Aeroflex Incorporated
2000 Stock Option Plan
SECTION 1. GENERAL PROVISIONS
1.1 Name and General Purpose
The name of this plan is the Aeroflex Incorporated 2000 Stock Option Plan
(hereinafter called the "Plan"). The Plan is intended to be a broadly-based
incentive plan which enables Aeroflex Incorporated (the "Company") and its
subsidiaries and affiliates to foster and promote the interests of the Company
by attracting and retaining directors, officers and employees of, and
consultants to, the Company who contribute to the Company's success by their
ability, ingenuity and industry, to enable such directors, officers, employees
and consultants to participate in the long-term success and growth of the
Company by giving them a proprietary interest in the Company and to provide
incentive compensation opportunities competitive with those of competing
corporations.
1.2 Definitions
a. "Affiliate" means any person or entity controlled by or under common
control with the Company, by virtue of the ownership of voting
securities, by contract or otherwise.
b. "Board" means the Board of Directors of the Company.
c. "Change in Control" means a change of control of the Company, or in
any person directly or indirectly controlling the Company, which shall
mean:
(a) a change in control as such term is presently defined in
Regulation 240.12b- (2) under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"); or
(b) if any "person" (as such term is used in Section 13(d) and 14(d)
of the Exchange Act) other than the Company or any "person" who on
the date of this Agreement is a director or officer of the Company,
becomes the "beneficial owner" (as defined in Rule 13(d)-3 under the
Exchange Act) directly or indirectly, of securities of the Company
representing twenty percent (20%) or more of the voting power of the
Company's then outstanding securities; or
(c) if during any period of two (2) consecutive years during the
term of this Plan, individuals who at the beginning of such period
constitute the Board of Directors, cease for any reason to
constitute at least a majority thereof.
d. "Committee" means the Committee referred to in Section 1.3 of the
Plan.
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e. "Common Stock" means shares of the Common Stock, par value $.10 per
share, of the Company.
f. "Company" means Aeroflex Incorporated, a corporation organized under
the laws of the State of Delaware (or any successor corporation).
g. "Fair Market Value" means the market price of the Common Stock on the
Nasdaq Stock Market on the on the date of the grant or on any other
date on which the Common Stock is to be valued hereunder. If no sale
shall have been reported on the Nasdaq Stock Market on such date, Fair
Market Value shall be determined by the Committee.
h. "Non-Employee Director" shall have the meaning set forth in Rule 16(b)
promulgated by the Securities and Exchange Commission ("Commission").
i. "Option" means any option to purchase Common Stock under Section 2 of
the Plan.
j. "Option Agreement" means the option agreement described in Section 2.4
of the Plan.
k. "Participant" means any director, officer, employee or consultant of
the Company, a Subsidiary or an Affiliate who is selected by the
Committee to participate in the Plan.
l. "Subsidiary" means any corporation in which the Company possesses
directly or indirectly 50% or more of the combined voting power of all
classes of stock of such corporation.
m. "Total Disability" means accidental bodily injury or sickness which
wholly and continuously disabled an optionee. The Committee, whose
decisions shall be final, shall make a determination of Total
Disability.
1.3 Administration of the Plan
The Plan shall be administered by the Board or by the Committee appointed
by the Board consisting of two or more members of the Board all of whom shall
be Non-Employee Directors. The Committee shall serve at the pleasure of the
Board and shall have such powers as the Board may, from time to time, confer
upon it.
Subject to this Section 1.3, the Committee shall have sole and complete
authority to adopt, alter, amend or revoke such administrative rules,
guidelines and practices governing the operation of the Plan as it shall, from
time to time, deem advisable, and to interpret the terms and provisions of the
Plan.
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The Committee shall keep minutes of its meetings and of action taken by
it without a meeting. A majority of the Committee shall constitute a quorum,
and the acts of a majority of the members present at any meeting at which a
quorum is present, or acts approved in writing by all of the members of the
Committee without a meeting, shall constitute the acts of the Committee.
1.4 Eligibility
Stock Options may be granted only to directors, officers, employees or
consultants of the Company or a Subsidiary or Affiliate. All employees are
eligible to receive Stock Options under the Plan. Any person who has been
granted any Option may, if he is otherwise eligible, be granted an additional
Option or Options.
1.5 Shares
The aggregate number of shares reserved for issuance pursuant to the Plan
shall be 750,000 shares of Common Stock, or the number and kind of shares of
stock or other securities which shall be substituted for such shares or to
which such shares shall be adjusted as provided in Section 1.6.
Such number of shares may be set aside out of the authorized but unissued
shares of Common Stock or out of issued shares of Common Stock acquired for
and held in the Treasury of the Company, not reserved for any other purpose.
Shares subject to, but not sold or issued under, any Option terminating or
expiring for any reason prior to its exercise in full will again be available
for Options thereafter granted during the balance of the term of the Plan.
1.6 Adjustments Due to Stock Splits, Mergers, Consolidation, Etc.
If, at any time, the Company shall take any action, whether by stock
dividend, stock split, combination of shares or otherwise, which results in a
proportionate increase or decrease in the number of shares of Common Stock
theretofore issued and outstanding, the number of shares which are reserved
for issuance under the Plan and the number of shares which, at such time, are
subject to Options shall, to the extent deemed appropriate by the Committee,
be increased or decreased in the same proportion, provided, however, that the
Company shall not be obligated to issue fractional shares.
Likewise, in the event of any change in the outstanding shares of Common
Stock by reason of any recapitalization, merger, consolidation,
reorganization, combination or exchange of shares or other corporate change,
the Committee shall make such substitution or adjustments, if any, as it deems
to be appropriate, as to the number or kind of shares of Common Stock or other
securities which are reserved for issuance under the Plan and the number of
shares or other securities which, at such time are subject to Options.
In the event of a Change in Control, at the option of the Board or
Committee, (a) all Options outstanding on the date of such Change in Control
shall become immediately and fully exercisable, and (b) an optionee will be
permitted to surrender for cancellation within sixty (60) days after such
Change in Control any Option or portion of an Option which was granted more
than six (6) months prior to the date of such surrender, to the extent not yet
exercised, and to receive a cash payment in an amount equal to the excess, if
any, of the Fair Market Value (on the date of surrender) of the shares of
Common Stock subject to the Option or portion thereof surrendered, over the
aggregate purchase price for such Shares under the Option.
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1.7 Non-Alienation of Benefits
Except as herein specifically provided, no right or unpaid benefit under
the Plan shall be subject to alienation, assignment, pledge or charge and any
attempt to alienate, assign, pledge or charge the same shall be void. If any
Participant or other person entitled to benefits hereunder should attempt to
alienate, assign, pledge or charge any benefit hereunder, then such benefit
shall, in the discretion of the Committee, cease.
1.8 Withholding or Deduction for Taxes
If, at any time, the Company or any Subsidiary or Affiliate is required,
under applicable laws and regulations, to withhold, or to make any deduction
for any taxes, or take any other action in connection with any Option
exercise, the Participant shall be required to pay to the Company or such
Subsidiary or Affiliate, the amount of any taxes required to be withheld, or,
in lieu thereof, at the option of the Company, the Company or such Subsidiary
or Affiliate may accept a sufficient number of shares of Common Stock to cover
the amount required to be withheld.
1.9 Administrative Expenses
The entire expense of administering the Plan shall be borne by the
Company.
1.10 General Conditions
a. The Board or the Committee may, from time to time, amend, suspend or
terminate any or all of the provisions of the Plan, provided that,
without the Participant's approval, no change may be made which would
alter or impair any right theretofore granted to any Participant.
b. With the consent of the Participant affected thereby, the Committee
may amend or modify any outstanding Option in any manner not
inconsistent with the terms of the Plan, including, without
limitation, and irrespective of the provisions of Section 2.3(c)
below, to accelerate the date or dates as of which an installment of
an Option becomes exercisable; provided, that the Committee shall not
have the right to reprice any outstanding Options.
c. Nothing contained in the Plan shall prohibit the Company or any
Subsidiary or Affiliate from establishing other additional incentive
compensation arrangements for employees of the Company or such
Subsidiary or Affiliate.
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d. Nothing in the Plan shall be deemed to limit, in any way, the right of
the Company or any Subsidiary or Affiliate to terminate a
Participant's employment or service with the Company (or such
Subsidiary or Affiliate) at any time.
e. Any decision or action taken by the Board or the Committee arising out
of or in connection with the construction, administration,
interpretation and effect of the Plan shall be conclusive and binding
upon all Participants and any person claiming under or through any
Participant.
f. No member of the Board or of the Committee shall be liable for any act
or action, whether of commission or omission, (i) by such member
except in circumstances involving actual bad faith, nor (ii) by any
other member or by any officer, agent or employee.
1.11 Compliance with Applicable Law
Notwithstanding any other provision of the Plan, the Company shall not be
obligated to issue any shares of Common Stock, or grant any Option with
respect thereto, unless it is advised by counsel of its selection that it may
do so without violation of the applicable Federal and State laws pertaining to
the issuance of securities and the Company may require any stock certificate
so issued to bear a legend, may give its transfer agent instructions limiting
the transfer thereof, and may take such other steps, as in its judgment are
reasonably required to prevent any such violation.
1.12 Effective Dates
The Plan was adopted by the Board on March 22, 2000. The Plan shall
terminate on March 21, 2010.
Section 2. OPTION GRANTS
2.1 Authority of Committee
Subject to the provisions of the Plan, the Committee shall have the sole
and complete authority to determine (i) the Participants to whom Options shall
be granted; (ii) the number of shares to be covered by each Option; and (iii)
the conditions and limitations, if any, in addition to those set forth in
Sections 2 and 3 hereof, applicable to the exercise of an Option, including
without limitation, the nature and duration of the restrictions, if any, to be
imposed upon the sale or other disposition of shares acquired upon exercise of
an Option.
Stock Options granted under the Plan shall be non-qualified stock
options.
The Committee shall have the authority to grant Options.
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2.2 Option Exercise Price
The exercise price set forth in the Option Agreement at the time of grant
shall not be less than the Fair Market Value of the Common Stock at the time
that the Option is granted.
The purchase price is to be paid in full in cash, certified or bank
cashier's check or, at the option of the Company, Common Stock valued at its
Fair Market Value on the date of exercise, or a combination thereof, when the
Option is exercised and stock certificates will be delivered only against such
payment.
2.3 Option Grants
Each Option will be subject to the following provisions:
a. Term of Option
An Option will be for a term of not more than ten years from the date of
grant.
b. Exercise
(i) By an Employee:
Unless otherwise provided by the Committee and except in the
manner described below upon the death of the optionee, an Option
may be exercised only in installments as follows: up to one-half
of the subject shares on and after the first anniversary of the
date of grant, up to all of the subject shares on and after the
second such anniversary of the date of the grant of such Option
but in no event later than the expiration of the term of the
Option.
An Option shall be exercisable during the optionee's lifetime
only by the optionee and shall not be exercisable by the optionee
unless, at all times since the date of grant and at the time of
exercise, such optionee is an employee of or providing services
to the Company, any parent corporation of the Company or any
Subsidiary or Affiliate, except that, upon termination of all
such employment or provision of services (other than by death,
Total Disability, or by Total Disability followed by death in the
circumstances provided below), the optionee may exercise an
Option at any time within three months thereafter but only to the
extent such Option is exercisable on the date of such
termination.
Upon termination of all such employment by Total Disability, the
optionee may exercise such Options at any time within one year
thereafter, but only to the extent such Option is exercisable on
the date of such termination.
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In the event of the death of an optionee (i) while an employee of
or providing services to the Company, any parent corporation of
the Company or any Subsidiary or Affiliate, or (ii) within three
months after termination of all such employment or provision of
services (other than for Total Disability) or (iii) within one
year after termination on account of Total Disability of all such
employment or provision of services, such optionee's estate or
any person who acquires the right to exercise such option by
bequest or inheritance or by reason of the death of the optionee
may exercise such optionee's Option at any time within the period
of three years from the date of death. In the case of clauses (i)
and (iii) above, such Option shall be exercisable in full for all
the remaining shares covered thereby, but in the case of clause
(ii) such Option shall be exercisable only to the extent it was
exercisable on the date of such termination of employment or
service.
(ii) By Persons other than Employees:
If the optionee is not an employee of the Company or the parent
corporation of the Company or any Subsidiary or Affiliate, the
vesting of such optionee's right to exercise his Options shall be
established and determined by the Committee in the Option
Agreement covering the Options granted to such optionee.
Notwithstanding the foregoing provisions regarding the exercise
of an Option in the event of death, Total Disability, other
termination of employment or provision of services or otherwise,
in no event shall an Option be exercisable in whole or in part
after the termination date provided in the Option Agreement.
c. Transferability
An Option granted under the Plan shall not be transferable
otherwise than by will or by the laws of descent and
distribution, except as may be permitted by the Board or the
Committee.
2.4 Agreements
In consideration of any Options granted to a Participant under the Plan,
each such Participant shall enter into an Option Agreement with the Company
providing, consistent with the Plan, such terms as the Committee may deem
advisable.
