Document:

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                                                                    EXHIBIT 10.7

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                                STOCK OPTION PLAN

                    OF EXFO ELECTRO-OPTICAL ENGINEERING INC.

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1.   PURPOSE OF THE PLAN

1.1  The purpose of the stock option plan (the "PLAN") for directors, executive
     officers, employees and other persons or companies providing ongoing
     management  or  consulting  services (the "CONSULTANTS") to EXFO
     Electro-Optical Engineering Inc. (the "CORPORATION") or to any of the
     Subsidiaries of the Corporation is to secure for the Corporation and its
     shareholders the benefit of an incentive to partake in share ownership by
     directors, executive officers and employees of the Corporation and its
     Subsidiaries, as the case may be, and by certain Consultants who provide
     services on a continuous basis. For the purposes of the Plan,
     "SUBSIDIARIES" shall mean (i) any legal entity of which the Corporation is
     the holder or the beneficiary, at the time of the granting of the option,
     directly or indirectly, otherwise than by way of security only, of
     securities to which are attached over 50% of the votes enabling it to elect
     the majority of the directors of such entity as well as any subsidiary of
     such legal entity and (ii) any legal entity in which the Corporation or a
     subsidiary of the Corporation holds at least 50% of the voting rights or in
     which it has a majority interest and of which the Corporation or a
     subsidiary of the Corporation manages the operations.

2.   ADMINISTRATION

     The Plan shall be administered by the Corporation's Board of Directors
     (the "BOARD") or the Human Resources  Committee or any other committee
     constituted from time to time (the "COMMITTEE"). The Board or the Committee
     shall have full and complete latitude to interpret the Plan and to
     establish the rules and regulations applying to it and to make all other
     determinations it deems necessary or useful for the administration of the
     Plan, including without limiting the scope of the foregoing and subject to
     subsection 6.3, to change an Early Expiry Date (as defined hereinafter)
     provided that such interpretations, rules, regulations and determinations
     shall be consistent with the relevant policy statements of the competent
     securities authorities and the rules of the stock exchanges on which the
     securities of the Corporation are listed.

3.   SHARES SUBJECT TO THE PLAN

     The shares subject to the Plan are the Subordinate Voting Shares (the
     "SHARES") of the Corporation. The total number of Shares that may be issued
     under the Plan shall not exceed 4,470,961 Shares of the Corporation,
     subject to the adjustment under Section 11, and no Optionee (as defined
     hereinbelow) shall hold options to purchase more than 5% of the number of
     Shares issued and outstanding from time to time. All of the Shares covered
     by options that will have expired or have been cancelled without being
     exercised according to

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     the terms of the Plan shall become reserved Shares for the purposes of
     options that may be subsequently granted under the terms of the Plan.

4.   GRANT OF OPTIONS

     The Board or the Committee shall from time to time designate the directors,
     officers or employees of the Corporation or any of its Subsidiaries, as the
     case may be, or the Consultants to whom options shall be granted (an
     "OPTIONEE") and the number of Shares covered by each of such option. Any
     Optionee may hold more than one option. The granting of each option shall
     be evidenced by a letter from the Corporation addressed to the Optionee
     setting forth the number of Shares covered by such option, the subscription
     price, the terms and conditions of exercise of the option and the option
     period.

5.   SUBSCRIPTION PRICE

     The subscription price of the Shares subject to an option shall be
     established by the Board or the Committee at the time of the grant, but
     such price shall not be less than the market price of the Shares at the
     date of the granting of the option (the "GRANT DATE"), calculated as the
     greater of the closing prices of the Shares on The Toronto Stock Exchange
     and the Nasdaq National Market on the last trading day preceding the Grant
     Date or, if the Shares did not trade on such last trading day, the greater
     of the average, rounded off to the nearest cent, of the bid and ask prices
     for the Shares on The Toronto Stock Exchange and the Nasdaq National Market
     at the close of trading on such last trading day preceding the Grant Date
     (the "SUBSCRIPTION PRICE").

     The closing price of the Shares or, as the case may be, the average of the
     bid and ask prices of the Shares at the close of trading on the NASDAQ
     National Market shall be converted into Canadian dollars at the noon buying
     rate of Federal Reserve Bank of New York on the Grant Date when such
     conversion is required.

6.   OPTION PERIOD

6.1  Subject to the provisions of subsections 6.2 and 6.3, each option shall be
     exercisable during a period established by the Board or the Committee (the
     "OPTION PERIOD"); such period shall commence no earlier than the Grant Date
     and shall terminate no later than ten years after such date.

6.2  Notwithstanding the provisions of subsection 6.1, an option shall not be
     exercisable by an Optionee from and after each and every one of the
     following dates (an "EARLY EXPIRY DATE"), unless the Board or the Committee
     decides otherwise:

     6.2.1     in the case where the Optionee is an officer or an employee, the
               date on which the Optionee resigns or voluntary leaves his
               employment with the Corporation or one of its subsidiaries, as
               the case may be, or the date on which the employment of the
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               Optionee with the Corporation or one of its Subsidiaries is
               terminated for a good and sufficient cause, as the case may be;

     6.2.2     in the case where the Optionee is a director of the Corporation
               or one of its Subsidiaries, as the case may be, but is not
               employed by either the Corporation or one of its subsidiaries,
               30 days following the date on which such Optionee ceases to be a
               member of the Board of Directors for any reason other than death;

     6.2.3     (i) in the case where the Optionee is an officer or employee,
               6 months following the date on which the Optionee's employment
               with the Corporation or any of its Subsidiaries, as the case may
               be, is terminated by reason of death or (ii) in the case where
               the Optionee is a director of the Corporation or any of its
               Subsidiaries, as the case may be, but is not employed by either
               the Corporation or any of its Subsidiaries, 6 months following
               the date on which such Optionee ceases to be a member of the
               Board of Directors by reason of death;

     6.2.4     in the case where the Optionee is an officer or employee, 30 days
               following the date on which the Optionee's employment with the
               Corporation or any of its Subsidiaries, as the case may be, is
               terminated for any cause or reason other than those mentioned in
               paragraphs 6.2.1 and 6.2.2, including, without limiting the scope
               of the foregoing, disability, illness, retirement or early
               retirement. Notwithstanding the foregoing, in case of retirement
               or early retirement of an officer or employee, the Board or the
               Committee may at its own discretion but subject to Section 2,
               extend the Early Expiry Date mentioned in this paragraph 6.2.4;

     6.2.5     in the case where the Optionee is a Consultant, 30 days following
               the date on which his contract as a Consultant is terminated or,
               as the case may be, 30 days following the receipt by the
               Consultant of a notice from the Corporation indicating that the
               options must be exercised within 30 days from the date of receipt
               of the notice.

6.3  The rules set forth in paragraph 6.2 shall not be interpreted in such a
     manner as to extend the Option Period beyond 10 years.

6.4  All rights conferred by an option not exercised at the termination of the
     Option Period or from and after any Early Expiry Date shall be forfeited.

7.   EXERCISE OF OPTIONS

7.1  Subject to the provisions of section 6, an option may be exercised in
     whole, at any time, or in part, from time to time, during the Option
     Period, but in all cases in accordance with the exercise frequency
     established by the Board or the Committee and applicable at the time of the
     grant.

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7.2  An option may be exercised by forwarding a duly executed subscription form
     as attached hereto as Schedule 1 (the "Subscription Form") to the Secretary
     of the Corporation. Such Subscription Form shall set forth the number of
     Shares so subscribed and the address to which the Share Certificate is to
     be delivered. The Subscription Form shall also be accompanied by a
     certified cheque made payable to the Corporation in the amount of the
     Subscription Price. The Corporation shall cause a certificate for the
     number of Shares specified in the Subscription Form to be issued in the
     name of the Optionee and delivered to the address specified in the
     Subscription Form no later than 10 business days following the receipt of
     such Subscription Form and cheque.

8.   NO ASSIGNMENT

     No option or interest therein shall be assignable for purpose of transfer
     of guarantee or otherwise by the Optionee other than by will or the
     operation of applicable legal dispositions regarding succession.

9.   NOT A SHAREHOLDER

     An Optionee shall have no rights as a shareholder of the Corporation with
     respect to any Shares covered by his/her option until he/she shall have
     become the holder of record of such Shares.

10.  CHANGE OF CONTROL

10.1 For the purposes of this section 10, "CHANGE OF CONTROL" shall mean:

     10.1.1    the acquisition by any person or entity, or any persons or
               entities acting jointly or in concert, whether directly or
               indirectly, of voting securities of the Corporation which
               together with all other voting securities of the Corporation held
               by such persons or entities, constitute, in the aggregate, either
               (a) fifty percent (50%) or more of the votes attached to all
               outstanding voting securities of the Corporation, or (b) forty
               percent (40%) or more of the votes attached to all outstanding
               voting securities of the Corporation and is followed within
               twenty-four (24) months by changes of the members of the Board
               resulting in a change of the majority of the Board;

     10.1.2    an amalgamation, arrangement or other form of business
               combination of the Corporation with another entity which results
               in the holders of voting securities of that other entity holding,
               in the aggregate, either (a) fifty percent (50%) or more of the
               votes attached to all outstanding voting securities of the entity
               resulting from the business combination, or (b) forty percent
               (40%) or more of the votes attached to all outstanding voting
               securities of the entity resulting from the business combination
               and is followed within twenty-four (24) months by changes of the
               members of the Board resulting in a change of the majority of the
               Board;

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     10.1.3    any event or series of events (which event or series of events
               may include, without limitation, a proxy fight or proxy
               solicitation with respect to the election of directors of the
               Corporation made in opposition to the nominees recommended by the
               Continuing Directors during any period of twenty-four (24)
               consecutive months) as a result of which a majority of the
               members of the Board consists of individuals other than
               Continuing Directors; or

     10.1.4    the sale, lease or exchange of all or substantially all of the
               property of the Corporation to another person or entity, other
               than in the ordinary course of business of the Corporation or any
               of its Subsidiaries.

10.2 For the purposes of this section 10, "CONTINUING DIRECTORS" shall mean with
     respect to any period of twenty-four (24) consecutive months, (a) any
     members of the Board on the first (1st) day of such period, (b) any members
     of the Board elected after the first (1st ) day of such period at any
     annual meeting of shareholders who were nominated by the Board or a
     committee thereof, if a majority of the members of the Board or such
     committee were Continuing Directors at the time of such nomination, and
     (c) any members of the Board elected to succeed Continuing Directors by the
     Board or a committee thereof, if a majority of the members of the Board or
     such committee were Continuing Directors at the time of such election.

10.3 Notwithstanding any provisions to the contrary contained in this Plan, the
     Board or the Committee shall have the power to accelerate the time at which
     an option may first be exercised or the time during which an option or any
     part thereof will become exercisable including, without limitation, prior
     to or in connection with a Change of Control.

11.  EFFECTS OF ALTERATION OF SHARE CAPITAL

     In the event of any change in the number of outstanding Shares of the
     Corporation by reason of any stock dividend, stock split, recapitalization,
     merger, consolidation, combination or exchange of Shares or other similar
     change, subject to the prior approval of the competent regulatory
     authorities, an equitable adjustment shall be made by the Board or the
     Committee in the maximum number or kind of Shares issuable under the Plan
     or subject to outstanding options and in the Subscription Price of such
     Shares. Such adjustment will be definitive and mandatory for the purposes
     of the Plan.

12.  AMENDMENT AND TERMINATION

12.1 The Board or the Committee may, at any time, with the prior approval of the
     competent regulatory authorities, amend, suspend or terminate the Plan in
     whole or in part. Subject to the provisions of section 11, any material
     amendment (including an increase in the maximum number of Shares issuable
     under the Plan) or a reduction in the Subscription Price of an

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     option (other than for standard anti-dilution purposes) shall be approved
     by a majority of votes cast at a meeting of shareholders of the
     Corporation.

12.2 In addition to the foregoing, any material amendment to an option held by
     an insider (within the meaning of the Securities Act (Quebec)) (other than
     a person who is an insider solely by virtue of being a director or an
     executive officer of a Subsidiary of the Corporation) or an associate of an
     insider, including a change in the Subscription Price or expiry date, shall
     be approved by a majority of votes cast at a meeting of shareholders of the
     Corporation, other than votes attaching to Shares beneficially owned by the
     insider and the insider's associates.

12.3 For the purposes of this section 12, an amendment does not include an
     accelerated expiry of an option or change of the time during which an
     option may first be exercised or time during which an option or any part
     thereof will become exercisable as provided for herein.

12.4 The shareholders' approval of an amendment may be given by way of
     confirmation at the next meeting of shareholders after the amendment is
     made, provided that no Shares are issued pursuant to the amended terms
     prior thereto.

13.  FINAL PROVISIONS

13.1 The Corporation's obligation to issue options granted or Shares under the
     terms of the Plan is subject to all of the applicable laws, regulations or
     rules of any governmental regulatory agency or other competent authority in
     respect of the issuance or distribution of securities and to the rules of
     any stock exchange on which the Shares of the Corporation are listed. Each
     Optionee shall agree to comply with such laws, regulations and rules and to
     provide to the Corporation any information or undertaking required to
     comply with such laws, regulations and rules.

13.2 The participation in the Plan of a director, an executive officer or an
     employee of the Corporation or any of its Subsidiaries, as well as any
     Consultant, shall be entirely optional and shall not be interpreted as
     conferring upon a director, an executive officer or an employee of the
     Corporation or any of its Subsidiaries, as well as any Consultant, any
     right or privilege whatsoever, except for the rights and privileges set out
     expressly in the Plan. Neither the Plan nor any act that is done under the
     terms of the Plan shall be interpreted as restricting the right of the
     Corporation or any of its Subsidiaries to terminate the employment of an
     executive officer or employee at any time, as well as any contractual
     relationship with any Consultant. Any notice of dismissal given to an
     executive officer or employee, as well as to any Consultant, at the time
     his/her employment is terminated, or any payment in the place and stead of
     such notice, or any combination of the two, shall not have the effect of
     extending the duration of the employment or the contractual relationship
     for purposes of the Plan.

13.3 No director, executive officer or employee of the Corporation or any of its
     Subsidiaries, as well as any Consultant, shall acquire the automatic right
     to be granted one or more options

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     under the terms of the Plan by reason of any previous grant of options
     under the terms of the Plan.

13.4 The Plan does not provide for any guarantee in respect of any loss or
     profit that may result from fluctuations in the price of the Shares.

13.5 (i)    The Corporation and its Subsidiaries shall assume no responsibility
            as regards the tax consequences that participation in the Plan will
            have for a director, an executive officer or an employee of the
            Corporation or any of its Subsidiaries, as well as any Consultant,
            and such persons are urged to consult their own tax advisors in such
            regard.

     (ii)   An Optionee may be required to pay to the Corporation or any
            subsidiary and the Corporation or any Subsidiary shall have the
            right and is hereby authorized to withhold from any Shares or other
            property deliverable under any Option or from any compensation or
            other amounts owing to an Optionee the amount (in cash or Shares) of
            any required tax withholding and payroll taxes in respect of an
            Option, its exercise, or any payment or transfer under an Option or
            under the Plan and to take such other action as may be necessary in
            the opinion of the Corporation to satisfy all obligations for the
            payment of such taxes.

     (iii)  Without limiting the generality of clause (ii) above an Optionee may
            satisfy, in whole or in part, the foregoing withholding liability
            (but no more than the minimum required withholding liability) by
            delivery of Shares owned by the Optionee with a fair market value
            equal to such withholding liability (provided that such Shares are
            not subject to any pledge or other security interest and have either
            been held by the Optionee for 6 months, previously acquired by the
            Optionee on the open market or meet such other requirements as the
            Committee may determine necessary in order to avoid an accounting
            earnings charge), or by having the Corporation withhold from the
            number of Shares otherwise issuable pursuant to the exercise or
            settlement of the Option a number of Shares with a fair market value
            equal to such withholding liability.

13.6 The Plan and any option granted under the terms of the Plan shall be
     governed and interpreted according to the laws of the province of Quebec
     and the laws of Canada applicable thereto.

13.8 The Plan is dated as of May 25, 2000.

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                                   SCHEDULE 1

                              STOCK OPTION PLAN OF
                     EXFO ELECTRO-OPTICAL ENGINEERING INC.

                               SUBSCRIPTION FORM

                                                         _______________________
                                                         (DATE)

EXFO ELECTRO-OPTICAL ENGINEERING INC.
465 Avenue Godin
Vanier, Quebec
G1M 3G7

Attention of the Secretary

     I, the undersigned, ______________________, hereby subscribe for [ ] out of
     the _____________ Subordinate Voting Shares of EXFO Electro-Optical
     Engineering Inc. (the "Corporation") to which I am entitled to subscribe
     pursuant to an option granted on ___________ in accordance with the terms
     and conditions mentioned in paragraph 7.2 of the Corporation's Stock Option
     Plan. I enclose herewith my certified cheque (or money order) made payable
     to the order of EXFO Electro-Optical Engineering Inc., in the amount of
     $________________ in payment of the said subscription.

                                   (x)
                                   ____________________________________________
                                   (SIGNATURE)

                                   ____________________________________________
                                   (NUMBER)  (STREET)

                                   ____________________________________________
                                   (CITY)              (PROVINCE) (POSTAL CODE)

                                   (    )
                                   ____________________________________________
                                   (TELEPHONE)<PAGE>   1
                                                                    EXHIBIT 10.8

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                                   SHARE PLAN
                       FOR HOLDERS OF CLASS "F" SHARES OF
                     EXFO ELECTRO-OPTICAL ENGINEERING INC.
                        OR OF SHARES RESULTING FROM THE
                       CONVERSION OF THE CLASS "F" SHARES

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1.   DEFINITIONS

1.1. The terms listed herein shall have the following meanings, unless the
     context requires otherwise

     1.1.1     "Board" shall mean the Board of directors of the Corporation;

     1.1.2     "Change of Control" shall mean:

               a)   the acquisition by any person or entity, or any persons or
                    entities acting jointly or in concert, whether directly or
                    indirectly, of voting securities of the Corporation which,
                    together with all other voting securities of the Corporation
                    held by such persons or entities, constitute, in the
                    aggregate, either (a) fifty percent (50%) or more of the
                    votes attached to all outstanding voting securities of the
                    Corporation, or (b) forty percent (40%) or more of the votes
                    attached to all outstanding voting securities of the
                    Corporation and is followed within twenty-four (24) months
                    by changes of the members of the Board resulting in a change
                    of the majority of the Board;

               b)   an amalgamation, arrangement or other form of business
                    combination of the Corporation with another entity which
                    results in the holders of voting securities of that other
                    entity holding, in the aggregate, either (a) fifty percent
                    (50%) or more of the votes attached to all outstanding
                    voting securities of the entity resulting from the business
                    combination, or (b) forty percent (40%) or more of the votes
                    attached to all outstanding voting securities of the entity
                    resulting from the business combination and is followed
                    within twenty-four (24) months by changes of the members of
                    the Board resulting in a change of the majority of the
                    Board;

               c)   any event or series of events (which event or series of
                    events may include, without limitation, a proxy fight or
                    proxy solicitation with respect to the election of directors
                    of the Corporation made in opposition to the nominees
                    recommended by the Continuing Directors during any period of
                    twenty-four (24) consecutive months) as a result of which a
                    majority of the members of the Board consists of individuals
                    other than Continuing Directors; or

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               d)   the sale, lease or exchange of all or substantially all of
                    the property of the Corporation to another person or entity,
                    other than in the ordinary course of business of the
                    Corporation or any of its Subsidiaries.

     1.1.3     "Continuing Directors" shall mean with respect to any period of
               twenty-four (24) consecutive months, (a) any members of the Board
               on the first (1st) day of such period, (b) any members of the
               Board elected after the first (1st) day of such period at any
               annual meeting of shareholders who were nominated by the Board or
               a committee thereof, if a majority of the members of the Board or
               such committee were Continuing Directors at the time of such
               nomination, and (c) any members of the Board elected to succeed
               Continuing Directors by the Board or a committee thereof, if a
               majority of the members of the Board or such committee were
               Continuing Directors at the time of such election;

     1.1.4     "Corporation" shall mean EXFO Electro-Optical Engineering Inc.;

     1.1.5     "Plan" shall mean the Share Plan of the Corporation as embodied
               herein;

     1.1.6     "Shareholder" or "Shareholders" shall mean, unless otherwise
               stipulated, one or more holders of Shares;

     1.1.7     "Shares" shall mean (i) the class "F" shares of the Corporation
               issued pursuant to the Stock Purchase Plan for Officers,
               Directors and Key Employees of EXFO Electro-Optical Engineering
               Inc. adopted by the Corporation on September 19, 1998 (the
               "SPP"), or (ii) the class "F" shares of the Corporation issued by
               the Board outside the purview of the SPP, if any, or, as the case
               may be, (iii) the Subordinate Voting Shares of the Corporation
               resulting from the conversion of the shares issued pursuant to
               (i) or (ii), which shall be listed on a recognized stock
               exchange;

     1.1.8     "Subsidiaries" shall mean (i) any legal entity of which the
               Corporation is the holder or the beneficiary, directly or
               indirectly, otherwise than by way of security only, of securities
               to which are attached over 50% of the vote enabling it to elect
               the majority of the directors of such entity as well as any
               subsidiaries of such legal entity and (ii) any legal entity in
               which the Corporation or a subsidiary of the Corporation holds at
               least 50% of the voting rights or in which it has a majority
               interest and of which the Corporation or a subsidiary of the
               Corporation manages the operations.

2.   PURPOSE OF THE PLAN

2.1  The Plan is designed to establish restrictions on the rights of the
     Shareholders and the terms and conditions governing the holding of the
     Shares further to the closing of the initial public offering of the
     Corporation on the Canadian and United States markets.

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2.2  Subject to the prior approval of the competent regulatory authorities, the
     Board shall be entitled to amend or modify, in whole or in part, any or all
     of the provisions of the Plan. However, any amendment or modification
     affecting retroactively and prejudicially the rights of the Shareholders
     shall be approved by 66 2/3% of the votes cast at a meeting of
     Shareholders.

3.   DEPOSIT OF SHARES IN TRUST

3.1  The Shareholders hereby deposit with CIBC Mellon Trust Company (the
     "Trustee"), to be held in trust under and subject to this Plan, the Shares
     held by each of them.

3.2  The Corporation and each Shareholder hereby direct the Trustee to retain
     the Shares in trust until the Shares are released pursuant to the terms of
     this Plan.

3.3  The deposit of the Shares in trust will not impair any right of a
     Shareholder to exercise voting rights attaching to the Shares.

3.4  The deposit of the Shares in trust will not impair any right of a
     Shareholder to receive a dividend or other distribution on the Shares or to
     elect the form or manner in which a dividend or other distribution on the
     Shares will be paid. If, during the period in which the Shares are retained
     in trust pursuant to this Plan, any dividend or other distribution, other
     than one paid in Shares of the Corporation, is received by the Trustee in
     respect of the Shares held in trust, such dividend or other distribution
     will be paid or transferred forthwith to the respective Shareholder
     entitled thereto. Additional Shares distributed on the Shares will, if
     received by the Trustee, be retained in trust and, if received by the
     Shareholder, be deposited in trust in accordance with section 2, to be held
     in and released from the trust on the same terms and conditions as applied
     to the Shares on which the distribution was paid.

3.5  Subject to Article 9, the deposit of the Shares in trust will not impair
     any right of a Shareholder to exercise a right attaching to the Shares that
     entitles the Shareholder to purchase or otherwise acquire another security
     or to exchange or convert Shares for or into another security.

4.   PERMITTED TRANSFERS

4.1  The Shares may be transferred within the trust by a Shareholder to a
     Registered Retirement Savings Plan ("RRSP") or Registered Retirement Income
     Fund ("RRIF"), or subsequently between RRSPs or from an RRSP to an RRIF,
     provided that the Trustee first receives:

     4.1.1     evidence from the trustee of the RRSP or RRIF, as applicable,
               stating that, to the best of trustee's knowledge, the Shareholder
               is, during the Shareholder's lifetime, the sole beneficiary of
               the RRSP or RRIF;

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     4.1.2     a transfer power of attorney, duly executed by the transferor and
               giving full power and authority to the trustee of the RRSP or
               RRIF to act in accordance herewith; and

     4.1.3     an acknowledgement signed by the trustee of the RRSP or RRIF
               confirming that it agrees to be bound by the terms and conditions
               hereof.

4.2  In the event of the bankruptcy of a Shareholder, the Shares of such
     Shareholder may be transferred within the trust to the trustee in
     bankruptcy, provided that the Trustee first receives:

     4.2.1     a certified copy of either:

               a)   the assignment in bankruptcy of the Shareholder filed with
                    the superintendent of bankruptcy; or

               b)   the receiving order adjudging the Shareholder bankrupt;

     4.2.2     a certified copy of a certificate of appointment of the trustee
               in Bankruptcy;

     4.2.3     a transfer power of attorney, duly executed by the transferor and
               giving full power and authority to the trustee in bankruptcy to
               act in accordance herewith; and

     4.2.4     an acknowledgment signed by the trustee in bankruptcy or other
               person (or company) legally entitled to the Shares or an amended
               agreement reflecting the transfer.

4.3  Upon completion of a transfer of Shares pursuant to this section 4, the
     transferee will be a Shareholder and the Shares transferred will remain in
     trust, to be held in and released from the trust on the same terms and
     conditions as were applicable prior to the transfer.

4.4  Without limiting the generality of the foregoing, the provisions of
     Articles 6, 7 and 8 shall apply mutatis mutandis to a Shareholder that is
     the trustee of a RRSP or a RRIF when any of the events set forth in those
     Articles affect the beneficiary of such RRSP or RRIF.

5.   RELEASE OF THE SHARES

5.1. Subject to Articles 6, 7 and 8, the Shares shall be released from the trust
     under this Plan on August 31, 2004 (the "Release Date").

5.2  As soon as reasonably practicable after the Release Date, the Trustee will
     deliver, to or at the direction of the Shareholder, certificates evidencing
     the Shares released from the trust.

5.3  The Trustee shall have no further responsibility for the Shares held in
     trust for a Shareholder after it has delivered the Shares to or at the
     direction of such Shareholder in accordance with the terms of this Plan.

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<PAGE>   5
5.4  Notwithstanding any provisions to the contrary contained herein, the
     Trustee shall not be entitled to release the Shares from the trust and to
     deliver the Shares to or at the direction of a Shareholder if such shares
     are also held in trust by the Trustee pursuant to any other agreement among
     the Shareholder and the Corporation.

5.5  Notwithstanding any provisions to the contrary contained herein, the Board
     shall have the power to accelerate the Release Date of the Shares in the
     event the employment of a Shareholder with the Corporation or one of its
     Subsidiaries is terminated for any reason whatsoever other than those set
     forth in Article 8 hereof.

6.   RELEASE UPON DEATH

6.1  Upon receipt by the Trustee of written notice from the Corporation of the
     death of a Shareholder, the Shares will be released from the trust and the
     Trustee will deliver certificates evidencing such Shares to the legal
     representative of the deceased Shareholder, provided that the Trustee first
     receives:

     6.1.1     a certified copy of the death certificate; and

     6.1.2     such evidence of the legal representative status that the Trustee
               may reasonably require.

7.   RELEASE UPON DISABILITY

7.1  Upon receipt by the Trustee of written notice from the Corporation of the
     establishment of the permanent disability of a Shareholder, the Shares will
     be released from the trust and the Trustee will deliver certificates
     evidencing such Shares to the legal representative of the disabled
     Shareholder, provided that the Trustee first receives:

     7.1.1     a medical report establishing the disability of the Shareholder.
               For the purposes of this Plan, a permanent disability, whether
               total or partial, is a disability preventing a Shareholder from
               carrying out his functions within the Corporation for a minimum
               6 month period; and

     7.1.2     such evidence of the legal representative status that the Trustee
               may reasonably require.

8. COMPULSORY SALE

8.1  Upon receipt by the Trustee of written notice from the Corporation of the
     occurrence of one of the following events prior to the Release Date,
     instructions are hereby irrevocably given to the Trustee by the Shareholder
     concerned by such event (the "Concerned Shareholder") and the Corporation,
     to sell the Shares (the "Offered Shares") held in trust by the Trustee for
     such Concerned Shareholder on the public market in accordance with the
     terms hereof:

                                                                               5

<PAGE>   6
               8.1.1     misappropriation of funds, theft, or fraud by a
                         Shareholder against the Corporation or one of its
                         Subsidiaries or any termination of employment with the
                         Corporation or one of its Subsidiaries for cause,
                         including but not limited to refusal or systematic
                         negligence by a Shareholder to fulfil the functions he
                         undertook to fulfil for the Corporation or one of its
                         Subsidiaries and which is not cured within five (5)
                         days following receipt of a written notice from the
                         Corporation to that effect;

               8.1.2     violation of any non-competition covenant of a
                         Shareholder towards the Corporation or one of its
                         Subsidiaries;

               8.1.3     concurrent holding of another position by a Shareholder
                         who is a full-time employee of the Corporation or one
                         of its Subsidiaries;

               8.1.4     failure by a Shareholder to comply with the provisions
                         of this Plan within five (5) days following receipt of
                         a written notice from the Corporation to that effect;

               8.1.5     seizure or forced transfer of ownership of Shares held
                         by a Shareholder in favor of a third party;

               8.1.6     resignation or voluntary departure from the Corporation
                         or one of its Subsidiaries by a Shareholder.

     8.2       The sale of the Offered Shares on the public market shall take
               place 10 days after receipt by the Trustee of a notice from the
               Corporation indicating the occurrence of one of the events
               mentioned in section 8.1, with evidence of delivery of such
               notice to the Concerned Shareholder.

     8.3       Within 30 days following the sale of the Offered Shares pursuant
               to the provisions of section 8.1, the Trustee shall distribute
               the net proceeds of the sale of the Offered Shares as follows:

               8.3.1     if the sale of the Offered Shares results from the
                         occurrence of one of the events set forth in
                         subsections 8.1.1 to 8.1.5,

                         a)   the Trustee shall pay to the Concerned Shareholder
                              a sum equal to the lesser of (i) the price (the
                              "Subscription Price") paid by the Concerned
                              Shareholder for the Offered Shares at the time of
                              their subscription, and (ii) the net proceeds of
                              the sale of the Offered Shares; and

                         b)   the Trustee shall pay the balance to the
                              Corporation, if any;

               8.3.2     if the sale of the Offered Shares results from the
                         occurrence of the event set forth in subsection 8.1.6,

                                                                               6
<PAGE>   7
               a)   the Trustee shall pay to the Concerned Shareholder a sum
                    equal to the lesser of (i) the Subscription Price to which
                    is added a premium of 8% per year since August 31st, 1999
                    regardless of the date of subscription of such Shares, and
                    (ii) the net proceeds of the sale of the Offered Shares;

               b)   the Trustee shall pay the balance to the Corporation, if
                    any.

9.   TAKEOVER BID

9.1  A Shareholder who wishes to tender certain of its Shares (the "Tendered
     Shares") to a bona fide formal takeover bid, plan of arrangement,
     amalgamation, merger or similar transaction (a "Transaction") will deliver
     to the Corporation which shall deliver to the Trustee:

     9.1.1     a written direction signed by the Shareholder (a "Direction")
               that directs the Trustee to deliver to a specified person
               (or company) (the "Depositary") either:

               (a)  certificates evidencing the Tendered Shares, or

               (b)  where the Shareholder has provided the Trustee with a notice
                    of guaranteed delivery or similar notice of the
                    Shareholder's intent to tender the Tendered Shares to the
                    Transaction, that notice,

               together with a letter of transmittal or similar document and,
               where required, transfer power of attorney duly executed for
               transfer, and any other documentation specified or provided by
               the Shareholder and required to be delivered to the Depositary
               under the terms of the Transaction; and

     9.1.2     such other information concerning or evidence of the transaction
               as the Trustee may reasonably require.

9.2  Subject to section 9.1, forthwith after its receipt of the information and
     documentation specified in subsection 9.1, the Trustee will deliver to the
     Depositary, in accordance with the Direction, documentation specified or
     provided under subsection 9.1 (a), together with the Trustee's standard
     documentation addressed to the Depositary that:

     9.2.1     identifies the Tendered Shares;

     9.2.2     states that the Tendered Shares are held in trust;

     9.2.3     states that the Tendered Shares are delivered only for the
               purposes of the Transaction and that they will be released from
               the trust only upon receipt by the Trustee of the information
               described in section 9.3;

                                                                               7
<PAGE>   8
     9.2.4     where certificates for the Shares have been delivered to the
               Depositary, requires the Depositary to return to the Trustee, as
               soon as practicable, the certificates evidencing the Shares that
               are not releasable from the trust as described in clause (9.2.3)
               above; and

     9.2.5     where applicable, requires the Depositary to deliver or cause to
               be delivered to the Trustee, as soon as practicable, certificates
               representing securities acquired by the Shareholder under the
               Transaction in exchange, substitution or consideration for the
               Tendered Shares.

9.3  Subject to section 9.1, the Tendered Shares will be released from the trust
     upon receipt by the Trustee of the Depositary's standard documentation in
     respect of the Transaction indicating that:

     9.3.1     the terms and conditions of the Transaction have been met; and

     9.3.2     the Tendered Shares have either been taken up and paid for or are
               subject to an unconditional obligation to be taken up and paid
               for under the Transaction.

9.4  Subject to Section 9.1, the Trustee will hold any additional securities
     acquired by a Shareholder under the Transaction in trust on the same terms
     and conditions, including Release Date, as applied to the Shares for which
     they were exchanged, substituted or constituted consideration.

9.5  Notwithstanding any provisions to the contrary contained herein, the Shares
     shall be released forthwith from the trust upon the occurrence of a Change
     of Control and, as soon as reasonably practicable, the Trustee will
     deliver, to or at the direction of the Shareholder, certificates evidencing
     the Shares released from the trust.

10.  REMUNERATION OF TRUSTEE

     The Corporation shall pay the Trustee reasonable remuneration for, and
     reimburse the Trustee for its expenses and disbursements in connection
     with, its services under this Plan.

11.  INDEMNIFICATION OF TRUSTEE

     The Shareholders and the Corporation agree, jointly but not severally, to
     indemnify and save harmless the Trustee from and against all claims,
     liabilities, losses, penalties, actions, suits, costs, expenses and
     disbursements (including the fees and expenses of legal and other advisers)
     made against it by anyone, in the absence of gross negligence or fraud by
     the Trustee, its officers, directors and employees, by reason of Trustee's
     compliance in good faith with the terms hereof.

                                                                               8

<PAGE>   9

12. RESPONSIBILITY OF TRUSTEE

12.1 The Trustee will bear no responsibility for seeking, obtaining, compiling,
     preparing or determining the accuracy of any information or document, the
     Trustee's receipt of which is a condition to a release from the trust or a
     transfer within the trust under this Plan.

12.2 The Trustee may retain legal counsels and advisors as may be reasonably
     required for the purpose of discharging its duties or determining its
     rights under this Plan, and may rely and act upon advice of such counsels
     or advisors. The Corporation shall pay or reimburse the Trustee for any
     reasonable fees, expenses and disbursements of such counsels or advisors.

12.3 The Trustee shall be protected in acting and relying reasonably upon any
     written notice, direction, instruction, order, certificate, confirmation,
     request, waiver, consent, receipt statutory declaration or other paper or
     document (collectively referred to as "Documents") furnished to it and
     signed by any person required to or entitled to execute and deliver to the
     Trustee any such Documents in connection with this Plan, not only as to its
     due execution and the validity and effectiveness of its provisions, but
     also as to the truth and accuracy of any information therein contained,
     which the Trustee in good faith believes to be genuine.

13.  RESIGNATION OF TRUSTEE

     The resignation of the Trustee will be effective and the Trustee will cease
     to be bound by this Plan on the date that is 60 days after the date of
     receipt by the Corporation of a notice of the Trustee's intent to resign,
     or, as the case may be, on such other date as the Trustee and the
     Corporation may agree upon (the "Resignation Date"), provided that the
     Resignation Date will not be a date that is less than 10 days before the
     Release Date. The Corporation will, before the Resignation Date, appoint
     another Trustee, which appointment will be binding on the Corporation and
     the Shareholders. If the Corporation fails to appoint another Trustee
     within the 60-day period set forth above, the Trustee will be entitled to
     deliver the Shares held in trust pursuant to this Plan to the Corporation
     which shall act according to the provisions of the Plan and appoint another
     Trustee forthwith.

14.  ASSIGNMENT OF SHARES

14.1 A Shareholder shall not, without the prior written consent of the
     Corporation, hypothecate, mortgage, pledge, encumber, or otherwise assign
     as security any portion of the Shares held in trust by the Trustee.

14.2 Notwithstanding the provisions of Section 14.1, a Shareholder shall be
     entitled to hypothecate, mortgage, pledge and encumber, or otherwise assign
     as security any portion of the Shares held in trust by the Trustee, in
     favour of the Corporation and as a guarantee

                                                                               9
<PAGE>   10
     for the reimbursement of any loan by the Corporation to such Shareholder
     for the acquisition of Shares.

15.  CONVERSION OF SHARES

     The provisions of the Plan shall apply mutatis mutandis to any shares or
     securities into which the Shares may be converted, changed, reclassified,
     redivided, redesignated, subdivided or consolidated, to any shares or
     securities that may be subscribed for by a Shareholder as a stock dividend
     or similar distribution payable in shares or securities of the Corporation
     and to any shares or securities of the Corporation or of any successor or
     continuing company or corporation to the Corporation that may be received
     by a Shareholder or the Trustee as the registered holder of the Shares on a
     reorganization, amalgamation, consolidation or merger, statutory or
     otherwise. All such shares or securities to which the Plan applies mutatis
     mutandis shall be deposited in trust according to the provisions hereof.

16.  NOTICES

16.1 Notice to the Trustee:

     Documents will be considered to have been delivered to the Trustee on the
     next business day following the date of transmission, if delivered by fax,
     the date of physical delivery, if delivered by hand or by prepaid courier,
     or 5 days after the date of mailing, if delivered by mail, to the
     following:

     CIBC Mellon Trust Company
     2001 University Street
     16th Floor
     Montreal, Quebec
     H3A 2A6

     Attention: Corporate Trust Department
     Fax: 514-285-3640

16.2 Notice to the Corporation:

     Documents will be considered to have been delivered to the Corporation on
     the next business day following the date of transmission, if delivered by
     fax, the date of physical delivery, if delivered by hand or by prepaid
     courier, or 5 days after the date of mailing, if delivered by mail, to the
     following:

     EXFO Electro-Optical Engineering inc.
     465 Godin Avenue
     Vanier, Quebec
     G1M 3G7

                                                                              10
<PAGE>   11
     Attention: The Vice President, Finance Fax: 418-683-2170

16.3 Deliveries to Shareholders:

     Documents will be considered to have been delivered to a Shareholder on the
     next business day following the date of transmission, if delivered by fax,
     the date of physical delivery, if delivered by hand or by prepaid courier,
     of 5 days after the date of mailing, if delivered by mail, to the last
     address of the Shareholder entered in the Corporation's records. The
     Trustee will, unless a Shareholder directs the Trustee in writing
     otherwise, deliver all certificates representing the Shares of the
     Shareholder that have been released from the trust to the last address of
     the Shareholder entered in the Corporation's records.

16.4 Change of Address

     A change in an address for delivery of the Trustee or the Corporation under
     this section 16 will be effective upon delivery to each other party hereof
     of a written notice of such change. A change in an address for delivery of
     a Shareholder under this section 16 will be effective upon delivery to the
     Trustee and the Corporation of a written notice of such change.

16.5 Postal Disruption

     A party will not effect a delivery by mail if the party is aware of an
     actual or impending disruption of postal service.

17.  DIVISIBILITY OF THE PLAN

     Each section of this document is a whole. If a court of law should find
     that one section is null and unenforceable, the remaining sections shall
     remain valid and enforceable.

18.  TITLES

     Titles of paragraphs are inserted for reference purposes only and do not
     affect the structure or the interpretation of the provisions of the Plan.

19.  JURISDICTION

     The Plan shall be interpreted and governed by the laws applicable in the
     Province of Quebec.

20.  EFFECTIVE DATE

     This Plan is dated as of April 3, 2000.

                                                                              11

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