Document:

Exhibit 10.1

        THE COMTECH TELECOMMUNICATIONS CORP.

                

                2000 STOCK INCENTIVE PLAN

                

                AMENDED AND RESTATED 

                

                (EFFECTIVE OCTOBER 9, 2006)

	

 

	TABLE OF CONTENTS               

	 

	 	 	Page	 
	 	 	
	 
	 	 	 	 
	ARTICLE I PURPOSE	 	1	 
	ARTICLE II DEFINITION	 	1	 
	 	2.1	 	“Acquisition Event”	 	1	 
	 	2.2	 	“Affiliate”	 	1	 
	 	2.3	 	 “Award”	 	2	 
	 	2.4	 	“Board”	 	2	 
	 	2.5	 	“Cause”	 	2	 
	 	2.6	 	“Change in Control”	 	2	 
	 	2.7	 	“Code”	 	2	 
	 	2.8	 	“Committee”	 	2	 
	 	2.9	 	“Common Stock”	 	3	 
	 	2.10	 	“Company”	 	3	 
	 	2.11	 	“Consultant”	 	3	 
	 	2.12	 	“Detrimental Activity”	 	3	 
	 	2.13	 	“Disparagement”	 	4	 
	 	2.14	 	“Disability”	 	4	 
	 	2.15	 	“Effective Date”	 	4	 
	 	2.16	 	“Eligible Employee”	 	4	 
	 	2.17	 	“Exchange Act”	 	4	 
	 	2.18	 	“Family Member”	 	4	 
	 	2.19	 	“Fair Market Value”	 	4	 
	 	2.20	 	“Foreign Jurisdiction”	 	5	 
	 	2.21	 	“Incentive Stock Option”	 	5	 
	 	2.22	 	“Limited Stock Appreciation Right”	 	5	 
	 	2.23	 	“Non-Employee Director”	 	5	 
	 	2.24	 	“Non-Qualified Stock Option”	 	5	 
	 	2.25	 	“Non-Tandem Stock Appreciation Right”	 	5	 
	 	2.26	 	“Other Stock-Based Award”	 	5	 
	 	2.27	 	“Parent”	 	5	 
	 	2.28	 	“Participant”	 	5	 
	 	2.29	 	“Performance Criteria”	 	6	 
	 	2.30	 	“Performance Cycle”	 	6	 
	 	2.31	 	“Performance Goal”	 	6	 
	 	2.32	 	“Performance Period”	 	6	 
	 	2.33	 	“Performance Share”	 	6	 
	 	2.34	 	“Performance Unit”	 	6	 
	 	2.35	 	“Performance Unit Cycle”	 	6	 
	 	2.36	 	“Plan”	 	6	 
	 	2.37	 	“Reference Stock Option”	 	6	 
	 	2.38	 	“Restricted Stock”	 	6	 
	 	2.39	 	“Restriction Period”	 	6	 
	 	2.40	 	“Retirement”	 	6	 

	

	 	2.41	 	“Rule 16b-3”	 	6	 	 
	 	2.42	 	“Section 162(m) of the Code”	 	7	 	 
	 	2.43	 	“Section 409A of the Code”	 	7	 	 
	 	2.44	 	“Securities Act”	 	7	 	 
	 	2.45	 	“Stock Appreciation Right”	 	7	 	 
	 	2.46	 	“Stock Option”	 	7	 	 
	 	2.47	 	“Subsidiary”	 	7	 	 
	 	2.48	 	“Tandem Stock Appreciation Right”	 	7	 	 
	 	2.49	 	“Ten Percent Stockholder”	 	7	 	 
	 	2.50	 	“Termination of Consultancy”	 	7	 	 
	 	2.51	 	“Termination of Directorship”	 	7	 	 
	 	2.52	 	“Termination of Employment”	 	7	 	 
	 	2.53	 	“Transfer”	 	8	 	 
	ARTICLE III ADMINISTRATION	 	8	 	 
	 	3.1	 	The Committee	 	8	 	 
	 	3.2	 	Grants of Awards	 	8	 	 
	 	3.3	 	Guidelines	 	9	 	 
	 	3.4	 	Decisions Final	 	10	 	 
	 	3.5	 	Reliance on Counsel	 	10	 	 
	 	3.6	 	Procedures	 	10	 	 
	 	3.7	 	Designation of Consultants/Liability	 	10	 	 
	ARTICLE IV SHARE AND OTHER LIMITATIONS	 	11	 	 
	 	4.1	 	Shares	 	11	 	 
	 	4.2	 	Changes	 	13	 	 
	 	4.3	 	Minimum Purchase Price	 	14	 	 
	 	4.4	 	Assumption of Awards	 	15	 	 
	ARTICLE V ELIGIBILITY	 	15	 	 
	 	5.1	 	General Eligibility	 	15	 	 
	 	5.2	 	Incentive Stock Options	 	15	 	 
	 	5.3	 	Non-Employee Directors	 	15	 	 
	ARTICLE VI STOCK OPTIONS	 	15	 	 
	 	6.1	 	Stock Options	 	15	 	 
	 	6.2	 	Grants	 	15	 	 
	 	6.3	 	Terms of Stock Options	 	16	 	 
	ARTICLE VII STOCK APPRECIATION RIGHTS	 	18	 	 
	 	7.1	 	Tandem Stock Appreciation Rights	 	18	 	 
	 	7.2	 	Terms and Conditions of Tandem Stock Appreciation Rights	 	18	 	 
	 	7.3	 	Non-Tandem Stock Appreciation Rights	 	20	 	 
	 	7.4	 	Terms and Conditions of Non-Tandem Stock Appreciation Rights	 	20	 	 
	 	7.5	 	Limited Stock Appreciation Rights	 	21	 	 
	ARTICLE VIII RESTRICTED STOCK	 	21	 	 
	 	8.1	 	Awards of Restricted Stock	 	21	 	 
	 	8.2	 	Awards and Certificates	 	22	 	 
	 	8.3	 	Restrictions and Conditions on Restricted Stock Awards	 	22	 	 
	ARTICLE IX PERFORMANCE SHARES	 	24	 	 
	 	9.1	 	Award of Performance Shares	 	24	 	 

	

	 	9.2	 	Terms and Conditions	 	24	 
	ARTICLE X CASH INCENTIVE AWARDS AND PERFORMANCE UNITS	 	26	 
	 	10.1	 	Cash Incentive Awards	 	26	 
	 	10.2	 	Awards of Performance Units	 	26	 
	 	10.3	 	Terms and Conditions	 	27	 
	ARTICLE XI OTHER STOCK-BASED AWARDS	 	28	 
	 	11.1	 	Other Awards	 	28	 
	 	11.2	 	Terms and Conditions	 	29	 
	ARTICLE XII NON-TRANSFERABILITY AND TERMINATION OF 

    EMPLOYMENT/CONSULTANCY	 	30	 
	 	12.1	 	Non-Transferability	 	30	 
	 	12.2	 	Termination of Employment or Termination of Consultancy	 	30	 
	ARTICLE XIII NON-EMPLOYEE DIRECTOR STOCK OPTION GRANTS	 	32	 
	 	13.1	 	Stock Options	 	32	 
	 	13.2	 	Grants	 	32	 
	 	13.3	 	Non-Qualified Stock Options	 	32	 
	 	13.4	 	Terms of Stock Options	 	33	 
	 	13.5	 	Termination of Directorship	 	34	 
	 	13.6	 	Acceleration of Exercisability	 	34	 
	 	13.7	 	Changes	 	34	 
	ARTICLE XIV CHANGE IN CONTROL PROVISIONS	 	35	 
	 	14.1	 	Benefits	 	35	 
	 	14.2	 	Change in Control	 	36	 
	ARTICLE XV TERMINATION OR AMENDMENT OF PLAN	 	37	 
	ARTICLE XVI UNFUNDED PLAN	 	38	 
	 	16.1	 	Unfunded Status of Plan	 	38	 
	ARTICLE XVII GENERAL PROVISIONS	 	38	 
	 	17.1	 	Legend	 	38	 
	 	17.2	 	Other Plans	 	39	 
	 	17.3	 	Right to Employment/Consultancy	 	39	 
	 	17.4	 	Withholding of Taxes	 	39	 
	 	17.5	 	Listing and Other Conditions	 	39	 
	 	17.6	 	Governing Law	 	40	 
	 	17.7	 	Construction	 	40	 
	 	17.8	 	Other Benefits	 	40	 
	 	17.9	 	Costs	 	40	 
	 	17.10	 	    No Right to Same Benefits	 	40	 
	 	17.11	 	    Death/Disability	 	40	 
	 	17.12	 	    Section 16(b) of the Exchange Act	 	40	 
	 	17.13	 	    Section 409A of the Code	 	40	 
	 	17.14	 	    Severability of Provisions	 	41	 
	 	17.15	 	    Headings and Captions	 	41	 
	ARTICLE XVIII EFFECTIVE DATE OF PLAN	 	41	 
	ARTICLE XIX TERM OF PLAN	 	41	 

	

	
THE COMTECH TELECOMMUNICATIONS CORP.

	 
	

	  

	2000 STOCK INCENTIVE PLAN
	  
	

	 
	
AMENDED AND RESTATED 

(EFFECTIVE OCTOBER 9, 2006)

ARTICLE I

PURPOSE

                The purpose of The Comtech Telecommunications Corp. 2000 Stock Incentive Plan is to enhance the profitability
and value of the Company for the benefit of its stockholders by enabling the Company: (i) to
offer employees of, and Consultants to, the Company and its Affiliates stock-based incentives and
other equity interests in the Company and cash-based incentive Awards, thereby creating a means to
attract, retain, motivate and reward such individuals and, through awards with a value based on the
value of Company stock, to strengthen the mutuality of interests between such individuals and the
Company’s stockholders; and (ii) to make equity based awards to Non-Employee Directors,
thereby creating a means to attract, retain and reward such Non-Employee Directors and strengthen
the mutuality of interests between Non-Employee Directors and the Company’s stockholders.

ARTICLE II

DEFINITIONS

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

	 

	 	                              2.1             “Acquisition Event” has the meaning set forth in Section 4.2(d).
		 
	 	                              2.2             “Affiliate” means each of the following: (i) any Subsidiary; (ii) any Parent;
  (iii) any corporation, trade or business (including, without limitation, a partnership or limited
  liability company) which is directly or indirectly controlled 50% or more (whether by ownership of
  stock, assets or an equivalent ownership interest or voting interest) by the Company or one of its
  Affiliates; and (iv) any other entity in which the 

	

	 	Company or any of its Affiliates has a material equity interest and which is designated as an “Affiliate” by resolution of the Committee.

		 
	 	                              2.3             “Award” means any award under this Plan of any: (i) Stock Option; (ii) Stock
  Appreciation Right; (iii) Restricted Stock; (iv) Performance Share; (v) Performance
  Unit; (vi) Other Stock-Based Award; (vii) other award providing benefits similar to (i) through
  (vi) designed to meet the requirements of a Foreign Jurisdiction; or (viii) cash incentive Award
  awarded under Section 10.1. An Award other than a cash incentive Award is referred to as an “Equity
  Award.” 

		 
	 	                              2.4             “Board” means the Board of Directors of the Company.
		 
	 	                              2.5             “Cause” means, with respect to a Participant’s Termination of Employment or Termination
  of Consultancy: (i) in the case where there is no employment agreement, consulting agreement,
  change in control agreement or similar agreement in effect between the Company or an Affiliate and
  the Participant at the time of the grant of the Award (or where there is such an agreement but it
  does not define “cause” (or words of like import)), termination due to a Participant’s
  commission of a fraud or a felony in connection with his or her duties as an employee of the Company
  or an Affiliate, willful misconduct or any act of disloyalty, dishonesty, fraud, breach of trust
  or confidentiality as to the Company or an Affiliate or any other act which is intended to cause
  or may reasonably be expected to cause economic or reputational injury to the Company or an Affiliate;
  or (ii) in the case where there is an employment agreement, consulting agreement, change in
  control agreement or similar agreement in effect between the Company or an Affiliate and the Participant
  at the time of the grant of the Award that defines “cause” (or words of like import), as
  defined under such agreement; provided, however, that with regard to any agreement that conditions
“cause” on occurrence of a change in control, such definition of “cause” shall
  not apply until a change in control actually takes place and then only with regard to a termination
  thereafter. With respect to a Participant’s Termination of Directorship, “cause” shall
  mean an act or failure to act that constitutes cause for removal of a director under applicable Delaware law.

		 
	 	                              2.6             “Change in Control” has the meaning set forth in Article XIII or Article XIV, as applicable.

		 
	 	                              2.7             “Code” means the Internal Revenue Code of 1986, as amended. Any reference to any section
  of the Code shall also be a reference to any successor provision.

		 
	 	                              2.8             “Committee” means:  (a) with respect to the application of this Plan
  to Eligible Employees and Consultants, a committee or subcommittee of the Board appointed from time
  to time by the Board, which committee or subcommittee shall consist of two or more Non-Employee Directors,
  each of whom is intended to be, to the extent required by Rule 16b-3, a “non-employee director”
  as defined in Rule 16b-3 and, to the extent required by Section 162(m) of the Code and any regulations
  thereunder, an “outside director” as defined under Section 162(m) of the Code; provided,
  however, that 

	

2

	 	if and to the extent that no Committee exists which has the authority to administer this Plan, the functions of the Committee shall be exercised by the Board and all references herein to the Committee shall  be deemed to be references to the Board; and (b) with respect to the application
  of this Plan to Non-Employee Directors, the Board.

		 
	 	                              2.9             “Common Stock” means the common stock, $.10 par value per share, of the Company.

		 
	 	                              2.10            “Company” means Comtech Telecommunications Corp., a Delaware corporation, and its successors
  by operation of law. 

		 
	 	                              2.11            “Consultant” means any advisor or consultant to the Company or its Affiliates.

		 
	 	                              2.12            “Detrimental Activity” means (a) the disclosure to anyone outside the Company
  or its Affiliates, or the use in any manner other than in the furtherance of the Company’s or
  its Affiliate’s business, without written authorization from the Company, of any confidential
  information or proprietary information, relating to the business of the Company or its Affiliates,
  acquired by a Participant prior to the Participant’s Termination; (b) activity while
  employed that results, or if known could result, in the Participant’s Termination that is classified
  by the Company as a Termination for Cause; (c) any attempt, directly or indirectly, to
  solicit, induce or hire (or the identification for solicitation, inducement or hire) any non-clerical
  employee of the Company or its Affiliates to be employed by, or to perform services for, the Participant
  or any person or entity with which the Participant is associated (including, but not limited to,
  due to the Participant’s employment by, consultancy for, equity interest in, or creditor relationship
  with such person or entity) or any person or entity from which the Participant receives direct or
  indirect compensation or fees as a result of such solicitation, inducement or hire (or the identification
  for solicitation, inducement or hire) without, in all cases, written authorization from the Company; (d) any
  attempt, directly or indirectly, to solicit in a competitive manner any current or prospective customer
  of the Company or its Affiliates without, in all cases, written authorization from the Company; (e) the
  Participant’s Disparagement, or inducement of others to do so, of the Company or its Affiliates
  or their past and present officers, directors, employees or products; (f) without written
  authorization from the Company, the rendering of services for any organization, or engaging, directly
  or indirectly, in any business, which is competitive with the Company or its Affiliates, or which
  organization or business, or the rendering of services to such organization or business, is otherwise
  prejudicial to or in conflict with the interests of the Company or its Affiliates, or (g) breach
  of any agreement between the Participant and the Company or an Affiliate (including, without limitation,
  any employment agreement or non-competition or non-solicitation agreement). Unless otherwise determined
  by the Committee at grant, Detrimental Activity shall not be deemed to occur after the end of the
  one-year period following the Participant’s Termination. For purposes of subsections (a), (c),
  (d) and (f) above, the Chief Executive Officer and the General Counsel of the Company shall
  each have authority to provide the Participant with written authorization to engage in the activities
  contemplated thereby 

	

3

	 	and no other person shall have authority to provide the Participant with such authorization.

	 	 
	 	                      
         2.13            
        “Disparagement” means
        making comments or statements to the press, the Company’s or its
        Affiliates’ employees, consultants or any individual or entity with
        whom the Company or its Affiliates has a business relationship which would
        adversely affect in any manner: the conduct of the business of the
        Company or its Affiliates (including, without limitation, any products
        or business plans or prospects), or the business reputation of the Company
        or its Affiliates, or any of their products, or their past or present
        officers, directors or employees.

		 
	 	                        
        2.14             “Disability” means,
        with respect to an Eligible Employee, Consultant or Non-Employee Director,
        a permanent and total disability, as determined by the Committee in its
        sole discretion, provided that in no event shall any disability that is
        not a permanent and total disability, as defined in Section 22(e)(3) of
        the Code, shall be treated as a Disability. A Disability shall only be
        deemed to occur at the time of the determination by the Committee of the
        Disability. Notwithstanding the foregoing, for Awards that are subject
        to Section 409A of the Code, Disability shall mean that a Participant
        is disabled under Section 409A(a)(2)(C)(i) of the Code.

		 
	 	                      
           2.15             “Effective
        Date” means the effective date of this Plan as defined in Article
        XVIII.

		 
	 	                       
         
        2.16             “Eligible
        Employee” means each employee of the Company or an Affiliate.

		 
	 	                          2.17              “Exchange
        Act” means the Securities Exchange Act of 1934, as amended.
        Any references to any section of the Exchange Act shall also be a reference
        to any successor provision.

		 
	 	                          2.18              “Family
        Member” shall mean “family member” as defined in Section
        A1(a)(5) of the general instructions of Form S-8.

		 
	 	                          2.19              “Fair
        Market Value” means, unless otherwise required by any applicable
        provision of the Code or any regulations issued thereunder, as of any
        date, the last sales price for the Common Stock or the average of trading
        prices for Common Stock on the applicable date, as specified by the Committee: (i) as
        reported on the principal national securities exchange on which it is
        then traded or The Nasdaq Stock Market LLC or (ii) if not traded
        on any such national securities exchange or The Nasdaq Stock Market LLC
        as quoted on an automated quotation system sponsored by the National Association
        of Securities Dealers, Inc. If the Common Stock is not readily tradable
        on a national securities exchange, The Nasdaq Stock Market LLC or any
        automated quotation system sponsored by the National Association of Securities
        Dealers, Inc., its Fair Market Value shall be set in good faith by the
        Committee. Notwithstanding anything herein to the contrary, “Fair
        Market Value” means the price for Common Stock set by the Committee
        in good faith based on reasonable methods set forth under Section 422
        of the Code and the regulations thereunder including, without limitation,
        a method utilizing the average of 

	

4

	 	prices of the Common Stock reported on the principal national securities exchange on which it is then traded during a reasonable period designated by the Committee. For purposes of the grant of any Stock Option or Stock Appreciation Right, the applicable date shall be the date of grant of the Stock Option or Stock Appreciation Right (which must be at or after the date on which such grant is duly authorized) or, if so specified by the Committee, the latest trading date for which the last sales price or average trading price is available at the time of grant, provided that
for purposes of the exercise of any Stock Option or Stock Appreciation Right, the applicable date shall be the date a notice of exercise
  is received by the Secretary of the Company or, if not a day on which the applicable market is open,
  the next day that it is open. For purposes of the conversion of a Performance Unit to shares of Common
  Stock for reference purposes, the applicable date shall be the date determined by the Committee in
  accordance with Section 10.2

		 
	 	                              2.20
                  “Foreign
        Jurisdiction” means any jurisdiction outside of the United States
        including, without limitation, countries, states, provinces and localities.

		 
	 	                              2.21            “Incentive Stock Option” means any Stock Option awarded to an Eligible Employee under
  this Plan intended to be and designated as an “Incentive Stock Option” within the meaning
  of Section 422 of the Code.

		 
	 	                              2.22            “Limited Stock Appreciation Right” means an Award of a limited Tandem Stock Appreciation
  Right or a Non-Tandem Stock Appreciation Right made pursuant to Section 7.5 of this Plan.

		 
	 	                              2.23            “Non-Employee Director” means a director of the Company who is not an active employee
  of the Company or an Affiliate and who is not an officer, director or employee of the Company or
  any Affiliate.

		 
	 	                              2.24            “Non-Qualified Stock Option” means any Stock Option awarded under this Plan that is
  not an Incentive Stock Option.

		 
	 	                              2.25            “Non-Tandem Stock Appreciation Right” means a Stock Appreciation Right entitling a Participant
  to receive an amount in cash or Common Stock (as determined by the Committee in its sole discretion)
  equal to the excess of: (i) the Fair Market Value of a share of Common Stock as of the
  date such right is exercised, over (ii) the aggregate exercise price of such right.

		 
	 	                              2.26            “Other Stock-Based Award” means an Award of Common Stock and other Awards made pursuant
  to Article XI that are valued in whole or in part by reference to, or are payable in or otherwise
  based on, Common Stock, including, without limitation, an Award valued by reference to performance
  of an Affiliate.

		 
	 	                              2.27            “Parent” means any parent corporation of the Company within the meaning of Section 424(e)
  of the Code.

		 
	 	                              2.28            “Participant” means any Eligible Employee or Consultant to whom an Award has been made
  under this Plan and each Non-Employee Director of the Company; provided, however, that a Non-Employee
  Director shall be a Participant for 

	

5

	 	purposes of the Plan solely with respect to awards of Stock Options pursuant to Article XIII. 

	 	 
	 	                              2.29            “Performance Criteria” has the meaning set forth in Exhibit A.
	 	 
	 	                              2.30            “Performance Cycle” has the meaning set forth in Section 10.1.
	 	 
	 	                              2.31            “Performance Goal” means the objective performance goals established by the Committee
  in accordance with Section 162(m) of the Code and based on one or more Performance Criteria.

		 
	 	                              2.32            “Performance Period” has the meaning set forth in Section 9.1.

		 
	 	                              2.33            “Performance Share” means an Award made pursuant to Article IX of this Plan of the right
  to receive Common Stock or, as determined by the Committee in its sole discretion, cash of an equivalent
  value at the end of the Performance Period or thereafter.

		 
	 	                              2.34            “Performance Unit” means an Award made pursuant to Article X of this Plan of the right
  to receive a fixed dollar amount, payable in cash or Common Stock (or a combination of both) as determined
  by the Committee in its sole discretion, at the end of a specified Performance Unit Cycle or thereafter.

		 
	 	                              2.35            “Performance
        Unit Cycle” has the meaning set forth in Section 10.2.

		 
	 	                              2.36            “Plan” means The Comtech Telecommunications Corp. 2000 Stock Incentive Plan. 

		 
	 	                              2.37            “Reference Stock Option” has the meaning set forth in Section 7.1.

		 
	 	                              2.38            “Restricted Stock” means an Award of shares of Common Stock under this Plan that is
  subject to restrictions under Article VIII.

		 
	 	                              2.39            “Restriction Period” has the meaning set forth in Section 8.3(a) with respect to Restricted
  Stock.

		 
	 	                              2.40            “Retirement” means a Termination of Employment or Termination of Consultancy other than
  a termination for Cause or due to death or Disability by a Participant at or after age 65 or such
  earlier date after age 50 as may be approved by the Committee with regard to such Participant. With
  respect to a Participant’s Termination of Directorship, Retirement shall mean the failure to
  stand for reelection or the failure to be reelected at or after a Participant has attained age 65
  or, with the consent of the Board, before age 65 but after age 50.

		 
	 	                              2.41            “Rule 16b-3” means Rule 16b-3 under Section 16(b) of the Exchange Act as then in effect
  or any successor provisions.

	

6

	 	                              2.42            “Section 162(m) of the Code” means Section 162(m) of the Code and any Treasury regulations thereunder.

	 	 
	 	                              2.43            “Section 409A of the Code” means Section 409A of the Code and any Treasury regulations thereunder.

	 	 
	 	                              2.44            “Securities Act” means the Securities Act of 1933, as amended. Any reference to any section of the Securities Act shall also be a reference to any successor provision.

	 	 
	 	                              2.45            “Stock Appreciation Right” or “SAR” means the right pursuant to an Award granted
  under Article VII.

		 
	 	                              2.46            “Stock Option” or “Option” means any option to purchase shares of Common Stock
  granted to Eligible Employees or Consultants under Article VI or to Non-Employee Directors under
  Article XIII.

		 
	 	                              2.47            “Subsidiary” means any subsidiary corporation of the Company within the meaning of Section
  424(f) of the Code.

		 
	 	                              2.48            “Tandem Stock Appreciation Right” means a Stock Appreciation Right entitling the holder
  to surrender to the Company all (or a portion) of a Stock Option in exchange for an amount in cash
  or Common Stock (as determined by the Committee in its sole discretion) equal to the excess of: (i) the
  Fair Market Value, on the date such Stock Option (or such portion thereof) is surrendered, of the
  Common Stock covered by such Stock Option (or such portion thereof), over (ii) the aggregate
  exercise price of such Stock Option (or such portion thereof).

		 
	 	                              2.49            “Ten Percent Stockholder” means a person owning stock possessing more than 10% of the
  total combined voting power of all classes of stock of the Company, its Subsidiaries or its Parent.

		 
	 	                              2.50            “Termination of Consultancy” means, with respect to a Consultant, that the Consultant
  is no longer acting as a consultant to the Company or an Affiliate. In the event an entity shall
  cease to be an Affiliate, there shall be deemed a Termination of Consultancy of any individual who
  is not otherwise a Consultant to the Company or another Affiliate at the time the entity ceases to
  be an Affiliate. In the event that a Consultant becomes an Eligible Employee upon the termination
  of his consultancy, the Committee, in its sole and absolute discretion, may determine that no Termination
  of Consultancy shall be deemed to occur until such time as such Consultant is no longer a Consultant
  or an Eligible Employee.

		 
	 	                              2.51            “Termination
        of Directorship” means, with respect to a Non-Employee Director,
        that the Non-Employee Director has ceased to be a director of the Company.

		 
	 	                              2.52            “Termination of Employment” means: (i) a termination of employment (for reasons
  other than a military or personal leave of absence granted by the 

	

7

	 	Company) of a Participant from the Company and its Affiliates; or (ii) when an entity which is employing a Participant ceases to be an Affiliate, unless the Participant otherwise is, or thereupon becomes, employed by the Company or another Affiliate. In the event that an Eligible Employee becomes a Consultant upon the termination of his employment, the Committee, in its sole and absolute discretion, may determine that no Termination of Employment shall be deemed to occur until such time as such Eligible Employee is no longer an Eligible Employee or a Consultant.

	 	 
	 	                              2.53            “Transfer” means anticipate, alienate, attach, sell, assign, pledge, encumber, charge, hypothecate or otherwise transfer and “Transferred” has a correlative meaning.

	 
	
ARTICLE III

ADMINISTRATION

	 

	 	                              3.1           The Committee.  The Plan shall be administered and interpreted by the Committee. If for any reason the appointed
  Committee does not meet the requirements of Rule 16b-3 or Section 162(m) of the Code, such noncompliance
  with the requirements of Rule 16b-3 and Section 162(m) of the Code shall not affect the validity
  of Awards, grants, interpretations or other actions of the Committee.

		 
	 	                              3.2           Grants of Awards.  The Committee shall have full authority to grant to Eligible Employees and Consultants, pursuant
  to the terms of this Plan: (i) Stock Options; (ii) Tandem Stock Appreciation Rights
  and Non-Tandem Stock Appreciation Rights; (iii) Restricted Stock; (iv) Performance Shares;
  (v) Performance Units; (vi) Other Stock-Based Awards; (vii) other awards providing
  benefits similar to (i) through (vi) designed to meet the requirements of Foreign Jurisdictions;
  and (viii) cash incentive Awards under Section 10.1. All Equity Awards shall be granted by, confirmed
  by, and subject to the terms of, a written agreement executed by the Company and the Participant.
  In particular, the Committee shall have the authority:

		 

	 	               (a)           to select the Eligible Employees
  and Consultants to whom Awards may from time to time be granted hereunder;

		 
	 	               (b)           to determine whether and to what
  extent Awards, including any combination of two or more Awards, are to be granted hereunder to one
  or more Eligible Employees or Consultants;

		 
	 	               (c)           to determine, in accordance with
  the terms of this Plan, the number of shares of Common Stock to be covered by each Equity Award granted
  hereunder;

		 
	 	               (d)           to determine the terms and conditions,
  not inconsistent with the terms of this Plan, of any Award granted hereunder (including, but not
  limited to, the exercise or purchase price (if any), any restriction or limitation, any vesting schedule
  or acceleration thereof and any forfeiture restrictions or waiver thereof, 

	

8

	 	regarding any Award and the shares of Common Stock relating thereto, based on such factors, if any, as the Committee shall determine, in its sole discretion);

	 	 
	 	             (e)           to determine whether and under what circumstances a Stock Option may be settled in cash, Common Stock and/or Restricted Stock under Section 6.3(d) or, with respect to Stock Options granted to Non-Employee Directors, Section 13.4(d);

	 	 
	 	             (f)           to the extent permitted by law, to determine whether, to what extent and under what circumstances to provide loans (which shall bear interest at the rate the Committee shall provide) to Eligible Employees and Consultants in order to exercise Stock Options under this Plan or to purchase Awards under this Plan (including shares
  of Common Stock);

		 
	 	             (g)           to determine whether a Stock Option
  is an Incentive Stock Option or Non-Qualified Stock Option, whether a Stock Appreciation Right is
  a Tandem Stock Appreciation Right or Non-Tandem Stock Appreciation Right or whether an Award is intended
  to satisfy Section 162(m) of the Code;

		 
	 	             (h)           to determine whether to require
  an Eligible Employee or Consultant, as a condition of the granting of any Award, not to sell or otherwise
  dispose of shares of Common Stock acquired pursuant to the exercise of an Option or an Award for
  a period of time as determined by the Committee, in its sole discretion, following the date of the
  acquisition of such Option or Award;

		 
	 	             (i)            to modify, extend or renew
  an Award, subject to Article XV herein, provided, however, that if an Award is modified, extended
  or renewed and thereby deemed to be the issuance of a new Award under the Code or the applicable
  accounting rules, the exercise price of an Award may continue to be the original exercise price even
  if less than the Fair Market Value of the Common Stock at the time of such modification, extension
  or renewal; provided further, however, that such Award may be restructured to comply with Section
  409A of the Code to avoid any adverse tax consequences, to the extent applicable; and

		 
	 	             (j)            to offer to buy out an Option
  previously granted, based on such terms and conditions as the Committee shall establish and communicate
  to the Participant at the time such offer is made.

		 

	 	                           3.3           Guidelines.  Subject to Article XV hereof, the Committee shall have the authority to adopt, alter and repeal
  such administrative rules, guidelines and practices governing this Plan and perform all acts, including
  the delegation of its administrative responsibilities, as it shall, from time to time, deem advisable;
  to construe and interpret the terms and provisions of this Plan and any Award issued under this Plan
  (and any agreements relating thereto); and to otherwise supervise the administration of this Plan.
  The Committee may correct any defect, supply any omission or reconcile any inconsistency in this
  Plan or in any agreement relating thereto in the manner and to the extent it shall deem necessary
  to effectuate the purpose and intent of this Plan. The 

	

9

	 	Committee may adopt special guidelines and provisions for persons who are residing in, or subject to, the taxes of, Foreign Jurisdictions to comply with applicable tax and securities laws and may impose any limitations and restrictions that it deems necessary to comply with the applicable tax and securities laws of such Foreign Jurisdictions. To the extent applicable, this Plan is intended to comply with Section 162(m) of the Code and the applicable requirements of Rule 16b-3 and shall be limited, construed and interpreted in a manner so as to comply therewith.

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

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

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

		 

	 	                            3.7           Designation of Consultants/Liability.
		 

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

		 
	 	             (b)           The Committee may employ such
  legal counsel, consultants and agents as it may deem desirable for the administration of this Plan
  and may rely upon any opinion received from any such counsel or consultant and any computation received
  from any such consultant or agent. Expenses incurred by the Committee in the engagement of any such
  counsel, consultant or agent shall be paid by the Company. The Committee, its members and any employee
  of the Company designated pursuant to paragraph (a) above shall not be liable for any action or determination
  made in good faith with respect to this Plan. To the 

	

10

	 	maximum
        extent permitted by applicable law, no officer of the Company or member
        or former member of the Committee shall be liable for any action or determination
        made in good faith with respect to this Plan or any Award granted under
        it. To the maximum extent permitted by applicable law or the Certificate
        of Incorporation or By-Laws of the Company and to the extent not covered
        by insurance, each officer and member or former member of the Committee
        shall be indemnified and held harmless by the Company against any cost
        or expense (including reasonable fees of counsel reasonably acceptable
        to the Company) or liability (including any sum paid in settlement of
        a claim with the approval of the Company), and advanced amounts necessary
        to pay the foregoing at the earliest time and to the fullest extent permitted,
        arising out of any act or omission to act in connection with this Plan,
        except to the extent arising out of such officer’s, member’s
        or former member’s own fraud or bad faith. Such indemnification shall
        be in addition to any rights of indemnification the officers, directors
        or members or former officers, directors or members may have under applicable
        law or under the Certificate of Incorporation or By-Laws of the Company
        or any Affiliate. Notwithstanding anything else herein, this indemnification
        will not apply to the actions or determinations made by an individual
        with regard to Awards granted to him or her under this Plan.

	 
	
ARTICLE IV

SHARE AND OTHER LIMITATIONS

	 

	 	                            4.1           Shares.
		 

	 	             (a)           General
        Limitation. The aggregate number of shares of Common Stock which may
        be issued or used for reference purposes under this Plan or with respect
        to which Equity Awards may be granted shall not exceed 5,737,500 shares
        of Common Stock (subject to any increase or decrease pursuant to Section
        4.2) with respect to all types of Equity Awards, plus 1,986,603 shares
        of Common Stock relating to outstanding awards assumed by this Plan under
        Section 4.4 and awards available for grant under the Comtech Telecommunications
        Corp. 1993 Incentive Stock Option Plan, as amended (the “1993 Plan”),
        for a total of 7,724,103 shares of Common Stock. The shares of Common
        Stock available under this Plan may be either authorized and unissued
        Common Stock or Common Stock held in or acquired for the treasury of the
        Company. If any Stock Option or Stock Appreciation Right granted under
        this Plan expires, terminates or is canceled for any reason without having
        been exercised in full or, with respect to Stock Options, the Company
        repurchases any Stock Option, the number of shares of Common Stock underlying
        such unexercised or repurchased Stock Option or any unexercised Stock
        Appreciation Right shall again be available for the purposes of Equity
        Awards under this Plan. If any shares of Restricted Stock, Performance
        Shares or Performance Units awarded under this Plan to a Participant are
        forfeited or repurchased by the Company for any reason, the number of
        forfeited or repurchased shares of Restricted Stock, Performance

	

11

	 	

      
        Shares or Performance Units shall again be available for the purposes
        of Equity Awards under this Plan. If a Tandem Stock Appreciation Right
        is granted or a Limited Stock Appreciation Right is granted in tandem
        with a Stock Option, such grant shall only apply once against the maximum
        number of shares of Common Stock which may be issued under this Plan.
        In determining the number of shares of Common Stock available for Equity
        Awards, if Common Stock has been exchanged by a Participant as full or
        partial payment of exercise price or withholding taxes, or if the number
        shares of Common Stock otherwise deliverable has been reduced for the
        payment of exercise price or withholding taxes, the number of shares of
        Common Stock exchanged as payment for the payment of exercise price or
        withholding taxes, or reduced, shall again be available for purposes of
        Equity Awards under this Plan. 

		 
	 	             (b)           Individual Participant Limitations.
(i) The maximum number of shares of Common Stock subject to any Award of Stock Options, Stock
  Appreciation Rights, Performance Shares or shares of Restricted Stock for which the grant of such
  Award or the lapse of the relevant Restriction Period is subject to the attainment of Performance
  Goals in accordance with Section 8.3(a)(ii) herein which may be granted under this Plan during any
  fiscal year of the Company to each Eligible Employee or Consultant shall be 225,000 shares per type
  of Award (which shall be subject to any increase or decrease pursuant to Section 4.2), provided that
  the maximum number of shares of Common Stock for all types of Equity Awards does not exceed 225,000
  (which shall be subject to any increase or decrease pursuant to Section 4.2) during any fiscal year
  of the Company. If a Tandem Stock Appreciation Right is granted or a Limited Stock Appreciation Right
  is granted in tandem with a Stock Option, it shall apply against the Eligible Employee’s or
  Consultant’s individual share limitations for both Stock Appreciation Rights and Stock Options.

		 

	 	              (ii)           There are no annual individual
  Eligible Employee or Consultant share limitations on Restricted Stock for which the grant of such
  Award or the lapse of the relevant Restriction Period is not subject to attainment of Performance
  Goals in accordance with Section 8.3(a)(ii) hereof.

		 
	 	              (iii)          The maximum value at grant of Performance
  Units which may be granted under this Plan during any fiscal year of the Company to each Eligible
  Employee or Consultant shall be $100,000. Each Performance Unit shall be referenced to one share
  of Common Stock and shall be charged against the available shares under this Plan at the time the
  unit value measurement is converted to a referenced number of shares of Common Stock in accordance
  with Section 10.2.

		 
	 	              (iv)          The individual Participant limitations
  set forth in this Section 4.1(b)(i) – (iv) shall be cumulative; that is, to the extent that
  shares of Common Stock for which Equity Awards are permitted to be granted to an Eligible Employee
  or a Consultant during a fiscal year are not covered 

	

12

	 	by an Award to such Eligible Employee or Consultant in a fiscal year, the number of shares of Common Stock available for Equity Awards to such Eligible Employee or Consultant shall automatically increase in the subsequent fiscal years during the term of the Plan until used.

	 	 
	 	              (v)           The maximum potential amount earnable under all cash incentive Awards granted under this Plan for any fiscal year of the Company to each Eligible Employee shall be such Eligible Employee’s “Annual Limit,” which in each fiscal year shall be $4 million plus the amount of the Eligible Person’s unused Annual Limit as of the close of the 
previous fiscal year. This limitation is separate and not affected by the number of Awards granted
  during such fiscal year subject to the limitations under Section 4.1(b)(i) – (iv). For this
  purpose, (i) the potential amount earnable means the maximum amount potentially payable, without
  regard to whether it is to be paid currently or on a deferred basis or continues to be subject to
  any service requirement or other non-performance condition, (ii) a Participant’s Annual Limit
  is used to the extent an amount may be potentially earned or paid under a cash incentive Award, regardless
  of whether such amount is in fact earned or paid, and (iii) a cash incentive Award is “granted” for the earliest fiscal year included in the Performance Cycle for that Award, regardless of whether
  the terms of the Award do or do not create a legal right on the part of the Participant ultimately
  to receive a payment with respect to such Award. 

		 

	 	                             4.2           Changes.
		 

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

		 
	 	              (b)           Subject to the provisions of Section
  4.2(d), in the event of any such change in the capital structure or business of the Company by reason
  of any stock split, reverse stock split, stock dividend, combination or reclassification of shares,
  recapitalization, or other change in the capital structure of the Company, merger, consolidation,
  spin-off, reorganization, partial or complete liquidation, issuance of rights or warrants to purchase
  any Common Stock or securities convertible into Common Stock, or any other corporate transaction
  or event having an effect similar to any of the foregoing and effected without receipt of consideration
  by the Company, then the aggregate number and kind of shares which thereafter may be issued under
  this Plan, the number and kind of shares or other property

	

13

	 	 (including cash) to be issued upon exercise of an outstanding Stock Option or other Awards granted under this Plan and the purchase price thereof shall be appropriately adjusted consistent with such change in such manner as the Committee may deem equitable to prevent substantial dilution or enlargement of the rights granted to, or available for, Participants under this Plan, and any such adjustment determined by the Committee in good faith shall be final, binding and conclusive on the Company and all Participants and employees and their respective heirs, executors, administrators, successors and assigns.

	 	 
	 	              (c)           Fractional shares of Common Stock
  resulting from any adjustment in Options or Awards pursuant to Section 4.2(a) or (b) shall be aggregated
  until, and eliminated at, the time of exercise by rounding-down for fractions less than one-half
  and rounding-up for fractions equal to or greater than one-half. No cash settlements shall be made
  with respect to fractional shares eliminated by rounding. Notice of any adjustment shall be given
  by the Committee to each Participant whose Award has been adjusted and such adjustment (whether or
  not such notice is given) shall be effective and binding for all purposes of this Plan.

		 
	 	              (d)           In the event of a merger or consolidation
  in which the Company is not the surviving entity or in the event of any transaction that results
  in the acquisition of substantially all of the Company’s outstanding Common Stock by a single
  person or entity or by a group of persons and/or entities acting in concert, or in the event of the
  sale or transfer of all or substantially all of the Company’s assets (all of the foregoing being
  referred to as “Acquisition Events”), then the Committee may, in its sole discretion, terminate
  all outstanding Stock Options and Stock Appreciation Rights, effective as of the date of the Acquisition
  Event, by delivering notice of termination to each Participant at least 30 days prior to the date
  of consummation of the Acquisition Event, in which case during the period from the date on which
  such notice of termination is delivered to the consummation of the Acquisition Event, each such Participant
  shall have the right to exercise in full all of his or her Stock Options and Stock Appreciation Rights
  that are then outstanding (without regard to any limitations on exercisability otherwise contained
  in the Stock Option or Award Agreements), but any such exercise shall be contingent upon and subject
  to the occurrence of the Acquisition Event, and, provided that, if the Acquisition Event does not
  take place within a specified period after giving such notice for any reason whatsoever, the notice
  and exercise pursuant thereto shall be null and void.

		 

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

		 
	 	                             4.3           Minimum Purchase Price. Notwithstanding any provision of this Plan to the contrary, if authorized but previously unissued
  shares of Common Stock are issued under this Plan, such shares shall not be issued for a consideration
  which is less than as permitted under applicable law.

	

14

	 	                             4.4           Assumption of Awards. Awards that were granted prior to the Effective Date under the (i) Comtech Telecommunications Corp. 1982 Incentive Stock Option Plan (the “1982 Plan”), and (ii) the 1993 Plan, shall be transferred and assumed by this Plan as of the Effective Date. Notwithstanding the foregoing, such Awards shall continue to be governed by the terms of the applicable agreement in effect prior to the Effective Date. 

	 
	
ARTICLE V

ELIGIBILITY

	 

	 	                             5.1           General Eligibility. All Eligible Employees and Consultants and prospective employees of and Consultants to the Company
  and its Affiliates are eligible to be granted Non-Qualified Stock Options, Stock Appreciation Rights,
  Restricted Stock, Performance Shares, Performance Units, Other Stock-Based Awards, awards providing
  benefits similar to each of the foregoing designed to meet the requirements of Foreign Jurisdictions
  under this Plan, and cash incentive Awards. Eligibility for the grant of an Award and actual participation
  in this Plan shall be determined by the Committee in its sole discretion. The vesting and exercise
  of Awards granted to a prospective employee or Consultant are conditioned upon such individual actually
  becoming an Eligible Employee or Consultant.

		 
	 	                             5.2           Incentive Stock Options. All Eligible Employees of the Company, its Subsidiaries and its Parent (if any) are eligible to be
  granted Incentive Stock Options under this Plan. Eligibility for the grant of an Award and actual
  participation in this Plan shall be determined by the Committee in its sole discretion.

		 
	 	                             5.3           Non-Employee Directors. Non-Employee Directors are only eligible to receive an Award of Stock Options in accordance with
  Article XIII of the Plan. 

	 
	
ARTICLE VI

STOCK OPTIONS

	 

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

		 
	 	                             6.2           Grants.  The Committee shall have the authority to grant to any Eligible Employee one or more Incentive
  Stock Options, Non-Qualified Stock Options or both types of Stock Options (in each case with or without
  Stock Appreciation Rights). To the extent that any Stock Option does not qualify as an Incentive
  Stock Option (whether because of its provisions or the time or manner of its exercise or otherwise),
  such Stock Option or the portion thereof which does not qualify, shall constitute a separate Non-Qualified
  Stock Option. The Committee shall have the authority to grant any Consultant one or more Non-Qualified
  Stock Options (with or without Stock 

	

15

	 	Appreciation Rights). Notwithstanding any other provision of this Plan to the contrary or any provision in an agreement evidencing the grant of a Stock Option to the contrary, any Stock Option granted to an Eligible Employee of an Affiliate (other than an Affiliate which is a Parent or a Subsidiary) shall be a Non-Qualified Stock Option.

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

		 

	 	              (a)           Exercise Price.  The exercise price per share of Common Stock purchasable under an Incentive Stock Option or
  a Stock Option intended to be “performance-based” for purposes of Section 162(m) of the
  Code shall be determined by the Committee at the time of grant, but shall not be less than 100% of
  the Fair Market Value of the share of Common Stock at the time of grant; provided, however, that
  if an Incentive Stock Option is granted to a Ten Percent Stockholder, the exercise price shall be
  no less than 110% of the Fair Market Value of the Common Stock. The exercise price per share of Common
  Stock purchasable under a Non-Qualified Stock Option shall be determined by the Committee; provided,
  that if the exercise price is less than 100% of the Fair Market Value of the Common Stock at the
  time of grant it is intended that such Award will be structured to comply with Section 409A of the
  Code, to the extent applicable. 

		 
	 	              (b)           Stock Option Term.  The term of each Stock Option shall be fixed by the Committee; provided, however, that no Stock
  Option shall be exercisable more than 10 years after the date such Stock Option is granted; and further
  provided that the term of an Incentive Stock Option granted to a Ten Percent Stockholder shall not
  exceed 5 years.

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

		 
	 	              (d)           Method of Exercise. Subject to whatever installment exercise and waiting period provisions apply under subsection (c)
  above, Stock Options may be exercised in whole or in part at any time and from time to time during
  the Stock Option term by giving written notice of exercise to the Secretary of the Company specifying
  the number of shares to be purchased. Such notice shall be accompanied by payment in full of the
  purchase price as follows: (i) in cash or by 

	

16

	 	check, bank draft or money order payable to the order of the Company; (ii) to the extent permitted by law, if the Common Stock is traded on a national securities exchange, The Nasdaq Stock Market LLC or quoted on a national quotation system sponsored by the National Association of Securities Dealers, through a “cashless exercise” procedure whereby the Participant delivers irrevocable instructions to a broker satisfactory to the Company to deliver promptly to the Company an amount equal to the purchase price; or (iii) on such other terms and conditions as may be acceptable to the Committee (including, without limitation, the relinquishment
  of Stock Options or by payment in full or in part in the form of Common Stock owned by the Participant
  (and for which the Participant has good title free and clear of any liens and encumbrances) based
  on the Fair Market Value of the Common Stock on the payment date as determined by the Committee).
  No shares of Common Stock shall be issued until payment therefore, as provided herein, has been made
  or provided for.

		 
	 	              (e)           Incentive Stock Option Limitations. To the extent that the aggregate Fair Market Value (determined as of the time of grant) of the Common
  Stock with respect to which Incentive Stock Options are exercisable for the first time by an Eligible
  Employee during any calendar year under this Plan and/or any other stock option plan of the Company,
  any Subsidiary or any Parent exceeds $100,000, such Options shall be treated as Non-Qualified Stock
  Options. In addition, if an Eligible Employee does not remain employed by the Company, any Subsidiary
  or any Parent at all times from the time an Incentive Stock Option is granted until 3 months prior
  to the date of exercise thereof (or such other period as required by applicable law), such Stock
  Option shall be treated as a Non-Qualified Stock Option. Should any provision of this Plan not be
  necessary in order for the Stock Options to qualify as Incentive Stock Options, or should any additional
  provisions be required, the Committee may amend this Plan accordingly, without the necessity of obtaining
  the approval of the stockholders of the Company.

		 
	 	              (f)           Form, Modification, Extension and Renewal of Stock Options. Subject to the terms and conditions and within the limitations of this Plan, Stock Options shall
  be evidenced by such form of agreement or grant as is approved by the Committee, and the Committee
  may (i) modify, extend or renew outstanding Stock Options granted under this Plan; provided that
  the rights of a Participant are not reduced without his consent; provided further, that any such
  modification, extension or renewal is intended to be structured to comply with Section 409A of the
  Code, to the extent applicable, and (ii) accept the surrender of outstanding Stock Options (up
  to the extent not theretofore exercised) and authorize the granting of new Stock Options in substitution
  therefor (to the extent not theretofore exercised). Notwithstanding the foregoing, an outstanding
  Option may not be modified to reduce the exercise price thereof nor may a new Option at a lower price
  be substituted for a surrendered Option (other than adjustments or substitutions in accordance with
  Section 4.2), unless such action is approved by the stockholders of the Company.

	

17

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

		 
	 	              (h)           Detrimental Activity. Unless otherwise determined by the Committee at grant, (i) in the event the Participant engages
  in Detrimental Activity prior to any exercise of the Stock Option, all Stock Options (whether vested
  or unvested) held by the Participant shall thereupon terminate and expire, (ii) as a condition
  of the exercise of a Stock Option, the Participant shall be required to certify (or shall be deemed
  to have certified) at the time of exercise in a manner acceptable to the Company that the Participant
  is in compliance with the terms and conditions of the Plan and that the Participant has not engaged
  in, and does not intend to engage in, any Detrimental Activity, and (iii) in the event the Participant
  engages in Detrimental Activity during the one year period following the later of (x) Participant’s
  Termination of Employment or (y) the date the Stock Option is exercised, that any Stock Options
  shall be immediately forfeited (whether or not then vested) and the Company shall be entitled to
  recover from the Participant at any time within one year after the later of (x) or (y), and the Participant
  shall pay over to the Company, an amount equal to any gain realized as a result of the exercise of
  any Stock Options (whether at the time of exercise or thereafter).

	 
	
ARTICLE VII

STOCK APPRECIATION RIGHTS

	 

	 	                             7.1           Tandem Stock Appreciation Rights. Stock Appreciation Rights may be granted in conjunction with all or part of any Stock Option (a “Reference
  Stock Option”) granted under this Plan (“Tandem Stock Appreciation Rights”). In the
  case of a Non-Qualified Stock Option, such rights may be granted either at or after the time of the
  grant of such Reference Stock Option. In the case of an Incentive Stock Option, such rights may be
  granted only at the time of the grant of such Reference Stock Option. Consultants shall not be eligible
  for a grant of Tandem Stock Appreciation Rights granted in conjunction with all or part of an Incentive
  Stock Option.

		 
	 	                             7.2           Terms and Conditions of Tandem Stock Appreciation Rights. Tandem Stock Appreciation Rights shall be subject to such terms and conditions, not inconsistent
  with the provisions of this Plan, as shall be determined from time to time by the Committee, including
  Article XII and the following:

	

18

	 	              (a)           Term.  A Tandem Stock Appreciation Right or applicable portion thereof granted with respect to a Reference Stock Option shall terminate and no longer be exercisable upon the termination or exercise of the Reference Stock Option, except that, unless otherwise determined by the Committee, in its sole discretion, at the time of grant, a Tandem Stock Appreciation Right granted with respect to
less than the full number of shares covered by the Reference Stock Option shall not be reduced until and then only to the extent the exercise or termination of the Reference Stock Option causes the number of shares covered by the Tandem Stock Appreciation Right to
  exceed the number of shares remaining available and unexercised under the Reference Stock Option.

		 
	 	              (b)           Exercisability.  Tandem Stock Appreciation Rights shall be exercisable only at such time or times and to the
  extent that the Reference Stock Options to which they relate shall be exercisable in accordance with
  the provisions of Article VI and this Article VII.

		 
	 	              (c)           Method of Exercise. A Tandem Stock Appreciation Right may be exercised by a Participant by surrendering the applicable
  portion of the Reference Stock Option. Upon such exercise and surrender, the Participant shall be
  entitled to receive an amount determined in the manner prescribed in this Section 7.2. Stock Options
  which have been so surrendered, in whole or in part, shall no longer be exercisable to the extent
  the related Tandem Stock Appreciation Rights have been exercised.

		 
	 	              (d)           Payment.  Upon the exercise of a Tandem Stock Appreciation Right, a Participant shall be entitled to
  receive up to, but no more than, an amount in Common Stock equal in value to the excess of the Fair
  Market Value of one share of Common Stock over the option price per share specified in the Reference
  Stock Option, multiplied by the number of shares in respect of which the Tandem Stock Appreciation
  Right shall have been exercised.

		 
	 	              (e)           Deemed Exercise of Reference Stock Option. Upon the exercise of a Tandem Stock Appreciation Right, the Reference Stock Option or part thereof
  to which such Stock Appreciation Right is related shall be deemed to have been exercised for the
  purpose of the limitation set forth in Article IV of this Plan on the number of shares of Common
  Stock to be issued under this Plan. 

		 
	 	              (f)           Detrimental Activity. Unless otherwise determined by the Committee at grant, (i) in the event the Participant engages
  in Detrimental Activity prior to any exercise of Tandem Stock Appreciation Rights, all Tandem Stock
  Appreciation Rights (whether vested or unvested) held by the Participant shall thereupon terminate
  and expire, (ii) as a condition of the exercise of a Tandem Stock Appreciation Right, the Participant
  shall be required to certify (or shall be deemed to have certified) at the time of exercise in a
  manner acceptable to the Company that the Participant is in compliance with the terms and conditions
  of the Plan and that the Participant has not engaged in, and does not intend to engage in, any Detrimental
  Activity, and (iii) in the event the Participant 

	

19

	 	engages in Detrimental Activity during the one year period following the later of (x) Participant’s Termination of Employment or (y) the date the Tandem Stock Appreciation Right is exercised, that any Tandem Stock Appreciation Rights shall be immediately forfeited (whether or not then vested) and the Company shall be entitled to recover from the Participant at any time within one year after the later of (x) or (y), and the Participant shall pay over to the Company, an amount equal to any gain realized as a result of the exercise (whether at the time of exercise or thereafter).

		 

	 	                            7.3           Non-Tandem Stock Appreciation Rights. Non-Tandem Stock Appreciation Rights may also be granted without reference to any Stock Option granted
  under this Plan.

		 
	 	                            7.4           Terms and Conditions of Non-Tandem Stock Appreciation Rights. Non-Tandem Stock Appreciation Rights shall be subject to such terms and conditions, not inconsistent
  with the provisions of this Plan, as shall be determined from time to time by the Committee, including
  Article XII and the following:

		 

	 	              (a)           Term.  The term of each Non-Tandem Stock Appreciation Right shall be fixed by the Committee, but shall
  not be greater than ten (10) years after the date the right is granted.

		 
	 	              (b)           Exercisability.  Non-Tandem Stock Appreciation Rights shall be exercisable at such time or times and subject
  to such terms and conditions as shall be determined by the Committee at grant. If the Committee provides,
  in its discretion, that any such right is exercisable subject to certain limitations (including,
  without limitation, that it is exercisable only in installments or within certain time periods),
  the Committee may waive such limitation on the exercisability at any time at or after grant in whole
  or in part (including, without limitation, waiver of the installment exercise provisions or
  acceleration of the time at which rights may be exercised), based on such factors, if any, as the
  Committee shall determine, in its sole discretion.

		 
	 	              (c)           Method of Exercise. Subject to whatever installment exercise and waiting period provisions apply under subsection (b)
  above, Non-Tandem Stock Appreciation Rights may be exercised in whole or in part at any time and
  from time to time during the term, by giving written notice of exercise to the Company specifying
  the number of Non-Tandem Stock Appreciation Rights to be exercised.

		 
	 	              (d)           Payment.  Upon the exercise of a Non-Tandem Stock Appreciation Right a Participant shall be entitled
  to receive, for each right exercised, up to, but no more than, an amount in cash and/or Common Stock
  (as chosen by the Committee in its sole discretion at grant, or thereafter if no rights of a Participant
  are reduced) equal in value to the excess of the Fair Market Value of one share of Common Stock on
  the date the right is exercised over the Fair Market Value of one share of Common Stock on the date
  the right was awarded to the Participant; 

	

20

	 	provided, that if payment is made in cash such payment shall be structured to comply with Section 409A of the Code, to the extent applicable.

	 	 
	 	              (e)           Detrimental Activity. Unless otherwise determined by the Committee at grant, (i) in the event the Participant engages in Detrimental Activity prior to any exercise of Non-Tandem Stock Appreciation Rights, all Non-Tandem Stock Appreciation Rights (whether vested or unvested) held by the Participant shall thereupon terminate and expire, (ii) as a condition of the exercise of a Tandem Stock Appreciation
  Right, the Participant shall be required to certify (or shall be deemed to have certified) at the
  time of exercise in a manner acceptable to the Company that the Participant is in compliance with
  the terms and conditions of the Plan and that the Participant has not engaged in, and does not intend
  to engage in, any Detrimental Activity, and (iii) in the event the Participant engages in Detrimental
  Activity during the one year period following the later of (x) Participant’s Termination
  of Employment or (y) the date the Non-Tandem Stock Appreciation Right is exercised, that any
  Non-Tandem Stock Appreciation Rights shall be immediately forfeited (whether or not then vested)
  and the Company shall be entitled to recover from the Participant at any time within one year after
  the later of (x) or (y), and the Participant shall pay over to the Company, an amount equal to any
  gain realized as a result of the exercise (whether at the time of exercise or thereafter).

		 

	 	                             7.5           Limited Stock Appreciation Rights. The Committee may, in its sole discretion, grant a Tandem Stock Appreciation Right or a Non-Tandem
  Stock Appreciation Right as a Limited Stock Appreciation Right. Limited Stock Appreciation Rights
  may be exercised only upon the occurrence of a Change in Control or such other event as the Committee
  may, in its sole discretion, designate at the time of grant or thereafter. Upon the exercise of limited
  Stock Appreciation Rights, except as otherwise provided in an Award agreement, the Participant shall
  receive in cash or Common Stock, as determined by the Committee, an amount equal to the amount (i) set
  forth in Section 7.2(d) with respect to Tandem Stock Appreciation Rights, or (ii) set forth
  in Section 7.4(d) with respect to Non-Tandem Stock Appreciation Rights, as applicable.

	 
	
ARTICLE VIII

RESTRICTED STOCK

	 

	 	                             8.1           Awards of Restricted Stock. Shares of Restricted Stock may be issued to Eligible Employees or Consultants either alone or in
  addition to other Awards granted under this Plan. The Committee shall determine the eligible persons
  to whom, and the time or times at which, grants of Restricted Stock will be made, the number of shares
  to be awarded, the price (if any) to be paid by the recipient (subject to Section 8.2), the time
  or times within which such Awards may be subject to forfeiture, the vesting schedule and rights to
  acceleration thereof, and all other terms and conditions of the Awards. The Committee may condition
  the grant or vesting of Restricted Stock upon the attainment of specified performance goals, including
  established Performance Goals in 

	

21

	 	accordance with Section 162(m) of the Code, or such other factors as the Committee may determine, in its sole discretion.

	 	 
	 	                            8.2           Awards and Certificates. An Eligible Employee or Consultant selected to receive Restricted Stock shall not have any rights with respect to such Award, unless and until such Participant has delivered to the Company a fully executed copy of the applicable Award agreement relating thereto and has otherwise complied with the applicable terms 
and conditions of such Award. Further, such Award shall be subject to the following conditions:

		 

	 	              (a)           Purchase Price.  The purchase price of Restricted Stock shall be fixed by the Committee. Subject to Section
  4.3, the purchase price for shares of Restricted Stock may be zero to the extent permitted by applicable
  law, and, to the extent not so permitted, such purchase price may not be less than par value.

		 
	 	              (b)           Acceptance.  Awards of Restricted Stock must be accepted within a period of 90 days (or such shorter period
  as the Committee may specify at grant) after the Award date by executing a Restricted Stock Award
  agreement and by paying whatever price (if any) the Committee has designated thereunder.

		 
	 	              (c)           Legend.  Each Participant receiving shares of Restricted Stock shall be issued a stock certificate in
  respect of such shares of Restricted Stock, unless the Committee elects to use another system, such
  as book entries by the transfer agent, as evidencing ownership of shares of Restricted Stock. Such
  certificate shall be registered in the name of such Participant, and shall bear an appropriate legend
  referring to the terms, conditions, and restrictions applicable to such Award, substantially in the
  following form:

		 
	 	              “The anticipation, alienation, attachment, sale, transfer, assignment, pledge, encumbrance or
  charge of the shares of stock represented hereby are subject to the terms and conditions (including
  forfeiture) of The Comtech Telecommunications Corp. 2000 Stock Incentive Plan (the “Plan”)
  and an Agreement entered into between the registered owner and the Company dated _______. Copies
  of such Plan and Agreement are on file at the principal office of the Company.”

		 
	 	              (d)           Custody.  The Committee may require that any stock certificates evidencing such shares be held in custody
  by the Company until the restrictions thereon shall have lapsed and that, as a condition to the grant
  of such Award of Restricted Stock, the Participant shall have delivered a duly signed stock power,
  endorsed in blank, relating to the Common Stock covered by such Award.

		 

	 	                             8.3           Restrictions and Conditions on Restricted Stock Awards. Shares of Restricted Stock awarded pursuant to this Plan shall be subject to Article XII and the
  following restrictions and conditions:

		 

	 	              (a)           Restriction Period; Vesting and Acceleration of Vesting. (i) The Participant shall not be permitted to Transfer shares of Restricted Stock awarded 

	

22

	 	under this Plan during the period or periods set by the Committee (the “Restriction Period”) commencing on the date of such Award, as set forth in the Restricted Stock Award agreement and such agreement shall set forth a vesting schedule and any events which would accelerate vesting of the shares of Restricted Stock. Within these limits, based on service, attainment of Performance Goals pursuant to Section 8.3(a)(ii) below and/or such other factors or criteria as the Committee may determine in its sole discretion, the Committee may provide for the
  lapse of such restrictions in installments in whole or in part, or may accelerate the vesting of
  all or any part of any Restricted Stock Award and/or waive the deferral limitations for all or any
  part of any Restricted Stock Award.

		 
	 	                              (ii)           Objective Performance Goals, Formulae or Standards. If the grant of shares of Restricted Stock or the lapse of restrictions is based on the attainment
  of Performance Goals, the Committee shall establish the Performance Goals and the applicable vesting
  percentage of the Restricted Stock Award applicable to each Participant or class of Participants
  in writing prior to the beginning of the applicable fiscal year or at such later date as otherwise
  determined by the Committee and while the outcome of the Performance Goals are substantially uncertain.
  Such Performance Goals may incorporate provisions for disregarding (or adjusting for) changes in
  accounting methods, corporate transactions (including, without limitation, dispositions and acquisitions)
  and other similar type events or circumstances. With regard to a Restricted Stock Award that is intended
  to comply with Section 162(m) of the Code, to the extent any such provision would create impermissible
  discretion under Section 162(m) of the Code or otherwise violate Section 162(m) of the Code, such
  provision shall be of no force or effect. The applicable Performance Goals shall be based on one
  or more of the Performance Criteria set forth in Exhibit A hereto. 

		 
	 	              (b)           Rights as Stockholder. Except as provided in this subsection (b) and subsection (a) above and as otherwise determined by
  the Committee, the Participant shall have, with respect to the shares of Restricted Stock, all of
  the rights of a holder of shares of Common Stock of the Company including, without limitation, the
  right to receive any dividends, the right to vote such shares and, subject to and conditioned upon
  the full vesting of shares of Restricted Stock, the right to tender such shares. The Committee may,
  in its sole discretion, determine at the time of grant that the payment of dividends shall be deferred
  until, and conditioned upon, the expiration of the applicable Restriction Period.

		 
	 	              (c)           Lapse of Restrictions. If and when the Restriction Period expires without a prior forfeiture of the Restricted Stock subject
  to such Restriction Period, the certificates for such shares shall be delivered to the Participant.
  All legends shall be removed from said certificates at the time of delivery to the Participant except
  as otherwise required by applicable law. 

		 
	 	              (d)           Detrimental Activity. Unless otherwise determined by the Committee at grant, each Award of Restricted Stock shall provide
  that in the 

	

23

	 	event the Participant engages in Detrimental Activity prior to, or during the one year period following the later of Termination of Employment or any vesting of Restricted Stock, the Committee may direct (at any time within one year thereafter) that all unvested Restricted Stock shall be immediately forfeited to the Company and that the Participant shall pay over to the Company an amount equal to the gain realized at the time of vesting of any Restricted Stock.

	 	 

	
ARTICLE IX

PERFORMANCE SHARES

	 

	 	                             9.1           Award of Performance Shares. Performance Shares may be awarded either alone or in addition to other Awards granted under this
  Plan. The Committee shall, in its sole discretion, determine the Eligible Employees and Consultants
  to whom and the time or times at which such Performance Shares shall be awarded, the duration of
  the period (the “Performance Period”) during which, and the conditions under which, a Participant’s
  right to Performance Shares will be vested and the other terms and conditions of the Award in addition
  to those set forth in Section 9.2.

		 
	 	               Each Performance Share awarded shall be referenced to one share of Common Stock. Except as otherwise
  provided herein, the Committee shall condition the right to payment of any Performance Share Award
  upon the attainment of objective Performance Goals established pursuant to Section 9.2(c) below and
  such other non-performance based factors or criteria as the Committee may determine in its sole discretion.

		 
	 	                             9.2           Terms and Conditions.  A Participant selected to receive Performance Shares shall not have any rights with respect to such
  Awards, unless and until such Participant has delivered a fully executed copy of a Performance Share
  Award agreement evidencing the Award to the Company and has otherwise complied with the following
  terms and conditions:

		 

	 	              (a)           Earning of Performance Share Award.  At the expiration of the applicable Performance Period, the Committee shall determine the extent
  to which the Performance Goals established pursuant to Section 9.2(c) are achieved and the percentage
  of each Performance Share Award that has been earned.

		 
	 	              (b)           Payment.  Following the Committee’s determination in accordance with subsection (a) above, shares
  of Common Stock or, as determined by the Committee in its sole discretion, the cash equivalent of
  such shares shall be delivered to the Participant, in an amount equal to such Participant’s
  earned Performance Share Award. Notwithstanding the foregoing, except as may be set forth in the
  agreement covering the Award, the Committee may, in its sole discretion and in accordance with Section
  162(m) of the Code, award an amount less than the earned Performance Share Award and/or subject the
  payment of all or part of any Performance Share Award to additional vesting and forfeiture conditions
  as it deems appropriate.

	

24

	 	              (c)           Objective Performance Goals, Formulae or Standards. The Committee shall establish the objective Performance Goals for the earning of Performance Shares based on a Performance Period applicable to each Participant or class of Participants in writing prior to the beginning of the applicable Performance Period or at such later
 date as permitted under Section 162(m) of the Code and while the outcome of the Performance Goals are substantially uncertain. Such Performance Goals may incorporate, if and only to the extent permitted under Section 162(m) of the Code, provisions for disregarding (or adjusting for) changes in accounting methods, corporate
  transactions (including, without limitation, dispositions and acquisitions) and other similar type
  events or circumstances. To the extent any such provision would create impermissible discretion under
  Section 162(m) of the Code or otherwise violate Section 162(m) of the Code, such provision shall
  be of no force or effect. The applicable Performance Goals shall be based on one or more of the Performance
  Criteria set forth in Exhibit A hereto.

		 
	 	              (d)           Dividends and Other Distributions. At the time of any Award of Performance Shares, the Committee may, in its sole discretion, award
  an Eligible Employee or Consultant the right to receive the cash value of any dividends and other
  distributions that would have been received as though the Eligible Employee or Consultant had held
  each share of Common Stock referenced by the earned Performance Share Award from the last day of
  the first year of the Performance Period until the actual distribution to such Participant of the
  related share of Common Stock or cash value thereof. Such amounts, if awarded, shall be paid to the
  Participant as and when the shares of Common Stock or cash value thereof are distributed to such
  Participant and, at the discretion of the Committee, may be paid with interest from the first day
  of the second year of the Performance Period until such amounts and any earnings thereon are distributed.
  The applicable rate of interest shall be determined by the Committee in its sole discretion; provided,
  however, that for each fiscal year or part thereof, the applicable interest rate shall not be greater
  than a rate equal to the four-year U.S. Government Treasury rate on the first day of each applicable fiscal year. 

		 
	 	              (e)           Detrimental Activity. Unless otherwise determined by the Committee at grant, each Award of Performance Shares shall provide
  that in the event the Participant engages in Detrimental Activity prior to, or during the one year
  period following the later of Termination of Employment or any vesting of Performance Shares, the
  Committee may direct (at any time within one year thereafter) that all unvested Performance Shares
  shall be immediately forfeited to the Company and that the Participant shall pay over to the Company
  an amount equal to the gain realized at the time of vesting of any Performance Shares.

	

25

	ARTICLE X

              

              CASH INCENTIVE AWARDS AND PERFORMANCE UNITS

	 

	 	                             10.1          Cash Incentive Awards.
Cash incentive Awards may be awarded either alone or in addition to other Awards granted under this Plan. The Committee shall, in its sole discretion, determine the Eligible Employees and Consultants to whom and the time or times at which such cash incentive Awards shall be awarded, the duration of the period (the “Performance Cycle”) during which, and the conditions under which, a Participant shall earn the cash incentive Award and the other terms and conditions of the Award in addition to those set forth in Section 10.3. Cash incentive Awards granted with a Performance
Cycle of one year shall be designated as “Annual Incentive Awards.” 

	
	 

	 	                Cash incentive Awards shall be awarded in a dollar amount or a formula that will ultimately yield a
  dollar amount, as determined by the Committee. Except as otherwise provided herein, the Committee
  shall condition the right to payment of any cash incentive Award upon the attainment of at least
  one objective Performance Goal established pursuant to Section 10.3(a) and such other factors or
  criteria as the Committee may determine in its sole discretion. 

		 
	 	                Cash incentive Awards under this Section 10.1 may be settled and paid only if stockholders of the Company
  previously have approved the amendment and restatement of the Plan containing the authorization of
  cash incentive Awards in this Section 10.1. 

		 
	 	                             10.2          Awards of Performance Units. Performance Units may be awarded either alone or in addition to other Awards granted under this Plan.
  The Committee shall, in its sole discretion, determine the Eligible Employees and Consultants to
  whom and the time or times at which such Performance Units shall be awarded, the duration of the
  period (the “Performance Unit Cycle”) during which, and the conditions under which, a Participant’s
  right to Performance Units will be vested and the other terms and conditions of the Award in addition
  to those set forth in Section 10.3.

		 
	 	                Performance Units shall be awarded in a dollar amount determined by the Committee and shall be converted
  for purposes of calculating growth in value to a referenced number of shares of Common Stock based
  on the Fair Market Value of shares of Common Stock at the close of trading on the first business
  day following the announcement of the annual financial results of the Company for the fiscal year
  of the Company immediately preceding the fiscal year of the commencement of the relevant Performance
  Unit Cycle, provided that the Committee may provide that the minimum price for such conversion shall
  be the Fair Market Value on the date of grant.

		 
	 	                Each Performance Unit shall be referenced to one share of Common Stock. Except as otherwise provided
  herein, the Committee shall condition the right to payment of any Performance Unit Award upon the
  attainment of objective Performance Goals established pursuant to Section 10.3(a) and such other
  non-performance based factors or criteria as the Committee may determine in its sole discretion.
  The cash value of any fractional Performance Unit Award subsequent to conversion to shares of Common
  Stock 

	

26

	
	 	shall be treated as a dividend or other distribution under Section 10.3(e) to the extent any portion of the Performance Unit Award is earned.

	 	 
	 	                            10.3        Terms and Conditions. The cash incentive Awards or Performance Units awarded pursuant to this Article 10 shall be subject to the following terms and conditions:

	 

	 	              (a)           Performance Goals.  The Committee shall establish the
objective Performance Goal or Goals for the earning of cash incentive Awards or Performance Units based on a Performance Cycle or Performance Unit Cycle applicable to each Participant or class of Participants in writing prior to the beginning of the applicable Performance Cycle or Performance Unit Cycle or at such later date as permitted under Section 162(m) of the Code and while the outcome of the Performance Goal or Goals is substantially uncertain. Such 
Performance Goals may incorporate, if and only to the extent permitted under Section 162(m) of the
  Code, provisions for disregarding (or adjusting for) changes in accounting methods, corporate transactions
  (including, without limitation, dispositions and acquisitions) and other similar type events or circumstances.
  To the extent any such provision would create impermissible discretion under Section 162(m) of the
  Code or otherwise violate Section 162(m) of the Code, such provision shall be of no force or effect.
  The applicable Performance Goals shall be based on one or more of the Performance Criteria set forth
  in Exhibit A hereto.

		 
	 	              (b)           Vesting.  At the expiration of the Performance Cycle or Performance Unit Cycle, the Committee shall determine
  and certify in writing the extent to which the Performance Goals have been achieved, and the corresponding
  extent to which a cash incentive Award or a Performance Unit has been earned in respect of each Participant.

		 
	 	              (c)           Payment.  Subject to the applicable provisions of the Award agreement and this Plan, at the expiration
  of the Performance Cycle or Performance Unit Cycle or any vesting period extending beyond the Performance
  Cycle or Performance Unit Cycle, cash or, with respect to Performance Units, shares of Common Stock
  (as the Committee may determine in its sole discretion at grant, or thereafter if no rights of a
  Participant are reduced), shall be delivered to the Participant in payment of any earned and vested
  cash incentive Award or any earned and vested Performance Units covered by the Performance Unit Award.
  Notwithstanding the foregoing, except as may be set forth in the agreement covering the Award, the
  Committee may, in its sole discretion, and to the extent applicable and permitted under Section 162(m)
  of the Code, award an amount less than the earned cash incentive Award or earned Performance Unit
  Award and/or subject the payment of all or part of any such Award to additional vesting and forfeiture
  conditions or conditions mandating the deferral of settlement of the Award as it deems appropriate.
  If an Award is deferred such Award shall not increase (between the date on which the Award is credited
  to any deferred compensation program applicable to such Participant and the payment 

	

27

	 	date) by an amount that would result in such deferral being deemed as an “increase in the amount of compensation” under Section 162(m) of the Code.

	 	 
	 	              (d)           Accelerated Vesting. Based on service, performance and/or such other factors or criteria, if any, as the Committee may determine, the Committee may, at or after grant, accelerate the date of earning or vesting of all or any part of any cash incentive Award or Performance Unit Award and/or waive the deferral limitations for all or any part of such Award.

	 	 
	 	              (e)           Dividends and Other Distributions.
At the time of any Award of Performance Units, the Committee may, in its sole discretion, award an Eligible Employee or Consultant the right to receive the cash value of any dividends and other distributions that would have been received as though the Eligible Employee or Consultant had held each share of Common Stock referenced by the earned Performance Unit Award from the last day of the first year of the Performance Cycle or Performance Unit Cycle until the actual distribution to such Participant of the
  related share of Common Stock or cash value thereof. Such amounts, if awarded, shall be paid to the
  Participant as and when the shares of Common Stock or cash value thereof are distributed to such
  Participant and, at the discretion of the Committee, may be paid with interest from the first day
  of the second year of the Performance Cycle or Performance Unit Cycle until such amounts and any
  earnings thereon are distributed. The applicable rate of interest shall be determined by the Committee
  in its sole discretion; provided, however, that for each fiscal year or part thereof, the applicable
  interest rate shall not be greater than a rate equal to the four-year U.S. Government Treasury rate
  on the first day of each applicable fiscal year. 

		 
	 	              (f)           Detrimental Activity. Unless otherwise determined by the Committee at grant, each Award of Performance Units shall provide
  that in the event the Participant engages in Detrimental Activity prior to, or during the one year
  period following the later of Termination of Employment or any vesting of Performance Units, the
  Committee may direct (at any time within one year thereafter) that all unvested Performance Units
  shall be immediately forfeited to the Company and that the Participant shall pay over to the Company
  an amount equal to the gain realized at the time of vesting of any Performance Units which had vested
  in the period referred to above.

	 
	
ARTICLE XI

OTHER STOCK-BASED AWARDS

	 

	 	                             11.1          Other Awards.  Other Stock-Based Awards may be granted either alone or in addition to or in tandem with Stock
  Options, Stock Appreciation Rights, Restricted Stock, Performance Shares or Performance Units.

	

28

	 	               Subject to the provisions of this Plan, the Committee shall have authority to determine the persons to whom and the time or times at which such Awards shall be made, the number of shares of Common Stock to be awarded pursuant to such Awards, and all other conditions of the Awards. The Committee may also provide for the grant of Common Stock under such Awards upon the completion of a specified performance period.

	 	 
	 	                            11.2          Terms and Conditions. Other Stock-Based Awards made pursuant to this Article XI shall be subject to the following terms and conditions:

	 	 
	 	              (a)           Non-Transferability. Subject to the applicable provisions of the Award agreement and this Plan, shares of Common Stock subject to Awards made under this Article XI may not be Transferred prior to the date on which the shares are issued, or, if later, the date on which any applicable restriction, performance or deferral period lapses.

	 	 
	 	              (b)           Dividends.  Unless otherwise determined by the Committee at the time of Award, subject to the provisions
  of the Award agreement and this Plan, the recipient of an Award under this Article XI shall be entitled
  to receive, currently or on a deferred basis, dividends or dividend equivalents with respect to the
  number of shares of Common Stock covered by the Award, as determined at the time of the Award by
  the Committee, in its sole discretion.

		 
	 	              (c)           Vesting.  Any Award under this Article XI and any Common Stock covered by any such Award shall vest or
  be forfeited to the extent so provided in the Award agreement, as determined by the Committee, in
  its sole discretion.

		 
	 	              (d)           Waiver of Limitation. The Committee may, in its sole discretion, waive in whole or in part any or all of the limitations
  imposed hereunder (if any) with respect to any or all of an Award under this Article XI.

		 
	 	              (e)           Price.  Common Stock or Other Stock-Based Awards issued on a bonus basis under this Article XI may
  be issued for no cash consideration; Common Stock or Other Stock-Based Awards purchased pursuant
  to a purchase right awarded under this Article XI shall be priced as determined by the Committee.
  Subject to Section 4.3, the purchase price of shares of Common Stock or Other Stock-Based Awards
  may be zero to the extent permitted by applicable law, and, to the extent not so permitted, such
  purchase price may not be less than par value. The purchase of shares of Common Stock or Other Stock-Based
  Awards may be made on either an after-tax or pre-tax basis, as determined by the Committee; provided,
  however, that if the purchase is made on a pre-tax basis, such purchase shall be made pursuant to
  a deferred compensation program established by the Committee, which will be deemed a part of this Plan. 

		 
	 	              (f)           Detrimental Activity. Other Stock-Based Awards under this Article XI and any Common Stock covered by any such Award shall
  be forfeited 

	

29

	 	in the event the Participant engages in Detrimental Activity under such conditions set forth by the Committee in the Award agreement.

	 
	ARTICLE XII

              

              NON-TRANSFERABILITY AND TERMINATION 

              OF EMPLOYMENT/CONSULTANCY

	 

	 	                             12.1          Non-Transferability.
        No Stock Option, Stock Appreciation Right, Performance Unit, Performance
        Share or Other Stock-Based Award shall be Transferable by the Participant
        otherwise than by will or by the laws of descent and distribution. All
        Stock Options and all Stock Appreciation Rights shall be exercisable,
        during the Participant’s lifetime, only by the Participant. Tandem
        Stock Appreciation Rights shall be Transferable, to the extent permitted
        above, only with the underlying Stock Option. Shares of Restricted Stock
        under Article VIII may not be Transferred prior to the date on which shares
        are issued, or, if later, the date on which any applicable restriction,
        performance or
        deferral period lapses. No Award shall, except as otherwise specifically
        provided by law or herein, be Transferable in any manner, and any attempt
        to Transfer any such Award shall be void, and no such Award shall in any
        manner be liable for or subject to the debts, contracts, liabilities,
        engagements or torts of any person who shall be entitled to such Award,
        nor shall it be subject to attachment or legal process for or against
        such person. Notwithstanding the foregoing, the Committee may determine
        at the time of grant or thereafter, that a Non-Qualified Stock Option
        that is otherwise not transferable pursuant to this Section 12.1 is transferable
        to a Family Member in whole or in part and in such circumstances, and
        under such conditions, as specified by the Committee. A Non-Qualified
        Stock Option that is transferred to a Family Member pursuant to the preceding
        sentence may not be subsequently transferred otherwise than by will or
        by the laws of descent and distribution. 

		 
	 	                            12.2          Termination of Employment or Termination of Consultancy. The following rules apply with regard to the Termination of Employment or Termination of Consultancy
  of a Participant:

		 

	 	              (a)           Rules Applicable to Stock Options and Stock Appreciation Rights. Unless otherwise determined by the Committee at grant or, if no rights of the Participant are reduced,
  thereafter:

		 
	 	                             (i)           Termination by Reason of Death, Disability or Retirement. If a Participant’s Termination of Employment or Termination of Consultancy is by reason of death,
  Disability or Retirement, all Stock Options and Stock Appreciation Rights held by such Participant
  may be exercised, to the extent exercisable at the Participant’s Termination of Employment or
  Termination of Consultancy, by the Participant (or, in the case of death, by the legal representative
  of the Participant’s estate) at any time within a period of one year from the date of such Termination
  of Employment or Termination of Consultancy, but in no event beyond the expiration of the stated
  terms of such 

	

30

	 	Stock Options and Stock Appreciation Rights; provided, however, that, in the case of Retirement, if the Participant dies within such exercise period, all unexercised Stock Options and Non-Tandem Stock Appreciation Rights held by such Participant shall thereafter be exercisable, to the extent to which they were exercisable at the time of death, for a period of one year from the date of such death, but in no event beyond the expiration of the stated term of such Stock Options and Non-Tandem Stock Appreciation Rights.

	 	 
	 	                             (ii)           Involuntary Termination Without Cause.
 If a Participant’s Termination of Employment or Termination of Consultancy is by involuntary termination without Cause, all Stock Options and Stock Appreciation Rights held by such Participant may be exercised, to the extent exercisable at Termination of Employment or Termination of Consultancy, by the Participant at any time within a period of 90 days from the date of such Termination of Employment or Termination of Consultancy, but in no event beyond the expiration of the stated term of such Stock Options and Stock Appreciation Rights.

	 	 
	 	                             (iii)          Voluntary Termination. If a Participant’s Termination of Employment or Termination of Consultancy is voluntary (other
  than a voluntary termination described in Section 12.2(a)(iv)(B) below), all Stock Options and Stock
  Appreciation Rights held by such Participant may be exercised, to the extent exercisable at Termination
  of Employment or Termination of Consultancy, by the Participant at any time within a period of 30
  days from the date of such Termination of Employment or Termination of Consultancy, but in no event
  beyond the expiration of the stated terms of such Stock Options and Stock Appreciation Rights. Notwithstanding
  the foregoing, effective for Stock Options and Stock Appreciation Rights granted on or after October
  19, 2000, if a Participant’s Termination of Employment or Termination of Consultancy is voluntary,
  all Stock Options and Stock Appreciation Rights held by such Participant shall thereupon terminate
  and expire as of the date of such Termination of Employment or Termination of Consultancy.

		 
	 	                             (iv)          Termination for Cause. If a Participant’s Termination of Employment or Termination of Consultancy (A) is for Cause
  or (B) is a voluntary termination (as provided in subsection (iii) above) within 90 days after
  an event which would be grounds for a Termination of Employment or Termination of Consultancy for
  Cause, all Stock Options and Stock Appreciation Rights held by such Participant shall thereupon terminate
  and expire as of the date of such Termination of Employment or Termination of Consultancy.

		 
	 	              (b)          Rules Applicable to Restricted Stock. Subject to the applicable provisions of the Restricted Stock Award agreement and this Plan, upon
  a Participant’s Termination of Employment or Termination of Consultancy for any reason during
  the relevant Restriction Period, all Restricted Stock still subject to restriction will vest or be
  forfeited in accordance with the terms and conditions established by the Committee at grant or thereafter.

	

31

	 	              (c)           Rules Applicable to Performance Shares and Performance Units. Subject to the applicable provisions of the Award agreement and this Plan, upon a Participant’s Termination of Employment or Termination of Consultancy for any reason during the Performance Period, the Performance Unit Cycle or other period or restriction as may be applicable for a given Award, the Performance Shares or Performance Units in question will vest (to the extent applicable and to the extent permissible under Section 162(m) of the Code) or be forfeited in accordance with the terms and conditions established by the Committee at grant or thereafter.

		 
	 	              (d)           Rules Applicable to Other Stock-Based Awards. Subject to the applicable provisions of the Award agreement and this Plan, upon a Participant’s Termination of Employment or Termination of Consultancy for any reason during any period or restriction as may be applicable for a given Award, the Other Stock-Based Awards in question will vest or be forfeited in accordance with the terms and conditions established by the Committee at grant or thereafter.

	 	 

	
ARTICLE XIII

NON-EMPLOYEE DIRECTOR STOCK OPTION GRANTS

	 

	 	                             13.1         Stock Options.  The terms of this Article XIII shall apply only to Stock Options granted to Non-Employee Directors.

		 
	 	                             13.2         Grants. Without further action by the Board or the stockholders of the Company, each Non-Employee Director
  shall, subject to the terms of the Plan, be granted:

		 

	 	                (a)           Stock Options to purchase 4,500
  shares of Common Stock as of the date the Non-Employee Director begins service as a Non-Employee
  Director on the Board (subject to increase or decrease pursuant to Section 4.2), provided that the
  Non-Employee Director began service on or after the Effective Date; and

		 
	 	                (b)           In addition to Stock Options granted
  pursuant to (a) above, Stock Options: (i) to purchase 12,500 shares of Common Stock as
  of the August 1 of each year (subject to increase or decrease pursuant to Section 4.2), commencing
  August 1, 2005, provided he or she has not, as of such day, experienced a Termination of Directorship
  and provided further that he or she has been a Non-Employee Director for at least six months as of
  such August 1 date; and (ii) to purchase 4,500 shares of Common Stock as of November 6, 2000,
  3,375 shares of Common Stock as of November 1, 2001, 3,750 shares of Common Stock as of November
  3, 2003 and 3,750 shares of Common Stock as of August 2, 2004.

		 

	 	                              13.3         Non-Qualified Stock Options. Stock Options granted under this Article XIII shall be Non-Qualified Stock Options.

	

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	 	                              13.4         Terms of Stock Options. Stock Options granted under this Article XIII shall be subject to the following terms and conditions, and shall be in such form and contain such additional terms and conditions, not inconsistent with the terms of this Plan, as the Board shall deem desirable:

	 	 

	 	                (a)           Stock Option Price. The Stock Option price per share of Common Stock purchasable under a Stock Option shall equal 100% of the Fair Market Value of the share of Common Stock at the time of grant.

	 	 
	 	                (b)           Stock Option Term.  The term of each Stock Option granted (i) prior to August 1, 2005 shall be ten (10) years and (ii) on or after August 1, 2005 shall be five (5) years.

	 	 
	 	                (c)           Exercisability. Stock Options granted to Non-Employee Directors pursuant to Section 13.2 shall vest and become exercisable (i) on the first anniversary of date of grant for Stock Options granted prior to August 1, 2005 and (ii) in installments over a three (3) year period, commencing on the date of grant for Stock Options granted on or after August 1, 2005, at the rate of 25% effective on the first and second anniversaries of the date of grant and 50% on the third anniversary of the
  date of grant; provided that in any event the Stock Option may become vested only during the continuance
  of his or her service as a director of the Company.

		 
	 	                (d)           Method of Exercise. Subject to whatever waiting period provisions apply under subsection (c) above, Stock Options may
  be exercised in whole or in part at any time and from time to time during the Stock Option term,
  by giving written notice of exercise to the Company specifying the number of shares to be purchased.
  Such notice shall be accompanied by payment in full of the purchase price as follows: (i) in
  cash or by check, bank draft or money order payable to the Company; (ii) to the extent permitted
  by law, if the Common Stock is traded on a national securities exchange, through a “cashless
  exercise” procedure whereby the Participant delivers irrevocable instructions to a broker satisfactory
  to the Company to deliver promptly to the Company an amount equal to the purchase price; or (iii) such
  other arrangement for the satisfaction of the purchase price, as the Board may accept. If and to
  the extent determined by the Board in its sole discretion at or after grant, payment in full or in
  part may also be made in the form of Common Stock owned by the Participant (and for which the Participant
  has good title free and clear of any liens and encumbrances) based on the Fair Market Value of the
  Common Stock on the payment date. No shares of Common Stock shall be issued until payment, as provided
  herein, therefore has been made or provided for.

		 
	 	                (e)           Form, Modification, Extension and Renewal of Stock Options. Subject to the terms and conditions and within the limitations of the Plan, a Stock Option shall
  be evidenced by such form of agreement or grant as is approved by the Board, and the Board may modify,
  extend or renew outstanding Stock Options 

		 

	

33

	 	granted under the Plan (provided that the rights of a Participant are not reduced without his consent).

	 	 
	 	                              13.5         Termination of Directorship. The following rules apply with regard to Stock Options upon the Termination of Directorship:

		 

	 	                (a)           Termination
        of Directorship by Reason of Death, Disability or Otherwise Ceasing to
        be a Director. Except as otherwise provided herein, upon the Termination
        of Directorship by reason of death, Disability, resignation, failure to
        stand for reelection or failure to be reelected or otherwise, all outstanding
        Stock Options exercisable and not exercised shall remain exercisable to
        the extent exercisable on such date of Termination of Directorship by
        the Participant or, in the case of death, by the Participant’s estate
        or by the person given authority to exercise such Stock Options by his
        or her will or by operation of law, at any time prior to the expiration
        of the stated term of such Stock Option.

	 	 
	 	                (b)           Cancellation of Options. Except as provided in Section 13.6, no Stock Options that were not exercisable as of the date of Termination of Directorship shall thereafter become exercisable upon a Termination of Directorship for any reason or no reason whatsoever, and such Stock Options shall terminate and become null and void upon
  a Termination of Directorship. If a Non-Employee Director’s Termination of Directorship is for
  Cause, all Stock Options held by the Non-Employee Director shall thereupon terminate and expire as
  of the date of termination.

		 

	 	                              13.6          Acceleration of Exercisability. All Stock Options granted to a Non-Employee Director and not previously exercisable shall become
  fully exercisable upon such Director’s death, and all Stock Options granted to Non-Employee
  Directors and not previously exercisable shall become fully exercisable immediately upon a Change
  in Control (as defined in Section 14.2).

		 

	 	                              13.7         Changes.
		 

	 	                (a)           The Awards to a Non-Employee Director
  shall be subject to Sections 4.2(a), (b) and (c) of the Plan and this Section 13.7, but shall not
  be subject to Section 4.2(d).

		 
	 	                (b)           If the Company shall not be the
  surviving corporation in any merger or consolidation, or if the Company is to be dissolved or liquidated,
  then, unless the surviving corporation assumes the Stock Options or substitutes new Stock Options
  which are determined by the Board in its sole discretion to be substantially similar in nature and
  equivalent in terms and value for Stock Options then outstanding, upon the effective date of such
  merger, consolidation, liquidation or dissolution, any unexercised Stock Options shall expire without
  additional compensation to the holder thereof; provided, that, the Board shall deliver notice to
  each Non-Employee Director at least 30 days prior to the date of consummation of such merger, consolidation,
  dissolution or liquidation which 

	

34

	 	would result in the expiration of the Stock
Options and during the period from the date on which such notice of termination is delivered to the consummation of the merger, consolidation, dissolution or liquidation, such Participant shall have the right to exercise in full, effective as of such consummation, all Stock Options that are then outstanding (without regard to limitations on exercise otherwise contained in the Stock Options) but contingent on occurrence of the merger, consolidation, dissolution or liquidation, and, provided that, if the contemplated transaction does not take place within a 90 day period after giving such notice for any reason whatsoever, the notice, accelerated vesting and exercise shall be null and void and, if and when appropriate, new notice shall be given as aforesaid.

	 
	ARTICLE XIV

              

              CHANGE IN CONTROL PROVISIONS

	 

	 	                             14.1         Benefits.  In the event of a Change in Control of the Company, except as otherwise provided by the Committee upon the grant of an Award, the Participant shall be entitled to the following benefits:

	 	 
	 	                (a)           Except to the extent provided
  in the applicable Award agreement, the Participant’s employment agreement with the Company or
  an Affiliate, as approved by the Committee, or other written agreement approved by the Committee
  (as such agreement may be amended from time to time), (i) Equity Awards granted and not previously
  exercisable shall become exercisable upon a Change in Control, (ii) restrictions to which any
  shares of Restricted Stock granted prior to the Change in Control are subject shall lapse upon a
  Change in Control, and (iii) the conditions required for vesting of any unvested Performance
  Units and/or Performance Shares shall be deemed to be satisfied upon a Change in Control.

		 
	 	                (b)           The Committee, in its sole discretion,
  may provide for the purchase of any Stock Option by the Company or an Affiliate for an amount of
  cash equal to the excess of the Change in Control Price (as defined below) of the shares of Common
  Stock covered by such Stock Options, over the aggregate exercise price of such Stock Options. For
  purposes of this Section 14.1, Change in Control Price shall mean the higher of (i) the highest
  price per share of Common Stock paid in any transaction related to a Change in Control of the Company,
  or (ii) the highest Fair Market Value per share of Common Stock at any time during the sixty
  (60) day period preceding a Change in Control.

		 
	 	                (c)           Notwithstanding anything to the
  contrary herein, unless the Committee provides otherwise at the time a Stock Option is granted hereunder
  or thereafter, no acceleration of exercisability shall occur with respect to such Stock Options if
  the Committee reasonably determines in good faith, prior to the occurrence of the Change in Control,
  that the Stock Options shall be honored or assumed, or new rights substituted therefore (each such
  honored, assumed or 

		 

	 
	

	

35

	 	substituted stock option hereinafter called an “Alternative Option”), by a Participant’s employer (or the parent or a subsidiary of such employer) immediately following the Change in Control, provided that any such Alternative Option must meet the following criteria:

	 

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

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

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

	
	 

	 	               For purposes of Incentive Stock Options, any assumed or substituted Stock Option shall comply with
  the requirements of Treasury Regulation § 1.424-1 (and any amendments thereto).

		 
	 	                (d)           Notwithstanding anything else
  herein, the Committee may, in its sole discretion, provide for accelerated vesting of an Award or
  accelerated lapsing of restrictions on shares of Restricted Stock at any time.

		 

	 	                              14.2         Change in Control.  A “Change in Control” shall be deemed to have occurred:

		 

	 	                (a)           upon any “person” as
  such term is used in Sections 13(d) and 14(d) of the Exchange Act (other than the Company, any trustee
  or other fiduciary holding securities under any employee benefit plan of the Company, or any company
  owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions
  as their ownership of Common Stock of the Company), becoming the owner (as defined in Rule 13d-3
  under the Exchange Act), directly or indirectly, of securities of the Company representing 30% or
  more of the combined voting power of the Company’s then outstanding securities;

		 
	 	                (b)            during any period of two
  (2) consecutive years, individuals who at the beginning of such period constitute the Board of Directors,
  and any new director (other than a director designated by a person who has entered into an agreement
  with the Company to effect a transaction described in paragraph (a), (c), or (d) of this section)
  or a director whose initial assumption of office occurs as a result of either an actual or threatened
  election contest (as such term is used in Rule 14a-11 of Regulation 14A promulgated under the Exchange
  Act) or other actual or threatened solicitation of proxies or consents by or on behalf of a person
  other than the Board of Directors of the Company whose election by the Board of Directors or nomination
  for election by the Company’s stockholders was approved 

	

36

	 	by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of the two-year period or whose election or nomination for election was previously so approved, cease for any reason to constitute at least a majority of the Board of Directors;

	 	 
	 	                (c)           upon a merger
or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 50% of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation; provided, however, that a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no person (other than those covered by the exceptions in (a) above)
acquires more than 50% of the combined voting power of the Company’s then outstanding securities shall not constitute a Change in Control of the Company; or

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

	 
	
ARTICLE XV

TERMINATION OR AMENDMENT OF PLAN

                Notwithstanding any other provision of this Plan, the Board or the Committee may at any time, and from
time to time, amend, in whole or in part, any or all of the provisions of this Plan (including any
amendment deemed necessary to ensure that the Company may comply with any regulatory requirement
referred to in Article XVII), or suspend or terminate it entirely, retroactively or otherwise; provided,
however, that, unless otherwise required by law or specifically provided herein, the rights of a
Participant with respect to Awards granted prior to such amendment, suspension or termination, may
not be impaired without the consent of such Participant and, provided further, without the approval
of the shareholders of the Company in accordance with the laws of the State of Delaware, to the extent
required by the applicable provisions of Rule 16b-3 or Section 162(m) of the Code, or, to the extent
applicable to Incentive Stock Options, Section 422 of the Code, no amendment may be made which would
(i) increase the aggregate number of shares of Common Stock that may be issued under this Plan;
(ii) increase the maximum individual Participant limitations for a fiscal year under Section
4.1(b); (iii) change the classification of employees or Consultants eligible to receive Awards
under this Plan; (iv) decrease the minimum option price of any Stock Option or Stock Appreciation
Right; (v) extend the maximum option period under Section 6.3; (vi) materially 

	

37

	alter the Performance Criteria for the Award of Restricted Stock, Performance Units, Performance Shares or cash incentive Awards as set forth in Exhibit A; or (vii) require stockholder approval in order
for this Plan to continue to comply with the applicable provisions of Section 162(m) of the Code or, to the extent applicable to Incentive Stock Options, Section 422 of the Code. In no event may this Plan be amended without the approval of the stockholders of the Company in accordance with the applicable laws of the State of Delaware to increase the aggregate number of shares of Common Stock that may be issued under this Plan, decrease the minimum exercise price of any Stock Option or Stock Appreciation Right, or to make any other amendment that would require stockholder approval under the rules of any exchange or system on which the Company’s securities are listed or traded at the request of the Company.

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

	 

	
ARTICLE XVI

UNFUNDED PLAN

	 

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

	 
	
ARTICLE XVII

GENERAL PROVISIONS

	 

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

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

	

38

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

		 
	 	                               17.3         Right to Employment/Consultancy. Neither this Plan nor the grant of any Award hereunder shall give any Participant or other employee or Consultant any right with respect to continuance of employment or Consultancy by the Company or any Affiliate, nor shall they be a limitation in any way on the right of the Company or any Affiliate by which an employee is employed or a Consultant is retained to terminate his employment or Consultancy at any time.

	 	 
	 	                               17.4         Withholding of Taxes. The Company shall have the right to deduct from any payment to be made to a Participant, or to otherwise require, prior to the issuance or delivery of any shares of Common Stock or the payment of any cash hereunder, payment by the Participant of, any Federal, state or local taxes required by law to be withheld. Upon the vesting of Restricted Stock, or upon making an election under Code Section 83(b), a Participant
  shall pay all required withholding to the Company.

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

		 

	 	                              17.5          Listing and Other Conditions.
		 

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

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

	

39

	 	                (c)           Upon termination of any period of suspension under this Section 17.5, any Award affected by such suspension which shall not then have expired or terminated shall be reinstated as to all shares available before such suspension and as to shares which would otherwise have become available during the period of such suspension, but no such suspension shall extend the term of any Stock Option.

	 

	 	                              17.6         Governing Law.  This Plan shall be governed and construed in accordance with the laws of the State of Delaware (regardless of the law that might otherwise govern under applicable Delaware principles of conflict of laws).

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

	 	 
	 	                              17.8         Other Benefits.  No Award payment under this Plan shall be deemed compensation for purposes of computing benefits
  under any retirement plan of the Company or its subsidiaries nor affect any benefits under any other
  benefit plan now or subsequently in effect under which the availability or amount of benefits is
  related to the level of compensation, unless otherwise specifically stated in such other benefit
  plan.

		 
	 	                              17.9         Costs.  The Company shall bear all expenses included in administering this Plan, including expenses
  of issuing Common Stock pursuant to any Awards hereunder.

		 
	 	                              17.10       No Right to Same Benefits. The provisions of Awards need not be the same with respect to each Participant, and such Awards to
  individual Participants need not be the same in subsequent years.

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

		 
	 	                              17.12       Section 16(b) of the Exchange Act. All elections and transactions under this Plan by persons subject to Section 16 of the Exchange Act
  involving shares of Common Stock are intended to comply with any applicable exemptive condition under
  Rule 16b-3. The Committee may establish and adopt written administrative guidelines, designed to
  facilitate compliance with Section 16(b) of the Exchange Act, as it may deem necessary or proper
  for the administration and operation of this Plan and the transaction of business thereunder.

		 
	 	                              17.13       Section 409A of the Code. This Plan is intended to comply with the applicable requirements of Section 409A of the Code and
  shall be limited, construed 

	

40

	 	and interpreted in a manner so as to comply therewith. Notwithstanding anything herein to the contrary, any provision in this Plan that is inconsistent with Section 409A of the Code shall be deemed to be amended to comply with Section 409A of the Code and to the extent such provision cannot be amended to comply therewith, such provision shall be null and void.

	 	 
	 	                              17.14         Severability of Provisions. If any provision of this Plan shall be held invalid or unenforceable, such invalidity or unenforceability shall not affect any other provisions hereof, and this Plan shall be construed and enforced as if such provisions had not been included.

		 
	 	                              17.15         Headings and Captions. The headings and captions herein are provided for reference and convenience only, shall not be considered part of this Plan, and shall not be employed in the construction of this Plan.

	 

	
ARTICLE XVIII

EFFECTIVE DATE OF PLAN

                     The
        Plan was originally adopted by the Board, and effective on October 19,
        1999, subject to approval by the stockholders of the Company (which was
        obtained at the stockholders meeting held on December 14, 1999). The Plan
        was thereafter amended and restated in accordance with the requirements
        of the laws of the State of Delaware. The Board approved this amendment
        and restatement of the Plan on October 9, 2006 and the amendments contained
        herein shall become effective on October 9, 2006, subject to approval
        of the provisions of this Plan adding a cash incentive Award and re-approval
        of the Performance Criteria for performance-based Equity Awards by the
        stockholders of the Company in accordance with the requirements of the
        laws of the State of Delaware or such later date as provided in the adopting
        resolution. If the stockholders of the Company do not approve the amendments
        that are subject to stockholder approval at the stockholder meeting to
        be held on December 5, 2006, the Plan as it was in effect prior to
        such amendment and restatement will remain in effect and such amendment
        and restatement shall be deemed null and void and of no effect; provided
        Awards (other than Stock Options and Stock Appreciation Rights) shall
        not qualify as “performance-based” for purposes of Section 162(m)
        of the Code. 

ARTICLE XIX

TERM OF PLAN

                     No
        Award shall be granted pursuant to this Plan on or after the tenth anniversary
        of the date this Plan was initially adopted, but Awards granted prior
        to such tenth anniversary may extend beyond that date. The foregoing notwithstanding,
        cash incentive Awards may be granted under Section 10.1 until the date
        of the Annual Meeting of Stockholders in the fifth year after the year
        in which the amendment and restatement of the Plan that included the authorization
        of cash incentive Awards was approved by the Company’s stockholders
        (even if this deadline extends past the date at which other Awards may
        be granted under the Plan). 

	

41

	
EXHIBIT A 

PERFORMANCE CRITERIA

                Performance Goals established for purposes of conditioning the grant of an Award of Restricted Stock
based on performance or the vesting of performance-based Awards of Restricted Stock, Performance
Units, Performance Shares and/or cash incentive Awards shall be based on one or more of the following
performance criteria (“Performance Criteria”): (i) the attainment of certain target
levels of, or a specified percentage increase in, revenues, income before income taxes and extraordinary
items, net income, income before income tax and stock based compensation expense, earnings before
income tax, earnings before interest, taxes, depreciation and amortization or a combination of any
or all of the foregoing; (ii) the attainment of certain target levels of, or a percentage increase
in, after-tax or pre-tax profits including, without limitation, that attributable to continuing and/or
other operations; (iii) the attainment of certain target levels of, or a specified increase
in, operational cash flow; (iv) the achievement of a certain level of, reduction of, or other
specified objectives with regard to limiting the level of increase in, all or a portion of, the Company’s
bank debt or other long-term or short-term public or private debt or other similar financial obligations
of the Company, which may be calculated net of such cash balances and/or other offsets and adjustments
as may be established by the Committee; (v) the attainment of target levels of or a specified
percentage increase in earnings per share or earnings per share from continuing operations; (vi) the
attainment of certain target levels of, or a specified increase in return on capital employed or
return on invested capital; (vii) the attainment of certain target levels of, or a percentage
increase in, after-tax or pre-tax return on stockholders’ equity; (viii) the attainment
of certain target levels of, or a specified increase in, economic value added targets based on a
cash flow return on investment formula; (ix) the attainment of certain target levels of or specified
increases in the fair market value of the shares of the Company’s common stock; and (x) the
growth in the value of an investment in the Company’s common stock assuming the reinvestment
of dividends. For purposes of item (i) above, “extraordinary items” shall mean all items
of gain, loss or expense for the fiscal year determined to be extraordinary or unusual in nature
or infrequent in occurrence or related to a corporate transaction (including, without limitation,
a disposition or acquisition) or related to a change in accounting principle, all as determined in
accordance with standards established by Opinion No. 30 of the Accounting Principles Board. The Committee
may specify that specific items of income or expense may be included or excluded from the calculation
of achievement of any of the foregoing Performance Criteria. 

                In addition, such Performance Criteria may be based upon the attainment of specified levels of Company
(or subsidiary, division or other operational unit of the Company) performance under one or more
of the measures described above relative to the performance of other corporations. To the extent
permitted under Code Section 162(m), but only to the extent permitted under Code Section 162(m) (including,
without limitation, compliance with any requirements for stockholder approval), the Committee may: (i) designate
additional business criteria on which the Performance Criteria may be based or (ii) adjust,
modify or amend the aforementioned business criteria.EMPLOYMENT AGREEMENT

AMENDMENT NO. 3 TO EMPLOYMENT AGREEMENT

This Amendment No. 3 to the Employment Agreement (the "Amendment") is entered into as of this 11th day of December, 2006, between Knoll, Inc., a Delaware corporation (the "Company"), and Andrew B. Cogan ("Executive").

WHEREAS, the parties wish to amend the March 23, 2001 Employment Agreement between Executive and the Company, as previously amended (the "Agreement), as hereinafter set forth; 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to become legally bound, the parties agree as follows:

	All defined terms contained in this Amendment shall have the meanings ascribed to them in the Agreement.
	Except as specifically set forth herein, the terms of the Agreement shall remain unchanged.
	Executive's "Base Salary" is changed to be $650,000 as of January 1, 2007.

IN WITNESS WHEREOF, each of the parties has duly executed this Agreement effective as of the date first above written.

KNOLL, INC.
By:/s/ Barry L. McCabe

Name: Barry L. McCabe  

Title: Senior Vice President and Chief Financial Officer

/s/ Andrew B. Cogan

Andrew B. Cogan

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