EXPONENT INC, DEF 14A, 1999-04-16

EXPONENT INC
DEF 14A, 1999-04-16
MANAGEMENT CONSULTING SERVICES

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<PAGE>

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )

Filed by the Registrant [X]

Filed by a Party other than the Registrant [_]

Check the appropriate box:

[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))

[X] Definitive Proxy Statement

[_] Definitive Additional Materials

[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12

Exponent, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[X] No fee required

[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

(1) Title of each class of securities to which transaction applies:

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(2) Aggregate number of securities to which transaction applies:

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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):

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(4) Proposed maximum aggregate value of transaction:

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(5) Total fee paid:

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[_] Fee paid previously with preliminary materials.

[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

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(2) Form, Schedule or Registration Statement No.:

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(3) Filing Party:

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(4) Date Filed:

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Notes:
<PAGE>

Exponent, Inc.

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

To Be Held on May 5, 1999

TO THE STOCKHOLDERS:

The Annual Meeting of Stockholders (the "Annual Meeting") of Exponent, Inc.,
a Delaware corporation (the "Company"), will be held on Wednesday, May 5,
1999, at 9:00 a.m., PDT, in the Company's auditorium located at 155 Jefferson
Drive, Menlo Park, California 94025, for the following purposes:

1. To elect eight directors for a term of one year.

2. To amend the Company's Employee Stock Purchase Plan.

3. To establish a 1999 Stock Option Plan.

4. To establish a Restricted Stock Plan.

5. To ratify the appointment of KPMG, L.L.P., as independent auditors for
the Company for the year ending December 31, 1999.

6. To attend to any other matters that properly come before the meeting.

Stockholders owning the Company's shares at the close of business on April
2, 1999 (the "Record Date"), are entitled to notice of and to vote at the
Annual Meeting.

All stockholders of record, as of the Record Date, are cordially invited to
attend the Annual Meeting in person.

Please note that if you hold your shares in "street name" that is, through a
broker or other nominee, you will need to bring a copy of a brokerage
statement reflecting your stock ownership as of the record date. Check-in at a
registration desk will be required.

FOR THE BOARD OF DIRECTORS
/s/ Richard L. Schlenker
Richard L. Schlenker, Corporate
Secretary

Menlo Park, California
April 1, 1999
<PAGE>

EXPONENT, INC.

----------------

PROXY STATEMENT
FOR THE
1999 ANNUAL MEETING OF STOCKHOLDERS

----------------

ABOUT THE MEETING

General

The enclosed proxy is solicited on behalf of the Board of Directors of
Exponent, Inc., a Delaware corporation for use at the Annual Meeting of
Stockholders to be held in the Company's auditorium located at 155 Jefferson
Drive, Menlo Park, California 94025, on Wednesday, May 5, 1999, at 9:00 a.m.,
PDT. The Company's principal executive office is located at 149 Commonwealth
Drive, Menlo Park, California 94025, and the telephone number for this
location is (650) 326-9400.

What is the purpose of the Annual Meeting?

At the Company's Annual Meeting, stockholders will act upon matters outlined
in the accompanying notice of the meeting, and transact such other business
that may properly come before the meeting. In addition, the Company's
management will report on the performance of the Company during fiscal 1998
and respond to questions from stockholders.

Who is entitled to vote?

Only stockholders of record at the close of business on the record date,
April 2, 1999, are entitled to receive notice of the Annual Meeting and to
vote the shares of common stock which they hold as of that date. Each
outstanding share entitles its holder to cast one vote on each matter to be
voted upon.

Please note that if you hold your shares in "street name," that is through a
broker or other nominee, you will need to bring a copy of a brokerage
statement reflecting your stock ownership as of the record date. If you do not
vote your proxy, your brokerage firm may either vote your shares on a routine
matter, such as election of directors, or leave your shares without a vote. We
encourage you to provide instructions to your brokerage firm by voting your
proxy. This ensures your shares will be voted at the meeting.

The proxy solicitation materials were mailed on or about April 5, 1999,
together with the Company's Annual Report for the period ended January 1,
1999, to all stockholders entitled to vote at the meeting.

How do I vote?

You have three ways of voting. You may return the proxy card by mail, vote
by telephone, or vote in person. The Company is not offering Internet voting
at this time. To vote by mail, you must sign your proxy card and send it in
the enclosed prepaid, addressed envelope. If you mark your voting instructions
on the proxy card, your shares will be voted as you instruct. If you return a
signed card but do not provide voting instructions, your shares will be voted,
as recommended by the Board of Directors:

. for the eight named nominees;

. for the proposed amendment to the Employee Stock Purchase Plan;

. for the proposed establishment of a 1999 Stock Option Plan;

. for the proposed establishment of a Restricted Stock Plan; and

. for the reappointment of KPMG, L.L.P., as the Company's auditors.

1
<PAGE>

If you choose to vote by telephone, please review the back of the proxy card
for instructions on how to do so. You do not need to mail in your proxy card
if you vote by telephone. Some brokers may not provide telephone voting.

If you choose to vote in person, you will have an opportunity to do so at
the Annual Meeting. You may either bring your proxy card to the Annual
Meeting, or if you do not bring your proxy card, the Company will pass out
written ballots to anyone who was a shareholder as of the record date of April
2, 1999.

What if I change my mind after I return my proxy card?

You may revoke your proxy and change your vote at any time before the polls
close at the Annual Meeting. You may do this by:

. signing another proxy with a later date, (the proxy with the latest date
is counted);

. voting by telephone (your latest telephone proxy is counted); or

. voting in person at the meeting.

What does it mean if I receive more than one proxy card?

It means you have multiple accounts with the transfer agent and/or with
stockbrokers. If you would like to cancel duplicate mailings, you may
authorize the Company to discontinue mailings of multiple Annual Reports by
marking the appropriate box on each proxy card, or if you are a stockholder of
record voting by telephone, you may stay on the line until you receive the
appropriate prompt.

What constitutes a quorum?

The presence, in person or by properly executed proxy, of the holders of a
majority of the shares of common stock outstanding as of the Record Date is
necessary to constitute a quorum at the Annual Meeting. Shares that voted
"For," "Against," or "Withheld" on the proposals are treated as being present
at the meeting for purposes of establishing a quorum and are deemed to be
"votes cast" at the Annual Meeting with respect to the proposals. Signed,
unmarked proxy cards are voted as the Board recommends. A plurality of the
votes duly cast is required for the election of directors. The affirmative
vote of a majority of the votes duly cast is required to amend the Company's
Employee Stock Purchase Plan, establish a 1999 Stock Option Plan, establish a
Restricted Stock Plan and ratify the appointment of auditors.

Abstentions and broker non-votes will be included for purposes of
determining whether a quorum of shares is present at the Annual Meeting.
However, abstentions and broker non-votes will not be included in the
tabulation of the voting results on the election of directors or on issues
requiring approval of a majority of the votes cast.

Only stockholders of record, at the close of business on the Record Date of
April 2, 1999 are entitled to notice of and to vote at the Annual Meeting. As
of the Record Date, a total of 6,907,092 shares of the Company's common stock,
$.001 par value were issued and outstanding. For information regarding
security ownership by management and by the beneficial owners of more than 5%
of the Company's common stock, see "Stock Ownership." The closing price of the
Company's common stock on the NASDAQ National Market on the Record Date was
$5.63 per share.

2
<PAGE>

PROPOSAL NO. 1

ELECTION OF DIRECTORS

Nominees

A board of eight directors is to be elected at the Annual Meeting. Unless
otherwise instructed, the proxy holders will vote the proxies received by them
for the Company's eight nominees named below. In the event that any nominee of
the Company is unable or declines to serve as a director at the time of the
Annual Meeting, the proxies will be voted for any nominee who shall be
designated by the present Board of Directors to fill the vacancy. It is not
expected that any nominee will be unable or will decline to serve as a
director. The term of office of each person elected as a director will
continue until the next Annual Meeting, or until a successor has been elected
and qualified.

Required Vote

The eight nominees receiving the highest number of affirmative votes duly
cast, shall be elected as directors. Votes withheld from any director are
counted for purposes of determining the presence or absence of a quorum for
the transaction of business but have no other legal effect under Delaware law.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE NOMINEES LISTED BELOW:

<TABLE>
<C> <S>
Michael R. Gaulke
Age: 53

Director Since: 1994

Principal Occupation: President and Chief Executive Officer

Recent Business Experience: Mr. Gaulke joined the Company in September 1992, as Executive
Vice President and Chief Financial Officer. He was named
President in March 1993, and he was appointed as a member of
the Board of Directors of the Company in January 1994. He
assumed his current role of President and Chief Executive
Officer in June 1996. Prior to 1992, he held senior executive
positions at Raynet Corporation and Spectra Physics.

Other Directorships: Member of the Board of RockShox, Inc.; Board of Trustees of
the Palo Alto Medical Foundation.

- -------------------------------------------------------------------------------

Roger L. McCarthy, Ph.D.

Age: 50

Director Since: 1989

Principal Occupation: Chairman of the Board of Exponent Failure Analysis Associates,
Inc. (FaAA)

Recent Business Experience: Dr. McCarthy was named Chief Technical Officer (CTO) of the
Company and Chairman of the Board of the Company's principal
operating subsidiary FaAA, in June of 1996. He resigned his
position as CTO in 1998. He has been a director of the Company
since 1989 and a director of FaAA since 1980. He was Chief
Executive Officer of the Company and FaAA from 1989 to June
1996. He also served as Chairman and President of the Company
from 1989 to March 1993.

</TABLE>

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3
<PAGE>

<TABLE>
<C> <S>
Edward J. Keith

Age: 64

Director Since: 1989

Principal Occupation: Chairman of the Board of Exponent, Inc., and
Private Investor

Recent Business Experience: Mr. Keith has been Chairman of the Board of
Directors of the Company since March 1993, and
he has been a member of the Board of Directors
of the Company since 1989, as well as a member
of the Board of Directors of FaAA since 1987. He
was advisor to FaAA in 1986. Mr. Keith has been
a private investor since 1985.

Other Directorships: Chairman of Vectra Technologies (1994-1998);
Inlex 1990-1994.

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Samuel H. Armacost

Age: 60

Director Since:. 1989

Principal Occupation: Chairman of the Board of SRI International since
July 1998

Recent Business Experience: Mr. Armacost was a Principal of Weiss, Peck &
Greer, L.L.C., an investment firm, from l990
to1997. In 1997, he was appointed Managing
Director until his departure in June 1998. He
was Managing Director of Merrill Lynch Capital
Markets of Merrill, Lynch, Pierce, Fenner &
Smith, Incorporated, from 1987 to August 1990,
and he was Director, President, and Chief
Executive Officer of Bank America Corporation
from 1981 to 1986.

Other Directorships: Member of the Boards of Chevron Corporation;
Scios, Inc.; SRI International; and The James
Irvine Foundation.

- -------------------------------------------------------------------------------

Barbara M. Barrett

Age: 48

Director Since: 1997

Principal Occupation: President and Chief Executive Officer of Triple
Creek Guest Ranch since 1993
Harvard University Fellowship

Recent Business Experience: Ms. Barrett served as President and CEO of the
American Management Association International,
Inc., in New York City (1997-1998); was
appointed by the President of the United States
as the Deputy Administrator of the Federal
Aviation Administration, serving from 1988
through 1989; and was appointed as Vice Chairman
of Civil Aeronautics Board, serving from 1983
through 1984. Prior to 1984 she practiced
corporate, international, and business law.
Other Directorships: Chairman of Valley Bank of Arizona; member of
the Boards of New Piper Aircraft Corporation
1996-1998; and the China Mist Tea Company
Advisory Board.
</TABLE>

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4
<PAGE>

<TABLE>
<C> <S>
Jon R. Katzenbach

Age: 66

Director Since: 1997

Principal Occupation: Founding Partner of Katzenbach Partners, L.L.C.,
since January 1999

Recent Business Experience: Mr. Katzenbach was with McKinsey & Company from
1959 until January 1999. During his 39 years of
service, Mr. Katzenbach managed several of their
offices, including McKinsey & Company's San
Francisco and New York offices for five years
each. Mr. Katzenbach served as Chairman of
several governance committees and was elected to
the Shareholders' Committee in 1972, for which
he served on for nearly 20 years.

Authored: Co-authored: The Wisdom of Teams; Real Change
Leaders
Authored: Teams at the Top

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Subbaiah V. Malladi, Ph.D.

Age: 52

Director Since: 1996

Principal Occupation: Chief Technical Officer

Recent Business Experience: Dr. Malladi joined Exponent Failure Analysis
Associates, Inc. (FaAA) in 1982 as a Senior
Engineer, becoming a Senior Vice President in
1988, a Corporate Vice President of FaAA in
1993, and Chief Technical Officer in 1998. Dr.
Malladi was a member of the Board of Directors
of the Company from 1991 through 1993, and was
re-elected to the Board in 1996.

- -------------------------------------------------------------------------------

George T. Van Gilder

Age: 55

Director Since: 1996

Principal Occupation: Insurance Industry Consultant

Recent Business Experience: Mr. Van Gilder owns and manages the Kitty Knight
House, a bed and breakfast located in Maryland.
Prior to this, he had a twenty-four year career
at Chubb and Son, Inc., a subsidiary of Chubb
Corporation, where he was responsible for a wide
variety of underwriting functions within the
company. Mr. Van Gilder attained the position of
Chief Underwriting Officer of the company's
worldwide property-casualty area.

Other Directorships: Chairman of Risk Management Solutions (RMS)
1995-1997; member of the Board of Techinsure
Corp., Inc.

</TABLE>

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5
<PAGE>

Board Meetings and Committees

The Board held four regular meetings and three special meetings in 1998.
Each director, except Dr. Malladi, attended at least 75% of all Board and
applicable committee meetings during 1998. Dr. Malladi was kept from meetings
due to Company business; he was able to attend 71% of the meetings. The table
below describes the Board's committees.

<TABLE>
<CAPTION>
Number of Meetings
Name of Committee and Members Function of the Committee in 1998
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<C> <S> <C>
AUDIT . Confers with 2 regular meetings
Terry Van Gilder-- independent accountants
Chairperson and auditors regarding
Sam Armacost scope of examinations
Barbara Barrett . Reviews reports and fees
Jon Katzenbach of independent
Ed Keith accountants and auditors
. Reviews financial
policies and internal
controls
- -------------------------------------------------------------------------------
HUMAN RESOUCES
Sam Armacost--Chairperson . Establishes the general 3 regular meetings
Barbara Barrett compensation 2 special meetings
Jon Katzenbach policies for all
Ed Keith employees and oversees
Terry Van Gilder the specific
compensation plans for
officers of the
Company, including the
President and CEO
- -------------------------------------------------------------------------------
CORPORATE GOVERNANCE AND
NOMINATING
Barbara Barrett--Chairperson . Oversees corporate No meetings
Sam Armacost governance processes
Jon Katzenbach and makes
Ed Keith recommendations to the
Terry Van Gilder Board regarding
nominations for the
Board
</TABLE>

Compensation of Directors

Members of the Board of Directors who are employees of the Company do not
receive additional compensation for their services as directors of the
Company.

Non-employee members of the Board of Directors receive:

. an annual cash retainer of $24,000;

. $2,000 for attending each meeting of the Board of Directors;

. $5,000 for service on the Human Resources Committee;

. $5,000 for service on the Audit Committee;

. $1,000 for service on the Corporate Governance and Nominating Committee.

Furthermore, Mr. Keith received an additional retainer of $10,500 for his
duties associated with serving as Chairman of the Board of Directors. Non-
employee Board members were reimbursed for certain expenses related to travel
and incidentals, with the exception of Mr. Armacost. The reimbursement for Mr.
Katzenbach was paid to McKinsey & Company.

6
<PAGE>

PROPOSAL NO. 2

TO AMEND THE COMPANY'S EMPLOYEE STOCK PURCHASE PLAN

Why does the Company want to amend its Employee Stock Purchase Plan?

The original plan was established in 1992. There were 400,000 shares
authorized to be distributed from the Plan. By the middle of the second
quarter of 1999 all of these shares will have been distributed.

What is the proposal?

To amend the Company's Employee Stock Purchase Plan by:

. increasing the Plan by 400,000 shares;

. inserting a clause in the Plan that states "that an annual increase can
be added on each anniversary date of the adoption of the Plan equal to
the lesser of:

I.200,000 shares

II.3% of outstanding shares on such date

III.a lessor amount determined by the Board of Directors".

(For a description of the principal features of the Plan, "Appendix 1--
Summary of the Purchase Plan.")

Why should I vote for this proposal?

The Employee Stock Purchase Plan allows employees to purchase stock through
regular payroll deductions. Currently, if an employee so elects, a monthly
payroll deduction enables the employee to purchase Company stock at about a
15% discount. Management and the Board of Directors believe that it is
important for employees to have the ability to participate in ownership of the
Company. This benefit is an integral, long-standing, and valued aspect of the
Company's benefit plan; to lose this benefit would be a loss both to the
Company and its employees. If the additional shares here proposed are not
authorized, the plan will run out of shares and be terminated.

Required Vote

Approval of the Amendment to the Company's Employee Stock Purchase Plan
requires the affirmative vote of a majority of the votes duly cast.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THIS PROPOSAL.

7
<PAGE>

PROPOSAL NO. 3

TO ESTABLISH A 1999 STOCK OPTION PLAN

Why does the Company want to establish a 1999 Stock Option Plan?

The Company's stock plan established in 1990 will expire in the year 2000.
Management and the Board of Directors feel very strongly that a stock option
plan facilitates the hiring and retention of highly qualified staff, provides
additional incentive to employees, directors and consultants, and moreover
promotes the success of the Company.

What is the proposal?

To establish a 1999 Stock Option Plan that will:

. initially have 400,000 shares available for grant;

. have a clause in the Plan that states "that an annual increase can be
added on each anniversary date of the adoption of the Plan equal to the
lesser of:

I. 300,000 shares

II. 3% of outstanding shares on such date

III. a lessor amount determined by the Board of Directors".

(For a description of the principal features of the Plan, see "Appendix 2--
Description of the Exponent, Inc. 1999 Stock Plan.")

Why should I vote for this proposal?

It is the Company's view that hiring, retaining, and rewarding highly
qualified employees will in turn benefit the Company. Without stock options
the Company will not be competitive in the market place for hiring and
retaining the best consultants..

Required Vote

Approval to establish a 1999 Stock Option Plan requires the affirmative vote
of a majority of the votes duly cast.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE ADOPTION OF
THE 1999 STOCK PLAN AND THE NUMBER OF SHARES RESERVED FOR ISSUANCE THEREUNDER.

8
<PAGE>

PROPOSAL NO. 4

TO ESTABLISH A RESTRICTED STOCK PLAN

Why does the Company want to establish a Restricted Stock Plan?

The primary purpose is for officers of the Company to have one-third of
their annual performance bonus paid in restricted stock. Historically, bonuses
have been 100% cash. The plan is for these shares to cliff vest three years
after issuance. Vesting would be tied to continued employment. To prevent
dilution the Company intends to utilize the cash that would have otherwise
been distributed as cash bonuses to repurchase the Company's stock.

What is the proposal?

To establish a Restricted Stock Plan that will:

. initially will have 100,000 shares available for grant;

. have a clause in the Plan that states "that an annual increase can be
added on each anniversary date of the adoption of the Plan equal to the
lesser of:

I.200,000 shares

II.2% of outstanding shares on such date

III.a lessor amount determined by the Board of Directors".

(For a description of the principal features of the Plan see "Appendix 3--
The Restricted Stock Plan.")

Why should I vote for this proposal?

The vesting at the end of three years will directly align management and
shareholder interests, management will have the equivalent of one year's bonus
restricted. With vesting directly tied to employment it will help the Company
retain key employees. Also, the cash that would have otherwise been paid out
in bonuses can be utilized to further improve shareholder value.

Required Vote

Approval of the establishment of the Restricted Stock Plan requires the
affirmative vote of a majority of the votes duly cast.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THIS PROPOSAL.

PROPOSAL NO. 5

RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS

The Board of Directors has appointed KPMG L.L.P., independent auditors, to
audit the financial statements of the Company for the year ending December 31,
1999. KPMG L.L.P. has audited the Company's financial statements since 1987. A
representative of KPMG L.L.P. is expected to be present at the meeting and is
expected to be available to respond to appropriate questions.

Required Vote

The Board of Directors has conditioned its appointment of the Company's
independent auditors upon the receipt of the affirmative vote of a majority of
the votes cast. In the event that the stockholders do not approve the
selection of KPMG L.L.P., the Board of Directors will reconsider the
appointment of the independent auditors.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THIS PROPOSAL.

9
<PAGE>

STOCK OWNERSHIP

Who are the largest owners of the Company's stock?

Roger L. McCarthy, Chairman of the Board of Exponent Failure Analysis
Associates, Inc., is the only insider who owns more than 5% of the Company's
stock.

How much stock do the Company's Directors and Officers own?

The following table indicates beneficial ownership of the Company's common
stock as of February 26, 1999. It includes the Company's directors, the
executive officers of the Company named in the Executive Compensation Table
(see page 18), and the directors and executive officers of the Company named
as a group. A total of 7,042,692 shares of the Company's common stock were
issued and outstanding as of February 26, 1999.

<TABLE>
<CAPTION>
Number of
Name Shares(1) Percent of Total
- ---- --------- ----------------
<S> <C> <C>
Roger L. McCarthy(2)................................ 1,028,740 14.6%
c/o Exponent, Inc.
149 Commonwealth Drive
Menlo Park, CA 94025
Dimensional Fund Advisors, Inc. (3)................. 457,600 6.5%
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
Palo Alto Investors(3).............................. 445,500 6.3%
431 Florence Street, Suite 200
Palo Alto, CA 94301
Subbaiah V. Malladi(4).............................. 323,684 4.5%
Michael R. Gaulke(5)................................ 273,193 3.7%
Robert W. Morgan(6)................................. 204,916 2.9%
Samuel H. Armacost(7)............................... 69,906 *
Edward J. Keith(8).................................. 66,940 *
Alexander Kusko(9).................................. 19,826 *
Barbara M. Barrett(10).............................. 12,500 *
George T. Van Gilder(11)............................ 3,500 *
All Directors & Executive Officers (21
persons)(12)....................................... 2,653,637 34.2%
</TABLE>
- --------
* Represents less than one percent of the outstanding common stock of the
Company.
(1) The number and percentage of shares beneficially owned is determined
under rules of the Securities and Exchange Commission (the "SEC"), and
the information is not necessarily indicative of beneficial ownership for
any other purpose. Under SEC rules, beneficial ownership includes any
shares as to which the individual has sole or shared voting power or
investment power and also any shares which the individual has the right
to acquire within sixty days of February 26, 1999 through the exercise of
any stock option or other right. Unless otherwise indicated in the
footnotes, each person has sole voting and investment power (or shares
such powers with his or her spouse) with respect to the shares shown as
beneficially owned.
(2) Includes 983,962 shares of common stock held by Roger L. and Gail E.
McCarthy, as trustees of a revocable trust established for the benefit of
Roger L. and Gail E. McCarthy, and 44,778 shares of common stock held in
trusts for the benefit of the McCarthys' children.
(3) As indicated on a Form 13G filed with the SEC on February 4, 1999 for
Palo Alto Investors, Inc., and February 11, 1999 for Dimensional Fund
Advisors Inc.
(4) Includes 179,908 shares of common stock subject to options exercisable
within sixty days of February 26, 1999.
(5) Includes 256,250 shares of common stock subject to options exercisable
within sixty days of February 26, 1999.

10
<PAGE>

(6) Includes 25,000 shares of common stock subject to options exercisable
within sixty days of February 26, 1999.
(7) Includes 24,000 shares of common stock subject to options exercisable
within sixty days of February 26, 1999.
(8) Includes 18,000 shares of common stock subject to options exercisable
within sixty days of February 26, 1999.
(9) Includes 10,000 shares of common stock subject to options exercisable
within sixty days of February 26, 1999.
(10) Includes 2,500 shares of common stock subject to options exercisable
within sixty days of February 26, 1999.
(11) Includes 2,500 shares of common stock subject to options exercisable
within sixty days of February 26, 1999
(12) Includes 708,242 shares of common stock subject to options exercisable
within sixty days of February 26, 1999.

Compliance with Section 16(a) of the Securities Exchange Act

The Company believes that during 1998, all filings with the Securities and
Exchanges Commission (SEC), of its officers, directors and 10% stockholders
complied with requirements for reporting ownership or changes in ownership of
Company common stock pursuant to Section 16(a) of the Securities Exchange Act
of 1934, except that of Alexander Kusko and George T. Van Gilder. Mr. Van
Gilder filed with the Company on a timely basis, but his filing was
inadvertently overlooked by the Company and missed the SEC due date.

Compensation Committee Interlocks and Insider Participation

During 1998, Ms. Barrett and Messrs. Armacost, Keith, Katzenbach, and Van
Gilder served as members of the Human Resources Committee. No member of the
Human Resources Committee is or was formerly an officer or an employee of the
Company or any of its subsidiaries.

No interlocking relationship exists between the Company's Board of Directors
or Human Resources Committee and the board of directors or compensation
committee of any other company, nor has any such interlocking relationship
existed in the past.

11
<PAGE>

EXECUTIVE OFFICER COMPENSATION

Executive Compensation Table

The following table shows compensation paid for services to the Company in
all capacities for the fiscal years indicated for the Chief Executive Officer
and each of the other four most highly compensated executive officers (the
"Named Officers"):

<TABLE>
<CAPTION>
Long-term
Compensation
Annual Compensation Awards
---------------------- ------------
Securities
Underlying All Other
Salary Bonus Options Compensation
Name and Principal Position Year ($) (1) ($) (#) (2) ($)
--------------------------- ---- -------- -------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Roger L. McCarthy 1998 $499,990 $100,000 0 $19,939
Chairman of the Board of 1997 $499,990 $200,000 0 $20,346
Exponent Failure 1996 $493,746 $ 90,000 0 $18,779
Analysis, Inc. (FaAA) and
Director of the
Company

Subbaiah V. Malladi 1998 $490,006 $160,000 0 $34,777
Chief Technical Officer and 1997 $485,969 $160,000 0 $23,242
Director of the 1996 $468,759 $ 60,000 0 $20,221
Company

Michael R. Gaulke 1998 $436,546 $100,000 85,000 $18,782
President, Chief Executive 1997 $400,005 $140,000 75,000 $19,892
Officer and 1996 $387,504 $ 50,000 50,000 $17,775
Director of the Company

Robert W. Morgan(3) 1998 $361,541 $ 0 0 $19,942
Group Vice President of the 1997 $398,595 $ 0 0 $33,610
Exponent Health 1996 $148,495 $ 0 50,000 $ 0
Group, Inc.

Alexander Kusko 1998 $336,825 $ 0 0 $ 0
Corporate Vice President of 1997 $341,025 $ 0 0 $ 0
FaAA 1996 $362,550 $ 20,000 0 $ 0

</TABLE>
- --------
(1) Includes bonuses earned or accrued with respect to services rendered in
the year or period indicated, whether or not such bonus was actually paid
during such year.
(2) Represents contributions to the Company's defined contribution pension
plan and insurance premiums, respectively, as follows: S. V. Malladi,
$12,800 and $9,227; R.L. McCarthy, $12,800 and $7,139; M. R. Gaulke
$12,800 and $5,982; R. W. Morgan $12,800 and $7,142. Additionally, Dr.
Malladi was compensated $12,750 for lost vacation time.
(3) R. W. Morgan's salary in 1998 was partially converted from Canadian
currency. His 1996 data is only represented since August 1, 1996, the date
the Company acquired Environmental Health Strategies, Inc, (currently
known as Exponent Health Group). It does not include amounts paid for
acquisition of Dr. Morgan's stock in Environmental Health Strategies, Inc.

12
<PAGE>

What options were granted to the Named Officers in 1998?

The following table offers information concerning stock options granted
during the year ended January 1, 1999 to the Named Officers.

<TABLE>
<CAPTION>
Potential
Realizable
Value at Assumed
Annual Rates of
Stock Price
Appreciation for
Individual Grants Option Term(3)
---------------------------------------------- -------------------
Percent of Total
Options Options Granted to Exercise
Granted Employees in Price Expiration
Name (#) (1) Year(2) ($/Sh) Date 5% ($) 10% ($)
---- ------- ------------------ -------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Roger L. McCarthy....... 0 -- -- -- -- --
Subbaiah V. Malladi..... 0 -- -- -- -- --
Michael R. Gaulke....... 85,000 18% $9.25 02/04/08 $494,468 $1,253,080
Robert W. Morgan........ 0 -- -- -- -- --
Alexander Kusko......... 0 -- -- -- -- --
</TABLE>
- --------
(1) All options in this table were granted under the 1990 Stock Option and
Rights Plan and have exercise prices equal to the fair market value on the
date of grant. The options generally become exercisable over a period of
four years at a rate of 25% per year and expire 10 years from the date of
grant.
(2) In 1998, the Company granted options to employees to purchase 469,500
shares of common stock.
(3) Potential realizable value assumes that the stock price increases from the
date of grant until the end of the option term (10 years) at the annual
rate specified (5% and 10%). Annual compounding results in total
appreciation of 63% (at 5% per year) and 159% (at 10% per year). If the
price of the Company's common stock on the date Mr. Gaulke was granted
options were to increase at such rates from the price at the time of grant
($9.25) over the next 10 years, the resulting stock price at 5% and 10%
appreciation would be $15.08 and $23.96, respectively. The assumed annual
rates of appreciation are specified in SEC rules and do not represent the
Company's estimate or projection of future stock price growth. The Company
does not necessarily agree that this method can properly determine the
value of an option.

What is the value of the options held by the Named Officers?

The following table shows information concerning the shares exercised and
the number of shares exercisable and unexercisable as of January 1, 1999. Also
reported are values for "in-the-money" options that represent the positive
spread between the respective exercise prices of outstanding stock options and
the fair market value of the Company's common stock as of January 1, 1999.

<TABLE>
<CAPTION>
Number of Shares
Acquired Upon Number of Unexercised Value of Unexercised
Exercise of Option Options at January 1, In-the-Money Options at
at January 1, 1999 1999 January 1, 1999(1)
-------------------- ------------------------- -------------------------
Value
Exercisable Realized Exercisable Unexercisable Exercisable Unexercisable
----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Roger L. McCarthy....... 0 $ 0 0 $ 0 $ 0
Subbaiah V. Malladi..... 29,760 $274,181 179,908 0 $20,000 $ 0
Michael R. Gaulke....... 0 $ 197,500 172,500 $72,656 $ 17,969
Robert W. Morgan........ 0 $ 25,000 25,000 $ 0 $173,438
Alexander Kusko......... 0 $ 10,000 0 $ 0 $ 0
</TABLE>
- --------
(1) Market value of underlying securities based on the closing price of
Company's common stock on December 31, 1998 (the last trading day of the
period), on the NASDAQ National Market of $6.00 minus the exercise price
of the options.

13
<PAGE>

REPORT OF THE HUMAN RESOURCES COMMITTEE
OF THE BOARD OF DIRECTORS

The Human Resources Committee of the Board of Directors establishes the
general compensation policies for all employees and oversees the specific
compensation plans for officers of the Company, including the President and
CEO. The Committee is composed of the five non-employee directors; no
executive officers of the Company are included on the Human Resources
Committee.

What is the Company's philosophy of executive compensation?

The Company's compensation program for executives consists of three
elements:

. base salary,

. bonus based on performance, and

. stock option grants.

The compensation of the Company's officers, including the President and CEO,
is based on the profitability of the Company, the individual achievements of
the officers, and the competitive environment for such employees. Individual
performance assessments are based on both objective and subjective appraisals
of contributions to: the Company's financial performance, quality of work, and
leadership that meets the level of excellence demanded by the Company's
clients.

What is the timing of compensation changes?

The performance reviews of officers and employees are typically completed
within three months after the close of each year. Hence, compensation changes
for 1999 were based on 1998 results. These compensation changes went into
effect April 3, 1999. Bonuses based on 1998 performance were paid out on March
11, 1999.

What is the basis for determining the Executive's Compensation?

Salaries. The Company strives to provide base salaries commensurate with
comparable executives and private consultants. However, the unique nature of
the Company's business makes direct comparisons difficult as many competitors
are sole practitioners or in private partnerships. In consideration of their
responsibilities for both managing the Company and/or providing direct
consulting services which generate significant Company revenue, the Human
Resources Committee believes the officers' salaries are comparable to those
earned by executives and consultants of similar background, capability, and
technical expertise.

Bonuses. For the year ended January 1, 1999, the bonus plan was continued
for all exempt employees, including executive officers. The Company-wide bonus
pool was tied to the corporate profitability. Funding was provided for all
levels at approximately 42% of target. Mr. Gaulke, President and CEO
recommends individual executive bonuses based on the executive's performance
contribution of the Company's success in the areas of financial, quality, and
leadership. The Human Resources Committee reviews and approves the bonuses for
each executive and the Company-wide distribution as a whole. Additionally,
they determine the bonuses for all inside directors including the President
and CEO, the Chairman of FaAA, and the Company's CTO.

Stock Options. The Human Resources Committee believes that stock ownership
provides significant opportunity to assure that officers are motivated to
maximize stockholder value. The fiscal 1998 options were granted at the market
price on the date of grant and vest over a four-year period to encourage
retention of key employees.

Executive Compensation. The Human Resources Committee reviewed the
performance of the President and CEO, Michael R. Gaulke; the Chairman of
FaAA., Roger L. McCarthy; and the CTO, Subbaiah V. Malladi, during 1998. In
recognition of individual performance and contributions to overall corporate
performance in

14
<PAGE>

1998, the Committee approved an increase in base salary for the President and
CEO and the CTO. The Human Resources Committee reviewed the 1998 performance of
all other officers, and select base salary increases were approved, based on an
assessment of the Company, group, and individual performance.

Human Resources Committee

Samuel H. Armacost
Barbara M. Barrett
Jon R. Katzenbach
Edward J. Keith
George T. Van Gilder

15
<PAGE>

COMPANY STOCK PRICE PERFORMANCE GRAPH

The following graph compares the Company's cumulative total stockholder
return calculated on a dividend-reinvested basis from 1993 through 1998 with
those of the S&P 500 Index and a peer group constructed by the Company (the
"Peer Group"). The graph assumes that $100 was invested on first day of 1993.
The Peer Group is composed of Nuclear Support Services, Inc., Analysis &
Technology, Inc., Harding Associates, Inc., Gilbert Associates Inc., Dames &
Moore, and Emcon. Returns for the Peer Group are weighted based on market
capitalization at the beginning of each period presented. Note that historic
stock price performance is not necessarily indicative of future stock price
performance.

COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
AMONG EXPONENT, S&P 500 INDEX AND PEER GROUP

PERFORMANCE GRAPH APPEARS HERE
<TABLE>
<CAPTION>
Measurement Period EXPONENT, INC. S&P
(Fiscal Year Covered) NAME HERE] 500 INDEX Peer Group
- ------------------- -------------- --------- ----------
<S> <C> <C> <C>
Measurement Pt-12/93 $100.00 $100.00 $100.00
FYE 12/94 $ 80.95 $101.32 $ 80.31
FYE 12/95 $126.19 $139.40 $ 71.18
FYE 12/96 $116.67 $171.40 $ 83.66
FYE 12/97 $200.00 $228.59 $ 89.12
FYE 12/98 $114.29 $293.91 $ 78.63
</TABLE>

16
<PAGE>

OTHER MATTERS

The Company knows of no other matters that will be brought before the
meeting. However, if any such matters are properly presented before the
meeting, it is the intention of the persons named in the enclosed proxy card
to vote the shares they represent as the Company may recommend. It is
important that your shares be represented at the meeting, regardless of the
number of shares that you hold. You are, therefore, urged to execute and
return at your earliest convenience the accompanying proxy card in the
envelope, which has been enclosed.

Stockholder Proposals for the 2000 Annual Meeting. Stockholders are entitled
to present proposals for action at a forthcoming meeting if they comply with
the requirements of the proxy rules promulgated by the Securities and Exchange
Commission. Stockholders interested in presenting a proposal for consideration
at the Company's Annual Meeting of stockholders for the year 2000 may do so by
submitting the proposals to the Company's Corporate Secretary, no later than
January 1, 2000.

Proxy Solicitation Costs. The cost of soliciting proxies will be borne by
the Company. The Company has retained the services of ChaseMellon Shareholder
Services to assist in obtaining proxies from brokers and nominees of
stockholders for the Annual Meeting. The estimated cost of such services is
$3,500, plus out-of-pocket expenses. In addition, the Company may reimburse
brokerage firms and other persons representing beneficial owners of shares for
their expenses in forwarding solicitation materials to such beneficial owners.
Proxies by certain of the Company's directors, officers, and regular employees
may be solicited, without additional compensation, by personal conversation,
telephone, telegram, letter, electronically or by facsimile.

FOR THE BOARD OF DIRECTORS

/s/ Richard L. Schlenker
Richard L. Schlenker, Corporate
Secretary

Menlo Park, California
April 1, 1999

17
<PAGE>

Appendix 1

Summary of the Employee Stock Purchase Plan

General. The purpose of the Purchase Plan is to provide employees with an
opportunity to purchase Common Stock of the Company through payroll
deductions.

Administration. The Purchase Plan may be administered by the Board of
Directors (the "Board") or a committee appointed by the Board. All questions
of interpretation or application of the Purchase Plan are determined by the
Board or its appointed committee, and its decisions are final, conclusive and
binding upon all participants.

Eligibility. Each employee of the Company (including officers), whose
customary employment with the Company is at least twenty (20) hours per week
and more than five (5) months in any calendar year, is eligible to participate
in the Purchase Plan; provided, however, that no employee shall be granted an
option under the Purchase Plan (i) to the extent that, immediately after the
grant, such employee would own 5% of either the voting power or value of the
stock of the Company, or (ii) to the extent that his or her rights to purchase
stock under all employee stock purchase plans of the Company accrues at a rate
which exceeds $25,000 worth of stock (determined at the fair market value of
the shares at the time such option is granted) for each calendar year.

Offering Period. The Purchase Plan is implemented by offering periods
lasting approximately twelve months in duration with a new offering period
commencing on or after the first day of each fiscal quarter. Each offering
period is divided into four purchase periods which each last one quarter. To
participate in the Purchase Plan, each eligible employee must authorize
payroll deductions pursuant to the Purchase Plan. Such payroll deductions may
not exceed 15% of a participant's compensation. Compensation is defined as
base straight time gross earnings and commissions, but exclusive of payments
for overtime, shift premium, incentive compensation, bonuses and other
compensation. Once an employee becomes a participant in the Purchase Plan,
Common Stock will automatically be purchased under the Purchase Plan at the
end of each offering period, unless the participant withdraws or terminates
employment earlier and, the employee will automatically participate in each
successive offering period until such time as the employee withdraws from the
Purchase Plan or the employee's employment with the Company terminates.

Purchase Price. The purchase price per share at which shares will be sold in
an offering under the Purchase Plan is the lower of (i) 85% of the fair market
value of a share of Common Stock on the first day of an offering period or
(ii) 85% of the fair market value of a share of Common Stock on the last day
of each offering period. The fair market value of the Common Stock on a given
date is generally the closing sale price of the Common Stock as reported on
the Nasdaq National Market for such date.

Payment of Purchase Price; Payroll Deductions. The purchase price of the
shares is accumulated by payroll deductions throughout each purchase period.
The number of shares of Common Stock a participant may purchase in each
purchase period during an offering period is determined by dividing the total
amount of payroll deductions withheld from the participant's compensation
during that offering period by the purchase price; provided, however, that a
participant may not purchase more than 10,000 shares each offering period.
During the offering period, a participant may discontinue his or her
participation in the Purchase Plan, and may decrease or increase the rate of
payroll deductions in an offering period within limits set by the
Administrator.

All payroll deductions made for a participant are credited to the
participant's account under the Purchase Plan, are withheld in whole
percentages only and are included with the general funds of the Company. Funds
received by the Company pursuant to exercises under the Purchase Plan are also
used for general corporate purposes. A participant may not make any additional
payments into his or her account.

Withdrawal. A participant may terminate his or her participation in the
Purchase Plan at any time by giving the Company a written notice of
withdrawal. In such event, the payroll deductions credited to the

18
<PAGE>

participant's account will be returned, without interest, to such participant.
Payroll deductions will not resume unless a new subscription agreement is
delivered in connection with a subsequent offering period.

Termination of Employment. Termination of a participant's employment for any
reason, including death, cancels his or her participation in the Purchase Plan
immediately. In such event the payroll deductions credited to the
participant's account will be returned without interest to such participant,
his or her designated beneficiaries or the executors or administrators of his
or her estate.

Adjustments Upon Changes in Capitalization. In the event of any changes in
the capitalization of the Company effected without receipt of consideration by
the Company, such as a stock split, stock dividend, combination or
reclassification of the Common Stock, resulting in an increase or decrease in
the number of shares of Common Stock, proportionate adjustments will be made
by the Board in the shares subject to purchase and in the price per share
under the Purchase Plan. In the event of liquidation or dissolution of the
Company, the offering periods then in progress will terminate immediately
prior to the consummation of such event unless otherwise provided by the
Board. In the event of a sale of all or substantially all of the assets of the
Company, or the merger of the Company with or into another corporation, each
option under the Purchase Plan shall be assumed or an equivalent option shall
be substituted by such successor corporation or a parent or subsidiary of such
successor corporation. If the successor corporation refuses to assume or
substitute for the outstanding options, the offering period then in progress
will be shortened and a new exercise date will be set.

Amendment and Termination. The Board may at any time and for any reason
amend or terminate the Purchase Plan, except that no such termination shall
affect options previously granted and no amendment shall make any change in an
option granted prior thereto which adversely affects the rights of any
participant. Stockholder approval for amendments to the Purchase Plan shall be
obtained in such a manner and to such a degree as required to comply with all
applicable laws or regulations. The Purchase Plan will terminate in 2007,
unless terminated earlier by the Board in accordance with the Purchase Plan.

Certain Federal Income Tax Information. The following brief summary of the
effect of federal income taxation upon the participant and the Company with
respect to the shares purchased under the Purchase Plan does not purport to be
complete, and does not discuss the tax consequences of a participant's death
or the income tax laws of any state or foreign country in which the
participant may reside.

The Purchase Plan, and the right of participants to make purchases
thereunder, is intended to qualify under the provisions of Sections 421 and
423 of the Code. Under these provisions, no income will be taxable to a
participant until the shares purchased under the Purchase Plan are sold or
otherwise disposed of. Upon sale or other disposition of the shares, the
participant will generally be subject to tax in an amount that depends upon
the holding period. If the shares are sold or otherwise disposed of more than
two years from the first day of the applicable offering period and one year
from the applicable date of purchase, the participant will recognize ordinary
income measured as the lesser of (a) the excess of the fair market value of
the shares at the time of such sale or disposition over the purchase price, or
(b) an amount equal to 15% of the fair market value of the shares as of the
first day of the applicable offering period. Any additional gain will be
treated as long-term capital gain. If the shares are sold or otherwise
disposed of before the expiration of these holding periods, the participant
will recognize ordinary income generally measured as the excess of the fair
market value of the shares on the date the shares are purchased over the
purchase price. Any additional gain or loss on such sale or disposition will
be long-term or short-term capital gain or loss, depending on the holding
period. The Company generally is not entitled to a deduction for amounts taxed
as ordinary income or capital gain to a participant except to the extent of
ordinary income recognized by participants upon a sale or disposition of
shares prior to the expiration of the holding periods described above.

19
<PAGE>

Appendix 2

Description of the Exponent, Inc. 1999 Stock Plan

General. The purpose of the Plan is to attract and retain the best available
personnel for positions of substantial responsibility with the Company, to
provide additional incentive to the employees, directors and consultants of
the Company and to promote the success of the Company's business. Options
granted under the Plan may be either "incentive stock options," as defined in
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), or
nonstatutory stock options. Stock purchase rights may also be granted under
the Plan.

Administration. The Plan may generally be administered by the Board or a
Committee appointed by the Board (as applicable, the "Administrator"). The
Administrator may make any determinations deemed necessary or advisable for
the Plan.

Eligibility. Nonstatutory stock options and stock purchase rights may be
granted under the Plan to employees, directors and consultants of the Company
and any parent or subsidiary of the Company. Incentive stock options may be
granted only to employees. The Administrator, in its discretion, selects the
employees, directors and consultants to whom options or rights may be granted,
the time or times at which such options or rights shall be granted, and the
exercise price and number of shares subject to each such grant.

Limitations. Section 162(m) of the Code places limits on the deductibility
for federal income tax purposes of compensation paid to certain executive
officers of the Company. In order to preserve the Company's ability to deduct
the compensation income associated with options granted to such persons, the
Plan provides that no employee may be granted, in any fiscal year of the
Company, options to purchase more than 300,000 shares of Common Stock.
Notwithstanding this limit, however, in connection with such individual's
initial employment with the Company, he or she may be granted options to
purchase up to an additional 300,000 shares of Common Stock.

Terms and Conditions of Options. Each option is evidenced by a stock option
agreement between the Company and the optionee, and is subject to the
following terms and conditions:

(a) Exercise Price. The Administrator determines the exercise price of
options at the time the options are granted. The exercise price of an
incentive stock option may not be less than 100% of the fair market value
of the Common Stock on the date such option is granted; provided, however,
the exercise price of an incentive stock option granted to a 10%
shareholder may not be less than 110% of the fair market value of the
Common Stock on the date such option is granted. The fair market value of
the Common Stock is generally determined with reference to the closing sale
price for the Common Stock (or the closing bid if no sales were reported)
on the last market trading day prior to the date the option is granted.

(b) Exercise of Option; Form of Consideration. The Administrator
determines when options become exercisable, and may in its discretion,
accelerate the vesting of any outstanding option. The means of payment for
shares issued upon exercise of an option is specified in each option
agreement. The Plan permits payment to be made by cash, check, promissory
note, other shares of Common Stock of the Company (with some restrictions),
cashless exercises, a reduction in the amount of any Company liability to
the optionee, any other form of consideration permitted by applicable law,
or any combination thereof.

(c) Term of Option. The term of an incentive stock option may be no more
than ten (10) years from the date of grant; provided that in the case of an
incentive stock option granted to a 10% shareholder, the term of the option
may be no more than five (5) years from the date of grant. No option may be
exercised after the expiration of its term.

(d) Termination of Employment or Consultancy. If an optionee's employment
or consulting relationship terminates for any reason (including death or
disability), then the optionee may exercise the option within such period
of time as is specified in the option agreement to the extent that the
option is

20
<PAGE>

vested on the date of termination, (but in no event later than the
expiration of the term of such option as set forth in the option
agreement). The Plan and the option agreement may provide for a longer
period of time for the option to be exercised after terminations due to the
optionee's death or disability than for other terminations. The optionee
(or the optionee's estate or the person who acquires the right to exercise
the option by bequest or inheritance) may exercise all or part of his or
her option to the extent the option is exercisable at the time of such
termination.

(e) Nontransferability of Options and Stock Purchase Rights: Unless
otherwise determined by the Administrator, options and stock purchase
rights granted under the Plan are not transferable other than by will or
the laws of descent and distribution, and may be exercised during the
optionee's lifetime only by the optionee.

(f) Other Provisions: The stock option agreement or restricted stock
purchase agreement may contain other terms, provisions and conditions not
inconsistent with the Plan as may be determined by the Administrator.

Adjustments Upon Changes in Capitalization. In the event that the stock of
the Company changes by reason of any stock split, reverse stock split, stock
dividend, combination, reclassification or other similar change in the capital
structure of the Company effected without the receipt of consideration,
appropriate adjustments shall be made in the number and class of shares of
stock subject to the Plan, the number and class of shares of stock subject to
any option or right outstanding under the Plan, and the exercise price of any
such outstanding option or right.

In the event of a liquidation or dissolution, any unexercised options [or
stock purchase rights] will terminate. The Administrator may, in its sole
discretion, provide that each optionee shall have the right to exercise all of
the [shares subject to the ]optionee's option [or right,] including those not
otherwise [vested or] exercisable.

In connection with any merger, consolidation, acquisition of assets or like
occurrence involving the Company, each outstanding option and stock purchase
right shall be assumed or an equivalent option or right substituted by the
successor corporation. If the successor corporation refuses to assume the
options or rights or to substitute substantially equivalent options or rights,
the Administrator shall have the discretion to allow the optionee to exercise
the option or stock purchase right as to all the optioned stock, including
shares not otherwise exercisable. In such event, the Administrator shall
notify the optionee that the option or right is fully exercisable for fifteen
(15) days from the date of such notice and that the option or stock purchase
right terminates upon expiration of such period.

Amendment and Termination of the Plan. The Board may amend, alter, suspend
or terminate the Plan, or any part thereof, at any time and for any reason.
However, the Company shall obtain shareholder approval for any amendment to
the Plan to the extent necessary and desirable to comply with applicable law.
No such action by the Board or shareholders may alter or impair any option
previously granted under the Plan without the written consent of the optionee.
Unless terminated earlier, the Plan shall terminate ten years from the date of
its approval by the shareholders or the Board of the Company, whichever is
earlier.

Federal Income Tax Consequences

21
<PAGE>

market value of the shares at the date of the option exercise or (ii) the sale
price of the shares. Any gain or loss recognized on such a premature
disposition of the shares in excess of the amount treated as ordinary income
is treated as long-term or short-term capital gain or loss, depending on the
holding period. A different rule for measuring ordinary income upon such a
premature disposition may apply if the optionee is also an officer, director,
or 10% shareholder of the Company. Unless limited by Section 162(m) of the
Code, the Company is entitled to a deduction in the same amount as the
ordinary income recognized by the optionee.

Nonstatutory Stock Options. An optionee does not recognize any taxable
income at the time he or she is granted a nonstatutory stock option. Upon
exercise, the optionee recognizes taxable income generally measured by the
excess of the then fair market value of the shares over the exercise price.
Any taxable income recognized in connection with an option exercise by an
employee of the Company is subject to tax withholding by the Company. Unless
limited by Section 162(m) of the Code, the Company is entitled to a deduction
in the same amount as the ordinary income recognized by the optionee. Upon a
disposition of such shares by the optionee, any difference between the sale
price and the optionee's exercise price, to the extent not recognized as
taxable income as provided above, is treated as long-term or short-term
capital gain or loss, depending on the holding period. Net capital gains on
shares held more than 12 months may be taxed at a maximum federal rate of 20%.
Capital losses are allowed in full against capital gains and up to $3,000
against other income.

Stock Purchase Rights. Generally, no income will be recognized by a
recipient in connection with the grant of a stock purchase right of unvested
stock, unless an election under Section 83(b) of the Code is filed with the
Internal Revenue Service within 30 days of the date of grant in the case of an
award of stock. Otherwise, at the time the stock purchase right vests, the
recipient generally will recognize compensation income in an amount equal to
the difference between the fair market value of the stock at the time of
vesting and the amount paid for the stock, if any. Generally, the recipient
will be subject to tax consequences similar to those discussed under
"Nonstatutory Stock Options." In the case of a recipient who is also an
employee, any amount treated as compensation will be subject to tax
withholding by the Company. The Company will be entitled to a tax deduction in
the amount and at the time the recipient recognizes ordinary income with
respect to the stock purchase right to the extent permitted under Section 162
of the Code.

The foregoing is only a summary of the effect of federal income taxation
upon optionees and the Company with respect to the grant and exercise of
options under the Plan. It does not purport to be complete, and does not
discuss the tax consequences of the employee's or consultant's death or the
provisions of the income tax laws of any municipality, state or foreign
country in which the employee or consultant may reside.

22
<PAGE>

Appendix 3

Description of the Exponent, Inc. Restricted Stock Award Plan

General. The purpose of the Stock Plan is to provide additional incentives
to the Company's key employees to promote the success of the Company's
business. Restricted Stock Awards may be granted under the Stock Plan.

Administration. The Stock Plan may generally be administered by the Board or
a Committee appointed by the Board (as applicable, the "Administrator"). The
Administrator may make any determinations deemed necessary or advisable for
the Stock Plan.

Eligibility. Restricted Stock Awards may be granted under the Stock Plan to
employees of the Company and any parent or subsidiary of the Company. However,
Employees who own at least five percent of the Company are not eligible for
awards under the Stock Plan. The Administrator, in its discretion, selects the
employees to whom awards may be granted, the time or times at which such
awards shall be made, and the number of shares subject to each such award.

Terms and Conditions of Award. Each award is evidenced by a restricted stock
award agreement between the Company and the employee, and is subject to the
following terms and conditions:

(a) Reacquisition Option. If the awardee leaves employment with the
Company for any reason, the Company has a right to reacquire any unvested
shares.

(b) Nontransferability Restricted Stock Awards: Unless otherwise
determined by the Administrator, options and stock purchase rights granted
under the Stock Plan are not transferable other than by will or the laws of
descent and distribution, and may be exercised during the optionee's
lifetime only by the optionee.

(c) Other Provisions: The restricted stock award agreement may contain
other terms, provisions and conditions not inconsistent with the Stock Plan
as may be determined by the Administrator.

Adjustments Upon Changes in Capitalization. In the event that the stock of
the Company changes by reason of any stock split, reverse stock split, stock
dividend, combination, reclassification or other similar change in the capital
structure of the Company effected without the receipt of consideration,
appropriate adjustments shall be made in the number and class of shares of
stock subject to the Stock Plan, the number and class of shares of stock
subject to any option or right outstanding under the Stock Plan, and the
exercise price of any such outstanding option or right.

In the event of a liquidation or dissolution, the Administrator may, in its
sole discretion, provide that the Company's right to reacquire the shares
shall lapse.

In connection with any merger, consolidation, acquisition of assets or like
occurrence involving the Company, each restricted stock award shall be subject
to the same reacquisition right by the successor corporation. If the successor
corporation refuses to assume the Company's options or to substitute
substantially equivalent options, the Company's reacquisition right shall
lapse as to all restricted stock awards. In such event, the Administrator
shall notify the awardee that the reacquisition right will lapse as of the day
of the transaction.

Amendment and Termination of the Stock Plan. The Board may amend, alter,
suspend or terminate the Stock Plan, or any part thereof, at any time and for
any reason. However, the Company shall obtain shareholder approval for any
amendment to the Stock Plan to the extent necessary and desirable to comply
with applicable law. No such action by the Board or shareholders may alter or
impair any option previously granted under the Stock Plan without the written
consent of the optionee. Unless terminated earlier, the Stock Plan shall
terminate ten years from the date of its approval by the shareholders or the
Board of the Company, whichever is earlier.

23
<PAGE>

Federal Income Tax Consequences

Incentive Stock Options. An optionee who is granted an incentive stock
option does not recognize taxable income at the time the option is granted or
upon its exercise, although the exercise is an adjustment item for alternative
minimum tax purposes and may subject the optionee to the alternative minimum
tax. Upon a disposition of the shares more than two years after grant of the
option and one year after exercise of the option, any gain or loss is treated
as long-term capital gain or loss. Net capital gains on shares held more than
12 months may be taxed at a maximum federal rate of 20%. Capital losses are
allowed in full against capital gains and up to $3,000 against other income.
If these holding periods are not satisfied, the optionee recognizes ordinary
income at the time of disposition equal to the difference between the exercise
price and the lower of (i) the fair market value of the shares at the date of
the option exercise or (ii) the sale price of the shares. Any gain or loss
recognized on such a premature disposition of the shares in excess of the
amount treated as ordinary income is treated as long-term or short-term
capital gain or loss, depending on the holding period. A different rule for
measuring ordinary income upon such a premature disposition may apply if the
optionee is also an officer, director, or 10% shareholder of the Company.
Unless limited by Section 162(m) of the Code, the Company is entitled to a
deduction in the same amount as the ordinary income recognized by the
optionee.

The foregoing is only a summary of the effect of federal income taxation
upon optionees and the Company with respect to the grant and exercise of
options under the Stock Plan. It does not purport to be complete, and does not
discuss the tax consequences of the employee's or consultant's death or the
provisions of the income tax laws of any municipality, state or foreign
country in which the employee or consultant may reside.

24
<PAGE>

Appendix 4

EXPONENT, INC.

1999 STOCK PLAN

1. Purposes of the Plan. The purposes of this 1999 Stock Plan are:
--------------------

. to attract and retain the best available personnel for positions
of substantial responsibility,

. to provide additional incentive to Employees, Directors and
Consultants, and

. to promote the success of the Company's business.

Options granted under the Plan may be Incentive Stock Options or
Nonstatutory Stock Options, as determined by the Administrator at the time of
grant. Stock Purchase Rights may also be granted under the Plan.

2. Definitions. As used herein, the following definitions shall apply:
-----------

(a) "Administrator" means the Board or any of its Committees as
-------------
shall be administering the Plan, in accordance with Section 4 of the Plan.

(b) "Applicable Laws" means the requirements relating to the
---------------
administration of stock option plans under U. S. state corporate laws, U.S.
federal and state securities laws, the Code, any stock exchange or quotation
system on which the Common Stock is listed or quoted and the applicable laws of
any foreign country or jurisdiction where Options or Stock Purchase Rights are,
or will be, granted under the Plan.

(d) "Code" means the Internal Revenue Code of 1986, as amended.
----

(e) "Committee" means a committee of Directors appointed by the
---------
Board in accordance with Section 4 of the Plan.

(f) "Common Stock" means the common stock of the Company.
------------
<PAGE>

(g) "Company" means Exponent, Inc., a Delaware corporation.
-------

(h) "Consultant" means any person, including an advisor, engaged by
----------
the Company or a Parent or Subsidiary to render services to such entity.

(i) "Director" means a member of the Board.
--------

(j) "Disability" means total and permanent disability as defined
----------
in Section 22(e)(3) of the Code.

(k) "Employee" means any person, including Officers and Directors,
--------
employed by the Company or any Parent or Subsidiary of the Company. A Service
Provider shall not cease to be an Employee in the case of (i) any leave of
absence approved by the Company or (ii) transfers between locations of the
Company or between the Company, its Parent, any Subsidiary, or any successor.
For purposes of Incentive Stock Options, no such leave may exceed ninety days,
unless reemployment upon expiration of such leave is guaranteed by statute or
contract. If reemployment upon expiration of a leave of absence approved by the
Company is not so guaranteed, on the 181st day of such leave any Incentive Stock
Option held by the Optionee shall cease to be treated as an Incentive Stock
Option and shall be treated for tax purposes as a Nonstatutory Stock Option.
Neither service as a Director nor payment of a director's fee by the Company
shall be sufficient to constitute "employment" by the Company.

(l) "Exchange Act" means the Securities Exchange Act of 1934, as
------------
amended.

(m) "Fair Market Value" means, as of any date, the value of Common
-----------------
Stock determined as follows:

(i) If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation the Nasdaq
National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its
Fair Market Value shall be the mean between the closing high bid and the low
asked prices for the Common stock as quoted on such exchange or system for the
last market trading day prior to the time of determination, as reported in The
Wall Street Journal or such other source as the Administrator deems reliable;

(ii) If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, the Fair Market Value
of a Share of Common Stock shall be the mean between the closing high bid and
low asked prices for the Common Stock on the last market trading day prior to
the day of determination, as reported in The Wall Street Journal or such other
source as the Administrator deems reliable; or

(iii) In the absence of an established market for the Common
Stock, the Fair Market Value shall be determined in good faith by the
Administrator.
<PAGE>

(n) "Incentive Stock Option" means an Option intended to qualify as
----------------------
an incentive stock option within the meaning of Section 422 of the Code and the
regulations promulgated thereunder.

(o) "Nonstatutory Stock Option" means an Option not intended to
-------------------------
qualify as an Incentive Stock Option.

(p) "Notice of Grant" means a written or electronic notice
---------------
evidencing certain terms and conditions of an individual Option or Stock
Purchase Right grant. The Notice of Grant is part of the Option Agreement.

(q) "Officer" means a person who is an officer of the Company within
-------
the meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.

(r) "Option" means a stock option granted pursuant to the Plan.
------

(s) "Option Agreement" means an agreement between the Company and an
----------------
Optionee evidencing the terms and conditions of an individual Option grant. The
Option Agreement is subject to the terms and conditions of the Plan.

(t) "Option Exchange Program" means a program whereby outstanding
-----------------------
Options are surrendered in exchange for Options with a lower exercise price.

(u) "Optioned Stock" means the Common Stock subject to an Option
--------------
or Stock Purchase Right.

(v) "Optionee" means the holder of an outstanding Option or Stock
--------
Purchase Right granted under the Plan.

(w) "Parent" means a "parent corporation," whether now or hereafter
------
existing, as defined in Section 424(e) of the Code.

(x) "Plan" means this 1999 Stock Plan.
----

(y) "Restricted Stock" means shares of Common Stock acquired
----------------
pursuant to a grant of Stock Purchase Rights under Section 11 of the Plan.

(z) "Restricted Stock Purchase Agreement" means a written agreement
-----------------------------------
between the Company and the Optionee evidencing the terms and restrictions
applying to stock purchased under a Stock Purchase Right. The Restricted Stock
Purchase Agreement is subject to the terms and conditions of the Plan and the
Notice of Grant.
<PAGE>

(aa) "Rule 16b-3" means Rule 16b-3 of the Exchange Act or any
----------
successor to Rule 16b-3, as in effect when discretion is being exercised with
respect to the Plan.

(bb) "Section 16(b)" means Section 16(b) of the Exchange Act.
-------------

(cc) "Service Provider" means an Employee, Director or Consultant.
----------------

(dd) "Share" means a share of the Common Stock, as adjusted in
-----
accordance with Section 13 of the Plan.

(ee) "Stock Purchase Right" means the right to purchase Common Stock
--------------------
pursuant to Section 11 of the Plan, as evidenced by a Notice of Grant.

(ff) "Subsidiary" means a "subsidiary corporation", whether now or
----------
hereafter existing, as defined in Section 424(f) of the Code.

3. Stock Subject to the Plan. Subject to the provisions of Section 13
-------------------------
of the Plan, the maximum aggregate number of Shares which may be optioned and
sold under the Plan is 400,000 Shares, plus an annual increase to be added on
each anniversary date of the adoption of the Plan equal to the lesser of (i)
300,000 Shares, (ii) 3% of the outstanding Shares on such date, or (iii) a
lesser amount determined by the Board. The Shares may be authorized, but
unissued, or reacquired Common Stock.

If an Option or Stock Purchase Right expires or becomes unexercisable
without having been exercised in full, or is surrendered pursuant to an Option
Exchange Program, the unpurchased Shares which were subject thereto shall become
available for future grant or sale under the Plan (unless the Plan has
terminated); provided, however, that Shares that have actually been issued under
--------
the Plan, whether upon exercise of an Option or Right, shall not be returned to
the Plan and shall not become available for future distribution under the Plan,
except that if Shares of Restricted Stock are repurchased by the Company at
their original purchase price, such Shares shall become available for future
grant under the Plan.

4. Administration of the Plan.
--------------------------

(a) Procedure.
---------

(i) Multiple Administrative Bodies. The Plan may be
------------------------------
administered by different Committees with respect to different groups of
Service Providers.

(ii) Section 162(m). To the extent that the Administrator
--------------
determines it to be desirable to qualify Options granted hereunder as
"performance-based compensation" within the meaning of Section 162(m) of the
Code, the Plan shall be administered by a Committee of two or more "outside
directors" within the meaning of Section 162(m) of the Code.
<PAGE>

(iii) Rule 16b-3. To the extent desirable to qualify
----------
transactions hereunder as exempt under Rule 16b-3, the transactions
contemplated hereunder shall be structured to satisfy the requirements for
exemption under Rule 16b-3.

(iv) Other Administration. Other than as provided above,
--------------------
the Plan shall be administered by (A) the Board or (B) a Committee, which
committee shall be constituted to satisfy Applicable Laws.

(b) Powers of the Administrator. Subject to the provisions of the
---------------------------
Plan, and in the case of a Committee, subject to the specific duties delegated
by the Board to such Committee, the Administrator shall have the authority, in
its discretion:

(i) to determine the Fair Market Value;

(ii) to select the Service Providers to whom Options and Stock
Purchase Rights may be granted hereunder;

(iii) to determine the number of shares of Common Stock to be
covered by each Option and Stock Purchase Right granted hereunder;

(iv) to approve forms of agreement for use under the Plan;

(v) to determine the terms and conditions, not inconsistent
with the terms of the Plan, of any Option or Stock Purchase Right granted
hereunder. Such terms and conditions include, but are not limited to, the
exercise price, the time or times when Options or Stock Purchase Rights may be
exercised (which may be based on performance criteria), any vesting
acceleration or waiver of forfeiture restrictions, and any restriction or
limitation regarding any Option or Stock Purchase Right or the shares of
Common Stock relating thereto, based in each case on such factors as the
Administrator, in its sole discretion, shall determine;

(vi) to reduce the exercise price of any Option or Stock
Purchase Right to the then current Fair Market Value if the Fair Market Value
of the Common Stock covered by such Option or Stock Purchase Right shall have
declined since the date the Option or Stock Purchase Right was granted;

(vii) to institute an Option Exchange Program;

(viii) to construe and interpret the terms of the Plan and
awards granted pursuant to the Plan;
<PAGE>

(ix) to prescribe, amend and rescind rules and regulations
relating to the Plan, including rules and regulations relating to sub-plans
established for the purpose of qualifying for preferred tax treatment under
foreign tax laws;

(x) to modify or amend each Option or Stock Purchase Right
(subject to Section 15(c) of the Plan), including the discretionary authority
to extend the post-termination exercisability period of Options longer than is
otherwise provided for in the Plan;

(xi) to allow Optionees to satisfy withholding tax
obligations by electing to have the Company withhold from the Shares to be
issued upon exercise of an Option or Stock Purchase Right that number of
Shares having a Fair Market Value equal to the amount required to be withheld.
The Fair Market Value of the Shares to be withheld shall be determined on the
date that the amount of tax to be withheld is to be determined. All elections
by an Optionee to have Shares withheld for this purpose shall be made in such
form and under such conditions as the Administrator may deem necessary or
advisable;

(xii) to authorize any person to execute on behalf of the
Company any instrument required to effect the grant of an Option or Stock
Purchase Right previously granted by the Administrator;

(xiii) to make all other determinations deemed necessary or
advisable for administering the Plan.

(c) Effect of Administrator's Decision. The Administrator's
----------------------------------
decisions, determinations and interpretations shall be final and binding on all
Optionees and any other holders of Options or Stock Purchase Rights.

5. Eligibility. Nonstatutory Stock Options and Stock Purchase Rights
-----------
may be granted to Service Providers. Incentive Stock Options may be granted
only to Employees.

6. Limitations.
-----------

(a) Each Option shall be designated in the Option Agreement as
either an Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such designation, to the extent that the aggregate Fair Market
Value of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by the Optionee during any calendar year (under
all plans of the Company and any Parent or Subsidiary) exceeds $100,000, such
Options shall be treated as Nonstatutory Stock Options. For purposes of this
Section 6(a), Incentive Stock Options shall be taken into account in the order
in which they were granted. The Fair Market Value of the Shares shall be
determined as of the time the Option with respect to such Shares is granted.
<PAGE>

(b) Neither the Plan nor any Option or Stock Purchase Right shall
confer upon an Optionee any right with respect to continuing the Optionee's
relationship as a Service Provider with the Company, nor shall they interfere in
any way with the Optionee's right or the Company's right to terminate such
relationship at any time, with or without cause.

(i) No Service Provider shall be granted, in any fiscal
year of the Company, Options to purchase more than 500,000 Shares.

(ii) In connection with his or her initial service, a
Service Provider may be granted Options to purchase up to an additional
500,000 Shares which shall not count against the limit set forth in subsection
(i) above.

(iii) The foregoing limitations shall be adjusted
proportionately in connection with any change in the Company's capitalization
as described in Section 13.

(iv) If an Option is cancelled in the same fiscal year of the
Company in which it was granted (other than in connection with a transaction
described in Section 13), the cancelled Option will be counted against the
limits set forth in subsections (i) and (ii) above. For this purpose, if the
exercise price of an Option is reduced, the transaction will be treated as a
cancellation of the Option and the grant of a new Option.

7. Term of Plan. Subject to Section 19 of the Plan, the Plan shall
------------
become effective upon its adoption by the Board. It shall continue in effect
for a term of ten (10) years unless terminated earlier under Section 15 of the
Plan.

8. Term of Option. The term of each Option shall be stated in the
--------------
Option Agreement. In the case of an Incentive Stock Option, the term shall be
ten (10) years from the date of grant or such shorter term as may be provided in
the Option Agreement. Moreover, in the case of an Incentive Stock Option
granted to an Optionee who, at the time the Incentive Stock Option is granted,
owns stock representing more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company or any Parent or Subsidiary, the
term of the Incentive Stock Option shall be five (5) years from the date of
grant or such shorter term as may be provided in the Option Agreement.

9. Option Exercise Price and Consideration.
---------------------------------------

(a) Exercise Price. The per share exercise price for the Shares to
--------------
be issued pursuant to exercise of an Option shall be determined by the
Administrator, subject to the following:

(i) In the case of an Incentive Stock Option
<PAGE>

(A) granted to an Employee who, at the time the
Incentive Stock Option is granted, owns stock representing more than ten
percent (10%) of the voting power of all classes of stock of the Company or
any Parent or Subsidiary, the per Share exercise price shall be no less than
110% of the Fair Market Value per Share on the date of grant.

(B) granted to any Employee other than an Employee
described in paragraph (A) immediately above, the per Share exercise price
shall be no less than 100% of the Fair Market Value per Share on the date of
grant.

(ii) In the case of a Nonstatutory Stock Option, the per
Share exercise price shall be determined by the Administrator. In the case of
a Nonstatutory Stock Option intended to qualify as "performance-based
compensation" within the meaning of Section 162(m) of the Code, the per Share
exercise price shall be no less than 100% of the Fair Market Value per Share
on the date of grant.

(iii) Notwithstanding the foregoing, Options may be granted
with a per Share exercise price of less than 100% of the Fair Market Value per
Share on the date of grant pursuant to a merger or other corporate transaction.

(b) Waiting Period and Exercise Dates. At the time an Option is
---------------------------------
granted, the Administrator shall fix the period within which the Option may be
exercised and shall determine any conditions which must be satisfied before the
Option may be exercised.

(c) Form of Consideration. The Administrator shall determine the
---------------------
acceptable form of consideration for exercising an Option, including the method
of payment. In the case of an Incentive Stock Option, the Administrator shall
determine the acceptable form of consideration at the time of grant. Such
consideration may consist entirely of:

(i) cash;

(ii) check;

(iii) promissory note;

(iv) other Shares which (A) in the case of Shares acquired
upon exercise of an option, have been owned by the Optionee for more than six
months on the date of surrender, and (B) have a Fair Market Value on the date
of surrender equal to the aggregate exercise price of the Shares as to which
said Option shall be exercised;

(v) consideration received by the Company under a cashless
exercise program implemented by the Company in connection with the Plan;
<PAGE>

(vi) a reduction in the amount of any Company liability to
the Optionee, including any liability attributable to the Optionee's
participation in any Company-sponsored deferred compensation program or
arrangement;

(vii) any combination of the foregoing methods of payment; or

(viii) such other consideration and method of payment for the
issuance of Shares to the extent permitted by Applicable Laws.

10. Exercise of Option.
------------------

(a) Procedure for Exercise; Rights as a Shareholder. Any
-----------------------------------------------
Option granted hereunder shall be exercisable according to the terms of the
Plan and at such times and under such conditions as determined by the
Administrator and set forth in the Option Agreement. Unless the Administrator
provides otherwise, vesting of Options granted hereunder shall be tolled
during any unpaid leave of absence. An Option may not be exercised for a
fraction of a Share.

An Option shall be deemed exercised when the Company receives:
(i) written or electronic notice of exercise (in accordance with the Option
Agreement) from the person entitled to exercise the Option, and (ii) full
payment for the Shares with respect to which the Option is exercised. Full
payment may consist of any consideration and method of payment authorized by
the Administrator and permitted by the Option Agreement and the Plan. Shares
issued upon exercise of an Option shall be issued in the name of the Optionee
or, if requested by the Optionee, in the name of the Optionee and his or her
spouse. Until the Shares are issued (as evidenced by the appropriate entry on
the books of the Company or of a duly authorized transfer agent of the
Company), no right to vote or receive dividends or any other rights as a
shareholder shall exist with respect to the Optioned Stock, notwithstanding
the exercise of the Option. The Company shall issue (or cause to be issued)
such Shares promptly after the Option is exercised. No adjustment will be made
for a dividend or other right for which the record date is prior to the date
the Shares are issued, except as provided in Section 13 of the Plan.

Exercising an Option in any manner shall decrease the number
of Shares thereafter available, both for purposes of the Plan and for sale
under the Option, by the number of Shares as to which the Option is exercised.

(b) Termination of Relationship as a Service Provider. If an
-------------------------------------------------
Optionee ceases to be a Service Provider, other than upon the Optionee's death
or Disability, the Optionee may exercise his or her Option within such period
of time as is specified in the Option Agreement to the extent that the Option
is vested on the date of termination (but in no event later than the
expiration of the term of such Option as set forth in the Option Agreement).
In the absence of a specified time in the Option Agreement, the Option shall
remain exercisable for three (3) months following the Optionee's
<PAGE>

termination. If, on the date of termination, the Optionee is not vested as to
his or her entire Option, the Shares covered by the unvested portion of the
Option shall revert to the Plan. If, after termination, the Optionee does not
exercise his or her Option within the time specified by the Administrator, the
Option shall terminate, and the Shares covered by such Option shall revert to
the Plan.

(c) Disability of Optionee. If an Optionee ceases to be a Service
----------------------
Provider as a result of the Optionee's Disability, the
Optionee may exercise his or her Option within such period of time as is
specified in the Option Agreement to the extent the Option is vested on the
date of termination (but in no event later than the expiration of the term of
such Option as set forth in the Option Agreement). In the absence of a
specified time in the Option Agreement, the Option shall remain exercisable
for twelve (12) months following the Optionee's termination. If, on the date
of termination, the Optionee is not vested as to his or her entire Option, the
Shares covered by the unvested portion of the Option shall revert to the Plan.
If, after termination, the Optionee does not exercise his or her Option within
the time specified herein, the Option shall terminate, and the Shares covered
by such Option shall revert to the Plan.

(d) Death of Optionee. If an Optionee dies while a Service
-----------------
Provider, the Option may be exercised within such period of time as is
specified in the Option Agreement (but in no event later than the expiration
of the term of such Option as set forth in the Notice of Grant), by the
Optionee's estate or by a person who acquires the right to exercise the Option
by bequest or inheritance, but only to the extent that the Option is vested on
the date of death. In the absence of a specified time in the Option Agreement,
the Option shall remain exercisable for twelve (12) months following the
Optionee's termination. If, at the time of death, the Optionee is not vested
as to his or her entire Option, the Shares covered by the unvested portion of
the Option shall immediately revert to the Plan. The Option may be exercised
by the executor or administrator of the Optionee's estate or, if none, by the
person(s) entitled to exercise the Option under the Optionee's will or the
laws of descent or distribution. If the Option is not so exercised within the
time specified herein, the Option shall terminate, and the Shares covered by
such Option shall revert to the Plan.

(e) Buyout Provisions. The Administrator may at any time offer to
-----------------
buy out for a payment in cash or Shares an Option previously granted based on
such terms and conditions as the Administrator shall establish and communicate
to the Optionee at the time that such offer is made.

11. Stock Purchase Rights.
---------------------

(a) Rights to Purchase. Stock Purchase Rights may be issued either
------------------
alone, in addition to, or in tandem with other awards granted under the Plan
and/or cash awards made outside of the Plan. After the Administrator determines
that it will offer Stock Purchase Rights under the Plan, it shall advise the
offeree in writing or electronically, by means of a Notice of Grant, of the
terms, conditions and restrictions related to the offer, including the number of
Shares that the offeree shall be entitled to purchase, the price to be paid, and
the time within which the offeree must accept such
<PAGE>

offer. The offer shall be accepted by execution of a Restricted Stock Purchase
Agreement in the form determined by the Administrator.

(b) Repurchase Option. Unless the Administrator determines
-----------------
otherwise, the Restricted Stock Purchase Agreement shall grant the Company a
repurchase option exercisable upon the voluntary or involuntary termination of
the purchaser's service with the Company for any reason (including death or
Disability). The purchase price for Shares repurchased pursuant to the
Restricted Stock Purchase Agreement shall be the original price paid by the
purchaser and may be paid by cancellation of any indebtedness of the purchaser
to the Company. The repurchase option shall lapse at a rate determined by the
Administrator.

(c) Other Provisions. The Restricted Stock Purchase Agreement shall
----------------
contain such other terms, provisions and conditions not inconsistent with the
Plan as may be determined by the Administrator in its sole discretion.

(d) Rights as a Shareholder. Once the Stock Purchase Right is
-----------------------
exercised, the purchaser shall have the rights equivalent to those of a
shareholder, and shall be a shareholder when his or her purchase is entered upon
the records of the duly authorized transfer agent of the Company. No adjustment
will be made for a dividend or other right for which the record date is prior to
the date the Stock Purchase Right is exercised, except as provided in Section 13
of the Plan.

12. Non-Transferability of Options and Stock Purchase Rights. Unless
--------------------------------------------------------
determined otherwise by the Administrator, an Option or Stock Purchase Right may
not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any
manner other than by will or by the laws of descent or distribution and may be
exercised, during the lifetime of the Optionee, only by the Optionee. If the
Administrator makes an Option or Stock Purchase Right transferable, such Option
or Stock Purchase Right shall contain such additional terms and conditions as
the Administrator deems appropriate.

13. Adjustments Upon Changes in Capitalization, Dissolution, Merger or
------------------------------------------------------------------
Asset Sale.
----------

(a) Changes in Capitalization. Subject to any required action by
-------------------------
the shareholders of the Company, the number of shares of Common Stock covered by
each outstanding Option and Stock Purchase Right, and the number of shares of
Common Stock which have been authorized for issuance under the Plan but as to
which no Options or Stock Purchase Rights have yet been granted or which have
been returned to the Plan upon cancellation or expiration of an Option or Stock
Purchase Right, as well as the price per share of Common Stock covered by each
such outstanding Option or Stock Purchase Right, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of issued shares of Common Stock effected without receipt
of consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not
<PAGE>

be deemed to have been "effected without receipt of consideration." Such
adjustment shall be made by the Board, whose determination in that respect
shall be final, binding and conclusive. Except as expressly provided herein,
no issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment
by reason thereof shall be made with respect to, the number or price of shares
of Common Stock subject to an Option or Stock Purchase Right.

(b) Dissolution or Liquidation. In the event of the proposed
--------------------------
dissolution or liquidation of the Company, the Administrator shall notify each
Optionee as soon as practicable prior to the effective date of such proposed
transaction. The Administrator in its discretion may provide for an Optionee to
have the right to exercise his or her Option until ten (10) days prior to such
transaction as to all of the Optioned Stock covered thereby, including Shares as
to which the Option would not otherwise be exercisable. In addition, the
Administrator may provide that any Company repurchase option applicable to any
Shares purchased upon exercise of an Option or Stock Purchase Right shall lapse
as to all such Shares, provided the proposed dissolution or liquidation takes
place at the time and in the manner contemplated. To the extent it has not been
previously exercised, an Option or Stock Purchase Right will terminate
immediately prior to the consummation of such proposed action.

(c) Merger or Asset Sale. In the event of a merger of the Company
--------------------
with or into another corporation, or the sale of substantially all of the assets
of the Company, each outstanding Option and Stock Purchase Right shall be
assumed or an equivalent option or right substituted by the successor
corporation or a Parent or Subsidiary of the successor corporation. In the
event that the successor corporation refuses to assume or substitute for the
Option or Stock Purchase Right, the Optionee shall fully vest in and have the
right to exercise the Option or Stock Purchase Right as to all of the Optioned
Stock, including Shares as to which it would not otherwise be vested or
exercisable. If an Option or Stock Purchase Right becomes fully vested and
exercisable in lieu of assumption or substitution in the event of a merger or
sale of assets, the Administrator shall notify the Optionee in writing or
electronically that the Option or Stock Purchase Right shall be fully vested and
exercisable for a period of fifteen (15) days from the date of such notice, and
the Option or Stock Purchase Right shall terminate upon the expiration of such
period. For the purposes of this paragraph, the Option or Stock Purchase Right
shall be considered assumed if, following the merger or sale of assets, the
option or right confers the right to purchase or receive, for each Share of
Optioned Stock subject to the Option or Stock Purchase Right immediately prior
to the merger or sale of assets, the consideration (whether stock, cash, or
other securities or property) received in the merger or sale of assets by
holders of Common Stock for each Share held on the effective date of the
transaction (and if holders were offered a choice of consideration, the type of
consideration chosen by the holders of a majority of the outstanding Shares);
provided, however, that if such consideration received in the merger or sale of
assets is not solely common stock of the successor corporation or its Parent,
the Administrator may, with the consent of the successor corporation, provide
for the consideration to be received upon the exercise of the Option or Stock
Purchase Right, for each Share of Optioned Stock subject to the Option or Stock
Purchase Right, to be solely common stock of the
<PAGE>

successor corporation or its Parent equal in fair market value to the per
share consideration received by holders of Common Stock in the merger or sale
of assets.

14. Date of Grant. The date of grant of an Option or Stock Purchase
-------------
Right shall be, for all purposes, the date on which the Administrator makes the
determination granting such Option or Stock Purchase Right, or such other later
date as is determined by the Administrator. Notice of the determination shall
be provided to each Optionee within a reasonable time after the date of such
grant.

15. Amendment and Termination of the Plan.
-------------------------------------

(a) Amendment and Termination. The Board may at any time amend,
-------------------------
alter, suspend or terminate the Plan.

(b) Shareholder Approval. The Company shall obtain shareholder
--------------------
approval of any Plan amendment to the extent necessary and desirable to comply
with Applicable Laws.

(c) Effect of Amendment or Termination. No amendment, alteration,
----------------------------------
suspension or termination of the Plan shall impair the rights of any Optionee,
unless mutually agreed otherwise between the Optionee and the Administrator,
which agreement must be in writing and signed by the Optionee and the Company.
Termination of the Plan shall not affect the Administrator's ability to exercise
the powers granted to it hereunder with respect to Options granted under the
Plan prior to the date of such termination.

16. Conditions Upon Issuance of Shares.
----------------------------------

(a) Legal Compliance. Shares shall not be issued pursuant to the
----------------
exercise of an Option or Stock Purchase Right unless the exercise of such Option
or Stock Purchase Right and the issuance and delivery of such Shares shall
comply with Applicable Laws and shall be further subject to the approval of
counsel for the Company with respect to such compliance.

(b) Investment Representations. As a condition to the exercise of
--------------------------
an Option or Stock Purchase Right, the Company may require the person
exercising such Option or Stock Purchase Right to represent and warrant at the
time of any such exercise that the Shares are being purchased only for
investment and without any present intention to sell or distribute such Shares
if, in the opinion of counsel for the Company, such a representation is
required.

17. Inability to Obtain Authority. The inability of the Company to
-----------------------------
obtain authority from any regulatory body having jurisdiction, which authority
is deemed by the Company's counsel to be necessary to the lawful issuance and
sale of any Shares hereunder, shall relieve the Company of any
<PAGE>

liability in respect of the failure to issue or sell such Shares as to which
such requisite authority shall not have been obtained.

18. Reservation of Shares. The Company, during the term of this
---------------------
Plan, will at all times reserve and keep available such number of Shares as
shall be sufficient to satisfy the requirements of the Plan.

19. Shareholder Approval. The Plan shall be subject to approval by
--------------------
the shareholders of the Company within twelve (12) months after the date the
Plan is adopted. Such shareholder approval shall be obtained in the manner and
to the degree required under Applicable Laws.
<PAGE>
Appendix 5

EXPONENT, INC.

RESTRICTED STOCK AWARD PLAN

1. Purposes of the Plan. The purposes of this Plan are:
--------------------

. to provide additional incentive to Employees, and

. to promote the success of the Company's business.

Restricted Stock Awards granted under the Plan.

2. Definitions. As used herein, the following definitions shall apply:
-----------

(a) "Administrator" means the Board or any of its Committees as
-------------
shall be administering the Plan, in accordance with Section 4 of the Plan.

(b) "Applicable Laws" means the requirements relating to the
---------------
administration of restricted stock award plans under U. S. state corporate
laws, U.S. federal and state securities laws, the Code, any stock exchange or
quotation system on which the Common Stock is listed or quoted and the
applicable laws of any foreign country or jurisdiction where Restricted Stock
Awards are, or will be, granted under the Plan.

(d) "Board" means the Board of Directors of the Company.
-----

(e) "Code" means the Internal Revenue Code of 1986, as amended.
----

(f) "Committee" means a committee of Directors appointed by the
---------
Board in accordance with Section 4 of the Plan.

(g) "Common Stock" means the common stock of the Company.
------------

(h) "Company" means Exponent, Inc., a Delaware corporation.
-------

(i) "Consultant" means any person, including an advisor, engaged
----------
by the Company or a Parent or Subsidiary to render services to such entity.

(j) "Director" means a member of the Board.
--------

(k) "Disability" means total and permanent disability as defined
----------
in Section 22(e)(3) of the Code.
<PAGE>

(l) "Employee" means any person, including Officers and
--------
Directors, employed by the Company or any Parent or Subsidiary of the Company.
A Service Provider shall not cease to be an Employee in the case of (i) any
leave of absence approved by the Company or (ii) transfers between locations
of the Company or between the Company, its Parent, any Subsidiary, or any
successor. Neither service as a Director nor payment of a director's fee by
the Company shall be sufficient to constitute "employment" by the Company.

(m) "Exchange Act" means the Securities Exchange Act of 1934, as
------------
amended.

(n) "Fair Market Value" means, as of any date, the value of
-----------------
Common Stock determined as follows:

(i) If the Common Stock is listed on any established
stock exchange or a national market system, including without limitation the
Nasdaq National Market or The Nasdaq SmallCap Market of The Nasdaq Stock
Market, its Fair Market Value shall be the mean between the closing high bid
and the low asked prices for the Common stock as quoted on such exchange or
system for the last market trading day prior to the time of determination, as
reported in The Wall Street Journal or such other source as the Administrator
deems reliable;

(ii) If the Common Stock is regularly quoted by a
recognized securities dealer but selling prices are not reported, the Fair
Market Value of a Share of Common Stock shall be the mean between the closing
high bid and low asked prices for the Common Stock on the last market trading
day prior to the day of determination, as reported in The Wall Street Journal
or such other source as the Administrator deems reliable; or

(iii) In the absence of an established market for the
Common Stock, the Fair Market Value shall be determined in good faith by the
Administrator.

(o) "Notice of Grant" means a written or electronic notice
---------------
evidencing certain terms and conditions of an individual Restricted Stock
Award grant. The Notice of Grant is part of the Restricted Stock Award
Agreement.

(p) "Officer" means a person who is an officer of the Company
-------
within the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.

(q) "Optioned Stock" means the Common Stock subject to a
--------------
Restricted Stock Award.

(r) "Parent" means a "parent corporation," whether now or
------
hereafter existing, as defined in Section 424(e) of the Code.

(s) "Plan" means this Restricted Stock Award Plan.
----

(t) "Restricted Stock Award" means shares of Common Stock granted
----------------------
pursuant to Section 7 of the Plan.

-2-
<PAGE>

(u) "Restricted Stock Award Agreement" means a written agreement
--------------------------------
between the Company and the Optionee evidencing the terms and restrictions
applying to stock awarded under a Restricted Stock Award. The Restricted Stock
Award Agreement is subject to the terms and conditions of the Plan and the
Notice of Grant.

(v) "Rule 16b-3" means Rule 16b-3 of the Exchange Act or any
----------
successor to Rule 16b-3, as in effect when discretion is being exercised with
respect to the Plan.

(w) "Section 16(b) " means Section 16(b) of the Exchange Act.
-------------

(x) "Service Provider" means an Employee, Director or Consultant.
----------------

(y) "Share" means a share of the Common Stock, as adjusted in
-----
accordance with Section 13 of the Plan.

(z) "Subsidiary" means a "subsidiary corporation", whether now
----------
or hereafter existing, as defined in Section 424(f) of the Code.

3. Stock Subject to the Plan. Subject to the provisions of Section 9 of
-------------------------
the Plan, the maximum aggregate number of Shares which may be optioned and
granted under the Plan is 100,000 Shares, plus an annual increase to be added at
the first regularly schedule Board of Director meeting of each calendar year,
equal to the lesser of (i) 200,000 Shares, (ii) 2% of the outstanding Shares on
such date, or (iii) a lesser amount determined by the Board. The Shares may be
authorized, but unissued, or reacquired Common Stock.

If a Restricted Stock Award expires or becomes unexercisable without
having been acquired in full, the unacquired Shares which were subject thereto
shall become available for future grant under the Plan.

4. Administration of the Plan.
--------------------------

(a) Procedure.
---------

(i) Multiple Administrative Bodies. The Plan may be
------------------------------
administered by different Committees with respect to different groups of
Service Providers.

(ii) Rule 16b-3. To the extent desirable to qualify
----------
transactions hereunder as exempt under Rule 16b-3, the transactions
contemplated hereunder shall be structured to satisfy the requirements for
exemption under Rule 16b-3.

(iii) Other Administration. Other than as provided
--------------------
above, the Plan shall be administered by (A) the Board or (B) a Committee,
which committee shall be constituted to satisfy Applicable Laws.

-3-
<PAGE>

(b) Powers of the Administrator. Subject to the provisions of
---------------------------
the Plan, and in the case of a Committee, subject to the specific duties
delegated by the Board to such Committee, the Administrator shall have the
authority, in its discretion:

(i) to determine the Fair Market Value;

(ii) to select the Service Providers to whom
Restricted Stock Awards may be granted hereunder;

(iii) to determine the number of shares of Common Stock
to be covered by each Restricted Stock Award granted hereunder;

(iv) to approve forms of agreement for use under the
Plan;

(v) to determine the terms and conditions, not
inconsistent with the terms of the Plan, of any Restricted Stock Awards
granted hereunder. Such terms and conditions include, but are not limited to,
the time or times when Restricted Stock Awards may be exercised (which may be
based on performance criteria), any vesting acceleration or waiver of
forfeiture restrictions, and any restriction or limitation regarding any
Restricted Stock Award or the shares of Common Stock relating thereto, based
in each case on such factors as the Administrator, in its sole discretion,
shall determine;

(vi) to construe and interpret the terms of the Plan
and awards granted pursuant to the Plan;

(vii) to prescribe, amend and rescind rules and
regulations relating to the Plan, including rules and regulations relating to
sub-plans established for the purpose of qualifying for preferred tax
treatment under foreign tax laws;

(viii) to modify or amend each Restricted Stock Award
(subject to Section 11(c) of the Plan);

(ix) to authorize any person to execute on behalf of
the Company any instrument required to effect the grant of a Restricted Stock
Award previously granted by the Administrator;

(x) to allow employees receiving Restricted Stock to
satisfy withholding tax obligations by electing to have the Company withhold
from the Shares to be issued or purchase from the Shares issued that number of
Shares having a Fair Market Value equal to the amount required to be withheld.
The Fair Market Value of the Shares to be withheld shall be determined on the
date that the amount of tax to be withheld is to be determined. All elections
by an employee to have Shares withheld for this purpose shall be made in such
form and under such conditions as the Administrator may deem necessary or
advisable;

-4-
<PAGE>

(xi) to make all other determinations deemed necessary
or advisable for administering the Plan.

(c) Effect of Administrator's Decision. The Administrator's
----------------------------------
decisions, determinations and interpretations shall be final and binding on
all Optionees and any other holders of Restricted Stock Awards.

5. Eligibility. Restricted Stock Awards may be granted to Employees;
-----------
provided, however, that Employees who own at least three percent
(3%) of the Company's outstanding Common Stock may not receive
Restricted Stock Awards under the Plan. Neither the Plan nor any
Restricted Stock Award shall confer upon an Optionee any right with
respect to continuing the Optionee's relationship as a Service
Provider with the Company, nor shall they interfere in any way with
the Optionee's right or the Company's right to terminate such
relationship at any time, with or without cause.

6. Term of Plan. Subject to Section 15 of the Plan, the Plan shall
------------
become effective upon its adoption by the Board. It shall continue
in effect for a term of ten (10) years unless terminated earlier
under Section 11 of the Plan.

7. Terms of Restricted Stock Awards.
--------------------------------

Rights to Acquire. Restricted Stock Awards may be issued either
-----------------
alone, in addition to, or in tandem with cash awards made outside of the Plan.
After the Administrator determines that it will offer Restricted Stock Awards
under the Plan, it shall advise the offeree in writing or electronically, by
means of a Notice of Grant, of the terms, conditions and restrictions related to
the offer, including the number of Shares that the offeree shall be entitled to
receive and the time within which the offeree must accept such offer. The offer
shall be accepted by execution of a Restricted Stock Award Agreement in the form
determined by the Administrator.

Reacquisition Option. Unless the Administrator determines otherwise,
--------------------
the Restricted Stock Award Agreement shall grant the Company a reacquisition
option exercisable upon the voluntary or involuntary termination of the
participant's service with the Company for any reason (including death or
Disability). The reacquisition option shall lapse at a rate determined by the
Administrator.

Other Provisions. The Restricted Stock Award Agreement shall contain
----------------
such other terms, provisions and conditions not inconsistent with the Plan as
may be determined by the Administrator in its sole discretion.

Rights as a Shareholder. Once the Restricted Stock Award Agreement is
-----------------------
exercised, the participant shall have the rights equivalent to those of a
shareholder, and shall be a shareholder when his or her acquisition is entered
upon the records of the duly authorized transfer agent of the Company. No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the Restricted Stock Award Agreement is exercised, except
as provided in Section 9 of the Plan.

-5-
<PAGE>

8. Non-Transferability of Restricted Stock Awards. Unless determined
----------------------------------------------
otherwise by the Administrator, a Restricted Stock Award may not be sold,
pledged, assigned, hypothecated, transferred, or disposed of in any
manner other than by will or by the laws of descent or distribution and
may be exercised, during the lifetime of the Optionee, only by the
Optionee. If the Administrator makes a Restricted Stock Award
transferable, such Restricted Stock Award shall contain such additional
terms and conditions as the Administrator deems appropriate.

9. Adjustments Upon Changes in Capitalization, Dissolution, Merger or Asset
------------------------------------------------------------------------
Sale.
-----

Changes in Capitalization. Subject to any required action by the
-------------------------
shareholders of the Company, the number of shares of Common Stock covered by
each outstanding Restricted Stock Award, and the number of shares of Common
Stock which have been authorized for issuance under the Plan but as to which
no Restricted Stock Awards have yet been granted or which have been returned
to the Plan upon cancellation or expiration of a Restricted Stock Award, shall
be proportionately adjusted for any increase or decrease in the number of
issued shares of Common Stock resulting from a stock split, reverse stock
split, stock dividend, combination or reclassification of the Common Stock, or
any other increase or decrease in the number of issued shares of Common Stock
effected without receipt of consideration by the Company; provided, however,
that conversion of any convertible securities of the Company shall not be
deemed to have been "effected without receipt of consideration." Such
adjustment shall be made by the Board, whose determination in that respect
shall be final, binding and conclusive. Except as expressly provided herein,
no issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment
by reason thereof shall be made with respect to, the number of shares of
Common Stock subject to a Restricted Stock Award.

Dissolution or Liquidation. In the event of the proposed dissolution
--------------------------
or liquidation of the Company, the Administrator shall notify each Awardee and
holder of Restricted Stock as soon as practicable prior to the effective date of
such proposed transaction. The Administrator may provide that any Company
reacquisition right applicable to any Shares acquired upon exercise of a
Restricted Stock Award shall lapse as to all such Shares, provided the proposed
dissolution or liquidation takes place at the time and in the manner
contemplated. To the extent it has not been previously exercised, a Restricted
Stock Award will terminate immediately prior to the consummation of such
proposed action.

Merger or Asset Sale. In the event of a merger of the Company with or
--------------------
into another corporation, or the sale of substantially all of the assets of the
Company, the new substituted or additional securities received for the
Restricted Stock shall be subject to the same reacquisition right by the Company
or the successor corporation. In the event that the successor corporation
refuses to assume or substitute for options issued by the Company, the holders
of Restricted Stock shall fully vest in and the Company's reacquisition shall
fully lapse as to all the Restricted Stock. If a Restricted Stock becomes fully
vested in the event of a merger or sale of assets, the Administrator shall
notify the holder of Restricted Stock in writing or electronically that the
Restricted Stock shall be fully vested as of the date of the transaction.

-6-
<PAGE>

10. Date of Grant. The date of grant of a Restricted Stock Award shall be,
-------------
for all purposes, the date on which the Administrator makes the
determination granting such Restricted Stock Award, or such other later
date as is determined by the Administrator. Notice of the determination
shall be provided to each Optionee within a reasonable time after the
date of such grant.

11. Amendment and Termination of the Plan.
-------------------------------------

Amendment and Termination. The Board may at any time amend, alter,
-------------------------
suspend or terminate the Plan.

Shareholder Approval. The Company shall obtain shareholder approval
--------------------
of any Plan amendment to the extent necessary and desirable to comply with
Applicable Laws.

Effect of Amendment or Termination. No amendment, alteration,
----------------------------------
suspension or termination of the Plan shall impair the rights of any Optionee,
unless mutually agreed otherwise between the Optionee and the Administrator,
which agreement must be in writing and signed by the Optionee and the Company.
Termination of the Plan shall not affect the Administrator's ability to exercise
the powers granted to it hereunder with respect to Restricted Stock Awards
granted under the Plan prior to the date of such termination.

12. Conditions Upon Issuance of Shares.
----------------------------------

Legal Compliance. Shares shall not be issued pursuant to the exercise
----------------
of a Restricted Stock Award unless the exercise of such Restricted Stock Award
and the issuance and delivery of such Shares shall comply with Applicable Laws
and shall be further subject to the approval of counsel for the Company with
respect to such compliance.

Investment Representations. As a condition to the exercise of a
--------------------------
Restricted Stock Award, the Company may require the person exercising such
Restricted Stock Award to represent and warrant at the time of any such exercise
that the Shares are being acquired only for investment and without any present
intention to sell or distribute such Shares if, in the opinion of counsel for
the Company, such a representation is required.

13. Inability to Obtain Authority. The inability of the Company to obtain
-----------------------------
authority from any regulatory body having jurisdiction, which authority
is deemed by the Company's counsel to be necessary to the lawful issuance
and sale of any Shares hereunder, shall relieve the Company of any
liability in respect of the failure to issue or sell such Shares as to
which such requisite authority shall not have been obtained.

14. Reservation of Shares. The Company, during the term of this Plan, will
---------------------
at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.

-7-
<PAGE>

15. Shareholder Approval. The Plan shall be subject to approval by the
--------------------
shareholders of the Company within twelve (12) months after the date the
Plan is adopted. Such shareholder approval shall be obtained in the
manner and to the degree required under Applicable Laws.

-8-
<PAGE>

EXPONENT, INC.

STOCK AWARD PLAN

RESTRICTED STOCK AWARD AGREEMENT

Unless otherwise defined herein, the terms defined in the Plan shall have
the same defined meanings in this Restricted Stock Award Agreement.

WHEREAS the Participant named in the Notice of Grant, (the "Participant")
is a Service Provider, and the Participant's continued participation is
considered by the Company to be important for the Company's continued growth;
and

WHEREAS in order to give the Participant an opportunity to acquire an
equity interest in the Company as an incentive for the Participant to
participate in the affairs of the Company, the Administrator has granted to the
Participant a Restricted Stock Award subject to the terms and conditions of the
Plan and the Notice of Grant, which are incorporated herein by reference, and
pursuant to this Restricted Stock Award Agreement (the "Agreement").

NOW THEREFORE, the parties agree as follows:

1. Transfer of Stock. The Company hereby agrees to award to the
-----------------
Participant and the Participant hereby agrees to accept shares of the
Company's Common Stock (the "Shares").

2. Reacquisition Option.
--------------------

In the event the Participant ceases to be a Service Provider for any or
no reason (including death or disability) before all of the Shares are
released from the Company's Reacquisition Option (see Section 3), the Company
shall, upon the date of such termination (as reasonably fixed and determined
by the Company) have an irrevocable, exclusive option (the "Reacquisition
Option") for a period of sixty (60) days from such date to receive, without
payment or future consideration, up to that number of shares which constitute
the Unreleased Shares (as defined in Section 3). The Reacquisition Option
shall be exercised by the Company by delivering written notice to the
Participant or the Participant's executor (with a copy to the Escrow Holder).
Upon delivery of such notice, the Company shall become the legal and
beneficial owner of the Shares being reacquired and all rights and interests
therein or relating thereto, and the Company shall have the right to retain
and transfer to its own name the number of Shares being reacquired by the
Company.

Whenever the Company shall have the right to reacquire Shares hereunder,
the Company may designate and assign one or more employees, officers,
directors or shareholders of the Company or other persons or organizations to
exercise all or a part of the Company's acquisition rights under this
Agreement.
<PAGE>

3. Release of Shares From Reacquisition Option.
-------------------------------------------

(a) One-third of the Shares shall be released from the Company's
Reacquisition Option each year on the anniversary of the Date of Grant
provided that the Participant does not cease to be a Service Provider prior to
the date of any such release.

(b) Any of the Shares that have not yet been released from the
Reacquisition Option are referred to herein as "Unreleased Shares."

(c) The Shares that have been released from the Reacquisition
Option shall be delivered to the Participant at the Participant's request (see
Section 5).

4. Restriction on Transfer. Except for the escrow described in Section
-----------------------
6 or the transfer of the Shares to the Company or its assignees contemplated
by this Agreement, none of the Shares or any beneficial interest therein shall
be transferred, encumbered or otherwise disposed of in any way until such
Shares are released from the Company's Reacquisition Option in accordance with
the provisions of this Agreement, other than by will or the laws of descent
and distribution.

5. Escrow of Shares.
----------------

(a) To ensure the availability for delivery of the Participant's
Unreleased Shares upon reacquisition by the Company pursuant to the Repurchase
Option, the Participant shall, upon execution of this Agreement, deliver and
deposit with an escrow holder designated by the Company (the "Escrow Holder")
the share certificates representing the Unreleased Shares, together with the
stock assignment duly endorsed in blank, attached hereto as Exhibit A-2. The
Unreleased Shares and stock assignment shall be held by the Escrow Holder,
pursuant to the Joint Escrow Instructions of the Company and Participant
attached hereto as Exhibit A-3, until such time as the Company's Reacquisition
Option expires. As a further condition to the Company's obligations under this
Agreement, the Company may require the spouse of Participant, if any, to execute
and deliver to the Company the Consent of Spouse attached hereto as Exhibit A-4.

(b) The Escrow Holder shall not be liable for any act it may do or
omit to do with respect to holding the Unreleased Shares in escrow while acting
in good faith and in the exercise of its judgment.

(c) If the Company or any assignee exercises the Reacquisition
Option hereunder, the Escrow Holder, upon receipt of written notice of such
exercise from the proposed transferee, shall take all steps necessary to
accomplish such transfer.

(d) When the Reacquisition Option has been exercised or expires
unexercised or a portion of the Shares has been released from the
Reacquisition Option, upon request the Escrow Holder shall promptly cause a
new certificate to be issued for the released Shares and shall deliver the
certificate to the Company or the Participant, as the case may be.

-2-
<PAGE>

(e) Subject to the terms hereof, the Participant shall have all
the rights of a shareholder with respect to the Shares while they are held in
escrow, including without limitation, the right to vote the Shares and to
receive any cash dividends declared thereon. If, from time to time during the
term of the Reacquisition Option, there is (i) any stock dividend, stock split
or other change in the Shares, or (ii) any merger or sale of all or
substantially all of the assets or other acquisition of the Company, any and
all new, substituted or additional securities to which the Participant is
entitled by reason of the Participant's ownership of the Shares shall be
immediately subject to this escrow, deposited with the Escrow Holder and
included thereafter as "Shares" for purposes of this Agreement and the
Reacquisition Option.

6. Legends. The share certificate evidencing the Shares, if any,
-------
issued hereunder shall be endorsed with the following legend (in addition to
any legend required under applicable state securities laws):

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RESTRICTIONS UPON TRANSFER AND RIGHTS OF REACQUISITION AS SET FORTH IN AN
AGREEMENT BETWEEN THE COMPANY AND THE SHAREHOLDER, A COPY OF WHICH IS ON FILE
WITH THE SECRETARY OF THE COMPANY.

7. Adjustment for Stock Split. All references to the number of Shares
--------------------------
in this Agreement shall be appropriately adjusted to reflect any stock split,
stock dividend or other change in the Shares which may be made by the Company
after the date of this Agreement.

8. Tax Consequences. The Participant has reviewed with the
----------------
Participant's own tax advisors the federal, state, local and foreign tax
consequences of this investment and the transactions contemplated by this
Agreement. The Participant is relying solely on such advisors and not on any
statements or representations of the Company or any of its agents. The
Participant understands that the Participant (and not the Company) shall be
responsible for the Participant's own tax liability that may arise as a result
of the transactions contemplated by this Agreement. The Participant
understands that Section 83 of the Internal Revenue Code of 1986, as amended
(the "Code"), taxes as ordinary income the difference between the Fair Market
Value of the Shares on the date of acquisition and the Fair Market Value of
the Shares as of the date any restrictions on the Shares lapse. In this
context, "restriction" includes the right of the Company to reacquire the
Shares pursuant to the Reacquisition Option. The Participant understands that
the Participant may elect to be taxed at the time the Shares are acquired
rather than when and as the Reacquisition Option expires by filing an election
under Section 83(b) of the Code with the IRS within 30 days from the date of
purchase. The form for making this election is attached as Exhibit A-5 hereto.

THE PARTICIPANT ACKNOWLEDGES THAT IT IS THE PARTICIPANT'S SOLE
RESPONSIBILITY AND NOT THE COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION
83(b), EVEN IF THE PARTICIPANT REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO
MAKE THIS FILING ON THE PARTICIPANT'S BEHALF.

-3-
<PAGE>

9. General Provisions.
------------------

(a) This Agreement shall be governed by the internal substantive
laws, but not the choice of law rules of California. This Agreement, subject
to the terms and conditions of the Plan and the Notice of Grant, represents
the entire agreement between the parties with respect to the acquisition of
the Shares by the Participant. Subject to Section 11(c) of the Plan, in the
event of a conflict between the terms and conditions of the Plan and the terms
and conditions of this Agreement, the terms and conditions of the Plan shall
prevail. Unless otherwise defined herein, the terms defined in the Plan shall
have the same defined meanings in this Agreement.

(b) Any notice, demand or request required or permitted to be
given by either the Company or the Participant pursuant to the terms of this
Agreement shall be in writing and shall be deemed given when delivered
personally or deposited in the U.S. mail, First Class with postage prepaid,
and addressed to the parties at the addresses of the parties set forth at the
end of this Agreement or such other address as a party may request by
notifying the other in writing.

Any notice to the Escrow Holder shall be sent to the Company's address
with a copy to the other party hereto.

(c) The rights of the Company under this Agreement shall be
transferable to any one or more persons or entities, and all covenants and
agreements hereunder shall inure to the benefit of, and be enforceable by the
Company's successors and assigns. The rights and obligations of the
Participant under this Agreement may only be assigned with the prior written
consent of the Company.

(d) Either party's failure to enforce any provision of this
Agreement shall not in any way be construed as a waiver of any such provision,
nor prevent that party from thereafter enforcing any other provision of this
Agreement. The rights granted both parties hereunder are cumulative and shall
not constitute a waiver of either party's right to assert any other legal
remedy available to it.

(e) The Participant agrees upon request to execute any further
documents or instruments necessary or desirable to carry out the purposes or
intent of this Agreement.

(f) PARTICIPANT ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES
PURSUANT TO SECTION 3 HEREOF IS EARNED ONLY BY CONTINUING SERVICE AS A SERVICE
PROVIDER AT THE WILL OF THE COMPANY (AND NOT THROUGH THE ACT OF BEING HIRED OR
ACQUIRING SHARES HEREUNDER). PARTICIPANT FURTHER ACKNOWLEDGES AND AGREES THAT
THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE
SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED
ENGAGEMENT AS A SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT
ALL, AND SHALL NOT INTERFERE WITH PARTICIPANT'S RIGHT OR THE COMPANY'S RIGHT TO
TERMINATE PARTICIPANT'S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR
WITHOUT CAUSE.

-4-
<PAGE>

By Participant's signature below, Participant represents that he or she
is familiar with the terms and provisions of the Plan, and hereby accepts this
Agreement subject to all of the terms and provisions thereof. Participant has
reviewed the Plan and this Agreement in their entirety, has had an opportunity
to obtain the advice of counsel prior to executing this Agreement and fully
understands all provisions of this Agreement. Participant agrees to accept as
binding, conclusive and final all decisions or interpretations of the
Administrator upon any questions arising under the Plan or this Agreement.
Participant further agrees to notify the Company upon any change in the
residence indicated in the Notice of Grant.

DATED: _____________________

PARTICIPANT: EXPONENT, INC.

__________________________________ __________________________________
Signature By

__________________________________ __________________________________
Print Name Title

-5-
<PAGE>

EXHIBIT A-2
-----------

ASSIGNMENT SEPARATE FROM CERTIFICATE

FOR VALUE RECEIVED I, __________________________, hereby sell, assign and
transfer unto ____________________________________________ (__________) shares
of the Common Stock of Exponent, Inc. standing in my name of the books of said
corporation represented by Certificate No. _____ herewith and do hereby
irrevocably constitute and appoint ____________ __________ to transfer the
said stock on the books of the within named corporation with full power of
substitution in the premises.

This Stock Assignment may be used only in accordance with the Restricted
Stock Award Agreement (the "Agreement") between Exponent, Inc. and the
undersigned dated ______________, 19__.

Dated: _______________, 19__

Signature: ______________________________

INSTRUCTIONS: Please do not fill in any blanks other than the signature line.
The purpose of this assignment is to enable the Company to exercise the
Reacquisition Option, as set forth in the Agreement, without requiring
additional signatures on the part of the Participant.
<PAGE>

EXHIBIT A-3
-----------

JOINT ESCROW INSTRUCTIONS
-------------------------

__________, 19__

Corporate Secretary
Exponent, Inc.
[Address]

Dear ___________:

As Escrow Agent for both Exponent, Inc., a Delaware corporation (the
"Company"), and the undersigned participant (the "Participant"), you are
hereby authorized and directed to hold the documents delivered to you pursuant
to the terms of that certain Restricted Stock Award Agreement ("Agreement")
between the Company and the undersigned, in accordance with the following
instructions:

1. In the event the Company and/or any assignee of the Company
(referred to collectively as the "Company") exercises the Company's
Reacquisition Option set forth in the Agreement, the Company shall give to
Participant and you a written notice specifying the number of shares of stock
to be reacquired and the time for a closing hereunder at the principal office
of the Company. Participant and the Company hereby irrevocably authorize and
direct you to close the transaction contemplated by such notice in accordance
with the terms of said notice.

2. At the closing, you are directed (a) to date the stock assignments
necessary for the transfer in question, (b) to fill in the number of shares
being transferred, and (c) to deliver same, together with the certificate
evidencing the shares of stock to be transferred, to the Company or its
assignee pursuant to the exercise of the Company's Reacquisition Option.

3. Participant irrevocably authorizes the Company to deposit with
you any certificates evidencing shares of stock to be held by you hereunder and
any additions and substitutions to said shares as defined in the Agreement.
Participant does hereby irrevocably constitute and appoint you as Participant's
attorney-in-fact and agent for the term of this escrow to execute with respect
to such securities all documents necessary or appropriate to make such
securities negotiable and to complete any transaction herein contemplated,
including but not limited to the filing with any applicable state blue sky
authority of any required applications for consent to, or notice of transfer of,
the securities. Subject to the provisions of this paragraph 3, Participant
shall exercise all rights and privileges of a shareholder of the Company while
the stock is held by you.

4. Upon written request of the Participant, but no more than once
per calendar year, unless the Company's Reacquisition Option has been exercised,
you shall deliver to Participant a certificate or certificates representing so
many shares of stock as are not then subject to the Company's Reacquisition
Option. Within 90 days after Participant ceases to be a Service Provider,
<PAGE>

you shall deliver to Participant a certificate or certificates representing
the aggregate number of shares held or issued pursuant to the Agreement and
not acquired by the Company or its assignees pursuant to exercise of the
Company's Reacquisition Option.

5. If at the time of termination of this escrow you should have in your
possession any documents, securities, or other property belonging to
Participant, you shall deliver all of the same to Participant and shall be
discharged of all further obligations hereunder.

6. Your duties hereunder may be altered, amended, modified or revoked
only by a writing signed by all of the parties hereto.

7. You shall be obligated only for the performance of such duties as
are specifically set forth herein and may rely and shall be protected in
relying or refraining from acting on any instrument reasonably believed by you
to be genuine and to have been signed or presented by the proper party or
parties. You shall not be personally liable for any act you may do or omit to
do hereunder as Escrow Agent or as attorney-in-fact for Participant while
acting in good faith, and any act done or omitted by you pursuant to the
advice of your own attorneys shall be conclusive evidence of such good faith.

8. You are hereby expressly authorized to disregard any and all
warnings given by any of the parties hereto or by any other person or
corporation, excepting only orders or process of courts of law, and are hereby
expressly authorized to comply with and obey orders, judgments or decrees of
any court. In case you obey or comply with any such order, judgment or decree,
you shall not be liable to any of the parties hereto or to any other person,
firm or corporation by reason of such compliance, notwithstanding any such
order, judgment or decree being subsequently reversed, modified, annulled, set
aside, vacated or found to have been entered without jurisdiction.

9. You shall not be liable in any respect on account of the identity,
authorities or rights of the parties executing or delivering or purporting to
execute or deliver the Agreement or any documents or papers deposited or
called for hereunder.

10. You shall not be liable for the outlawing of any rights under the
statute of limitations with respect to these Joint Escrow Instructions or any
documents deposited with you.

11. You shall be entitled to employ such legal counsel and other experts
as you may deem necessary properly to advise you in connection with your
obligations hereunder, may rely upon the advice of such counsel, and may pay
such counsel reasonable compensation therefor.

12. Your responsibilities as Escrow Agent hereunder shall terminate if
you shall cease to be an officer or agent of the Company or if you shall
resign by written notice to each party. In the event of any such termination,
the Company shall appoint a successor Escrow Agent.

13. If you reasonably require other or further instruments in connection
with these Joint Escrow Instructions or obligations in respect hereto, the
necessary parties hereto shall join in furnishing such instruments.
<PAGE>

14. It is understood and agreed that should any dispute arise with
respect to the delivery and/or ownership or right of possession of the
securities held by you hereunder, you are authorized and directed to retain in
your possession without liability to anyone all or any part of said securities
until such disputes shall have been settled either by mutual written agreement
of the parties concerned or by a final order, decree or judgment of a court of
competent jurisdiction after the time for appeal has expired and no appeal has
been perfected, but you shall be under no duty whatsoever to institute or
defend any such proceedings.

15. Any notice required or permitted hereunder shall be given in writing
and shall be deemed effectively given upon personal delivery or upon deposit
in the United States Post Office, by registered or certified mail with postage
and fees prepaid, addressed to each of the other parties thereunto entitled at
the following addresses or at such other addresses as a party may designate by
ten days' advance written notice to each of the other parties hereto.

COMPANY: Exponent, Inc.
[Address]

PARTICIPANT: _____________________________

_____________________________

ESCROW AGENT: Corporate Secretary
Exponent, Inc.
[Address]

16. By signing these Joint Escrow Instructions, you become a party hereto
only for the purpose of said Joint Escrow Instructions; you do not become a
party to the Agreement.
<PAGE>

17. This instrument shall be binding upon and inure to the benefit of the
parties hereto, and their respective successors and permitted assigns.

18. These Joint Escrow Instructions shall be governed by, and construed and
enforced in accordance with, the internal substantive laws, but not the choice
of law rules, of California.

Very truly yours,

EXPONENT, INC.

_____________________________________
By

_____________________________________
Title

PARTICIPANT:

_____________________________________
Signature

_____________________________________
Print Name

ESCROW AGENT:

_____________________________________
Corporate Secretary
<PAGE>

EXHIBIT A-4
-----------

CONSENT OF SPOUSE
-----------------

I, ____________________, spouse of ___________________, have read and
approve the foregoing Restricted Stock Award Agreement (the "Agreement"). In
consideration of the Company's grant to my spouse of the right to acquire shares
of Exponent, Inc., as set forth in the Agreement, I hereby appoint my spouse as
my attorney-in-fact in respect to the exercise of any rights under the Agreement
and agree to be bound by the provisions of the Agreement insofar as I may have
any rights in said Agreement or any shares issued pursuant thereto under the
community property laws or similar laws relating to marital property in effect
in the state of our residence as of the date of the signing of the foregoing
Agreement.

Dated: _______________, 19__

______________________________________
Signature of Spouse
<PAGE>

EXHIBIT A-5
-----------

ELECTION UNDER SECTION 83(b)
----------------------------
OF THE INTERNAL REVENUE CODE OF 1986
------------------------------------

The undersigned taxpayer hereby elects, pursuant to Section 83(b) of the
Internal Revenue Code of 1986, as amended, to include in taxpayer's gross income
for the current taxable year the amount of any compensation taxable to taxpayer
in connection with his or her receipt of the property described below:

1. The name, address, taxpayer identification number and taxable year of the
undersigned are as follows:

NAME: TAXPAYER: SPOUSE:

ADDRESS:

IDENTIFICATION NO.: TAXPAYER: SPOUSE:

TAXABLE YEAR:

2. The property with respect to which the election is made is described as
follows: _____ shares (the "Shares") of the Common Stock of Exponent, Inc.
(the "Company").

3. The date on which the property was transferred is: ____________, 19__.

4. The property is subject to the following restrictions:

The Shares may be reacquired by the Company, or its assignee, upon certain
events. This right lapses with regard to a portion of the Shares based on
the continued performance of services by the taxpayer over time.

5. The fair market value at the time of transfer, determined without regard to
any restriction other than a restriction which by its terms will never
lapse, of such property is:
$_______________.

6. The amount (if any) paid for such property is:

$0.00____________.

The undersigned has submitted a copy of this statement to the person for whom
the services were performed in connection with the undersigned's receipt of the
above-described property. The transferee of such property is the person
performing the services in connection with the transfer of said property.

The undersigned understands that the foregoing election may not be revoked
- --------------------------------------------------------------------------
except with the consent of the Commissioner.
- -------------------------------------------

Dated:_____________, 19__ ____________________________________
Taxpayer

The undersigned spouse of taxpayer joins in this election.

Dated:_____________, 19__ ____________________________________
Spouse of Taxpayer
<PAGE>

EXPONENT, INC.

RESTRICTED STOCK AWARD PLAN

NOTICE OF GRANT OF RESTRICTED STOCK AWARD

Unless otherwise defined herein, the terms defined in the Plan shall
have the same defined meanings in this Notice of Grant.

[Grantee's Name and Address]

You have been granted the right to acquire Common Stock of the Company,
subject to the Company's Reacquisition Option and your ongoing status as a
Service Provider (as described in the Plan and the attached Restricted Stock
Award), as follows:

Grant Number _________________________

Date of Grant _________________________

Total Number of Shares Subject _________________________
to This Restricted Stock Award

Expiration Date: _________________________

YOU MUST EXERCISE THIS RESTRICTED STOCK AWARD BEFORE THE EXPIRATION
DATE OR IT WILL TERMINATE AND YOU WILL HAVE NO FURTHER RIGHT TO ACQUIRE THE
SHARES. By your signature and the signature of the Company's representative
below, you and the Company agree that this Restricted Stock Award is granted
under and governed by the terms and conditions of the Restricted Stock Award
Plan and the Restricted Stock Award Agreement, attached hereto as Exhibit A,
both of which are made a part of this document. You further agree to execute
the attached Restricted Stock Award Agreement as a condition to acquiring any
shares under this Restricted Stock Award Right.

GRANTEE: EXPONENT, INC.

_____________________________ ______________________________
Signature By

_____________________________ ______________________________
Print Name Title
<PAGE>

WILL BE VOTED FOR ITEMS 1 AND 2, AND AS SAID PROXIES DEEM ADVISABLE ON SUCH
OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING.

your vote
as indicated X

1. Election of all nominees listed below to the Board of Directors to serve
until the next Annual Meeting or until their successors have been duly
elected and qualified, except as noted (write the names of any nominees for
whom you withhold authority to vote).
Nominees: Michael R. Gaulke, Samuel H. Armacost, Barbara M. Barrett, Jon R.
Katzenbach, Edward J. Keith, Subbaiah V. Malladi, Roger L. McCarthy and George
T. Van Gilder.
FOR WITHHELD
- -----------------------------------------
FOR ALL NOMINEE'S EXCEPT AS NOTED ABOVE

- --------------------------------------------------------------------------------
...IF YOU WISH TO VOTE BY TELEPHONE PLEASE READ THE INSTRUCTIONS BELOW...
- --------------------------------------------------------------------------------

2. To amend the Company's FOR AGAINST ABSTAIN
Employee Stock Purchase Plan

3. To establish a 1999 Stock
Option Plan

4. To establish a Restricted
Stock Plan

5. To ratify the appointment of KPMG
L.L.P. as independent public
accountants for the Company for
the fiscal year ending December 31,
1999.

6. To transact such other business as
may properly come before the DATE ___________________, 19__
Annual Meeting or any adjournment
thereof. ___________________________________
Signature

___________________________________
Signature, If Jointly Held

If acting as Attorney, Executor,
Trustee or in other
representative capacity, please
sign name and title.

FOLD AND DETACH HERE

VOTE BY TELEPHONE

QUICK...EASY...IMMEDIATE

Your telephone vote authorizes the named proxies to vote shares in the same
manner as if you marked, signed and returned your proxy card.

. You will be asked to enter a Control Number which is located in the box in the
lower right hand corner of this form.

- --------------------------------------------------------------------------------
OPTION #1: To vote as the Board of Directors recommends on ALL proposals: Press
1.
- -------------------------------------------------------------------------------

Your vote will be confirmed and cast as you directed. END OF CALL

- -------------------------------------------------------------------------------
OPTION #2: If you choose to vote on each proposal separately, press 0. You will
hear these Instructions:
- -------------------------------------------------------------------------------

Proposal 1: To vote FOR ALL nominees, press 1; to WITHHOLD FOR ALL
Nominees, press 9.

Proposal 2: To vote FOR, press 1; AGAINST, press 9, ABSTAIN, press 0.

The instructions are the same for all remaining proposals.

Your vote will be confirmed and cast as you directed. END OF CALL

- -------------------------------------------------------------------------------
If you vote by telephone, there is no need for you to mail your proxy.
THANK YOU FOR VOTING.
- -------------------------------------------------------------------------------
Call..Toll Free..On a Touch Tone Telephone
1-800-840-1208 - ANYTIME
There is NO CHARGE to you for this call

<PAGE>

EXPONENT, INC.

ANNUAL MEETING OF SHAREHOLDERS, MAY 5, 1999

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE 1999 ANNUAL MEETING OF STOCKHOLDERS

The undersigned stockholder of Exponent, Inc. a Delaware corporation (the
"Company"), hereby acknowledges receipt of the Notice of Annual Meeting of
Stockholders and Proxy Statement, each dated April 1, 1999, and hereby
appoints Michael R. Gaulke, Roger L. McCarthy and Richard L. Schlenker and any
of them, each with power of substitution and revocation, proxies and attorneys-
in-fact of the undersigned to represent the undersigned and vote all shares of
Common Stock of the Company which the undersigned would be entitled to vote if
personally present at the Company's Annual Meeting of Stockholders to be held
at the Company's auditorium, located at 155 Jefferson Drive, Menlo Park,
California 94025, at 9:00 a.m., local time, on Wednesday, May 5, 1999 and at
any adjournment thereof, upon the following matters.

(Continued and to be signed on the reverse side)

FOLD AND DETACH HERE

YOUR VOTE IS IMPORTANT:

You can vote in one of two ways:

1. Call toll free 1-800-840-1208 on a touch tone telephone and follow the
instructions on the reverse side. There is NO CHARGE to you for this call.

2. Mark, sign and date your proxy card and return it promptly in the enclosed
envelope.

PLEASE VOTE