Document:

EXECUTION
      COPY

     

    PERCEPTRON,
      INC.

     

    FIRST
      AMENDED AND RESTATED 

     

    2004
      STOCK INCENTIVE PLAN

     

    I. GENERAL
      PROVISIONS

     

    1.1 Establishment.
      On
      October 22, 2004, the Board of Directors (“Board”)
      of
      Perceptron, Inc., a Michigan corporation (“Corporation”),
      adopted the 2004 Stock Incentive Plan (“Plan”).
      On
      October 2, 2008, the Plan was amended and restated.

     

    1.2 Purpose.
      The
      purpose of the Plan is (i) to promote the best interests of the Corporation
      and
      its shareholders by encouraging Employees, Consultants and non-employee
      directors of the Corporation and its Subsidiaries to acquire an ownership
      interest in the Corporation through Options, Stock Appreciation Rights,
      Restricted Stock, Restricted Stock Units, Performance Share Awards, Director
      Stock Purchase Rights and Deferred Stock Units, thus identifying their interests
      with those of shareholders, and (ii) to enhance the ability of the Corporation
      to attract and retain qualified Employees, Consultants and non-employee
      directors. It is the further purpose of the Plan to permit the granting of
      Stock
      Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units
      and
      Performance Share Awards that will constitute performance based compensation,
      as
      described in Section 162(m) of the Code, and regulations promulgated thereunder.
      After the Effective Date, the Corporation shall no longer issue any awards
      under
      the 1992 Stock Option Plan and the Directors Stock Option Plan.

     

    1.3 Definitions.
      As used
      in this Plan, the following terms have the meaning described below:

     

    (a) “Agreement”
means
      the written agreement that sets forth the terms of a Participant’s Option, Stock
      Appreciation Right, Restricted Stock grant, Restricted Stock Unit, Performance
      Share Award, Director Stock Purchase Right or Deferred Stock Unit.

     

    (b) “Approval
      Date”
means
      October 22, 2004, the date the Plan was approved by the Board.

     

    (c) “Award”
means
      Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units,
      Performance Share Awards, Deferred Stock Units and Director Stock Purchase
      Rights.

     

    (d) “Board”
means
      the Board of Directors of the Corporation.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    (e) “Change
      in Control”
means
      (i)
      a
      merger involving the Corporation in which the Corporation is not the surviving
      corporation (other than a merger with a wholly-owned subsidiary of the
      Corporation formed for the purpose of changing the Corporation's corporate
      domicile); (ii) a share exchange in which the shareholders of the Corporation
      exchange their stock in the Corporation for stock of another corporation (other
      than a share exchange in which all or substantially all of the holders of the
      voting stock of the Corporation, immediately prior to the transaction, exchange,
      on a pro rata basis, their voting stock of the Corporation for more than 50%
      of
      the voting stock of such other corporation); (iii) the sale of all or
      substantially all of the assets of the Corporation; or (iv) any person or group
      of persons (as defined by Section 13(d) of the Securities Exchange Act of 1934,
      as amended) (other than any employee benefit plan or employee benefit trust
      benefitting the employees of the Corporation) becoming a beneficial owner,
      directly or indirectly, of securities of the Corporation representing more
      than
      fifty (50%) percent of either the then outstanding Common Stock of the
      Corporation, or the combined voting power of the Corporation's then outstanding
      voting securities. Notwithstanding
      any other provision in this Plan to the contrary, to the extent that Awards
      under the Plan subject to Code Section 409A are payable upon a Change in
      Control, an event shall not be considered to be a Change in Control under the
      Plan with respect to such Awards unless such event is also a “change in
      ownership,” a “change in effective control” or a “change in the ownership of a
      substantial portion of the assets” of the Corporation within the meaning of Code
      Section 409A.

     

    (f) “Code”
means
      the Internal Revenue Code of 1986, as amended.

     

    (g) “Code
      Section 409A” means Code Section 409A of the Code and the applicable guidance
      issued thereunder.

     

    (h) “Committee”
means
      the Management Development, Compensation and Stock Option Committee of the
      Corporation or other committee of the Board duly appointed to administer the
      Plan and having such powers as shall be specified by the Board. If no committee
      of the Board has been appointed to administer the Plan, the Board shall exercise
      all of the powers of the Committee granted herein, and, in any event, the Board
      may in its discretion exercise any or all of such powers. The Committee shall
      be
      comprised of two or more members of the Board.

     

    (i) “Common
      Stock”
means
      shares of the Corporation’s authorized common stock.

     

    (j) “Consultant”
means
      a
      person engaged to provide consulting or advisory services (other than as an
      Employee or a member of the Board) to the Corporation, provided that the
      identity of such person, the nature of such services or the entity to which
      such
      services are provided would not preclude the Corporation from offering or
      selling securities to such person pursuant to the Plan in reliance on a Form
      S-8
      Registration Statement under the Securities Act. 

     

    (k) “Corporation”
means
      Perceptron, Inc. a Michigan corporation.

     

    (l) “Deferred
      Stock Unit”
means
      a
      bookkeeping entry representing a right granted to a Participant pursuant to
      Article
      VII
      of the
      Plan to receive a share of Common Stock on a date determined in accordance
      with
      the provisions of Article
      VII
      of the
      Plan.

     

    (m) “Director”
means
      a
      member of the Corporation’s Board of Directors.

     

    (n) “Director
      Fee Payment Date”
shall
      mean each March 1, June 1, September 1 and December 1.

     

    (o) “Director
      Stock Purchase Right”
means
      an election by a Director to purchase Common Stock in accordance with
Article
      VI
      of the
      Plan.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    (p) “Disability”
means
      total and permanent disability, as defined in Code
      Section 22(e).

     

    (q) “Dividend
      Equivalent”
means
      a
      credit, made at the discretion of the Committee or as otherwise provided by
      the
      Plan, to the account of a Participant in an amount equal to the cash dividends
      paid on one share of Common Stock for each share of Common Stock represented
      by
      an Award held by such Participant.

     

    (r) “Effective
      Date”
means
      the day after the Plan is approved by shareholders of the Corporation.

     

    (s) “Employee”
means
      an individual who has an “employment relationship” with the Corporation or a
      Subsidiary, as defined in Treasury Regulation 1.421-7(h), and the term
“employment” means employment with the Corporation, or a Subsidiary of the
      Corporation.

     

    (t) “Exchange
      Act”
means
      the Securities Exchange Act of 1934, as amended from time to time and any
      successor thereto.

     

    (u) “Fair
      Market Value”
means
      for purposes of determining the value of Common Stock on the Grant
      Date:

     

    (i) the
      final
      reported sales price (or, if there is no reported sale on such date, the final
      reported sales price on the last preceding date for which such reported sales
      price exists) of the Common Stock on the principal United States securities
      exchange on which the Common Stock may at the time be listed on the Grant Date;
      or

     

    (ii) if
      the
      Common Stock is not listed on any domestic stock exchange, the closing bid
      quotation with respect to a share as reported by the OTC Bulletin Board on
      the
      Grant Date; or

     

    (iii) if
      none
      of the foregoing clauses apply, the value as determined by the Committee in
      accordance with Code Section 409A.

     

    Unless
      otherwise specified in the Plan, “Fair Market Value” for purposes of determining
      the value of Common Stock on the date of exercise means the applicable
      definitions under (i)-(iii) above, substituting the date of exercise for the
      Grant Date, unless otherwise required by applicable law.

     

    (v) “Grant
      Date”
means
      the date on which the Committee authorizes an individual Option, Stock
      Appreciation Right, Restricted Stock grant, Restricted Stock Unit, Performance
      Share Award, or a Director Fee Payment Date in the case of a Director Stock
      Purchase Right, or such later date as shall be designated by the
      Committee.

     

    (w) “Incentive
      Stock Option”
means
      an Option that is intended to meet the requirements of Section 422 of the
      Code.

     

    (x) “Nonqualified
      Stock Option”
means
      an Option that is not intended to constitute an Incentive Stock
      Option.

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    (y) “Option”
means
      either an Incentive Stock Option, a Nonqualified Stock Option.

     

    (z) “Participant”
means
      an Employee or non-employee director or Consultant designated by the Committee
      to participate in the Plan.

     

    (aa) “Performance
      Measures”
shall
      mean the measures of performance of the Corporation and its Subsidiaries used
      to
      determine a Participant’s entitlement to an award under the Plan. Performance
      Measures shall have the same meanings as used in the Corporation’s financial
      statements, or, if such terms are not used in the Corporation’s financial
      statements, they shall have the meaning applied pursuant to generally accepted
      accounting principles, or as used generally in the Corporation’s industry.
      Performance Measures shall be calculated with respect to the Corporation and
      each Subsidiary consolidated therewith for financial reporting purposes or
      such
      division or other business unit as may be selected by the Committee. For
      purposes of the Plan, the Performance Measures shall be calculated in accordance
      with generally accepted accounting principles, but, unless otherwise determined
      by the Committee, prior to the accrual or payment of any award under this Plan
      for the same performance period and excluding the effect (whether positive
      or
      negative) of any change in accounting standards or any extraordinary, unusual
      or
      nonrecurring item, as determined by the Committee, occurring after the
      establishment of the performance goals. Performance Measures may be one or
      more
      of the following, or a combination of the any of the following, as determined
      by
      the Committee:

    
      
         

          
            	
                    (i)

                  	 	
                    revenue;

                  
	 	 	 
	
                    (ii)

                  	 	
                    gross
                      margin;

                  
	 	 	 
	
                    (iii)

                  	 	
                    operating
                      margin;

                  
	 	 	 
	
                    (iv)

                  	 	
                    operating
                      income;

                  
	 	 	 
	
                    (v)

                  	 	
                    pre-tax
                      profit;

                  
	 	 	 
	
                    (vi)

                  	 	
                    earnings
                      before interest, taxes and depreciation;

                  
	 	 	 
	
                    (vii)

                  	 	
                    net
                      income;

                  
	 	 	 
	
                    (viii)

                  	 	
                    cash
                      flow;

                  
	 	 	 
	
                    (ix)

                  	 	
                    expenses;

                  
	 	 	 
	
                    (x)

                  	 	
                    the
                      market price of the Common Stock;

                  
	 	 	 
	
                    (xi)

                  	 	
                    earnings
                      per share;

                  
	 	 	 
	
                    (xii)

                  	 	
                    operating
                      income per share

                  
	 	 	 
	
                    (xiii)

                  	 	
                    return
                      on stockholder equity;

                  
	 	 	 
	
                    (xiv)

                  	 	
                    return
                      on capital;

                  

          

        

         

        
          
             

          

          
            4

            
              

            

          

          
             

          

        

         

        
          
            	
                    (xv)

                  	 	
                    return
                      on net assets;

                  
	 	 	 
	
                    (xvi)

                  	 	
                    economic
                      value added;

                  
	 	 	 
	
                    (xvii)

                  	 	
                    market
                      share;

                  
	 	 	 
	
                    (xviii)

                  	 	
                    return
                      on investment;

                  
	 	 	 
	
                    (xix)

                  	 	
                    profit
                      after tax;

                  
	 	 	 
	
                    (xx)

                  	 	
                    product
                      approval; 

                  
	 	 	 
	
                    (xxi)

                  	 	
                    market
                      capitalization; 

                  
	 	 	 
	
                    (xxii)

                  	 	
                    new
                      products; and

                  
	 	 	 
	
                    (xxiii)

                  	 	
                    research
                      and development
                      activity.

                  

          

        

      

    

     

    Performance
      measures are required to be reapproved by shareholders of the Corporation,
      to
      the extent required by Section 162(m) of the Code, which currently requires
      such
      reapproval at the first shareholders meeting that occurs in the fifth year
      following the Effective Date.

     

    (bb) “Performance
      Share Award”
means
      a
      performance share award that is granted in accordance with Article
      V
      of the
      plan. 

     

    (cc) “Performance
      Share Award Unit”
means
      a
      Performance Share Award described in Section
      5.2(d)(ii).
      

     

    (dd) “Plan”
means
      the First Amended and Restated Perceptron, Inc. 2004 Stock Incentive Plan,
      the
      terms of which are set forth herein, and amendments thereto.

     

    (ee) “Restriction
      Period”
means
      the period of time during which a Participant’s Restricted Stock or Restricted
      Stock Unit grant is subject to restrictions and is nontransferable.

     

    (ff) “Restricted
      Stock”
means
      Common Stock that is subject to restrictions.

     

    (gg) “Restricted
      Stock Unit”
means
      a
      right granted pursuant to Article
      IV
      to
      receive Restricted Stock or an equivalent value in cash pursuant to the terms
      of
      the Plan and the related Agreement.

     

    (hh) “Retirement”
means
      termination of employment on or after the attainment of age 65 and completion
      of
      three (3) years of service with the Corporation.

     

    (ii) “Securities
      Act”
means
      the Securities Act of 1933, as amended.

     

    (jj) “Stock
      Appreciation Right”
means
      the right to receive a cash or Common Stock payment from the Corporation, in
      accordance with Article
      III
      of the
      Plan.

     

    (kk) “Subsidiary”
means
      a
      corporation or other entity defined in Code Section 424(f).

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    (ll) “Tandem
      Stock Appreciation Right”
means
      a
      Stock Appreciation Right granted in tandem with an Option. 

     

    (mm) “Vested”
means
      the extent to which an Option or Stock Appreciation Right granted hereunder
      has
      become exercisable in accordance with this Plan and the terms of the respective
      Agreement pursuant to which such Option or Stock Appreciation Right was
      granted.

     

    1.4 Administration.

     

    (a) The
      Plan
      shall be administered by the Committee. At all times it is intended that the
      directors appointed to serve on the Committee shall be “disinterested persons”
(within the meaning of Rule 16b-3 promulgated under the Exchange Act) and
“outside directors” (within the meaning of Code Section 162(m)); however, the
      mere fact that a Committee member shall fail to qualify under either of these
      requirements shall not invalidate any award made by the Committee if the award
      is otherwise validly made under the Plan. The members of the Committee shall
      be
      appointed by, and may be changed at any time and from time to time, at the
      discretion of the Board.

     

    (b) The
      Committee shall interpret the Plan, prescribe, amend, and rescind rules and
      regulations relating to the Plan, and make all other determinations necessary
      or
      advisable for its administration. The decision of the Committee on any question
      concerning the interpretation of the Plan or its administration with respect
      to
      any Option, Stock Appreciation Right, Restricted Stock grant, Restricted Stock
      Unit, Performance Share Award or Deferred Stock Unit granted under the Plan
      or
      any Director Stock Purchase Right shall be final and binding upon all
      Participants. No member of the Committee shall be liable for any action or
      determination made in good faith with respect to the Plan or any grant or award
      hereunder.

     

    (c) In
      addition to any other powers set forth in the Plan and subject to the provisions
      of the Plan, but, in the case of Options, Stock Appreciation Rights and other
      Awards designated as Awards under Code Section 162(m), subject to the
      requirements of Code Section 162(m), the Committee shall have the full and
      final
      power and authority, in its discretion: 

     

    (i) to
      the
      extent permitted under Code Section 409A, to amend, modify, extend, cancel
      or
      renew any Option, Stock Appreciation Right, Restricted Stock grant, Restricted
      Stock Unit, Performance Share Award, Deferred Stock Unit or Director Stock
      Purchase Right or to waive any restrictions or conditions applicable to any
      Option, Stock Appreciation Right, Restricted Stock grant, Restricted Stock
      Unit,
      Performance Share Award, Deferred Stock Unit or Director Stock Purchase Right
      or
      any shares acquired pursuant thereto; 

     

    (ii) to
      the
      extent permitted under Code Section 409A, to accelerate, continue, extend or
      defer the exercisability or vesting of any Option, Stock Appreciation Right,
      Restricted Stock grant, Restricted Stock Unit, Performance Share Award, Deferred
      Stock Unit or Director Stock Purchase Right or any shares acquired pursuant
      thereto, including with respect to the period following a Participant's
      termination of employment with the Corporation;

     

    (iii) to
      the
      extent permitted under Code Section 409A, to authorize, in conjunction with
      any
      applicable deferred compensation plan of the Corporation, that the receipt
      of
      cash or Common Stock subject to any Option, Stock Appreciation Right, Restricted
      Stock grant, Restricted Stock Unit, Performance Share Award, Deferred Stock
      Unit
      or Director Stock Purchase Right under this Plan may be deferred under the
      terms
      and conditions of such deferred compensation plan;

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    (d) To
      the
      extent permitted under Code Section 409A and other applicable law, the Committee
      may delegate to one or more officers of the Corporation or a committee of such
      officers, the authority, subject to such terms and limitations as the Committee
      shall determine, to grant Options, Stock Appreciation Rights, Restricted Stock,
      Restricted Stock Units, Performance Share Awards and Deferred Stock Units to,
      or
      to cancel, modify, waive rights with respect to, alter, discontinue or terminate
      any of the foregoing, held by Participants who are not officers or directors
      of
      the Corporation for purposes of Section 16 of the Exchange Act.

     

    1.5 Participants.  Participants
      in the Plan shall be such Employees (including Employees who are directors),
      non-employee directors of, or Consultants to, the Corporation and its
      Subsidiaries as the Committee in its sole discretion may select from time to
      time. The Committee may grant Options, Stock Appreciation Rights, Restricted
      Stock, Restricted Stock Units, Performance Share Awards and Deferred Stock
      Units
      to an individual upon the condition that the individual become an Employee
      of
      the Corporation or of a Subsidiary, provided that the Option, Stock Appreciation
      Right, Restricted Stock, Restricted Stock Unit, Performance Share Award or
      Deferred Stock Unit shall be deemed to be granted only on the date that the
      individual becomes an Employee. Awards covered by Code Section 162(m) shall
      be
      made to key Employees designated by the Committee.

     

    1.6 Stock.  The
      Corporation has reserved 600,000 shares of the Corporation’s Common Stock for
      issuance in conjunction with all Options and other stock-based awards to be
      granted under the Plan. All of the 600,000 shares of the Corporation’s Common
      Stock so reserved may be granted as ISOs. Shares subject to any unexercised
      portion of a terminated, cancelled or expired Option, Stock Appreciation Right,
      Restricted Stock grant, Restricted Stock Unit, or Performance Share Award
      granted hereunder may again be subjected to grants and awards under the Plan.
      In
      the event that an Option granted under the Plan is exercised by delivering
      shares of Common Stock that previously were acquired by exercising Options
      granted under the Plan, such shares of previously-acquired Common Stock so
      delivered to the Corporation may again be subject to grants under the Plan.
      Shares of Common Stock shall not be deemed to have been granted pursuant to
      the
      Plan (a) with respect to any portion of an Award that is settled in cash or
      (b)
      to the extent such shares are withheld in satisfaction of tax withholding
      obligations pursuant to Section 10.6. Upon payment in shares of Common Stock
      pursuant to the exercise of a Stock Appreciation Right, the number of shares
      available for grant under the Plan shall be reduced only by the number of shares
      actually issued in such payment. All provisions in this Section
      1.6
      shall be
      adjusted, as applicable, in accordance with Article
      VIII.

     

    1.7 No
      Repricing.
      Without
      the affirmative vote of holders of a majority of the shares of Common Stock
      cast
      in person or by proxy at a meeting of the shareholders of the Corporation at
      which a quorum representing a majority of all outstanding shares of Common
      Stock
      is present or represented by proxy, and without complying with the requirements
      of Code Section 409A, the Board shall not approve a program providing for either
      (a) the cancellation of outstanding Options and/or Stock Appreciation Rights
      and
      the grant in substitution therefore of any new awards under the Plan having
      a
      lower exercise price or (b) the amendment of outstanding Options and/or Stock
      Appreciation Rights to reduce the exercise price thereof. This paragraph shall
      not be construed to apply to “issuing or assuming a stock option in a
      transaction to which section 424(a) applies,” within the meaning of Section 424
      of the Code.

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    II. STOCK
      OPTIONS

     

    2.1 Grant
      of Options.
      The
      Committee, at any time and from time to time, subject to the terms and
      conditions of the Plan, may grant Options to such Participants and for such
      number of shares of Common Stock (whole or fractional) as it shall designate;
      provided, however, that no Participant may be granted Options during any one
      fiscal year of the Corporation to purchase more than 200,000 shares of Common
      Stock. Any Participant may hold more than one Option under the Plan and any
      other Plan of the Corporation or Subsidiary. The Committee shall determine
      the
      general terms and conditions of exercise, including any applicable vesting
      requirements, which shall be set forth in a Participant’s Option Agreement. The
      Committee may designate any Option granted as either an Incentive Stock Option
      or a Nonqualified Stock Option, or the Committee may designate a portion of
      an
      Option as an Incentive Stock Option or a Nonqualified Stock Option. At the
      discretion of the Committee, an Option may be granted in tandem with a Stock
      Appreciation Right. Options are intended to satisfy the requirements of Code
      Section 162(m) and the regulations promulgated thereunder, to the extent
      applicable. No Option shall be granted with an exercise term that extends beyond
      ten (10) years from the Grant Date.

     

    2.2 Incentive
      Stock Options.
      Any
      Option intended to constitute an Incentive Stock Option shall comply with the
      requirements of this Section
      2.2.
      An
      Incentive Stock Option may only be granted to an Employee. No Incentive Stock
      Option shall be granted with an exercise price below the Fair Market Value
      of
      Common Stock on the Grant Date nor with an exercise term that extends beyond
      ten
      (10) years from the Grant Date. An Incentive Stock Option shall not be granted
      to any Participant who owns (within the meaning of Code Section 424(d)) stock
      of
      the Corporation or any Subsidiary possessing more than 10% of the total combined
      voting power of all classes of stock of the Corporation or a Subsidiary unless,
      at the Grant Date, the exercise price for the Option is at least 110% of the
      Fair Market Value of the shares subject to the Option and the Option, by its
      terms, is not exercisable more than five (5) years after the Grant Date. The
      aggregate Fair Market Value of the underlying Common Stock (determined at the
      Grant Date) as to which Incentive Stock Options granted under the Plan
      (including a plan of a Subsidiary) may first be exercised by a Participant
      in
      any one calendar year shall not exceed $100,000. To the extent that an Option
      intended to constitute an Incentive Stock Option shall violate the foregoing
      $100,000 limitation (or any other limitation set forth in Code Section 422),
      the
      portion of the Option that exceeds the $100,000 limitation (or violates any
      other Code Section 422 limitation) shall be deemed to constitute a Nonqualified
      Stock Option.

     

    2.3 Option
      Price.
      The
      Committee shall determine the per share exercise price for each Option granted
      under the Plan; provided, however, that the option price of an option shall
      not
      be less than 100% of the Fair Market Value of the shares of Common Stock covered
      by the Option on the Grant Date. Notwithstanding the foregoing, an Option may
      be
      granted with an exercise price lower than the minimum exercise price set forth
      above if such Option is granted pursuant to an assumption or substitution for
      another option in a manner qualifying under Code Section 424(a) and/or Code
      Section 409A. The option price will be subject to adjustment in accordance
      with
      the provisions of Section
      9.1
      of this
      Plan.

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    2.4 Payment
      for Option Shares.
      The
      purchase price for shares of Common Stock to be acquired upon exercise of an
      Option granted hereunder shall be paid in full in cash or by personal check,
      bank draft or money order at the time of exercise; provided that the Committee
      may (but is not obligated to) permit payment to be made by (a) delivery to
      the
      Corporation of outstanding shares of Common Stock on such terms and conditions
      as may be specified in the optionee’s Agreement, (b) by delivery to the
      Corporation of a properly executed exercise notice, acceptable to the
      Corporation, together with irrevocable instructions to the Participant’s broker
      to deliver to the Corporation sufficient cash to pay the exercise price and
      any
      applicable income and employment withholding taxes, in accordance with a written
      agreement between the Corporation and the brokerage firm (“cashless exercise
      procedure”), (c) other means determined by the Committee, or (d) any combination
      of the foregoing. Shares of Common Stock surrendered upon exercise shall be
      valued at Fair Market Value as of the date of exercise, and the certificate(s)
      for such shares, duly endorsed for transfer or accompanied by appropriate stock
      powers, shall be surrendered to the Corporation. Participants who are subject
      to
      short swing profit restrictions under the Exchange Act and who exercise an
      Option by tendering previously-acquired shares shall do so only in accordance
      with the provisions of Rule 16b-3 of the Exchange Act. Notwithstanding the
      foregoing, an Option may not be exercised by delivery to the Corporation of
      shares of Common Sock to the extent such delivery would constitute a violation
      of the provisions of any law, regulation or agreement restricting the redemption
      of the Corporation’s stock. Until the optionee has been issued a certificate or
      certificates for the shares of Common Stock so purchased, he or she shall
      possess no rights as a record holder with respect to any such shares. In the
      event any Common Stock is delivered to or retained by the Corporation to satisfy
      all or any part of the purchase price, the part of the purchase price deemed
      to
      have been satisfied by such Common Stock shall be equal to the product derived
      by multiplying the Fair Market Value as of the date of exercise times the number
      of shares of Common Stock delivered to or retained by the Corporation. The
      number of shares of Common Stock delivered to or retained by the Corporation
      in
      satisfaction of the purchase price shall not be a number which when multiplied
      by the Fair Market Value as of the date of exercise would result in a product
      greater than the purchase price. No fractional shares of Common Stock shall
      be
      delivered to or retained by the Corporation in satisfaction of the purchase
      price. In the event that an optionee exercises both an Incentive Stock Option
      and a Nonqualified Stock Option, separate share certificates shall be issued
      for
      shares acquired pursuant to the Incentive Stock Option and for shares acquired
      pursuant to the Nonqualified Stock Option.

     

    III. STOCK
      APPRECIATION RIGHTS

     

    3.1 Grant
      of Stock Appreciation Rights.
      Stock
      Appreciation Rights may be granted, held and exercised in such form and upon
      such general terms and conditions as determined by the Committee on an
      individual basis. A Stock Appreciation Right may be granted to a Participant
      with respect to such number of shares of Common Stock of the Corporation as
      the
      Committee may determine; provided, however, that no Participant may be granted
      a
      Stock Appreciation Right during any one fiscal year of the Corporation for
      more
      than 200,000 shares of Common Stock. A Stock Appreciation Right may be granted
      on a stand-alone basis or as a Tandem Stock Appreciation Right. If a Tandem
      Stock Appreciation Right, the number of shares covered by the Stock Appreciation
      Right shall not exceed the number of shares of stock which the Participant
      could
      purchase upon the exercise of the related Option. Stock Appreciation Rights
      are
      intended to satisfy the requirements of Code Section 162(m) and the regulations
      promulgated thereunder, to the extent applicable. No Stock Appreciation Right
      shall be granted with an exercise term that extends beyond ten (10) years from
      the Grant Date.

     

    3.2 Exercise
      Price.
      The
      Committee shall determine the per share exercise price for each Stock
      Appreciation Right granted under the Plan; provided, however, that (i) the
      exercise price of a Stock Appreciation Right shall not be less than 100% of
      the
      Fair Market Value of the shares of Common Stock covered by the Stock
      Appreciation Right on the Date such Stock Appreciation Right is granted; and
      (ii) the per share exercise price subject to a Tandem Stock Appreciation Right
      shall be the per share exercise price under the related Option.

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    3.3 Exercise
      of Stock Appreciation Rights.
      A Stock
      Appreciation Right shall be deemed exercised upon receipt by the Corporation
      of
      written notice of exercise from the Participant. Except as permitted under
      Rule
      16b-3, notice of exercise of a Stock Appreciation Right by a Participant subject
      to the insider trading restrictions of Section 16(b) of the Securities Exchange
      Act of 1934, shall be limited to a period determined by the Committee or, if
      no
      period is so determined, the period beginning on the second day following the
      release of the Corporation’s quarterly or annual summary of earnings and ending
      on the 15th
      day of
      the third month of the calendar quarter in which such release is made. The
      exercise term of each Stock Appreciation Right shall be limited to such period
      as set by the Committee or in a related Option. If a Tandem Stock Appreciation
      Right, a Stock Appreciation Right shall be exercisable only at such times and
      in
      such amounts as the related Option may be exercised. A Tandem Stock Appreciation
      Right shall terminate and cease to be exercisable no later than the date on
      which the related Option expires or is terminated or canceled. Upon the exercise
      of a Tandem Stock Appreciation Right with respect to some or all of the shares
      subject to such Stock Appreciation Right, the related Option shall be canceled
      automatically as to the number of shares with respect to which the Tandem Stock
      Appreciation Right was exercised. Upon the exercise of an Option related to
      a
      Tandem Stock Appreciation Right as to some or all of the shares subject to
      such
      Option, the related Tandem Stock Appreciation Right shall be canceled
      automatically as to the number of shares with respect to which the related
      Option was exercised.

     

    3.4 Stock
      Appreciation Right Entitlement.
      Upon
      exercise of a Stock Appreciation Right, a Participant shall be entitled to
      payment from the Corporation, in cash, shares of Common Stock, or partly in
      each
      (as determined by the Committee in accordance with any applicable terms of
      the
      Agreement), of an amount equal to the difference between the aggregate Fair
      Market Value on the date of exercise for the specified number of shares being
      exercised and the aggregate exercise price of the Stock Appreciation Right
      being
      exercised. If the Stock Appreciation Right is granted in tandem with an Option,
      the payment shall be equal to the difference between:

     

    (a) the
      Fair
      Market Value of the number of shares subject to the Stock Appreciation Right
      on
      the exercise date; and

     

    (b) the
      option price of the associated Option multiplied by the number of shares
      available under the Option.

     

    3.5 Maximum
      Stock Appreciation Right Amount Per Share.
      The
      Committee may, at its sole discretion, establish (at the time of grant) a
      maximum amount per share which shall be payable upon the exercise of a Stock
      Appreciation Right, expressed as a dollar amount or as a percentage or multiple
      of the Option price of a related Option.

     

    IV. RESTRICTED
      STOCK GRANTS AND UNITS

     

    4.1 Grant
      of Restricted Stock and Restricted Stock Units.
      Subject
      to the terms and conditions of the Plan, the Committee, at any time and from
      time to time, may grant shares of Restricted Stock and Restricted Stock Units
      under this Plan to such Participants and in such amounts as it shall determine.
      

     

    4.2 Restricted
      Stock Agreement.
      Each
      grant of Restricted Stock or Restricted Stock Units shall be evidenced by an
      Agreement that shall specify the terms of the restrictions, including the
      Restriction Period, or periods, the number of Common Stock shares subject to
      the
      grant or units, the purchase price for the shares of Restricted Stock, if any,
      the form of consideration that may be used to pay the purchase price of the
      Restricted Stock, including those specified in Section
      2.4,
      and
      such other general terms and conditions, including performance goals, as the
      Committee shall determine.

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    4.3 Transferability.
      Except
      as provided in this Article
      X, Section
      10.4
      or
Section
      10.5
      of the
      Plan, the shares of Common Stock subject to a Restricted Stock grant or
      Restricted Stock Unit hereunder may not be transferred, pledged, assigned,
      or
      otherwise alienated or hypothecated until the termination of the applicable
      Restriction Period or for such period of time as shall be established by the
      Committee and as shall be specified in the applicable Agreement, or upon the
      earlier satisfaction of other conditions as specified by the Committee in its
      sole discretion and as set forth in the applicable Agreement. 

     

    4.4 Other
      Restrictions.
      The
      Committee shall impose such other restrictions on any shares of Common Stock
      subject to a Restricted Stock grant or Restricted Stock Unit under the Plan
      as
      it may deem advisable including, without limitation, restrictions under
      applicable federal or state securities laws, and may legend the certificates
      representing such shares to give appropriate notice of such
      restrictions.

     

    4.5 Certificate
      Legend.
      In
      addition to any legends placed on certificates pursuant to Sections
      4.3 and 4.4,
      each
      certificate representing shares of Common Stock subject to a Restricted Stock
      grant or Restricted Stock Unit shall bear the following legend:

     

    The
      sale
      or other transfer of the shares of stock represented by this certificate,
      whether voluntary, involuntary or by operation of law, is subject to certain
      restrictions on transfer set forth in the First Amended and Restated Perceptron,
      Inc. 2004 Stock Incentive Plan (“Plan”), rules and administrative guidelines
      adopted pursuant to such Plan and an Agreement dated                             .
      A copy
      of the Plan, such rules and such Agreement may be obtained from the Secretary
      of
      Perceptron, Inc.

     

    4.6 Removal
      of Restrictions.
      Except
      as otherwise provided in this Article
      IV
      of the
      Plan, and subject to applicable federal and state securities laws, shares of
      Common Stock subject to a Restricted Stock grant or Restricted Stock Unit under
      the Plan shall become freely transferable by the Participant after the last
      day
      of the Restriction Period. Once the shares are released from the restrictions,
      the Participant shall be entitled to have the legend required by Section
      4.5
      of the
      Plan removed from the applicable Common Stock certificate. Provided further,
      except as set forth in Section
      4.9,
      the
      Committee shall have the discretion to waive the applicable Restriction Period
      with respect to all or any part of the Common Stock subject to a Restricted
      Stock grant or Restricted Stock Unit.

     

    4.7 Voting
      Rights.
       

     

    (a) During
      the Restriction Period, Participants holding shares of Common Stock subject
      to a
      Restricted Stock grant hereunder may exercise full voting rights with respect
      to
      the Restricted Stock.

     

    (b) Participants
      shall have no voting rights with respect to shares of Common Stock represented
      by Restricted Stock Units until the date of the issuance of such shares (as
      evidenced by the appropriate entry on the books of the Corporation or of a
      duly
      authorized transfer agent of the Corporation).

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    4.8 Dividends
      and Other Distributions. 

     

    (a) Except
      as
      otherwise provided in Section
      4.9
      or in
      the Participant’s Agreement, during the Restriction Period, a Participant shall
      be entitled to receive all dividends and other distributions paid with respect
      to shares of Common Stock subject to a Restricted Stock grant. If any dividends
      or distributions are paid in shares of Common Stock during the Restriction
      Period, the dividend or other distribution shares shall be subject to the same
      restrictions on transferability as the shares of Common Stock with respect
      to
      which they were paid. 

     

    (b) The
      Committee, in its discretion, may provide in the Agreement evidencing any
      Restricted Stock Unit that the Participant shall be entitled to receive Dividend
      Equivalents with respect to the payment of cash dividends on Common Stock having
      a record date prior to date on which Restricted Stock Units held by such
      Participant are settled. Such Dividend Equivalents, if any, shall be paid by
      crediting the Participant with additional whole Restricted Stock Units as of
      the
      date of payment of such cash dividends on Common Stock. The number of additional
      Restricted Stock Units (rounded to the nearest whole number) to be so credited
      shall be determined by dividing (a) the amount of cash dividends paid on such
      date with respect to the number of shares of Common Stock represented by the
      Restricted Stock Units previously credited to the Participant by (b) the Fair
      Market Value per share of Common Stock on such date. Such additional Restricted
      Stock Units shall be subject to the same terms and conditions and shall be
      settled in the same manner and at the same time (or as soon thereafter as
      practicable) as the Restricted Stock Units originally subject to the Restricted
      Stock Unit. In the event of a dividend or distribution paid in shares of Common
      Stock or any other adjustment made upon a change in the capital structure of
      the
      Corporation as described in Section
      9.1,
      appropriate adjustments shall be made in the Participant's Restricted Stock
      Unit
      so that it represents the right to receive upon settlement any and all new,
      substituted or additional securities or other property (other than normal cash
      dividends) to which the Participant would be entitled by reason of the shares
      of
      Common Stock issuable upon settlement of the Restricted Stock Unit, and all
      such
      new, substituted or additional securities or other property shall be immediately
      subject to the same restrictions as are applicable to the Restricted Stock
      Unit.

     

    4.9 Restricted
      Stock Grants and Units Under Code Section 162(m).
      The
      Committee, at its discretion, may designate certain Restricted Stock grants
      or
      Restricted Stock Units as being granted pursuant to Code Section 162(m). Such
      Restricted Stock and Restricted Stock Units must comply with the following
      additional requirements, which override any other provision set forth in this
      Article
      IV:

     

    (a) Each
      Code
      Section 162(m) Restricted Stock Award or Restricted Stock Unit shall be based
      upon pre-established, objective performance goals that are intended to satisfy
      the performance-based compensation requirements of Code Section 162(m) and
      the
      regulations promulgated thereunder. Further, at the discretion of the Committee,
      a Restricted Stock Award or Restricted Stock Unit also may be subject to goals
      and restrictions in addition to the performance requirements.

     

    (b) Each
      Code
      Section 162(m) Restricted Stock Award or Restricted Stock Unit shall be based
      upon the attainment of specified levels of Corporation or Subsidiary performance
      during a specified performance period, as measured by any or all of the
      Performance Measures. 

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    (c) For
      each
      designated performance period, the Committee shall (i) select those Employees
      who shall be eligible to receive a Restricted Stock Award or Restricted Stock
      Unit, (ii) determine the performance period, which may be a one to five fiscal
      year period, (iii) determine the target levels of Corporation or Subsidiary
      performance, and (iv) determine the number of shares subject to a Restricted
      Stock Award or Restricted Stock Unit to be paid to each selected Employee.
      Unless otherwise permitted in compliance with the requirements under Section
      162(m) with respect to “performance-based compensation,” the Committee shall
      establish the performance goal(s) applicable to each Restricted Stock grant
      or
      Restricted Stock Unit no later than the earlier of (a) the date ninety (90)
      days
      after the commencement of the applicable performance period or (b) the date
      on
      which 25% of the performance period has elapsed, and, in any event, at a time
      when the outcome of the performance goals remains substantially uncertain,
      or
      such other period as is permitted by Code Section 162(m).

     

    (d) For
      each
      performance period, the Committee shall certify, in writing: (i) if the
      Corporation has attained the performance targets, and (ii) the number of shares
      pursuant to the Code Section 162(m) Restricted Stock Award or Restricted Stock
      Unit that are to become freely transferable. The Committee shall have no
      discretion to waive all or part of the conditions, goals and restrictions
      applicable to the receipt of full or partial payment of a Code Section 162(m)
      Restricted Stock Award or Restricted Stock Unit. Any certificate for shares
      under a Code Section 162(m) Restricted Stock Unit shall be issued only after
      the
      Committee certifies in writing that the performance goals and restrictions
      have
      been satisfied.

     

    (e) No
      shares
      under a Code Section 162(m) Restricted Stock Award or Restricted Stock Unit
      shall become transferable until the Committee certifies in writing that the
      performance goals and restrictions have been satisfied. Any dividends paid
      during the Restriction Period automatically shall be reinvested on behalf of
      the
      Employee in additional shares of Common Stock under the Plan, and such
      additional shares shall be subject to the same performance goals and
      restrictions as the other shares under the Code Section 162(m) Restricted Stock
      Award or Restricted Stock Unit. 

     

    (f) Except
      as
      otherwise provided in this Article
      X, Section
      10.4
      and
Section
      10.5
      of the
      Plan, and subject to applicable federal and state securities laws, shares
      covered by each Code Section 162(m) Restricted Stock Award or Restricted Stock
      Unit made under the Plan may not be transferred, pledged, assigned, or otherwise
      alienated or hypothecated until the applicable performance targets and other
      restrictions are satisfied, as shall be certified in writing by the Committee.
      At such time, shares covered by the Code Section 162(m) Restricted Stock Award
      or Restricted Stock Unit shall become freely transferable by the Employee.
      Once
      the shares are released from the restrictions, the Employee shall be entitled
      to
      have the legend required by Section 4.5
      of the
      Plan removed from the applicable Common Stock certificate. 

     

    (g) No
      Participant may be granted a Code Section 162(m) Restricted Stock Award or
      Restricted Stock Units during any one fiscal year of the Corporation for more
      than 200,000 shares of Common Stock.

     

    4.10 Settlement
      of Restricted Stock Unit Awards.
      If a
      Restricted Stock Unit is payable in Common Stock, the Corporation shall issue
      to
      a Participant on the date on which Restricted Stock Units subject to the
      Participant's Restricted Stock Unit vest, one (1) share of Common Stock (and/or
      any other new, substituted or additional securities or other property pursuant
      to an adjustment described in Section
      4.8
      or
Section
      9.1)
      for
      each Restricted Stock Unit then becoming vested or otherwise to be settled
      on
      such date, subject to the withholding of applicable taxes. 

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    V. PERFORMANCE
      SHARE AWARDS

     

    5.1 Grant
      of Performance Share Awards.
      The
      Committee, at its discretion, may grant Performance Share Awards to Participants
      and may determine, on an individual or group basis, the performance goals to
      be
      attained pursuant to each Performance Share Award. 

     

    5.2 Terms
      of Performance Share Awards.
       

     

    (a) Performance
      Share Awards shall consist of rights to receive cash, Common Stock or a
      combination of each, if designated performance goals are achieved. 

     

    (b) The
      terms
      of a Participant’s Performance Share Award shall be set forth in his or her
      individual Performance Share Agreement. Each Agreement shall specify the
      performance goals applicable to a particular Participant or group of
      Participants, the period over which the targeted goals are to be attained,
      the
      payment schedule if the goals are attained, and any other general terms and
      conditions applicable to an individual Performance Share Award as the Committee
      shall determine. 

     

    (c) Except
      as
      set forth in Section
      5.3
      of the
      Plan, the Committee, at its discretion, may waive all or part of the conditions,
      goals and restrictions applicable to the receipt of full or partial payment
      of a
      Performance Share Award.

     

    (d) Performance
      Share Awards may be granted in two different forms, at the discretion of the
      Committee as follows: 

     

    (i) Under
      one
      form, the Participant shall receive a Performance Share Award that consists
      of a
      legended certificate of Common Stock, restricted from transfer prior to the
      satisfaction of the designated performance goals and restrictions, as determined
      by the Committee and specified in the Participant’s Performance Share Agreement.

     

    (ii) Under
      the
      second form (a “Performance Share Award Unit”), the Participant shall receive a
      Performance Share Agreement from the Committee that specifies the performance
      goals and restrictions that must be satisfied before the Corporation shall
      issue
      the payment, which may be cash, a designated number of shares of Common Stock
      or
      a combination of the two. 

     

    (e) Each
      certificate representing shares under a Performance Share Award shall bear
      the
      following legend:

     

    The
      sale
      or other transfer of the shares of stock represented by this certificate,
      whether voluntary, involuntary or by operation of law, is subject to certain
      restrictions on transfer set forth in the First Amended and Restated Perceptron,
      Inc. 2004 Stock Incentive Plan (“Plan”), rules and administrative guidelines
      adopted pursuant to such Plan and a Performance Share Agreement dated
                            
      . A copy
      of the Plan, such rules and such Performance Share Agreement may be obtained
      from the Secretary of Perceptron, Inc.

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    (f) In
      its
      discretion, the Committee may, either at the time it grants a Performance Share
      Award or at any time thereafter, provide for the positive or negative adjustment
      of the performance goals applicable to a Performance Share Award granted to
      any
      Participant whose Performance Share Award has not been designated as a Code
      Section 162(m) Performance Share Award to reflect such Participant's individual
      performance in his or her position with the Corporation or such other factors
      as
      the Committee may determine. 

     

    (g) Notwithstanding
      any other provision in this Plan, including Section 5.3, the Performance Share
      Award shall be paid to the Participant within thirty (30) days after the
      Committee certifies that the performance goals and restrictions relating to
      the
      Performance Share Award have been satisfied.

     

    (h) If
      payment is to be made in shares of Common Stock, the number of such shares
      shall
      be determined by dividing the final value of the Performance Share Award by
      the
      value of a share of Common Stock determined by the method specified in the
      Agreement.

     

    (i) Participants
      holding Performance Share Awards or Performance Share Award Units shall have
      the
      same voting rights and rights to dividends and other distributions as would
      Participants holding Restricted Stock or Restricted Stock Units under
Article
      IV.
      

     

    5.3 Performance
      Share Awards Granted Under Code Section 162(m).
      The
      Committee, at its discretion, may designate certain Performance Share Awards
      as
      granted pursuant to Code Section 162(m). Such Performance Share Awards must
      comply with the following additional requirements, which, except for Section
      5.2(g), override any other provision set forth in this Article
      V:

     

    (a) The
      Committee, at its discretion, may grant Code Section 162(m) Performance Share
      Awards based upon pre-established, objective performance goals that are intended
      to satisfy the performance-based compensation requirements of Code Section
      162(m) and the regulations promulgated thereunder. Further, at the discretion
      of
      the Committee, a Performance Share Award also may be subject to goals and
      restrictions in addition to the performance requirements.

     

    (b) Each
      Code
      Section 162(m) Performance Share Award shall be based upon the attainment of
      specified levels of Corporation or Subsidiary performance during a specified
      performance period, as measured by any or all of the Performance Measures.
      

     

    (c) For
      each
      designated performance period, the Committee shall (i) select those Employees
      who shall be eligible to receive a Code Section 162(m) Performance Share Award,
      (ii) determine the performance period, which may be a one to five fiscal year
      period, (iii) determine the target levels of Corporation or Subsidiary
      performance, and (iv) determine the Performance Share Award to be paid to each
      selected Employee. Unless otherwise permitted in compliance with the
      requirements under Section 162(m) with respect to “performance-based
      compensation,” the Committee shall establish the performance goal(s) applicable
      to each Performance Share Award no later than the earlier of (a) the date ninety
      (90) days after the commencement of the applicable performance period or (b)
      the
      date on which 25% of the performance period has elapsed, and, in any event,
      at a
      time when the outcome of the performance goals remains substantially uncertain,
      or such other period as is permitted by Code Section 162(m). 

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    (d) For
      each
      performance period, the Committee shall certify, in writing: (i) if the
      Corporation has attained the performance targets; and (ii) the cash or number
      of
      shares (or combination thereof) pursuant to the Code Section 162(m) Performance
      Share Award that shall be paid to each selected Employee (or the number of
      shares that are to become freely transferable, if a Code Section 162(m)
      Performance Share Award is granted subject to attainment of the designated
      performance goals). The Committee shall have no discretion to waive all or
      part
      of the conditions, goals and restrictions applicable to the receipt of full
      or
      partial payment of a Code Section 162(m) Performance Share Award. Any
      certificate for shares under a Code Section 162(m) Performance Share Award
      Unit
      shall be issued only after the Committee certifies in writing that the
      performance goals and restrictions have been satisfied.

     

    (e) No
      shares
      under a Code Section 162(m) Performance Share Award shall become transferable
      until the Committee certifies in writing that the performance goals and
      restrictions have been satisfied.

     

    (f) Except
      as
      otherwise provided in this Article
      V
      or
Section
      10.4
      of the
      Plan, and subject to applicable federal and state securities laws, shares
      covered by each Code Section 162(m) Performance Share Award made under the
      Plan
      may not be transferred, pledged, assigned, or otherwise alienated or
      hypothecated until the applicable performance targets and other restrictions
      are
      satisfied, as shall be certified in writing by the Committee. At such time,
      shares covered by the Code Section 162(m) Performance Share Award shall become
      freely transferable by the Participant. Once the shares are released from the
      restrictions, the Employee shall be entitled to have the legend required by
      Section
      5.2(e)
      removed
      from the applicable Common Stock certificate.

     

    (g) Participants
      holding Code Section 162(m) Performance Awards or Performance Share Award Units
      shall have the same voting rights and rights to dividends and other
      distributions as would Participants holding Code Section 162(m) Restricted
      Stock
      or Restricted Stock Units under Article
      IV.
      

     

    (h) No
      Participant may be granted a Code Section 162(m) Performance Share Award during
      any one fiscal year for more than 200,000 shares of Common Stock, except that
      if
      a Performance Share Award Unit payout is not based upon a set number of shares
      of Common Stock for achievement of the performance goals, then no Employee
      may
      receive a Code Section 162(m) Performance Share Award Unit which could result
      in
      such Employee receiving more than Five Hundred Thousand Dollars ($500,000)
      for
      each fiscal year of the Corporation contained in the performance period for
      such
      Award. No Employee may be granted more than one Performance Share Award for
      the
      same performance period.

     

    (i) If
      permitted under the Employee’s Agreement, the Committee shall have the
      discretion, on the basis of such criteria as may be established by the
      Committee, to reduce some or all of the value of the Code Section 162(m)
      Performance Share Award that would otherwise be paid to the Employee upon its
      settlement notwithstanding the attainment of any performance goal. No such
      reduction may result in an increase in the amount payable upon settlement of
      another Participant's Code Section 162(m) Performance Share Award. 

     

    VI. DIRECTOR
      STOCK PURCHASE RIGHTS

     

    6.1 Eligibility.
      A
      Director of the Corporation may elect to purchase shares of Common Stock under
      the Plan using all or a portion of his or her cash fees received for services
      as
      a director of the Corporation for which the Director has not yet received
      payment (including but not limited to, quarterly retainer and Board/Committee
      meeting fees). 

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

    6.2 Elections.
      Elections to purchase Common Stock under the Plan in lieu of cash compensation
      may be submitted to the Corporation annually, prior to the end of December
      of
      each calendar year or such other period established by the Committee. An
      election shall cover director cash compensation payable in the next calendar
      year.

     

    6.3 Purchase
      Price.
      Common
      Stock purchased by a Director hereunder shall have a purchase price equal to
      100% of the Fair Market Value of the Corporation’s Common Stock on the first day
      of the month in which the quarterly Director Fee Payment Date
      falls.

     

    6.4 Termination
      of Services.
      If a
      Director ceases to remain on the Board for any reason, including but not limited
      to, voluntary or forced resignation, removal, failure to be re-elected as a
      director, death, Disability or retirement, the Director (or executor,
      administrator or legal representative, if applicable) shall receive share
      certificates for all cash director fees earned prior to the Director’s departure
      from the Board for which the Director elected to receive Common Stock pursuant
      to this Article
      VI,
      but for
      which the Director has not yet received a share certificate. Such share
      certificates shall be issued following the next quarterly Director Fee Payment
      Date.

     

    6.5 Non-Assignability.
      Any
      Common Stock purchase right granted hereunder shall be exercised by the Director
      only and is nontransferable. Upon the death of a Director, any earned, but
      unpaid cash director fees for which the Director elected to receive Common
      Stock
      pursuant to this Article
      VI,
      shall
      be paid in the form of share certificates to the Director’s executor,
      administrator or legal representative in accordance with Section
      6.4
      above.

     

    6.6 Adjustments.
      The
      total amount of Common Stock to be received by a Director at the time of any
      issuance of a share certificate shall be appropriately adjusted for any increase
      or decrease in the number of outstanding shares of Common Stock resulting from
      stock dividends, stock splits, recapitalizations, reorganizations, mergers,
      combinations, exchanges or other relevant changes in the capital structure
      of
      the Corporation occurring from the Director Fee Payment Date on which such
      shares of Common Stock were earned to the date of issuance of the share
      certificate for such shares. The foregoing adjustments and the manner of
      application of the foregoing provisions shall be determined by the Board in
      its
      sole discretion.

     

    6.7 Rule
      16b-3 Requirements.
      Notwithstanding any provision of the Plan, the Committee may impose such
      conditions on the purchase of shares of Common Stock hereunder as may be
      required to satisfy the requirements of Rule 16b-3 of the Exchange Act, as
      amended from time to time (or any successor rule). Notwithstanding any provision
      in the Plan to the contrary, the Committee shall have no discretion with respect
      to the terms of purchase made pursuant to this Article
      VI,
      except
      to the extent such discretion would not result in the purchase or the Plan
      failing to qualify for the exemption provided under Rule 16b-3.

     

    6.8 Delivery
      of Shares; Rights Prior to Delivery of Shares.
      By
      December 15th
      of each
      year, Directors electing to receive Common Stock will receive share certificates
      for shares earned during the year. A Director may request to receive Common
      Stock at any or each quarterly Director Fee Payment Date for the year in which
      the shares were earned. No Participant shall have any rights as a shareholder
      with respect to shares of Common Stock covered by a purchase right until the
      issuance of a stock certificate. No adjustment shall be made for dividends
      or
      other rights with respect to such shares for which the record date is prior
      to
      the date the certificate is issued. 

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

    VII. DEFERRED
      STOCK UNITS

     

    7.1 Establishment
      of Deferred Stock Unit Program.
      The
      Committee, in its discretion and upon such terms and conditions as it may
      determine, may establish one or more programs pursuant to the Plan under which,
      subject to the requirements of Code Section 409A, Participants designated by
      the
      Committee who are among a select group of management or highly compensated
      Employees may irrevocably elect, prior to a date specified by the Committee
      but
      no later than the close of the Corporation’s taxable year immediately preceding
      the first taxable year of the Corporation in which any services are performed
      for which such compensation is payable, to reduce such Participant's
      compensation otherwise payable in cash (subject to any minimum or maximum
      reductions imposed by the Committee) and to be granted automatically at such
      time or times as specified by the Committee one or more awards of Deferred
      Stock
      Units with respect to such numbers of shares of Common Stock as determined
      in
      accordance with the rules of the program established by the Committee and having
      such other terms and conditions as established by the Committee. 

     

    7.2 Terms
      and Conditions of Deferred Stock Units.
      Deferred
      Stock Units granted pursuant to this Section
      7.2
      shall be
      evidenced by Agreements in such form as the Committee shall from time to time
      establish. No such Deferred Stock Unit or purported Deferred Stock Unit shall
      be
      a valid and binding obligation of the Corporation unless evidenced by a fully
      executed Agreement. Agreements evidencing Deferred Stock Units may incorporate
      all or any of the terms of the Plan by reference and shall comply with and
      be
      subject to the following terms and conditions:

     

    (a) Deferred
      Stock Units shall not be subject to any vesting conditions. 

     

    (b) Participants
      shall have no voting rights with respect to shares of Common Stock represented
      by Deferred Stock Units until the date of the issuance of such shares (as
      evidenced by the appropriate entry on the books of the Corporation or of a
      duly
      authorized transfer agent of the Corporation). However, a Participant shall
      be
      entitled to receive Dividend Equivalents with respect to the payment of cash
      dividends on Common Stock having a record date prior to date on which Deferred
      Stock Units held by such Participant are settled. Such Dividend Equivalents
      shall be paid by crediting the Participant with additional whole and/or
      fractional Deferred Stock Units as of the date of payment of such cash dividends
      on Common Stock. The method of determining the number of additional Deferred
      Stock Units to be so credited shall be specified by the Committee and set forth
      in the Agreement. Such additional Deferred Stock Units shall be subject to
      the
      same terms and conditions and shall be settled in the same manner and at the
      same time (or as soon thereafter as practicable) as the Deferred Stock Units
      originally subject to the Deferred Stock Unit award. In the event of a dividend
      or distribution paid in shares of Common Stock or any other adjustment made
      upon
      a change in the capital structure of the Corporation as described in
Section
      9.1,
      appropriate adjustments shall be made in the Participant's Deferred Stock Unit
      so that it represents the right to receive upon settlement any and all new,
      substituted or additional securities or other property (other than normal cash
      dividends) to which the Participant would be entitled by reason of the shares
      of
      Common Stock issuable upon settlement of the award. 

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

    (c) A
      Participant electing to receive an award of Deferred Stock Units pursuant to
      this Section
      7.2,
      shall
      specify at the time of such election that is made in accordance with the
      requirements of Section 7.1(a), a payment date with respect to such Deferred
      Stock Unit. The Corporation shall issue to the Participant within sixty (60)
      days following the earlier of the payment date elected by the Participant or
      the
      date of termination of the Participant's employment (as long as the termination
      of employment qualifies as a “separation from service” under Code Section 409A)
      a number of whole shares of Common Stock equal to the number of whole Deferred
      Stock Units subject to the Deferred Stock Unit Award. Such shares of Common
      Stock shall be fully vested, and the Participant shall not be required to pay
      any additional consideration (other than applicable tax withholding) to acquire
      such shares. Any fractional Deferred Stock Unit subject to the Deferred Stock
      Unit Award shall be settled by the Corporation by payment in cash of an amount
      equal to the Fair Market Value as of the payment date of such fractional
      share.

     

    (d) If
      the
      Participant makes a subsequent election to defer or change the form of payment
      of his or her Deferred Stock Units (1) such election shall not take effect
      until
      at least twelve (12) months after the date on which the election is made and
      (ii) the payment of Deferred Stock Units that are subject to this subsequent
      election to defer or change in form of payment shall be paid no earlier than
      five (5) years from the date such payment would otherwise have been paid (or
      in
      the case of an installment payment, five (5) years from the date the first
      amount was scheduled to be paid).

     

    VIII. TERMINATION
      OF EMPLOYMENT OR SERVICES

     

    8.1 Options
      and Stock Appreciation Rights.

     

    (a) If,
      prior
      to the date that an Option or Stock Appreciation Right first becomes Vested,
      a
      Participant terminates employment or services for any reason, the Participant’s
      right to exercise the Option or Stock Appreciation Right shall terminate and
      all
      rights thereunder shall cease.

     

    (b) If,
      on or
      after the date that an Option or Stock Appreciation Right first becomes Vested,
      a Participant terminates employment or services for any reason other than death
      or Disability, the Participant shall have the right within the period specified
      in the Participant’s Agreement to exercise the Option or Stock Appreciation
      Right to the extent that it was exercisable and unexercised on the date of
      the
      Participant’s termination of employment or services, subject to any other
      limitation on the exercise of the Option or Stock Appreciation Right in effect
      on the date of exercise; provided, however, that the beneficial tax treatment
      of
      an Incentive Stock Option may be forfeited if the Option is exercised more
      than
      three months after a Participant’s termination of employment.

     

    (c) If,
      on or
      after the date that an Option or Stock Appreciation Right first becomes Vested,
      a Participant terminates employment or services due to death while an Option
      or
      Stock Appreciation Right is still exercisable, the person or persons to whom
      the
      Option or Stock Appreciation Right shall have been transferred by will or by
      the
      laws of descent and distribution, shall have the right within the exercise
      period specified in the Participant’s Agreement to exercise the Option or Stock
      Appreciation Right to the extent that it was exercisable and unexercised on
      the
      Participant’s date of death, subject to any other limitation on exercise in
      effect on the date of exercise; provided, however, that the beneficial tax
      treatment of an Incentive Stock Option may be forfeited if the Option is
      exercised more than one year after a Participant’s date of death. If the
      Participant dies after termination of employment or services while the Option
      or
      Stock Appreciation Right is still exercisable, the Option or Stock Appreciation
      Right shall be exercisable in accordance with the terms of paragraph
      (c)
      above.

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

    (d) If,
      on or
      after the date that an Option or Stock Appreciation Right first becomes Vested,
      a Participant terminates employment or services due to Disability, the
      Participant shall have the right, within the exercise period specified in the
      Participant’s Agreement to exercise the Option or Stock Appreciation Right to
      the extent that it was exercisable and unexercised on the date of the
      Participant’s termination of employment or services, subject to any other
      limitation on the exercise of the Option or Stock Appreciation Right in effect
      on the date of exercise; provided, however, that the beneficial tax treatment
      of
      an Incentive Stock Option may be forfeited if the Option is exercised more
      than
      one year after a Participant’s termination of employment due to
      Disability.

     

    (e) Subject
      to Code Section 409A, the Committee may designate in a Participant’s Agreement
      that an Option or Stock Appreciation Right shall terminate at an earlier or
      later time than set forth above. 

     

    (f) Subject
      to Code Section 409A, the Committee, at the time of a Participant’s termination
      of employment or services, may accelerate a Participant’s right to exercise an
      Option or extend the exercise period of an Option or Stock Appreciation Right
      (but in no event past the tenth anniversary of the Grant Date of such Option
      or
      Stock Appreciation Right); provided, however that the extension of the exercise
      period for an Incentive Stock Option may cause such Option to forfeit its
      preferential tax treatment.

     

    (g) Shares
      subject to Options and Stock Appreciation Rights that are not exercised in
      accordance with the provisions of paragraph
      (a) through (f)
      above
      shall expire and be forfeited by the Participant as of their expiration date
      and, subject to Section
      1.6,
      shall
      become available for new grants and awards under the Plan as of such
      date.

     

    8.2 Restricted
      Stock Grants and Units.
      If a
      Participant terminates employment or services for any reason, the Participant’s
      rights to shares of Common Stock subject to a Restricted Stock grant or
      Restricted Stock Unit that are still subject to the Restriction Period
      automatically shall terminate and be forfeited by the Participant (or, if the
      Participant was required to pay a purchase price for the Restricted Stock,
      other
      than the performance of services, the Corporation shall have the option to
      repurchase for the purchase price paid by the Participant any shares acquired
      by
      the Participant which are still subject to the Restriction Period) and, subject
      to Section
      1.6,
      said
      shares shall be available for new grants and awards under the Plan as of such
      termination date; provided, however, that the Committee, in its sole discretion
      and in accordance with Code Section 409A, may include a provision in a
      Participant’s Restricted Stock or Restricted Stock Unit Agreement providing for
      the continuation of a Restricted Stock grant or Restricted Stock Unit after
      a
      Participant terminates employment or services or waiving or changing the
      remaining restrictions or adding additional restrictions with respect to any
      Restricted Stock grant or Restricted Stock Unit that would otherwise be
      forfeited, as it deems appropriate, or may otherwise waive or change all or
      part
      of the remaining restrictions or add additional restrictions to any such
      Restricted Stock grant or Restricted Stock Unit. Notwithstanding the foregoing,
      the Committee shall not waive any restrictions on a Code Section 162(m)
      Restricted Stock Award or Restricted Stock Unit, but the Committee may include
      a
      provision in an Employee’s Code Section 162(m) Restricted Stock or Restricted
      Stock Unit Agreement stating that upon the Employee’s termination of employment
      due to (i) death or (ii) Disability prior to the attainment of the associated
      performance goals and the termination of the Restriction Period, that the
      performance goals and restrictions shall be deemed to have been satisfied on
      terms determined by the Committee.

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

    8.3 Performance
      Shares.
      Performance Share Awards shall expire and be forfeited by a Participant upon
      the
      Participant’s termination of employment or services for any reason, and, subject
      to Section
      1.6,
      such
      shares shall be available for new grants and awards under the Plan as of such
      termination date; provided, however, that the Committee, in its discretion
      and
      in accordance with Code Section 409A, may include a provision in a Participant’s
      Performance Share Award Agreement providing for the continuation of a
      Performance Share Award after a Participant terminates employment or services
      or
      waiving or changing all or part of the conditions, goals and restrictions
      applicable to the receipt of full or partial payment of a Performance Share
      Award or may otherwise waive or change all or part of the conditions, goals
      and
      restrictions applicable to such Performance Share Award. Notwithstanding the
      foregoing, the Committee shall not waive any restrictions on a Code Section
      162(m) Performance Share Award, but the Committee may include a provision in
      an
      Employee’s Code Section 162(m) Performance Share Agreement stating that upon the
      Employee’s termination of employment due to (i) death or (ii) Disability prior
      to the attainment of the associated performance goals and restrictions, that
      the
      performance goals and restrictions shall be deemed to have been satisfied on
      terms determined by the Committee.

     

    8.4 Other
      Provisions.
      The
      transfer of an Employee from one corporation to another among the Corporation
      and any of its Subsidiaries, or a leave of absence under the leave policy of
      the
      Corporation or any of its Subsidiaries, shall not be a termination of employment
      for purposes of the Plan, unless a provision to the contrary is expressly stated
      by the Committee in a Participant’s Agreement issued under the
      Plan.

     

    IX. ADJUSTMENTS
      AND CHANGE IN CONTROL

     

    9.1 Adjustments.

     

    (a) The
      total
      amount of Common Stock for which Options, Stock Appreciation Rights, Restricted
      Stock, Restricted Stock Units, Performance Share Awards, Director Stock Purchase
      Rights and Deferred Stock Units may be issued under the Plan, the number of
      shares subject to any such grants, awards or purchases (both as to the number
      of
      shares of Common Stock and exercise price), and the limit on the number of
      shares that can be included in an Award under Sections
      2.1, 3.1, 4.9(g) and 5.3(h),
      shall be
      adjusted pro rata for any increase or decrease in the number of outstanding
      shares of Common Stock resulting from payment of a stock dividend on Common
      Stock, a subdivision or combination of shares of Common Stock, a
      reclassification of Common Stock or other similar transaction determined by
      the
      Committee to be covered by this Section
      9.1(a);
      provided, however, in each case, that, with respect to Incentive Stock Options,
      any such adjustment shall be made in accordance with Section 422 of the Code
      or
      any successor provision thereto to the extent that such Option is intended
      to
      remain an Incentive Stock Option. Such adjustment shall be made by the Committee
      or the Board, whose determination in that respect shall be final, binding and
      conclusive.

    
      
         

      

      
        21

        
          

        

      

      
         

      

    

    (b) In
      the
      event of a proposed dissolution or liquidation of the Corporation, the Committee
      shall notify each Participant as soon as practicable prior to the effective
      date
      of such proposed transaction. The Committee in its discretion may provide for
      a
      Participant to have the right to exercise his or her Option, Stock Appreciation
      Right, Restricted Stock grant, Restricted Stock Units, Performance Share Award
      or Deferred Stock Unit in full for a period specified by the Committee as to
      all
      of the shares of Common Stock covered thereby, including shares as to which
      the
      Option, Stock Appreciation Right, Restricted Stock grant, Restricted Stock
      Unit,
      Performance Share Award or Deferred Stock Unit would not otherwise be
      exercisable, subject to the proposed dissolution or liquidation taking place
      at
      the time and in the manner contemplated. In addition, the Committee may provide
      that any re-purchase option of the Corporation applicable to the shares
      purchased upon exercise of an Option, Stock Appreciation Right, Restricted
      Stock
      grant, Restricted Stock Unit, Performance Share Award, Director Stock Purchase
      Rights or Deferred Stock Unit shall lapse as to all such shares, provided that
      the proposed dissolution or liquidation takes place at the time and in the
      manner contemplated. To the extent it has not been previously exercised, an
      Option, Stock Appreciation Right, Restricted Stock grant, Restricted Stock
      Unit,
      Performance Share Award or Deferred Stock Unit shall terminate immediately
      prior
      to the consummation of the proposed dissolution or liquidation.

     

    (c) In
      the
      event of a merger of the Corporation with or into another corporation where
      the
      Corporation is not the surviving corporation, a reverse triangular merger where
      the Corporation is the surviving corporation, but its stock is exchanged for
      stock of the parent company of the other party to the merger, the sale of
      substantially all of the assets of the Corporation, the reorganization of the
      Corporation or other similar transaction determined by the Committee to be
      covered by this Section
      9.1(c),
      it is
      intended that each outstanding Option, Stock Appreciation Right, Restricted
      Stock grant, Restricted Stock Unit, Performance Share Award, Director Stock
      Purchase Right or, if permitted under Code Section 409A, a Deferred Stock Unit
      shall be assumed or an equivalent option or right substituted by the successor
      corporation, the parent or a subsidiary of the successor corporation or the
      parent of the Corporation following a reverse triangular merger. In the event
      that such successor corporation (or the parent or a subsidiary thereof or the
      parent of the Corporation following a reverse triangular merger) refuses to
      assume or substitute for the Option, Stock Appreciation Right, Restricted Stock
      grant, Restricted Stock Unit, Performance Share Award, Deferred Stock Unit,
      or
      Director Stock Purchase Right, the Participant shall fully vest in and/or have
      the right to exercise the Option, Stock Appreciation Right, Restricted Stock
      grant, Restricted Stock Unit or Performance Share Award, including shares which
      would not otherwise be vested or exercisable, and the Participant shall have
      his
      or her Director Stock Purchase Right and, if permitted under Code Section 409A,
      a Deferred Stock Unit paid in full in Common Stock for services through the
      date
      of the consummation of the transaction. If an Option, Stock Appreciation Right,
      Restricted Stock grant, Restricted Stock Unit or Performance Share Award becomes
      fully vested and exercisable in lieu of assumption or substitution in the event
      of a merger, sale of assets, reorganization or other transaction, the Committee
      shall notify the Participant in writing or electronically that the Option,
      Stock
      Appreciation Right, Restricted Stock grant, Restricted Stock Unit or Performance
      Share Award shall be fully vested and exercisable for a period specified by
      the
      Committee from the date of such notice, provided that if such period expires
      prior to the consummation of the merger, sale of assets, reorganization or
      other
      transaction, any exercise shall be subject to the proposed merger, sale of
      assets or other transaction taking place, and the Option, Stock Appreciation
      Right, Restricted Stock grant, Restricted Stock Unit or Performance Share Award
      shall terminate upon the expiration of such period (or the consummation of
      the
      merger, sale of assets, reorganization or other transaction, if later). For
      the
      purposes of this paragraph, the Option, Stock Appreciation Right, Restricted
      Stock grant, Restricted Stock Unit, Performance Share Award, Director Stock
      Purchase Right or, if permitted under Code Section 409A, Deferred Stock Unit
      shall be considered assumed if, following the merger, sale of assets,
      reorganization or other transaction, the option or right confers the right
      to
      purchase or receive, for each share covered by the Participant’s Option, Stock
      Appreciation Right, Restricted Stock grant, Restricted Stock Unit, Performance
      Share Award, Director Stock Purchase Right or Deferred Stock Unit immediately
      prior to such transaction, the consideration (whether stock, cash, or other
      securities or property) received in the merger, sale of assets, reorganization,
      or other transaction, by holders of Common Stock for each share held on the
      effective date of the transaction (and if holders were offered a choice of
      consideration, the type of consideration determined by the Committee); provided,
      however, that if such consideration received in the merger, sale of assets,
      reorganization, or other transaction, is not solely common stock of the
      successor corporation (or the parent or a subsidiary thereof), the Committee
      may, with the consent of the successor corporation, provide for the
      consideration to be received upon the payment under the Deferred Stock Unit
      or
      Director Stock Purchase Right or exercise and/or vesting of the Option, Stock
      Appreciation Right, Restricted Stock grant, Restricted Stock Unit or Performance
      Share Award for each share of Common Stock subject to the Option, Stock
      Appreciation Right, Restricted Stock grant, Restricted Stock Unit, Performance
      Share, Director Stock Purchase Right or Deferred Stock Unit Award to be solely
      (i) common stock of the successor corporation (or the parent or a subsidiary
      thereof) equal in Fair Market Value to the per share consideration received
      by
      holders of Common Stock in the merger, sale of assets, reorganization or other
      transaction, or (ii) cash. 

    
      
         

      

      
        22

        
          

        

      

      
         

      

    

    (d) In
      the
      event of a proposed spin-off or a transfer by the Corporation of a portion
      of
      its assets resulting in the employment of certain Participants by the spin-off
      entity or the entity acquiring assets of the Corporation, the Committee may
      make
      whatever adjustments it determines appropriate with respect to such terminating
      Participants.

     

    (e) The
      foregoing adjustments shall be made by the Committee. Any such adjustment may
      provide for the elimination of any fractional share which might otherwise become
      subject to an Option, Stock Appreciation Right, Restricted Stock grant,
      Restricted Stock Unit, Performance Share Award, Director Stock Purchase Right
      or
      Deferred Stock Unit. The Committee need not make the same adjustments for each
      Participant.

     

    9.2 Change
      in Control. 

     

    (a) The
      Committee in its discretion may provide in a Participant’s Agreement or
      otherwise, notwithstanding anything contained herein to the contrary, that
      in
      the event of a Change in Control, or the occurrence of a Change in Control,
      any
      or all of the following will occur: (i) any outstanding Option or Stock
      Appreciation Right granted to such Participant hereunder immediately shall
      become fully Vested and exercisable in full, regardless of any installment
      provision applicable to such Option or Stock Appreciation Right; (ii) the
      remaining Restriction Period on any shares of Common Stock subject to a
      Restricted Stock grant or Restricted Stock Unit hereunder immediately shall
      lapse and the shares shall become fully transferable, subject to any applicable
      federal or state securities laws; (iii) all performance goals and conditions
      shall be deemed to have been satisfied and all restrictions shall lapse on
      any
      outstanding Performance Share Awards granted to such Participant hereunder,
      and
      such Awards shall become payable in full; (iv), for purposes of any Deferred
      Stock Unit granted to such Participant hereunder, payments due under the
      Deferred Stock Unit should become immediately payable; or (v) such other
      treatment as the Committee may determine.

     

    (b) The
      Committee may, in its sole discretion and without the consent of any
      Participant, determine that, upon the occurrence of a Change in Control, each
      or
      any Option or Stock Appreciation Right outstanding immediately prior to the
      Change in Control shall be canceled in exchange for a payment with respect
      to
      each vested share of Common Stock subject to such canceled Option or Stock
      Appreciation Right in (i) cash, (ii) stock of the Corporation or of a
      corporation or other business entity a party to the Change in Control, or (iii)
      other property which, in any such case, shall be in an amount having a Fair
      Market Value equal to the excess of the Fair Market Value of the consideration
      to be paid per share of Common Stock in the Change in Control over the exercise
      price per share under such Option or Stock Appreciation Right (the “Spread”). In
      the event such determination is made by the Committee, the Spread (reduced
      by
      applicable withholding taxes, if any) shall be paid to Participants in respect
      of their canceled Options and Stock Appreciation Rights as soon as practicable
      following the date of the Change in Control.

    
      
         

      

      
        23

        
          

        

      

      
         

      

    

    X. MISCELLANEOUS

     

    10.1 Partial
      Exercise/Fractional Shares.
      The
      Committee may permit, and shall establish procedures for, the partial exercise
      of Options and Stock Appreciation Rights granted under the Plan. No fractional
      shares shall be issued in connection with the exercise of an Option, a Stock
      Appreciation Right or Director Stock Purchase Right or payment of a Restricted
      Stock award, Restricted Stock Unit, Performance Share Award or Deferred Stock
      Unit; instead, the Fair Market Value of the fractional shares shall be paid
      in
      cash, or at the discretion of the Committee, the number of shares shall be
      rounded down to the nearest whole number of shares and any fractional shares
      shall be disregarded, and, in the case of an Option, the number of shares
      subject to the Option shall be rounded down to the nearest whole number of
      shares and any fractional shares shall be disregarded.

     

    10.2 Rule
      16b-3 Requirements.
      Notwithstanding any other provision of the Plan, the Committee may impose such
      conditions on the exercise of an Option or Stock Appreciation Right (including,
      without limitation, the right of the Committee to limit the time of exercise
      to
      specified periods), the grant of Restricted Stock or Restricted Stock Unit,
      the
      payment of a Performance Share Award or Deferred Stock Unit, or a Director
      Stock
      Purchase Right, as may be required to satisfy the requirements of Rule 16b-3
      of
      the Exchange Act.

     

    10.3 Rights
      Prior to Issuance of Shares.
      No
      Participant shall have any rights as a shareholder with respect to shares
      covered by an Option, Stock Appreciation Right, Restricted Stock grant,
      Restricted Stock Unit, Performance Share Award, Director Stock Purchase Right,
      or Deferred Stock Unit until the issuance of a stock certificate for such
      shares. Except as otherwise provided in the Plan, no adjustment shall be made
      for dividends or other rights with respect to such shares for which the record
      date is prior to the date the certificate is issued.

     

    10.4 Non-Assignability.
      Except
      as otherwise determined by the Committee in its discretion, the following
      restrictions on assignability of any award under the Plan shall apply to all
      Participants: (i) no Option, Stock Appreciation Right, Restricted Stock grant,
      Restricted Stock Unit, Performance Share Award, Director Stock Purchase Right
      or
      Deferred Stock Unit shall be transferable by a Participant except by will or
      the
      laws of descent and distribution; (ii) during the lifetime of a Participant,
      an
      Option, Stock Appreciation Right, Restricted Stock grant, Restricted Stock
      Unit,
      Director Stock Purchase Right or Deferred Stock Unit shall be exercised only
      by
      the Participant, except in the event of the Participant’s Disability, in which
      case the Participant’s legal guardian or the individual designated in the
      Participant’s durable power of attorney may exercise the Option, Stock
      Appreciation Right, Restricted Stock grant, Restricted Stock Unit, Director
      Stock Purchase Right or Deferred Stock Unit; and (iii) any transferee of the
      Option, Stock Appreciation Right, Restricted Stock grant, Restricted Stock
      Unit,
      Performance Share Award, Director Stock Purchase Right or Deferred Stock Unit
      shall take the same subject to the terms and conditions of this Plan. No
      transfer of an Option, Stock Appreciation Right, Restricted Stock grant,
      Restricted Stock Unit, Performance Share Award, Director Stock Purchase Right
      or
      Deferred Stock Unit by will or the laws of descent and distribution, or as
      otherwise permitted by the Committee, shall be effective to bind the Corporation
      unless the Corporation shall have been furnished with written notice thereof
      and
      a copy of the will and/or such evidence as the Corporation may deem necessary
      to
      establish the validity of the transfer and the acceptance by the transferee
      or
      transferees of the terms and conditions of the Option, Stock Appreciation Right,
      Restricted Stock grant, Restricted Stock Unit, Performance Share Award, Director
      Stock Purchase Right or Deferred Stock Unit.

    
      
         

      

      
        24

        
          

        

      

      
         

      

    

    10.5 Securities
      Laws.

     

    (a) Anything
      to the contrary herein notwithstanding, the Corporation’s obligation to sell and
      deliver Common Stock pursuant to the exercise of an Option or Stock Appreciation
      Right or deliver Common Stock pursuant to a Restricted Stock grant, Restricted
      Stock Unit, Performance Share Award, Director Stock Purchase Rights or Deferred
      Stock Unit is subject to such compliance with federal and state laws, rules
      and
      regulations applying to the authorization, issuance or sale of securities as
      the
      Corporation deems necessary or advisable. The Corporation shall not be required
      to sell and deliver or issue Common Stock unless and until it receives
      satisfactory assurance that the issuance or transfer of such shares shall not
      violate any of the provisions of the Securities Act of 1933 or the Securities
      Exchange Act of 1934, or the rules and regulations of the Securities Exchange
      Commission promulgated thereunder or those of The Nasdaq Stock Market or any
      stock exchange, recognized trading market or quotation system on which the
      Common Stock may be listed or traded, or the provisions of any state securities
      laws, or that there has been compliance with the provisions of such acts, rules,
      regulations and laws.

     

    (b) The
      Committee may impose such restrictions on any shares of Common Stock acquired
      pursuant to the exercise of an Option, Stock Appreciation Right or a Deferred
      Stock Unit, the grant of Restricted Stock or a Restricted Stock Unit, the
      payment of a Performance Share Award or pursuant to a Director Stock Purchase
      Right under the Plan as it may deem advisable, including, without limitation,
      restrictions (i) under applicable federal securities laws, (ii) under the
      requirements of The Nasdaq Stock Market or any other securities exchange,
      recognized trading market or quotation system upon which such shares of Common
      Stock are then listed or traded, and (iii) under any state securities laws
      applicable to such shares. No shares shall be issued until counsel for the
      Corporation has determined that the Corporation has complied with all
      requirements under appropriate securities laws.

     

    10.6 Withholding
      Taxes.

     

    (a) The
      Corporation shall have the right to withhold from a Participant’s compensation
      or require a Participant to remit sufficient funds to satisfy applicable
      withholding for income and employment taxes upon the exercise of an Option
      or
      Stock Appreciation Right, the lapse of the Restriction Period on shares of
      Common Stock subject to a Restricted Stock grant or Restricted Stock Unit or
      the
      payment of a Performance Share Award, Director Stock Purchase Right or Deferred
      Stock Unit, to the extent the Corporation is required to withhold such taxes.
      The Committee may permit a Participant to make a written election to tender
      previously-acquired shares of Common Stock or have shares of stock withheld
      from
      the exercise to satisfy applicable withholding for income and employment taxes
      associated with an Award under this Plan; provided that the shares have an
      aggregate Fair Market Value sufficient to satisfy in whole or in part the
      applicable withholding taxes. The Committee may permit a Participant to use
      the
      cashless exercise procedure of Section
      2.4
      to
      satisfy the withholding requirements related to the exercise of an Option.
      At no
      point shall the Corporation withhold more shares than are necessary to meet
      the
      established tax withholding requirements of federal, state and local
      obligations.

    
      
         

      

      
        25

        
          

        

      

      
         

      

    

    (b) A
      Participant subject to the insider trading restrictions of Section 16(b) of
      the
      Exchange Act may use Common Stock to satisfy the applicable withholding
      requirements only if such disposition is approved in accordance with Rule 16b-3
      of the Exchange Act. Any election by a Participant to utilize Common Stock
      for
      withholding purposes is further subject to the discretion of the
      Committee.

     

    10.7 Termination
      and Amendment.

     

    (a) The
      Plan
      shall continue in effect until the earlier of October 22, 2014, its termination
      by the Board or the date on which all of the shares of Common Stock available
      for issuance under the Plan have been issued and all restrictions on such shares
      under the terms of the Plan and the agreements evidencing Awards granted under
      the Plan have lapsed. The Board may terminate the Plan, the granting of Options,
      Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance
      Share Awards or Deferred Stock Units under the Plan, or purchases of Common
      Stock pursuant to the Director Stock Purchase Rights, at any time. 

     

    (b) The
      Board
      may amend or modify the Plan at any time and from time to time, but no amendment
      or modification shall, without the approval of the shareholders of the
      Corporation and without complying with the requirements of Code Section 409A,
      (i) materially increase the benefits accruing to Participants under the Plan;
      (ii) increase the amount of Common Stock for which grants and awards may be
      made
      under the Plan, except as permitted under Sections
      1.6 and 9.1;
      (iii)
      change the provisions relating to the eligibility of individuals to whom grants
      and awards may be made under the Plan; (iv) permit the repricing of Options
      or
      Stock Appreciation Rights as prohibited by Section
      1.7;
      or (v)
      permit the granting of Options with exercise prices less than Fair Market Value
      on the date of grant. In addition, so long as the Corporation’s Common Stock is
      listed on The Nasdaq Stock Market or another stock exchange, the Board may
      not
      amend the Plan in a fashion requiring approval of the shareholders of the
      Corporation under the rules of The Nasdaq Stock Market or such other stock
      exchange, without obtaining the approval of the shareholders.

     

    (c) No
      amendment, modification, or termination of the Plan shall in any manner affect
      (i) any Option, Stock Appreciation Right, Restricted Stock grant, Restricted
      Stock Unit, Performance Share Award or Deferred Stock Unit granted under the
      Plan without the consent of the Participant holding the Option, Stock
      Appreciation Right, Restricted Stock grant, Restricted Stock Unit, Performance
      Share Award or Deferred Stock Unit, except as set forth in any Agreement
      relating to such Option, Stock Appreciation Right, Restricted Stock grant,
      Restricted Stock Unit, Performance Share Award or Deferred Stock Unit granted
      under the Plan or (ii) any election to purchase Common Stock pursuant to a
      Director Stock Purchase Right made prior to such amendment, modification or
      termination of the Plan, without the consent of the Participant who made such
      election.

     

    (d) Notwithstanding
      anything in the Plan or Agreement, the Plan and any Agreements shall be subject
      to amendment, with or without the advance notice to Participants and other
      interested parties, and on a prospective and retroactive basis, including,
      but
      not limited to, amendment in a manner that adversely affects the rights of
      Participants and other interested parties, to the extent necessary to effect
      compliance with Code Section 409A. 

     

    10.8 Effect
      on Employment.
      Neither
      the adoption of the Plan nor the granting of any Option, Stock Appreciation
      Right, Restricted Stock, Restricted Stock Unit, Performance Share Award,
      Director Stock Purchase Right or Deferred Stock Unit pursuant to the Plan shall
      be deemed to create any right in any individual to be retained or continued
      in
      the employment, or as a non-employee director or Consultant, of the Corporation
      or a Subsidiary.

    
      
         

      

      
        26

        
          

        

      

      
         

      

    

    10.9 Use
      of Proceeds.
      The
      proceeds received from the sale of Common Stock pursuant to the Plan will be
      used for general corporate purposes of the Corporation. 

     

    10.10 Repurchase
      Rights.
      Subject
      to the requirements of Code Section 409A, shares of Common Stock issued under
      the Plan may be subject to one or more repurchase options, or other conditions
      and restrictions, as determined by the Committee in its discretion at the time
      the Award is granted. The Corporation shall have the right to assign at any
      time
      any repurchase right it may have, whether or not such right is then exercisable,
      to one or more persons as may be selected by the Corporation. Upon request
      by
      the Corporation, each Participant shall execute any agreement evidencing such
      transfer restrictions prior to the receipt of shares of Common Stock hereunder
      and shall promptly present to the Corporation any and all certificates
      representing shares of Common Stock acquired hereunder for the placement on
      such
      certificates of appropriate legends evidencing any such transfer
      restrictions.

     

    10.11 Severability.
      If any
      one or more of the provisions (or any part thereof) of this Plan or of any
      Agreement issued hereunder, shall be held to be invalid, illegal or
      unenforceable in any respect, such provision shall be modified so as to make
      it
      valid, legal and enforceable, and the validity, legality and enforceability
      of
      the remaining provisions (or any part thereof) of the Plan or of any Agreement
      shall not in any way be affected or impaired thereby. The Corporation may,
      without the consent of any Participant, and in a manner determined necessary
      solely in the discretion of the Corporation, amend the Plan and any outstanding
      Agreement as the Corporation deems necessary to ensure the Plan and all Awards
      remain valid, legal or enforceable in all respects.

     

    10.12 Beneficiary
      Designation.
      Subject
      to local laws and procedures, each Participant may file with the Corporation
      a
      written designation of a beneficiary who is to receive any benefit under the
      Plan to which the Participant is entitled in the event of such Participant's
      death before he or she receives any or all of such benefit. Each designation
      will revoke all prior designations by the same Participant, shall be in a form
      prescribed by the Corporation, and will be effective only when filed by the
      Participant in writing with the Corporation during the Participant's lifetime.
      If a married Participant designates a beneficiary other than the Participant's
      spouse, the effectiveness of such designation may be subject to the consent
      of
      the Participant's spouse. If a Participant dies without an effective designation
      of a beneficiary who is living at the time of the Participant's death, the
      Corporation will pay any remaining unpaid benefits to the Participant's legal
      representative.

     

    10.13 Unfunded
      Obligation.
      Participants shall have the status of general unsecured creditors of the
      Corporation. Any amounts payable to Participants pursuant to the Plan shall
      be
      unfunded and unsecured obligations for all purposes, including, without
      limitation, Title I of the Employee Retirement Income Security Act of 1974.
      The
      Corporation shall not be required to segregate any monies from its general
      funds, or to create any trusts, or establish any special accounts with respect
      to such obligations. The Corporation shall retain at all times beneficial
      ownership of any investments, including trust investments, which the Corporation
      may make to fulfill its payment obligations hereunder. Any investments or the
      creation or maintenance of any trust or any Participant account shall not create
      or constitute a trust or fiduciary relationship between the Committee or the
      Corporation and a Participant, or otherwise create any vested or beneficial
      interest in any Participant or the Participant's creditors in any assets of
      the
      Corporation. The Participants shall have no claim against the Corporation for
      any changes in the value of any assets which may be invested or reinvested
      by
      the Corporation with respect to the Plan.

    
      
         

      

      
        27

        
          

        

      

      
         

      

    

    10.14 Approval
      of Plan.
      Unless
      this Plan has been approved by the shareholders of the Corporation within 12
      months after adoption of the Plan by the Board, as required by Section 422
      of
      the Code, this Plan, and any grants or awards made hereunder, shall be of no
      further force or effect.

     

    10.15 Code
      Section 409A.
      Each of
      the Awards under this Plan and their respective Agreements are intended to
      comply with the requirements of Code Section 409A or be exempt from Code Section
      409A. Notwithstanding any provision of this Plan, if any amount payable under
      this Plan is not exempt from Code Section 409A and if the Participant is a
      “specified employee” (within the meaning of Treasury Regulation Section
      1.409A-1(i)) on the date of the Participant’s “separation from service” (within
      the meaning of Treasury Regulation Section 1.409A-1(h)), then the payment of
      such amount shall not be made prior to, and shall, if necessary, be deferred
      to
      and paid on the first day of the seventh month following the Participant’s
      separation from service or the date of the Participant’s death, if earlier.
      Provided, however, that the Corporation does not by operation of this
      requirement assume responsibility for compliance with Code Section 409A. The
      Participant is responsible for any additional tax, interest or penalties under
      Code Section 409A arising out of payments under this Plan.

     

    IN
      WITNESS WHEREOF, this First Amended and Restated 2004 Stock Incentive Plan
      has
      been executed on behalf of the Corporation on October 2, 2008.

     

    
      	 	
              PERCEPTRON,
                INC.

            
	 	 
	 	
              By:

            	
              /s/
                Harry T. Rittenour

            	 
	 	
              Harry
                T. Rittenour

            
	 	
              President
                and Chief Executive Officer

            

    

     

    BOARD
      OF
      DIRECTORS APPROVAL: 10/22/04 and 10/02/08

    SHAREHOLDER
      APPROVAL: 12/6/04

     

    
      
         

      

      
        28FIRST
      AMENDMENT TO THE

    PERCEPTRON,
      INC. 

    
      FIRST
        AMENDED AND RESTATED 2004 STOCK INCENTIVE PLAN

    

     

    Pursuant
      to the amendment provisions in Section 10.7 of the Perceptron, Inc. First
      Amended and Restated 2004 Stock Incentive Plan (“Plan”) and the approval of the
      Board of Directors of Perceptron, Inc. (“Company”), the Plan is hereby amended
      as set forth below:

     

    1. Subject
      to approval of the shareholders of the Company, Section 1.6 of the Plan (Stock)
      shall be amended and restated in its entirety to read as follows:

     

    1.6
      Stock.
      The
      Corporation has reserved 1,000,000 shares of the Corporation’s Common Stock for
      issuance in conjunction with all Options and other stock-based awards to be
      granted under the Plan. All of the 1,000,000 shares of the Corporation’s Common
      Stock so reserved may be granted as ISOs. Shares subject to any unexercised
      portion of a terminated, cancelled or expired Option, Stock Appreciation Right,
      Restricted Stock grant, Restricted Stock Unit, or Performance Share Award
      granted hereunder may again be subjected to grants and awards under the Plan.
      In
      the event that an Option granted under the Plan is exercised by delivering
      shares of Common Stock that previously were acquired by exercising Options
      granted under the Plan, such shares of previously-acquired Common Stock so
      delivered to the Corporation may again be subject to grants under the Plan.
      Shares of Common Stock shall not be deemed to have been granted pursuant to
      the
      Plan (a) with respect to any portion of an Award that is settled in cash or
      (b)
      to the extent such shares are withheld in satisfaction of tax withholding
      obligations pursuant to Section 10.6. Upon payment in shares of Common Stock
      pursuant to the exercise of a Stock Appreciation Right, the number of shares
      available for grant under the Plan shall be reduced only by the number of shares
      actually issued in such payment. All provisions in this Section
      1.6
      shall be
      adjusted, as applicable, in accordance with Article
      VIII.

     

    THIS
      FIRST AMENDMENT is hereby adopted as of October 2, 2008.

    

    
      	 	
              PERCEPTRON,
                INC.

            
	 	 
	 	
              By:

            	
              /s/
                Harry T. Rittenour

            
	 	 	
              Harry
                T. Rittenour, President

              and
                Chief Executive Officer

            

    

     

    BOARD
      OF
      DIRECTORS APPROVAL: 10/02/08

    SHAREHOLDER
      APPROVAL: __/__/__

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00148-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00148-of-00352.parquet"}]]