accordance with the terms of such
written option agreement as offered under the Plan, although the exercise of each Option shall be
subject to Section 6.1.3.

     (c) The stock option agreement shall specify whether each Option it evidences is an NQO or an
ISO.

     (d) Subject to Section 6.3.3 with respect to ISOs, the Administrator may approve the grant of
Options under this Plan to persons who are expected to become employees or consultants of the
Company, but are not employees or consultants at the date of approval, and the date of approval
shall be deemed to be the date of grant unless otherwise specified by the Administrator. However,
no such Options approved in anticipation of hire by the Company shall be exercisable or validly
existing and in effect before the actual date of hire.

6. TERMS AND CONDITIONS OF OPTIONS

     Each Option granted under this Plan shall be subject to the terms and conditions set forth in
Section 6.1. NQOs shall be also subject to the terms and conditions set forth in Section 6.2, but
not those set forth in Section 6.3. ISOs shall also be subject to the terms and conditions set
forth in Section 6.3, but not those set forth in Section 6.2.

     6.1 Terms and Conditions to which All Options Are Subject. All Options granted under
this Plan shall be subject to the following terms and conditions:

     6.1.1 Changes in Capital Structure. In the event of changes in the outstanding Common
Stock by reason of stock dividends, stock splits, reverse stock splits, split ups, consolidations,
recapitalizations, reorganizations or like events, an appropriate adjustment shall be made in the
number of shares reserved under the Plan, in the number of shares set forth in Section 3 hereof,
and in the number of shares and the option price per share specified in any stock option agreement
with respect to any unpurchased shares; provided, however, that the Company shall not be required
to issue fractional shares as a result of any such adjustments but may make such adjustment as the
Administrator deems appropriate. The Company shall give prompt notice to all optionees of any
adjustment pursuant to this Section.

     6.1.2 Corporate Transactions. Section 6.1.1 above to the contrary notwithstanding, in
the event of any merger, consolidation or other reorganization of the Company in which the Company
is not the surviving or continuing corporation or in the event of the liquidation or dissolution of
the Company, all options granted hereunder shall terminate on the effective date of the merger,
consolidation, reorganization, liquidation, or dissolution unless the agreement with respect
thereto provides for the assumption of such options by the continuing or surviving corporation.
Any other provision of this Plan or the applicable stock option agreement to the contrary
notwithstanding, all outstanding options granted hereunder shall be fully exercisable for a period
of 30 days prior to the

 

 

effective date of any such merger, consolidation, reorganization, liquidation, or dissolution
unless such options are assumed by the continuing or surviving corporation. The Committee shall
notify the holders of all outstanding options in advance of any such window period for exercising
options.

     6.1.3 Time of Option Exercise. Subject to Section 5 and Section 6.3.4, Options
granted under this Plan shall be exercisable (a) immediately as of the effective date of the stock
option agreement granting the Option, or (b) in accordance with a schedule related to the date of
the grant of the Option, the date of first employment, or such other date as may be set by the
Administrator (in any case, the “Vesting Base Date”) and specified in the written stock option
agreement relating to such Option. In any case, no Option shall be exercisable until a written
stock option agreement in form satisfactory to the Company is executed by the Company and the
optionee.

     6.1.4 Option Grant Date. Except in the case of advance approvals described in Section
5(d), the date of grant of an Option under this Plan shall be the date as of which the
Administrator approves the grant with respect to at least the following determinable features: the
identity of the grantee, type of grant, number of shares, exercise price, vesting schedule and
expiration date. For this purpose, the default provisions of the Plan shall be deemed incorporated
into any grant to the extent that other terms are not specified for the grant.

     6.1.5 Nontransferability of Option Rights. No Option granted under this Plan shall be
assignable or otherwise transferable by the optionee except by will or by the laws of descent and
distribution. During the life of the optionee, an Option shall be exercisable only by (or on
behalf of) the optionee.

     6.1.6 Payment. Except as provided below, payment in full, in cash, of the exercise
price shall be made for all stock purchased at the time written notice of exercise of an Option is
given to the Company, and proceeds of any payment shall constitute general funds of the Company.
At the time an Option is granted or exercised, the Administrator, in the exercise of its absolute
discretion after considering any tax, accounting and financial consequences, may authorize any one
or more of the following additional methods of payment:

     (a) Acceptance of the optionee’s full recourse promissory note for all or part of the Option
exercise price, payable on such terms and bearing such interest rate as determined by the
Administrator (but in no event less than the minimum interest rate specified under the Code at
which no additional interest would be imputed), which promissory note may be either secured or
unsecured in such manner as the Administrator shall approve (including, without limitation, by a
security interest in the shares of the Company); and

     (b) Subject to the discretion of the Administrator and the terms of the stock option agreement
granting the Option, delivery by the optionee of Common Stock already owned by the optionee for all
or part of the Option exercise price, provided the value (determined as set forth in Section
6.1.10) of such Common Stock is equal on the date of exercise to the Option exercise price, or such
portion thereof as the optionee is authorized to pay by delivery of such stock. In such case,
prior to the acceptance of such shares of Common Stock, the optionee shall supply the Board with
written representations and warranties, including without limitation a representation

 

 

and warranty that the optionee has good and marketable title to such shares free and clear of liens
and encumbrances. No share of Common Stock shall be issued until full payment therefor has been
made, and until any tax withholding obligations have been satisfied in a manner acceptable to the
Company.

     6.1.7 Termination of Employment. If for any reason other than death or permanent and
total disability, an optionee ceases to be employed by the Company or any of its Affiliates (such
event being called a “Termination”), Options held at the date of Termination (to the extent then
exercisable) may be exercised in whole or in part at any time within three months of the date of
such Termination, or such other period of not less than 30 days after the date of such Termination
as is specified in the Option Agreement (but in no event after the Expiration Date); provided,
however, that if such exercise of the Option would result in liability for the optionee under
Section 16(b) of the Exchange Act, then such three-month period automatically shall be extended
until the tenth day following the last date upon which optionee has any liability under Section
16(b) (but in no event after the Expiration Date). If an optionee dies or becomes permanently and
totally disabled (within the meaning of Section 22(e)(3) of the Code) while employed by the Company
or an Affiliate or within the period that the Option remains exercisable after Termination, Options
then held (to the extent then exercisable) may be exercised, in whole or in part, by the optionee,
by the optionee’s personal representative or by the person to whom the Option is transferred by
devise or the laws of descent and distribution, at any time within six months after the death or
six months after the permanent and total disability of the optionee or any longer period specified
in the Option Agreement (but in no event after the Expiration Date). For purposes of this Section
6.1.7, “employment” includes service as a consultant for the Company or an Affiliate. For purposes
of this Section 6.1.7, an optionee’s employment shall not be deemed to terminate by reason of sick
leave, military leave or other leave of absence approved by the Company, for as long as the period
of any such leave does not exceed 90 days or, if longer, the duration of the optionee’s right to
reemployment by the Company or any Affiliate as guaranteed either contractually or by statute.

     6.1.8 Withholding and Employment Taxes. At the time of exercise of an Option and as a
condition thereto, or at such other time as the amount of such obligations becomes determinable
(the “Tax Date”), the optionee shall remit to the Company in cash all applicable federal and state
withholding and employment taxes. Such obligation to remit may be satisfied, if authorized by the
Administrator in its sole discretion, after considering any tax, accounting and financial
consequences, by the optionee’s (i) delivery of a promissory note in the required amount on such
terms as the Administrator deems appropriate, (ii) tendering to the Company previously owned shares
of Stock or other securities of the Company with a fair market value equal to the required amount,
or (iii) agreeing to have shares of Common Stock (with a fair market value equal to the required
amount) which are acquired upon exercise of the Option withheld by the Company, subject to the
following limitations:

     (a) Any election pursuant to clause (iii) above by an optionee subject to Section 16 of the
Exchange Act shall either (x) be made at least six months before the Tax Date and shall be
irrevocable; or (y) shall be made in (or made earlier to take effect in) any 10-day period
beginning on the third business day following the date of release for publication of the Company’s
quarterly or annual summary statements of earnings and shall be subject to approval by the
Administrator,

 

 

which approval may be given at any time after such election has been made. In addition, in the
case of (y), the Option shall be held at least six months prior to the Tax Date.

     (b) Any election pursuant to clause (ii) above, where the optionee is tendering Common Stock
issued pursuant to the exercise of an Option, shall require that such shares be held at least six
months prior to the Tax Date.

     Any of the foregoing limitations may be waived (or additional limitations may be imposed) by
the Administrator, in its sole discretion, if the Administrator determines that such foregoing
limitations are not required (or that such additional limitations are required) in order that the
transaction shall be exempt from Section 16(b) of the Exchange Act pursuant to Rule 16b-3, or any
successor rule thereto. In addition, any of the foregoing limitations may be waived by the
Administrator, in its sole discretion, if the Administrator determines that Rule 16b-3, or any
successor rule thereto, is not applicable to the exercise of the Option by the optionee or for any
other reason.

     Any securities tendered or withheld in accordance with this Section 6.1.8 shall be valued by
the Company as of the Tax Date.

     6.1.9 Other Provisions. Each Option granted under this Plan may contain such other
terms, provisions, and conditions not inconsistent with this Plan as may be determined by the
Administrator, and each ISO granted under this Plan shall include such provisions and conditions as
are necessary to qualify the Option as an “incentive stock option” within the meaning of Section
422 of the Code.

     6.1.10 Determination of Value. For purposes of the Plan, the value of Common Stock or
other securities of the Company shall be determined as follows:

     (a) If the Common Stock (or other security) is readily tradable on an established securities
market, its fair market value shall be determined, in accordance with regulations under Code
Section 409A, by any of the following methods selected and consistently followed by the
Administrator from time to time: (i) the last sale before or the first sale after the grant; (ii)
the closing price on the trading day before or the trading day of the grant; (iii) the arithmetic
mean of the high and low prices on the trading day before or the trading day of the grant; or (iv)
any other reasonable method using actual transactions in the Common Stock (or other security) as
reported by such market.

     (b) If the Common Stock (or other security) is not readily tradable on an established
securities market, its fair market value shall be determined in good faith by the Administrator by
a reasonable application of a reasonable valuation method, taking into consideration all relevant
factors as provided in regulations under Code Section 409A, or the Administrator may consistently
apply, from time to time, one of the valuation methods presumed to be reasonable as set forth in
said regulations.

 

 

     6.1.11 Option Term. Subject to Section 6.3.5, no Option shall be exercisable more
than ten years after the date of grant, or such lesser period of time as is set forth in the stock
option agreement (the end of the maximum exercise period stated in the stock option agreement is
referred to in this Plan as the “Expiration Date”).

     6.2 Terms and Conditions to Which Only NQOs Are Subject. Options granted under this
Plan which are designated as NQOs shall be subject to the following terms and conditions:

     6.2.1 Exercise Price. The exercise price of a NQO shall be not less than the fair
market value (determined in accordance with Section 6.1.10) of the stock subject to the Option on
the date of grant. NQOs granted under this Plan shall not be discounted; accordingly they are
intended to be exempt from Code Section 409A.

     6.3 Terms and Conditions to Which Only ISOs Are Subject. Options granted under this
Plan which are designated as ISOs shall be subject to the following terms and conditions:

     6.3.1 Exercise Price. (a) Except as set forth in Section 6.3.1(b), the exercise price
of an ISO shall be determined in accordance with the applicable provisions of the Code and shall in
no event be less than the fair market value (determined in accordance with Section 6.1.10) of the
stock covered by the Option at the time the Option is granted.

     (b) The exercise price of an ISO granted to any person who owns, directly or by attribution
under the Code (currently Section 424(d)), stock possessing more than ten percent of the total
combined voting power of all classes of stock of the Company or of any Affiliate (a “Ten Percent
Shareholder”) shall in no event be less than 110% of the fair market value (determined in
accordance with Section 6.1.10) of the stock covered by the Option at the time the Option is
granted.

     6.3.2 Disqualifying Dispositions. If stock acquired by exercise of an ISO granted
pursuant to this Plan is disposed of in a “disqualifying disposition” within the meaning of Section
422 of the Code, the holder of the stock immediately before the disposition shall promptly notify
the Administrator in writing of the date and terms of the disposition and shall provide such other
information regarding the Option as the Administrator may reasonably require.

     6.3.3 Grant Date. If an ISO is granted in anticipation of employment as provided in
Section 5(d), the Option shall be deemed granted, without further approval, on the date the grantee
assumes the employment relationship forming the basis for such grant, and, in addition, satisfies
all requirements of this Plan for Options granted on that date.

     6.3.4 Vesting. Notwithstanding any other provision of this Plan, ISOs granted for any
particular optionee under all incentive stock option plans of the Company and its subsidiaries may
not “vest” for more than $100,000 in fair market value of stock (measured on the grant dates(s)) in
any calendar year. For purposes of the preceding sentence, an Option “vests” when it first becomes
exercisable. If, by their terms, such ISOs taken together would vest to a greater extent than the
foregoing vesting limit in a calendar year, and unless otherwise provided by the Administrator, the

 

 

vesting limitation described above shall be applied by deferring (only to the extent necessary to
satisfy the $100,000 limit) the exercisability of those ISOs or portions of ISOs which have the
highest per share exercise prices. The ISOs or portions of ISOs whose exercisability is so
deferred shall become exercisable on the first day of the first subsequent calendar year during
which they may be exercised, as determined by applying these same principles and all other
provisions of this Plan including those relating to the expiration and termination of ISOs. In no
event, however, will the operation of this Section 6.3.4 cause an ISO to vest before its terms or,
having vested, cease to be vested. To the extent that any portion of an ISO cannot be deferred to
any later calendar year, then the portion of such ISO that exceeds the foregoing annual vesting
limit for the last calendar year in which any portion of that ISO is permitted to vest as an ISO,
shall be converted and treated thereafter as an NQO under the Plan and the optionee shall be
notified of that conversion.

     6.3.5 Term. Notwithstanding Section 6.1.11, no ISO granted to any Ten Percent
Shareholder shall be exercisable more than five years after the date of grant.

7. MANNER OF EXERCISE

     (a) An optionee wishing to exercise an Option shall give written notice to the Company at its
principal executive office, to the attention of the officer of the Company designated by the
Administrator, accompanied by payment of the exercise price and withholding taxes as provided in
Sections 6.1.6 and 6.1.8. The date the Company receives written notice of an exercise hereunder
accompanied by full payment or satisfaction of the exercise price will be considered as the date
such Option was exercised.

     (b) Promptly after receipt of written notice of exercise of an Option and all payments called
for by Section 7(a), the Company shall, without stock issue or transfer taxes to the optionee or
other person entitled to exercise the Option, deliver to the optionee or such other person a
certificate or certificates for the requisite number of shares of stock. An optionee or permitted
transferee of an optionee shall not have any privileges as a shareholder with respect to any shares
of stock covered by the Option until the date of issuance (as evidenced by the appropriate entry on
the books of the Company or a duly authorized transfer agent) of such shares.

     (c) Unless exempted by the Administrator, if an officer or director who is subject to the
provisions of Section 16(b) of the Exchange Act exercises an Option within six months of the grant
of such Option, the shares acquired upon exercise of such Option may not be disposed of until six
months after the date of grant of such Option.

 

 

8. EMPLOYMENT OR CONSULTING RELATIONSHIP

     Nothing in this Plan or any Option granted hereunder shall interfere with or limit in any way
the right of the Company or of any of its Affiliates to terminate any optionee’s employment or
consulting at any time, nor confer upon any optionee any right to continue in the employ of, or
consult with, the Company or any of its Affiliates.

9. CONDITIONS UPON ISSUANCE OF SHARES

     Shares of Common Stock shall not be issued pursuant to the exercise of an Option unless the
exercise of such Option and the issuance and delivery of such shares pursuant thereto shall comply
with all relevant provisions of law, including, without limitation, the Securities Act of 1933, as
amended (the “Securities Act”).

10. NONEXCLUSIVITY OF THE PLAN

     The adoption of the Plan shall not be construed as creating any limitations on the power of
the Company to adopt such other incentive arrangements as it may deem desirable, including, without
limitation, the granting of stock options other than under the Plan.

11. AMENDMENTS TO PLAN

     The Board may at any time amend, alter, suspend or discontinue this Plan. Without the consent
of an optionee, no amendment, alteration, suspension or discontinuance may adversely affect
outstanding Options except to conform this Plan and Options granted under this Plan to the
requirements of federal or other tax laws relating to such stock Options. No amendment,
alteration, suspension or discontinuance shall require shareholder approval unless (a) shareholder
approval is required to preserve incentive stock option treatment for federal income tax purposes,
or (b) the Board otherwise concludes that shareholder approval is advisable; provided, however,
that no such amendment shall, without the approval of the shareholders of the Company, effectuate a
change for which shareholder approval is required in order for the Plan to continue to qualify
under Rule 16b-3 (while it is in effect) or any successor rule thereto.

12. EFFECTIVE DATE OF PLAN

     No Option shall be exercisable unless and until written consent of the shareholders of the
Company, or approval of shareholders of the Company voting at a validly called shareholders’
meeting, is obtained within twelve months after adoption of the Plan by the Board. If such
shareholder approval is not obtained within such time, Options granted hereunder shall terminate
and be of no force and effect from and after expiration of such twelve-month period to the extent
required by applicable law; otherwise such Options (if ISOs) shall be converted to NQOs if such
conversion would allow them to remain in effect. Options may be granted and exercised under this
Plan only after there has been compliance with all applicable federal and state securities laws.

 

 

     IN WITNESS WHEREOF, this Plan, having been first duly adopted by the Board of Directors, is
hereby executed below by a duly authorized officer of the Company on
this 3rd day of December,
2007, to take effect as of such date as provided herein.

	 	 	 	 	 
	 	TRIO-TECH INTERNATIONAL

 	 
	 	/s/           A. Charles Wilson
 	 
	 	Name:  	A. Charles Wilson 	 
	 	Title:  	Chairman of the Boardexv4w2

 

Exhibit 4.2

TRIO-TECH INTERNATIONAL

2007 DIRECTORS EQUITY INCENTIVE PLAN

     1. Purpose. This Trio-Tech International 2007 Directors Equity Incentive Plan (the
“Plan”) is hereby established to grant to directors of Trio-Tech International (the “Company”) a
favorable opportunity to acquire or receive Common Stock of the Company and to create an incentive
for such persons to serve on the Board of Directors of the Company and to contribute to its
long-term growth and profitability objectives. The Plan is established effective as of September
24, 2007. The Plan is designed to be exempt from Code Section 409A.

     As used in the Plan, the term “Code” shall mean the Internal Revenue Code of 1986, as amended.
The term “Participant” shall mean a member of the Board of Directors of the Company who is not an
officer or full-time salaried employee of the Company. Masculine terms used herein may be read as
feminine, singular terms as plural and plural terms as singular, as necessary to give effect to the
Plan.

     2. Administration. The Plan shall be administered by the Board of Directors of the
Company (the “Board”) or by a committee from time to time constituted (the “Committee”) to which
administration of the Plan is delegated by the Board (in either case, the “Administrator”). The
Administrator shall determine the meaning and application of the provisions of the Plan and all
option agreements executed and restricted stock awards granted pursuant thereto, and its decisions
shall be conclusive and binding upon all interested persons. Subject to the provisions of the
Plan, the Administrator shall have the sole authority to grant options and award restricted shares
of stock hereunder, to prescribe, amend and rescind rules and regulations relating to the Plan, to
determine and modify the terms and conditions of each stock option or restricted stock grant
entered into between the Company and any Participant, and to make all other determinations
necessary or advisable in the implementation and administration of the Plan.

     To the extent necessary to permit any grants or awards made under the Plan to be exempt from
Section 16(b) of the Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder, the Committee authorized to grant and administer such grants or awards to
Participants who are subject to Section 16 of said Securities Exchange Act shall consist solely of
two or more “Non-Employee Directors” (as defined for purposes of Rule 16b-3 under said Act) and
shall carry out its responsibilities in a manner consistent with said Rule 16b-3. Any member of
the Committee shall not take part in the Committee’s consideration of matters involving grants or
awards to such member.

     3. Eligibility; Status as Shareholder. All directors of the Company shall participate
in the Plan. No person shall have any rights of a shareholder by virtue of a grant of an
option except with respect to shares actually issued to that person upon the exercise thereof.

1.

 

     4. Stock Subject to Plan. There shall be reserved for issue upon the exercise of
options granted, or restricted stock awarded, under the Plan 200,000 shares of Common Stock or the
number of shares of Common Stock which, in accordance with the provisions of Section 9 hereof,
shall be substituted therefor. Such shares may be authorized but unissued shares or treasury
shares. If an option granted under the Plan shall expire or terminate for any reason without
having been exercised in full, unpurchased shares subject thereto shall again be available for the
purposes of the Plan.

     5. Terms of Options. Each option granted under the Plan shall be evidenced by a stock
option agreement between the person to whom such option is granted and the Company. Such stock
option agreement shall provide that the option is subject to the following terms and conditions and
to such other terms and conditions not inconsistent therewith as the Administrator may deem
appropriate in each case:

          (a) Option Exercise Price. The exercise price to be paid for each share of Common
Stock upon the exercise of an option shall be 100% of the fair market value of the shares on the
date the option is granted. As used in this Plan, the term “date the option is granted” means the
date when the corporate action necessary to create a legally binding option is completed and the
number of shares, exercise price, class of underlying stock and identity of the option recipient
are determinable. Fair market value of the shares shall be (i) the mean of the high and the low
prices of shares of Common Stock sold on an established securities market on the date the option is
granted (or, if there was no sale on such date, such mean for the next preceding trading day on
which there was such a sale) or (ii) if the Common Stock is not readily tradable on an established
securities market on the date the option is granted, then fair market value shall be determined by
a reasonable application of a reasonable valuation method, in accordance with the regulations under
Code Section 409A, taking into consideration all relevant factors or, if the Administrator so
chooses from time to time, by applying any valuation method presumed reasonable under those
regulations.

          (b) Grants. Each Option granted under the Plan shall be exercisable at such time or
times, or upon the occurrence of such event or events, and in such amounts, as the Board shall
specify in the specific option. No option shall be granted under this Plan more than ten (10)
years after the effective date of the Plan or any earlier termination date of the Plan.

          (c) Period of Option. Options granted hereunder shall have a term of five years from
the date of grant.

          (d) Exercisability. Each option granted under the Plan shall be 100% vested and
exercisable in full at any time and from time to time commencing as of the date of grant, unless
otherwise provided in the stock option agreement.

2.

 

          (e) Payment for Stock. The option exercise price for Common Stock purchased under an
option shall be paid in full at the time of purchase. The option agreement
may provide that the exercise price may be payable, at the election of the holder of the option, in
whole or in part either in cash or by delivery of Common Stock in transferable form, such Common
Stock to be valued for such purpose at its fair market value (as determined under Section 5(a)
above) as of the date on which the option is exercised (c) and that, in that case and
prior to the acceptance of shares of Common Stock as provided in this Section 5(e), the Participant
shall supply the Board with written representations and warranties, including without limitation a
representation and warranty that the Participant has good and marketable title to such shares free
and clear of liens and encumbrances. No share of Common Stock shall be issued until full payment
therefor has been made, and until any tax withholding obligation arising under Section 11 below has
been satisfied in a manner acceptable to the Company. No Participant shall have any rights as an
owner of shares of Common Stock until the date of issuance to him of the stock certificate
evidencing such Common Stock.

          (f) Nonqualified Options. All options granted under the Plan shall be non-qualified
options, meaning they do not qualify as “incentive stock options” under Code Section 422.

     6. Stock Awards. With the approval of the Company’s Board of Directors or an
appropriate Section 16b-3 Committee (as described in Section 2 above), a Participant may be granted
one or more Common Stock awards under the Plan. Such awards shall be grants of shares of Common
Stock on such terms and conditions, consistent with the other provisions of the Plan, as may be
determined by the Board of Directors or the Section 16b-3 Committee and set forth in a Restricted
Stock Agreement with the Participant. The Participant will have all voting, dividend, liquidation
and other rights with respect to the shares of Common Stock issued to the Participant as a Common
Stock award under this Section 6 upon the Participant becoming both the holder of record of such
shares; provided, however, that the Committee may impose such restrictions on the vesting,
assignment and transfer of a Common Stock award as it deems appropriate. In the event of a
Participant’s termination of service on the Company’s Board of Directors, any unvested shares of
Common Stock awarded under the Plan shall vest, continue to vest, be forfeited and become subject
to repurchase as and to the extent provided in the applicable Restricted Stock Agreement.

     7. Nontransferability. Options granted pursuant to the Plan shall be nontransferable
except by will or the laws of descent and distribution, and shall be exercisable during the
optionee’s lifetime only by him, and after his death, by his personal representative or by the
person entitled thereto under his will or the laws of intestate succession. Shares of Common Stock
awarded under Section 6 of the Plan shall be nontransferable the same as options, except as may be
permitted by the Company’s Board of Directors in connection with certain events described in
Sections 9(a) or (b) below.

     8. Termination of Service. Upon termination of the optionee’s service on the Board of
Directors (“Termination of Service”), his rights to exercise options then held by him shall be
terminated (and his outstanding unexercised options shall be forfeited and cancelled) as of an
earlier date than the scheduled expiration date of such outstanding options, in accordance with the
following provisions as applicable:

3.

 

          (a) Death or Disability. Upon the death or disability (as defined in Section 22(e)(3)
of the Code) of any person holding options granted under this Plan, his options shall be
exercisable, by the holder’s legal representative or by the person entitled thereto under his will
or the laws of intestate succession, only if and to the extent they are exercisable on the date of
his death or disability, and such options shall terminate twelve months after the date of his death
or disability (i.e., on the anniversary date of his death or disability) or on the originally
scheduled expiration date of such options, whichever date is earlier.

          (b) Termination for Cause. A Participant’s right to exercise stock options shall be
rescinded effective as of the date of termination of his service as a director if the Participant
has been found to be engaged directly or indirectly in any conduct or activity which is in
competition with the Company or is otherwise adverse to or not in the best interest of the Company.

          (c) Termination of Service. In the case of a Participant who has served as a
non-employee on the Company’s Board of Directors for less than five years, upon his Termination of
Service for any reason other than as set forth in Section 7(a) or 7(b) hereof, his options shall be
exercisable only if and to the extent they are exercisable on the date of his Termination of
Service and such options shall terminate 30 days after the date of his Termination of Service
unless the holder of the options dies prior thereto, in which event he shall be deemed to have died
on the date of his Termination of Service; provided, however, in no event shall such options be
exercised more than five years from the date they are granted. Nothing contained in the
Plan or in any option granted pursuant to the Plan shall obligate the Company or its parent or
subsidiary corporations to continue to engage any director in such or in any other capacity with
the Company, nor confer upon any director any right to continue as a director of or in any other
capacity with the Company or its parent or subsidiary corporations, if any, nor limit in any way
such right as the Company or its parent or subsidiary corporations may have to amend, modify or
terminate any person’s compensation, employment, directorship or consulting or advising agreement
at any time.

4.

 

     9. Adjustment of Shares.

          (a) In the event of changes in the outstanding Common Stock by reason of stock dividends,
stock splits, reverse stock splits, split-ups, consolidations, recapitalizations, reorganizations
or like events, an appropriate adjustment shall be made in the number of shares reserved under the
Plan, in the number of shares set forth in Section 4 hereof, and in the number of shares and the
option price per share specified in any stock option agreement with respect to any unpurchased
shares; provided, however, that the Company shall not be required to issue fractional shares as a
result of any such adjustments but may make such adjustment as the Administrator deems appropriate.
The Company shall give prompt notice to all optionees of any adjustment pursuant to this Section.

          (b) Section 9(a) above to the contrary notwithstanding, in the event of any merger,
consolidation or other reorganization of the Company in which the Company is not the surviving or
continuing corporation or in the event of the liquidation or dissolution of the Company, all
options granted hereunder shall terminate on the effective date of the merger, consolidation,
reorganization, liquidation, or dissolution unless the agreement with respect thereto provides for
the assumption of such options by the continuing or surviving corporation. Any other provision of
this Plan or the applicable stock option agreement to the contrary notwithstanding, all outstanding
options granted hereunder shall be fully exercisable for a period of 30 days prior to the effective
date of any such merger, consolidation, reorganization, liquidation, or dissolution unless such
options are assumed by the continuing or surviving corporation. The Committee shall notify the
holders of all outstanding options in advance of any such window period for exercising options.

     10. Securities Law Requirements. The Company may require prospective optionees, as a
condition of either the grant or the exercise of an option, to represent and establish to the
satisfaction of legal counsel to the Company that all shares of Common Stock acquired upon the
exercise of such option will be acquired for investment and not for resale. The Company may refuse
to permit the sale or other disposition of any shares acquired pursuant to any such representation
until it is satisfied that such sale or other disposition would not be in contravention of
applicable state or federal securities law.

     11. Tax Withholding. As a condition for issuing shares of Common Stock upon exercise
of an option or the grant of a Common Stock award, the Company may require an optionee to pay to
the Company all applicable federal, state and local taxes which the Company is required to withhold
with respect to such option exercise or Common Stock award.

     12. Amendment. The Board of Directors may amend the Plan at any time, except that
without shareholder approval:

          (a) The number of shares of Common Stock which may be reserved for issuance under the Plan
shall not be increased except as provided in Section 9 hereof;

5.

 

          (b) The option price per share of Common Stock may not be fixed at less than the price
specified in Section 5(a) hereof;

          (c) The maximum period during which the options may be exercised may not be extended;

          (d) The class of persons eligible to receive options or restricted stock awards under the Plan
as set forth in Section 3 shall not be changed;

          (e) This Section 12 may not be amended in a manner that limits or reduces the amendments which
require shareholder approval; and

          (f) The provisions of the Plan shall not be amended more than once every six months, other
than to comport with changes in the Code, the Employee Retirement Income Security Act (if
applicable), or the rules thereunder.

     13. Termination. The Plan shall terminate automatically on September 24, 2017. The
Board of Directors may terminate the Plan at any earlier time. The termination of the Plan shall
not affect the validity of any option agreement outstanding at the date of such termination, but no
option shall be granted after such date.

     14. Effective Date. The Plan shall be effective upon its adoption by the Board of
Directors of the Company. Options may be granted but not exercised prior to shareholder approval
of the Plan. If any options are so granted and shareholder approval shall not have been obtained
on or before September 24, 2008, such options shall terminate retroactively as of the date they
were granted. Common Stock awards under Section 6 shall not be granted prior to shareholder
approval of the Plan.

6.

 

     IN WITNESS WHEREOF, this Plan, having been first duly adopted by the Board of Directors, is
hereby executed below by a duly authorized officer of the Company on
this 3rd day of December,
2007, to take effect as of such date as provided herein.

	 	 	 	 	 
	 	TRIO-TECH INTERNATIONAL

 	 
	 	/s/           A. Charles Wilson
 	 
	 	Name:  	A. Charles Wilson 	 
	 	Title:  	Chairman of the Board 	 
	 

7.

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