EXHIBIT 4.1

ARTICLES OF INCORPORATION

OF

MICROPAC INDUSTRIES, INC.

I.

The name of the corporation is MICROPAC INDUSTRIES, INC.

II.

The address of its initial registered office in the State of Delaware is No. 100 West Tenth Street, in the City of Wilmington, County of New Castle. The name of its initial registered agent at such address is The Corporation Trust Company.

III.

The purpose of the corporation is to engage in any lawful act of activity for which corporation may be organized under the General Corporation Law of Delaware.

IV.

The corporation is authorized to issue only one class of stock. The total number of shares is five million (5,000,000) and the par value of each of such shares is $.10 cents a share.

V.

The names and mailing addresses of the persons who are to serve as directors until the first annual meeting of stockholders or until their successors are elected and qualify are:

     Name                         Mailing Address
     ----                         ---------------

W.W. Horsman                      905 E. Walnut
                                  Garland, Texas 75040

Florence Ann Horsman              905 E. Walnut
                                  Garland, Texas 75040

Jan L. Arps                       7206 Kenny Lane
                                  Dallas, Texas

Fred S. Abney                     2420 LTV Tower
                                  Dallas, Texas 75201

Robert E. Veigel                  c/o Dallas Southern Corporation
                                  600 Empire Life Building
                                  Dallas, Texas 75201

VII.

The Board of Directors is expressly authorized to make, alter or amend the by-laws of this Corporation or to adopt new by-laws.

VIII.

The shareholders may at any time, at a meeting expressly called for that purpose, remove any or all of the directors, with or without cause, by a vote of the holders of a majority of the shares then entitled to vote at an election of directors.

IX.

The period of its duration is perpetual.

X.

The election of directors need not be on written ballots.

I, the undersigned, being the sole incorporator above named, for the purpose of forming a corporation pursuant to the General Corporation Law of Delaware, sign and acknowledge this certificate of incorporation, this 25th day of February, 1969.

STATE OF TEXAS
COUNTY OF DALLAS

ON THIS the 25th day of February, 1969, before me personally came W.W. HORSMAN, the person who signed the foregoing certificate of incorporation, known to me personally to be such and the facts stated therein are true.

[GRAPHIC OMITTED]

My Commission Expires:
June 1, 1969

CERTIFICATE OF OWNERSHIP AND MERGER

MERGING

MICROPAC INDUSTRIES, INC. (a Texas Corporation)

INTO

MICROPAC INDUSTRIES, INC. (a Delaware Corporation)

***************

Micropac Industries, Inc., a corporation organized and existing under the laws of Texas,

DOES HEREBY CERTIFY:

FIRST: That this corporation was incorporated on the 26th day of November, 1965, pursuant to the Texas Business Corporation Act of the State of Texas, the provisions of which permit the merger of a corporation of another state and a corporation organized and existing under the laws of said state.

SECOND: That this corporation owns all of the outstanding shares of the stock of Micropac Industries, Inc., a corporation incorporated on the 3rd day of March, 1969, pursuant to the General Corporation Law of the State of Delaware.

THIRD: That the directors of Micropac Industries, Inc. (a Texas corporation) by the following resolutions of its Board of Directors, duly adopted by the unanimous written consent of its members. Filed with the minutes of the Board on the 5th day of March, 1969, determined to merge itself into said Micropac Industries, Inc. (a Delaware corporation):

RESOLVED, that Micropac Industries, Inc. (a Texas corporation) merge, and it hereby does merge itself into said Micropac Industries, Inc. (a Delaware corporation) which assumes all of the obligations of Micropac Industries, Inc. (a Texas Corporation).

FURTHER RESOLVED, that the merger shall become effective on June 2, 1969.

FURTHER RESOLVED, that the terms and conditions of the merger are as follows:

Each share of Common stock of said Micropac Industries, Inc. (a Texas corporation) shall be converted into one share of the Common stock of the surviving corporation and each holder of shares of the Common Stock of said Micropac Industries, Inc. (a Texas corporation) upon, the surrender to the Surviving Corporation of one or more certificates of such shares for cancellation, shall be entitled to receive one or more certificates for the number of shares represented by the certificates so surrendered for cancellation by such holder.

FURTHER RESOLVED, that the proposed merger shall be submitted to the stockholders of Micropac Industries, Inc. (a Texas corporation), at a meeting of such stockholders duly called and held after twenty days' notice of the purpose thereof mailed to the address of each such stockholder as it appears in the record of the corporation; and upon receiving the affirmative vote of the holders of at least two-thirds of the stock of Micropac Industries, Inc. (a Texas corporation), the merger shall be approved; and

FURTHER RESOLVED, that the proper officers of this corporation be and they hereby are directed to make and execute, under the corporate seal of this corporation, a Certificate of Ownership and Merger setting forth a copy of the resolutions to merge itself into said Micropac Industries, Inc. (a Delaware corporation), and the date of adoption thereof, and to cause the same to be filed with the Secretary of State and a certified copy recorded in the office of the Recorder of Deeds of New Castle County and to do all acts and things whatsoever, whether within or without the State of Delaware, which may be in anywise necessary or proper to effect said merger.

FOURTH: That the merger has been approved by the holders of at least two-thirds of the stock of Micropac Industries, Inc. (a Texas corporation) at a meeting duly called and held.

FIFTH: Anything herein or elsewhere to the contrary notwithstanding this merger may be terminated and abandoned by the Board of Directors of Micropac Industries, Inc. (a Texas corporation) at any time prior to the date of filing the merger with the Secretary of State.

IN WITNESS WHEREOF, said Micropac Industries, Inc. (a Texas corporation) has caused its corporate seal to be hereunto affixed and this certificate to be signed by W.W. Horsman, its President and attested by Fred S. Abney, its Secretary, this 29th day May, 1969.

MICROPAC INDUSTRIES, INC.
(a Texas Corporation)

ATTEST:                              By:  /s/ W.W. Horsman
                                        -----------------------------
                                        W.W. Horsman, President
By:
   -----------------------------
     Secretary

STATE OF TEXAS

COUNTY OF DALLAS

BE IT REMEMBERED that on this 29th day of May, 1969, personally came before me, a Notary Public in and for the County and State aforesaid, W.W. Horsman, President of Micropac Industries, Inc. (a Texas corporation), a corporation of the State of Texas, and he duly executed said certificate before me and acknowledged the said certificate to be his act and deed and the act and deed of said corporation and the facts stated therein are true; and that the seal affixed to said certificate and attested by the Secretary of said Corporation is the common or corporate seal of said corporation.

IN WITNESS WHEREOF, I have hereunto set my hand and seal of office the day and year aforesaid.

[GRAPHIC OMITTED]                       _________________________________
                                        Notary Public in and for Dallas
                                        County, Texas

CERTIFICATE OF AMENDMENT

OF

CERTIFICATE OF INCORPORATION

MICROPAC INDUSTRIES, INC., a corporation organized and existing under and by virtue of the General Corporation Laws of the State of Delaware, DOES HEREBY CERTIFY:

FIRST: That at a meeting of the Board of Directors on Micropac Industries, Inc., resolutions were duly adopted setting forth a proposed Amendment to the Certificate of Incorporation of said Corporation, declaring said Amendment to be advisable and calling a meeting of the stockholders of said Corporation for consideration thereof. The Resolution setting forth the proposed Amendment is as follows:

RESOLVED, the Board of Directors deems and declares it advisable and recommends to the stockholders that Article IV of the ARticles of Incorporation be amended so that, as amended, the same shall read in its entirety as follows:

"IV.

The aggregate number of shares which the Corporation shall have authority to issue is ten million (10,000,000) shares, ten cents ($.10) par value."

SECOND: That thereafter, the annual meeting of the stockholders of said Corporation was duly called and held, upon notice and accordance with Section 222 of the General Corporation Laws of the State of Delaware, at which meeting the necessary number of shares as required by statute were voted in favor of the Amendment.

THIRD: That said Amendment was duly adopted in accordance with the provisions of Section 242 of the General Corporation Laws of the State of Delaware.

IN WITNESS WHEREOF, said MICROPAC INDUSTRIES, INC., has caused its corporate seal to be hereunto affixed and that certificate to be signed by NICHOLAS NADOLSKY, its president and attested to by JAMES K. MURPHEY, its Secretary, this 11th day of July, 1974.

[SEAL OMITTED}                          MICROPAC INDUSTRIES, INC.


                                        BY:______________________
                                             President

ATTEST:

STATE OF TEXAS

COUNTY OF DALLAS

BE IT REMEMBERED that on this 11th day of July, 1974, personally came before me, a Notary Public, in and for the County and State aforesaid, NICHOLAS NADOLSKY, of MICROPAC INDUSTRIES, INC., a corporation of the State of Delaware, and he duly executed said Certificate before me and acknowledged the said Certificate to be his act and deed and the act and deed of said Corporation and the facts stated therin are true; and that the Seal affixed to said Certificate and attested by the Secretary of said Corporation is the common or corporate seal of said Corporation.

[SEAL OMITTED}                             ________________________
                                           Notary Public, In and
                                           For Dallas County, Texas

      STATE OF DELAWARE
2000 ANNUAL FRANCHISE TAX REPORT

DO NOT ALTER FILE NUMBER
--------------------------------------------------------------------------------------------------------------------------
FILE NUMBER                            CORPORATION NAME                                        PHONE NUMBER

  0704525                              MICORPAC INDUSTRIES, INC.                               972-272-3571
--------------------------------------------------------------------------------------------------------------------------
FEDERAL EMPLOYER ID NO.  INCORPORATION DATE     RENEWAL/REVOCATION DATE    DATE of INACTIVITY         FROM      TO


75-1225149               MARCH 3, 1969                                                                / /      / /
--------------------------------------------------------------------------------------------------------------------------
AUTHORIZED STOCK           DESIGNATION       NO. OF   PAR VALUE/SHARE   NO. SHARES     TOTAL GROSS    ASSET     ASSETS FOR
BEGIN DATE  ENDING DATE    OR STOCK CLASS    SHARES                     ISSUED         ASSETS         DATE      REGULATED
                                                                                                                INVESTMENT
                                                                                                                CORPS

10-11-1974       /         COMMON          10,000,000        .100000                                            JAN. 1st
                                                                                                                ----------
                                                                                                                DEC. 31st
--------------------------------------------------------------------------------------------------------------------------
FRANCHISE TAX     PENALTY      % MONTHLY INTEREST     FILING FEE      PREV CREDIT OR BALANCE    PREPAID QRTY. PAYMENTS

$  5,800.00       $  .00        $  88.86              $   20.00       $   4,088.86 CR           $
--------------------------------------------------------------------------------------------------------------------------
                                                                                                AMOUNT DUE
                                                                                                $  1,820.00
                                                                                                --------------------------

REGISTERD AGENT 9000010
THE CORPORATION TRUST COMPANY
CORPORATION TRUST CENTER
1209 ORANGE STREET
WILMINGTON, DE 19801

EXHIBIT 4.2

BYLAWS OF

MICROPAC INDUSTRIES, INC.

ARTICLE I

OFFICES

1.1 Registered Office. The registered office of the corporation is

located at 905 Fast Walnut, Garland, Texas 75040.

1.2 Registered Agent. The name of the registered agent of the corporation at such address is James K. Murphey.

1.3 Other Offices. The corporation may also have offices at such other places, within or without the State of Texas, where the corporation is qualified to do business, as the Board of Directors may from time to time designate, or business of the corporation may require.

ARTICLE II

SHAREHOLDERS' MEETINGS

2.1 Place-Of Meeting. Meetings of Shareholders shall be held at any place within or without the State of Texas designated by the Board of Directors pursuant to authority hereinafter granted to the Board, or by written consent of all persons entitled to vote thereat. Any meeting is valid wherever held if held by the written consent of all the persons entitled to vote thereat, given either before or after the meeting and filed with the Secretary of the corporation.

2.2 Time of Annual Meeting-Business Transacted. The annual meeting of Shareholders shall be held on or before a date designated by the Board of Directors after January 1 of each year and prior to April 30 of such year. At such meeting Directors shall be elected and any other business may be transacted which is within the powers of the shareholders.

2.3 Notice of Meeting. Notice of all meetings of Shareholders shall be given in writing to Shareholders entitled to vote by the President, any Vice President, Secretary or Assistant Secretary. The notice shall be given to each Shareholder, either personally or by prepaid mail, addressed to the Shareholder at his address appearing on the transfer books of the corporation.

2.4 Time and Notice. Notice of any meeting of Shareholders shall be sent to each Shareholder entitled thereto not less than ten (10) days nor more than fifty (50) days before the meeting, except in the case of a meeting for the purpose of approving a merger or consolidation agreement, in which case the notice must be given not less than twenty (20) days prior to the date of the meeting.

BYLAWS OF MICROPAC INDUSTRIES, INC. - Page 1

2.5 Contents of Notice. Notice of any meeting of Shareholders shall specify the place, date and hour of the meeting. The notice shall also specify the place, date and hour of the meeting. The notice shall also specify the purpose of the meeting if it is a special meeting, or if its purpose, or one of its purposes, will be to consider a proposed amendment of the Articles of Incorporation, to consider a proposed merger of consolidation, to consider a proposed reduction of stated capital without amendment, to consider a voluntary dissolution or the revocation of a voluntary dissolution by the act of the corporation, or to consider a proposed disposition of all, or substantially all, of the assets of the corporation outside of the ordinary course of business.

2.6 Notice of Adjourned Meeting. When a Shareholders' meeting is adjourned for thirty (30) days or more, notice of the adjourned meeting shall be given as in the case of an original meeting. When a meeting is adjourned for less than thirty (30) days, it is not necessary to give any notice of the time and place of the adjourned meeting or of the business to be transacted thereat, other than by announcement at the meeting at which the adjournment is taken.

2.7 Call of Special Meetings. Upon request in writing to the President, Vice-President, or Secretary, sent by registered mail or delivered to the officer in person, by any persons entitled to call a meeting of Shareholders, the forthwith shall cause notice to be given to the Shareholders entitled to vote, that a meeting will be held at a time fixed by the officer, not less than ten (10) days after the receipt of the request. If the notice is not given within seven (7) days after the date of delivery, or the date of mailing of the request, the person calling the meeting may fix the time of the meeting and give the notice in the manner provided in these Bylaws. Nothing contained in this section shall be construed as limiting, fixing, or affecting the time or date when a meeting of Shareholders called by action of the Board of Directors may be held.

2.8 Persons Entitled to Call Special Meetings. Special meetings of the Shareholders, for any purpose whatsoever, may be called at any time by any of the following: (1) the President; (2) the Board of Directors; (3) one or more shareholders holding not less than one tenth of all the shares entitled to vote at meetings.

2.9 Quorum of Shareholders. The presence in person or by proxy of the persons entitled to vote fifty-one percent (51%) of the voting shares of any meeting constitutes a quorum for the transaction of business.

2.10 Adjournment for Lack or Loss of Quorum. In the absence of a quorum or the withdrawal of enough Shareholders to leave less than quorum, any meeting of Shareholders may be adjourned from time to time by the vote of a majority of the shares, the holders of which are either present in person or represented by proxy thereat, but no other business may be transacted.

2.11 Closing Transfer Books. For the purpose of determining Shareholders entitled to notice of or to vote at any meeting of Shareholders or any adjournment thereof, or entitled to receive payment of any dividend, or in order to make a determination of Shareholders for any other proper purpose, the Board of Directors may provide that the share transfer books shall be closed for a stated period not to exceed in any case fifty (50) days. If the transfer books shall be closed for the purpose of determining Shareholders entitled to notice of or to vote at a meeting of Shareholders, such books shall be closed for at least ten (10) days immediately preceding such meeting.

BYLAWS OF MICROPAC INDUSTRIES INC. - Page 2

2.12 Record Date for Determination of Shareholders. In lieu of closing the share transfer books, the Board of Directors may fix in advance a date as the record date for any such determination of shareholders, such date in any case to be no more than fifty (50) days and, in case of a meeting of Shareholders, not less than ten (10) days prior to the date on which the particular action requiring such determination of Shareholders is to be taken.

2.13 Date of Notice or Resolution for Determination of Shareholders. If the share transfer books are not closed and no record date is fixed for the determination of Shareholders entitled to notice of or to vote at a meeting of Shareholders, the date on which notice of the meeting is mailed or the date on which the resolution of the Board of Directors declaring such dividend is adopted, as the case may be, is the record date for such determination of Shareholders.

2.14 Adjourned Meeting. When any determination of Shareholders entitled to vote at any meeting of Shareholders has been made as provided in this Article, such determination shall apply to any adjournment thereof except where the determination has been made through closing of the transfer books and the stated period of closing has expired, in which case the Board of Directors shall make a new determination as hereinbefore provided.

2.15 Voting List. At least ten (10) days before each meeting of shareholders, the officer or agent having charge of a complete list of the Shareholders entitled to vote at such meeting or any adjournment thereof, arranged in alphabetical order, with the address of and number of shares held by each, which shall, for a period of ten (10) days prior to such meeting, shall be kept on file at the registered office of the corporation and shall be subject to inspection of any shareholder during the whole time of the meeting. The original share transfer books shall be prima facie evidence as to who are the Shareholders entitled to examine such list. However, failure to prepare and to make available such list in the manner provided above shall not affect the validity of any action taken at the meeting.

2.16 Votes per Share. Each outstanding share, regardless of class, shall be entitled to one vote on each matter submitted to a vote at a meeting of the Shareholders, except to the extent that the voting rights of shares of any class or classes are limited by the Articles of Incorporation.

2.17 Cumulative Voting. Directors shall be elected by a plurality vote. Cumulative voting shall not be permitted.

2.18 Voting by Voice and Ballot. Elections for Directors need not be by ballot unless a Shareholder demands election by ballot at the election and before the voting begins.

2.19 Proxies. A Shareholder may vote either in person or by proxy executed in writing by a shareholder or by his authorized attorney in fact. No proxy shall be valid after eleven (11) months from the date of its execution unless otherwise provided in the proxy. Each proxy shall be revocable unless expressly provided therein to be irrevocable.

BYLAWS OF MICROPAC INDUSTRIES, INC. - Page 3

2.20 Waiver of Notice. Any notice required by law or these Bylaws may be waived by the execution by the person entitled to the notice of a written waiver of such notice, which may be signed before or after the time stated in the notice.

2.21 Action Without Meeting. Any action which, under any provision of the Delaware Business Corporation Act, may be taken at a meeting of the Shareholders, may be taken without a meeting if authorized by a writing signed by all of the persons who would be entitled to vote on such action at a meeting, and filed with the Secretary of the corporation. Any such signed consent, or a signed copy thereof, shall be placed in the minute book of the corporation.

2.22 Conduct of Meetings. At every meeting of the Shareholders, the President, or in his absence, the Vice-President, designated by the President, or if! the absence of any such designation, a chairman (who shall be one of the Vice-Presidents, if any is present) chosen by majority in interest of the Shareholders of the corporation present or by proxy and entitled to vote, shall act as Chairman. The Secretary of the corporation, or in his absence, M Assistant Secretary, shall act as Secretary of all meetings of the Shareholders. In the absence at such meeting of the Secretary or Assistant Secretary, the Chairman may appoint another person to act as Secretary of the meeting.

ARTICLE III

DIRECTORS

3.1 Directors Defined. "Directors" when used in relation to any power or duty requiring collective action, means "Board of Directors".

3.2 Powers. The business and affairs of the corporation and all corporate powers shall be exercised by or under authority of the Board of Directors, subject to limitation imposed by the Delaware Business Corporation Act, the Articles of Incorporation, or these Bylaws as to action which requires authorization or approval by the Shareholders.

3.3 Number of Directors. The number of Directors of this corporation shall be established from time to time by the Board of Directors not to exceed nine (9) directors. The number of Directors may be increased or decreased from time to time by the Board of Directors, but no decrease shall have the effect of shortening the terms of any incumbent Director.

3.4 Term of Office. Directors shall hold office until the next annual meeting of Shareholders and until their successors are elected and qualified.

BYLAWS OF MICROPAC INDUSTRIES, INC. - Page 4

3.5 Vacant,. Vacancies in the Board of Directors shall exist in the case of the happening of any of the following events: (a) the death, resignation or removal of any Directors; (b) the authorized number of Directors is increased; or (c) at an annual, regular, or special meeting of Shareholders at which arty Director is elected, the shareholders fail to elect the full authorized number of Directors to be voted for at that meeting.

3.6 Declaration of Vacancy. The Board of Directors may declare vacant the office of a Director in either of the following cases: (a) if he is adjudged incompetent by an order of Court, or finally convicted of a felony; or (b) if within sixty (60) days after notice of his election, he does not accept the office either in writing or by attending a meeting of the Board of Directors.

3.7 Filling Vacancies by Directors. Vacancies may be filled by a majority of the remaining Directors, though less than a quorum, or by a sole remaining Director. Each Director so elected shall hold office until his successor is elected at any annual, regular or special meeting of the shareholders.

3.8 Filling Vacancies by Shareholders - Reduction of Authorized Number of Directors. The Shareholders may elect a Director at any time to fill any vacancy not filled by the Directors. If the Board of Directors accepts the resignation of a Director tendered to take effect at a future time, the Board failing to fill the vacancy within ten (10) days of the effective date of the resignation, the Shareholders may elect a successor to take office. A reduction of the authorized number of Directors does not remove any Director prior to the expiration of his term of office.

3.9 Removal of Directors. The entire Board of Directors or any individual Director may be removed from office by a vote of Shareholders holding sixty-six and two thirds percent (66 2/3 %) of the outstanding shares entitled to vote at an election of Directors. If any or all Directors are so removed, new Directors may be elected at the same meeting.

3.10 Place of Meetings. Regular meetings of the Board of Directors shall be held at any place which has been designated from time to time by resolution of the Board or by written consent of all members of the Board. In the absence of such designation, regular meetings shall be held at the Registered Office of the corporation. Special meetings of the Board may be held either at a place so designated or at the Registered office. Any regular or special meeting is valid, wherever held, if held on written consent of all members of the Board given either before or after the meeting and filed with the Secretary of the Corporation.

3.11 Regular and Special Meetings. Regular meetings of the Board of Directors shall be held at such time and place as shall from time to time be determined by the Board. Special meetings of the Board of Directors shall be called by the President or if he is absent or is unable or refuses to act, by the Vice-President or by any two Directors.

3.12 Notice of Meetings. Written notice of the time and place of the regular or special meetings of the Board of Directors shall be delivered personally to each Director, or sent to each Director by mail or by other form of written communication at least seven (7) days before the meeting. If the address of a Director is not shown on the records and is not readily ascertainable, notice shall be addressed to him at the city of place in which the meetings of the Directors are regularly held. Notice of the time and place of holding an adjourned meeting need not be given to absent Directors if the time and place are fixed at the meeting adjourned.

BYLAWS OF MICROPAC INDUSTRIES, INC. - Page 5

3.13 Call of Regular Meetings. All regular meetings of the Board of Directors of this corporation shall be called by the President, or, if he is absent or is unable or refuses to act, by any Vice-President or by any two Directors.

3.14 Validation of Meeting Defectively Called or Noticed. The transactions of any meeting of the Board of Directors, however called and noticed or wherever held, are as valid as though had at a meeting duly held after regular call and notice, if a quorum is present, and if, either before or after the meeting, each of Directors not present signs a waiver of notice, a consent to holding the meeting, or an approval of the minutes thereof. All such waivers, consents, or approval shall be filed with the corporate records or made a part of the minutes of the meeting. Attendance by a Director at a meeting shall constitute a waiver of notice of the meeting, unless the express purpose for such attendance is to present the objection that the meeting is not lawfully called or convened.

3.15 Quorum. A majority of the authorized number of Directors constitutes a quorum of the Board for the transaction of business.

3.16 Majority Action. Every act or decision done or made by a majority of the Directors present at any meeting duly held at which a quorum is present is the act of the Board of Directors, unless an action of a greater number is required by the Articles of Incorporation of these Bylaws. Each Director who is present at a meeting will be deemed to have assented to any action taken at such meeting unless his dissent to the action is entered in the minutes of the meeting, or unless he shall file his written dissent thereto with the Secretary of the meeting or shall forward such dissent by registered mail to the Secretary of the corporation immediately after such meeting.

3.17 Action by Consent of Board Without Meeting. Any action required or permitted to be taken by the Board of Directors under any provision of the Delaware Business Corporation shall individually or collectively consent in writing to such action. Such written consent or consents shall be filed with the minutes of the proceedings of the Board. Such action by written consent shall have the same force and effect as a unanimous vote of such Directors. Any certificate or other document filed under any provision of the Delaware Business Corporation Act which related to action so taken shall state that the action was taken by unanimous written consent of the Board of Directors without a meeting and that these Bylaws authorize the Directors to so act, arid such statement shall be prima facie evidence of such authority.

3.18 Adjournment. In the absence of a quorum a majority of the Directors present may adjourn from time to time until the time fixed for the next regular meeting of the Board.

3.19 Conduct of Meetings. At every meeting of the Board of Directors, the Chairman of the Board of Directors, if there shall be such an officer, and if not, the President, or in his absence the Vice-President designated by him, or in the absence of such designation, a chairman chosen by a majority of the Directors present, shall preside. The Secretary of the corporation shall act as Secretary of the Board of Directors. In case the Secretary shall be absent from any meeting, the chairman may appoint any person to act as Secretary of the meeting.

BYLAWS OF MICROPAC INDUSTRIES,INC. - Page 6

3.20 Indemnification and Insurance

a. Definitions For purposes of this Section 3.20 only:

i. "Enterprise" means a foreign or domestic limited partnership, corporation, general partnership, joint venture, sole proprietorship, trust, employee benefit plan, or similar entity.

ii. "Expenses" include court costs and attorney's fees.

iii. "Proceeding" means any threatened, pending or completed action, suit, or proceeding, whether civil, criminal, administrative, arbitrative, or investigative, any appeal. in such an action, suit or proceeding, and any inquiry or investigation that could lead to such an action, suit or proceeding.

iv. "Representative" means a Person serving as a partner, director, officer, venturer, proprietor, trustee, employee, or agent of an enterprise or serving a similar function for an enterprise.

b. Indemnification. The corporation shall be required to indemnify a Person against reasonable expenses incurred. by the Person in connection with a proceeding in which the Person is a named defendant or respondent because the Person is or was an officer or director of the Corporation.

c. Advance Payment of Expenses. Reasonable expenses incurred by an officer or director with respect to a proceeding in which he was, is, or is threatened to be made a named defendant or respondent shall be paid or reimbursed by the corporation in advance of the final disposition of the proceeding.

d. Reimbursement of Expenses and Witness. The corporation shall pay or reimburse expenses incurred by an officer or director in connection with such officer or directors appearance as a witness or other participation in a proceeding involving or affecting the corporation at a time when the corporation is not a named defendant or respondent in the proceeding.

e. Insurance and Other Arrangements for Payment. The corporation may purchase and maintain insurance or another arrangement on behalf of any Person who is or was an officer or director, of the corporation, or who is or was serving at the request of the corporation as a representative of another enterprise, against any liability asserted against the Person and incurred by the Person in that capacity or arising out of the Person's status in that capacity, regardless of whether the Corporation would have the power to indemnify the Person against that liability under this Section 3.20. Without limiting the power of the corporation to procure or maintain any kind of insurance or other arrangement, the corporation may, for the benefit of Persons indemnified by the corporation, create a trust fund, establish any form of self interest or other lien on the assets of the corporation, or establish a letter of credit, guaranty, or surety arrangement. The insurance or other arrangement may be procured, maintained, or established within the corporation or with an insurer or other Person considered appropriate by the corporation regardless of whether all or part of the stock or other securities of the insurer or other Person are owned in whole or ,part by the corporation. In the absence of actual fraud, the judgment of the Board of Directors as to the terms and conditions of the insurance or other arrangement and the identity of the insurer or other arrangement is not voidable.

BYLAWS OF MICROPAC INDUSTRIES, INC - Page 7

3.21 Interested Directors. Any contract or other transaction between the corporation and any of its Directors (or any corporation or firm in which any of its Directors is directly or indirectly interested) shall be valid for all purposes notwithstanding the presence of such Director at the meeting authorizing such contract or transaction, or his participation in such meeting. The foregoing shall, however, apply only if the interest of each such Director is known or disclosed to the Board of Directors and it shall nevertheless authorize or ratify such contract or transaction by a majority of the Directors present, each such interested Director to be counted in determining whether a quorum is present, but not in calculating the majority necessary to carry such vote. This section shall not be construed to invalidate any contract or transaction which would be valid in the absence of this paragraph.

3.22 Committees. The Board of Directors, by an affirmative vote of a majority of the members constituting the Board of Directors, may appoint such committees which shall have and may exercise such powers as shall be conferred or authorized by resolution of the Board. A majority of any such committee may determine its action and fix the time and place of its meetings unless the Board of Directors shall otherwise provide. The Board of Directors by such affirmative vote, shall have power= at any time to change the powers and members of such committee.

ARTICLE IV

OFFICERS

4.1 Number and Titles The officers of the corporation shall be a President, a VicePresident, a Secretary, and a Treasurer. The corporation may also have, at the discretion of the Board of Directors, a Chairman of the Board, one or more additional Vice-Presidents, one or more Assistant Secretaries, one or more Assistant Treasurers, and such other officers as may be appointed in accordance with the provisions of Paragraph 4.3 of this Article. One person may hold two or more offices.

4.2 Election. The officers of the corporation, except such officers as may be appointed in accordance with the provisions of Paragraph 4.3 or Paragraph 4.5 of this Article, shall be chosen annually by the Board of Directors, and each shall hold his office until he shall resign or shall be removed or otherwise disqualified to serve, or his successor shall be elected and qualified.

4.3 Subordinate Officers The Board of Directors may appoint such other officers or agents as the business of the corporation may require, each of whom shall hold office for such period, have such authority, and perform such duties as are provided in these Bylaws or as the Board of Directors may delegate to any officer or committee the power to appoint any such subordinate officers, committees or agents, to specify their duties and to determine their compensation.

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4.4 Removal and Resignation. Any officer may be removed, either with or without cause, by a majority of the Directors, at the time in office, at any regular or special meeting of the Board, or, except in case of an officer chosen by the Board of Directors, by any committee or officer upon whom such power of removal may be conferred by the Board of Directors; provided, however, that such removal shall not be without prejudice to the contract rights, if any, of the person removed: Any officer may resign at any time by giving written notice to the Board of Directors or to the President, or the Secretary of the Corporation. Any such resignation shall take effect at the date of the receipt of such notice or at any later time specified therein; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

4.5 Vacancies. If the office of the President, Vice-President, Secretary, Treasurer, Assistant Secretary (if any) or Assistant Treasurer (if any), becomes vacant by reason of death, resignation, removal, or otherwise, the Board of Directors shall elect a successor who shall elect a successor who shall hold office for the unexpired term, and until his successor is elected.

4.6 Chairman of the Board. The Chairman of the Board, if there shall be such an officer, shall, if present, preside at all meetings of the Board of Directors and at all meetings of the shareholders, shall have the responsibility of directing and consulting with the President and supervising the President in the discharge of all of his duties hereafter specified in Paragraph 4.7. Further, the Chairman of the Board is hereby authorized to exercise, in the absence of the President, the same authority and powers as are hereinafter vested in the President.

4.7 President. Subject to the direction of the Board of Directors, and subject to the powers vested in the Chairman of the Board by these Bylaws, if there shall be such an officer, the President shall be the Chief Executive Officer of the corporation and as such, shall be responsible for the general supervision, direction, and control of the business and officers of the corporation, and shall have the general powers and duties ox management usually vested in the office of President of a corporation, by the Board of Directors or the Bylaws. Within this authority and in the course of his duties he shall:

a. Conduct Meetings. Preside at all meetings of the shareholders and in the absence of the Chairman of the Board, at all meetings of the Board of Directors and shall be ex officio a member of all the standing committees, including the executive committee, if any.

b. Sign Share Certificates. Sign all certificates of stock of the corporation, in conjunction with the Secretary or Assistant Secretary, unless otherwise ordered by the Board of Directors.

c. Execute Instruments. When authorized by the Board of Directors, execute in the name of the corporation deeds, conveyances, notices, leases, checks, drafts, bills of exchange, warrants, promissory notes, bonds, debentures, contracts, and other papers and instruments in writing.

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d. Hire and Fire Employees. Subject to the authorization of the Board of Directors, appoint and remove, employ and discharge, and prescribe the duties and fix the compensation of all agents, employees, and clerks of the corporation other than the duly appointed officers of the corporation.

e. Meeting of Other Corporations. Unless otherwise directed by the Board of Directors, attend in person or by substitute appointed by him or the Vice-President and the Secretary or the Assistant Secretary, and act and vote on behalf of the corporation, at all meetings of the Shareholders of any corporation in which this corporation holds stock.

4.8 Vice-President. In the absence or disability of the President, the Vice-Presidents, in order of their rank as fixed by the Board of Directors, or, if not ranked, the Vice-President designated by the Board of Directors, shall perform all the duties of the President, and when so acting shall have all the powers of the President, and when so acting shall have all the powers of and be subject to, all the restrictions on the President. The Vice-President shall have such other powers and perform such respectively by the Board of Directors or the Bylaws.

4.9 Secretary. The Secretary shall:

a. Sign Share Certificates. Sign, with the President or a Vice-President, certificates for shares of the corporation.

b. Attest Bylaws. Attest and keep at the principal office of the corporation the original or a copy of its Bylaws as amended or otherwise altered to date.

c. Minutes of Meetings. Keep at the principal office of the corporation or such other place as the Board of Directors may order, a book of minutes of all meetings of its Directors and Shareholders, executive committee, if any, and other committees, with the time and place of holding, whether regular or special, and if special, how authorized, the Notice thereof given, the names of those present at Directors' meetings, the number of shares present or represented at Shareholders meetings, and the proceedings thereof.

d. Sign or Attest Documents and Affix Seal. Sign or attest such documents as may be required by law or the business of the corporation, and to keep the corporate seal and affix it to such instruments as may be necessary or proper.

e. Notices. See that all notices are duly given in accordance with the provisions of these Bylaws or as required by law. In case of the absence or disability of the Secretary, or his refusal to or neglect to act, notice may be given and served by Vice-President or by the Board of Directors.

f. Custodian of Records and Seal. Be custodian of the records and of the seal of the corporation and see that it is engraved, lithographed, printed, stamped, impressed upon or affixed to all certificates for shares prior to their issuance and to all documents, the execution of which on behalf of the corporation under its seal is duly authorized in accordance with the provisions of these Bylaws.

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g. Share Register. Keep at the principal office of the corporation a share register or duplicate share register showing the names of the shareholders and their addresses; the number date of issue and class of shares represented by each outstanding share certificate; and the number and date of cancellation of each certificate surrendered for cancellation.

h. Reports and Statements. See that the books, reports, statements, certificates and all other documents and records required by law are properly kept and filed.

i. Exhibit Records. Exhibit at all reasonable times to any Director, on application, or on written demand stating the purpose thereof by any person who has been a Shareholder of record for at least six (6) months immediately preceding his demand or who is the holder of record of at least five (5 %O) percent of all of the outstanding shares of the corporation, upon application, the Bylaws, the share register, and minutes of proceedings of the Shareholders and Directors of the Corporation.

j. Other Duties. In general, perform all duties incident to the office of Secretary, and such other duties as from time to time may be assigned to him by the Board of Directors.

k. Absence of Secretary. In the case of the absence or disability of the Secretary or his refusal or neglect to act, the Assistant Secretary, or if there be none, the Treasurer, acting as Assistant Secretary, may perfonn all of the functions of the Secretary. In the absence or inability to act, or refusal or neglect to act of both the Secretary, the Assistant Secretary and Treasurer, any person thereunto authorized by the President or Vice-President or by the Board of Directors may perform the functions of the Secretary.

4.10 Assistant Secretary. At the request of the Secretary or in his absence or disability, the Assistant.Secretary, designated as set forth in preceding Subparagraph 4.9(k) of these Bylaws, shall perform all the duties of the Secretary. The Assistant Secretary shall perform such other duties from time to time assigned to him by the Board of Directors, or the Secretary.

4.11 Treasurer. The Treasurer shall:

a. Funds - Custody and Deposit. Have charge and custody of, and be responsible for, all funds and securities of the corporation, and deposit all such funds in the name of the corporation in such banks, trust companies, or other depositories as shall be selected by the Board of Directors.

b. Funds - Disbursements. Receive, and give receipt for monies due and payable to the corporation from any source whatsoever.

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c. Funds - Disbursements. Disburse or cause to be disbursed, the funds of the corporation as may be directed by the Board of Directors, taking proper vouchers for such disbursements.

d. Maintain Accounts. Keep and maintain adequate and correct accounts for the corporation's properties and business transactions including accounts of its assts, liabilities, receipts, disbursements, gains, losses, capital surplus, and shares. Any surplus, including earned surplus, paid-in surplus, and surplus arising from a reduction of stated capital shad be classified according to source and shown in a separate account.

e. Exhibit Records. Exhibit at all reasonable times the books of account and records to any Director on application, or to any person who has been a Shareholder of record for at least six (6) months immediately preceding his demand or who is the holder of record of at least five (5%) percent of all outstanding shares of the corporation on written demand stating the purpose thereof, during business hours at the office of the corporation where such books and records are kept.

f. Reports to President and Directors. Render to the President and Directors, whenever they request it, an account of all his transactions as Treasurer and of the financial condition of the corporation.

g. Financial Report to Shareholders. Prepare, or cause to be prepared, and certify the financial statements to be included in the annual report to shareholders and statements of the affairs of the corporation when requested by Shareholders holding at least ten (10 % ) percent of the number of outstanding shares of the corporation.

h. Bond. Give to the corporation a bond, if required by the Board of Directors or by the President, in a sum, and with one or more sureties, or a surety company satisfactory to the Board, for the faithful performance of the duties of his office and for the restoration to the corporation, in case of his death, resignation, retirement, or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his possession or under his control belonging to the corporation.

i. Other Duties. In general, perform all the duties incident to the office of Treasurer and such other duties as from time to time may be assigned to him by the Board of Directors.

j. Absence of Treasurer. In case of the absence or disability of the Treasurer or his refusal or neglect to act, the Assistant Treasurer or the Secretary acting as Assistant Treasurer, may perform all of the functions of the Treasurer. In the absence or inability to act, or refusal or neglect to act, of the Treasurer, the Assistant Treasurer, and the Secretary, any person thereunto authorized by the President of Vice-President or by the Board of Directors, may perform the functions of the Treasurer.

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4.12 Assistant Treasurer. The Assistant Treasurer, if required to do so by the Board of Directors, shall give bond for the faithful discharge of his duties, in such sum, and with such sureties as the Board of Directors shall require. At the request of the Treasurer, or in his absence or disability, the Assistant Treasurer designates as set forth in the preceding Subparagraph 4.110) of these Bylaws shall perform all of the duties of the Treasurer, and when so acting, he shall have all the powers of, and be subject to all the restrictions on, the Treasurer. He shall perform such other duties as from time to time may be assigned to him by the Board of Directors or the Treasurer.

ARTICLE V

EXECUTION OF INSTRUMENTS AND DEPOSIT OF FUNDS

5.1 Authority for Execution of Instruments. The Board of Directors, except as otherwise provided in these Bylaws, may authorize any officer or officers, agent or agents, to enter into any contract or execute and deliver any instrument in the name and on behalf of the corporation, and such authority may be general or confined to specific instances; and unless so authorized, no officer, agent or employee shall have any power or authority to bind the corporation by any contract or engagement or to pledge its credit or to render it liable pecuniarily for any purpose or in any amount.

5.2 Execution of Instruments. Unless otherwise specifically determined by the Board of Directors or otherwise required by law, formal contract of the corporation, promissory notes, deeds of trust, mortgages, and other evidence of indebtedness of the corporation, and other corporate instruments or documents, - and certificates of -shares of stock owned by the corporation, shall be executed, signed or endorsed by the President or Vice-President and by the Secretary or the Treasurer, or any Assistant Secretary or Assistant Treasurer, and may have the corporate seal affixed thereto.

5.3 Bank Accounts and Deposits. All funds of the corporation shall be deposited from time to time to the credit of the corporation with such banks, trust companies, or other depositories as the Board of Directors may select or as may be selected by any officer or officers, agent or agents of the corporation to whom such power may be delegated from time to time by the Board of Directors.

5.4 Endorsements WithoutCountersignature.. Endorsements for deposit to the credit of the corporation in any of its duly authorized depositories may be made without countersignature by the President or any Vice-President, or the Treasurer or any Assistant Treasurer, or by any other officer or agent of the corporation to whom the Board of Directors, by resolution, shall have delegated the power, or by hand stamped impression in the name of the corporation.

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5.5 Signing of Checks, Drafts, etc. All checks, drafts or other orders for payment of money, notes or other evidences of indebtedness, issued in the name of or payable to the corporation shall be signed or endorsed by such person or persons and in such manner as shall be determined from time to time by resolution of the Board of Directors.

ARTICLE VI

ISSUANCE AND TRANSFER OF SHARES

6.1 Classes and Series of Shares. The corporation shall issue one class of shares, which shall have a par value of $.01 with full voting rights and with such other preferences, rights or privileges and restrictions as stated in the Articles of Incorporation.

6.2 Certificates for Fully Paid Shares. Neither shares nor certificates representing such shares may be issues! by the corporation until the full amount of the consideration has been paid. When such consideration has been paid to the corporation, the shares shall be deemed to have been issued and the certificate representing such shares shall be issued to the Shareholder.

6.3 Consideration for Shares. The consideration paid for the issuance of shares shall consist of money paid, labor done, or property actually received; and neither promissory notes nor the promise of future services shall constitute payment of part payment for shares of the corporation.

6.4 Contents of Share Certificates. Certificates for shares shall be of such form and style, printed or otherwise, as the Board of Directors may designate.

6.5 Restriction on Transfer. Any restrictions imposed by the corporation on the sale or other disposition of its shares and on the transfer thereof must be copied at length or in summary form on the face of each certificate representing shares to which the restriction applies. The certificate may however, state on the face or back that such a restriction exists pursuant to a specified document and that the corporation will furnish a copy of the document to the holder of the certificate without charge upon written request to the corporation at its principal place of business.

6.6 Signing Certificates - Facsimile Signatures. All such certificates shall be signed by the President or a Vice-President and the Secretary or an Assistant Secretary. The signatures of the President or Vice-President, Secretary or Assistant Secretary may tie facsimiles if the certificate is countersigned by a transfer agent or registered by a registrar either of which is not the corporation itself or an employee of the corporation. If the officer who has signed or whose facsimile signature has been placed on the certificate has ceased to be such officer before the certificate is issued, the certificate may be issued by the corporation with the same effect as if he were such officer at the date of its issuance.

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6.7 Transfer, of Lost or Destroyed Shares. Where a share certificate has been lost, apparently destroyed, or wrongfully taken, and the owner fails to notify the corporation of that fact within a reasonable time after he has notice of it, and the corporation registers a transfer of the share represented by the certificate before receiving such a. notification, the owner is precluded from asserting against the corporation any claim for registering the transfer or any claim to a crew certificate.

6.8 Replacement of Lost or Destroyed Certificates. Where the holder of a share certificate claims that the certificate has been lost, destroyed, or wrongfully taken the corporation shall issue a new certifiicate in place of the original certificate if the owner so requests before the corporation has notice that the share has been acquired by a bona fide purchaser, and files with the corporation a sufficient indemnity bond; and satisfied any other reasonable requirements imposed by the Board of Directors.

6.9 Transfer After Replacement. If, after the issue of a new security as a replacement for a lost, destroyed or wrongfully taken certificate, a bona fide purchaser or the original certificate presents it for registration or transfer, the corporation must register the-transfer unless registration would. result in overissue. In addition to any rights on the indemnity bond, the corporation may recover the new security from the person to whom it was issued or any person taken under him except a bona fide purchaser.

6.10 Transfer Agents and Registrars. The Board of Directors may appoint one or more transfer agents or transfer clerks, and one or more registrars which shall be an incorporated bank or trust company, either domestic or foreign, who shall be appointed at such times and places as the requirements of the corporation may necessitate and the Board of Directors may designate.

6.11 Condition of Transfer. A person in whose name shares of stock stand on the books of the corporation shall be deemed the owner thereof as regards the corporation.

6.12 Reasonable Doubts as to Right to Transfer. When a transfer of shares is requested and there is reasonable doubt as to the right of the person seeking the transfer, the corporation or its transfer agent, before recording the transfer of the shares on its books or issuing any certificate thereof, may require from the person seeking the transfer reasonable proof of his right to the transfer. If there remains a reasonable doubt of the right of the transfer, the corporation may refuse a transfer unless the person gives adequate security or a bond or indemnity executed by a corporate surety or by two individual sureties satisfactory to the corporation as to form, amount, and responsibility of sureties. The bond shall be conditioned to protect the corporation, its officers, transfer agents, and registrars, or any of them, against any loss, damage, expenses, or other liability to the owner of the issuance of a new certificate for shares.

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ARTICLE VII

CORPORATE RECORDS, REPORTS, AND SEAL

7.1 Minutes of Corporate Meetings. The corporation shall keep at the registered office, or such other place as the Board of Directors may order, a book of minutes of all meetings of its Directors and of its Shareholders or members with the time and place of holding, whether regular or special, and, if special, how authorized, the notice thereof given the names of those present or represented at Shareholders' or members' meetings, and the proceedings thereof.

7.2 Books of Account. The corporation shall keep and maintain adequate and correct accounts of its properties and business transactions, including accounts of its assets, liabilities, receipts, disbursements, gains, losses, capital, surplus and shares. Any surplus, including earned surplus, paid-in surplus and surplus arising from a reduction of stated capital, shall be classified according to source and shown in a separate account.

7.3 Share Register. The corporation shall keep at the registered office, or at the office of the transfer agent, a share register, showing the names of the Shareholders and their addresses, and the number and classes of shares held at each and the number and date of certificates issued for shares, and the number and date or cancellation of every certificate surrendered for cancellation. The above specified information may be kept by the corporation on punch cards, magnetic tape, or other information storage devices related to electronic data processing equipment provided that such card, tape or other equipment is capable of reproducing the information in clearly legible form for the purposes of inspection as provided in Section 7.4 and 7.5 of these Bylaws.

7.4 Inspection of Records by Shareholders. Any person who shall have been a shareholder of record for at least six (6) months immediately preceding his demand, or who is the holder of record of at least five (5 %) percent of all of the outstanding shares of the corporation, on written demand stating the purpose thereof, has the right to examine, in person, or by agent, accountant, or attorney, at any reasonable time or times, for any proper purpose, its books and records of account, minutes, and record of Shareholders, and is entitled to make extracts therefrom.

7.5 Inspection of Records by Directors. Every Director shall have the absolute right at any reasonable time to inspect all books, records, documents of every kind, and the physical properties of the corporation, and also of its subsidiary corporations, domestic or foreign. Such inspection by a Director may be made in person or by agent or attorney, and the right of inspection includes the right to make extracts.

7.6 Annual Report to Shareholders. The Board of Directors shall cause an annual report to be sent to the Shareholders not later than one hundred twenty (120) days after the close of the fiscal or calendar year.

7.7 Contents of Annual Reports. The annual report shall include the following financial statements:

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a. A balance sheet as of such closing date;

b. a statement of income or profit and loss for the year ended on such closing date;

c. Such other information as the Directors shall determine.

7.8 Preparation of Financial Statements. The financial statements shall be prepared from the books and shall be in accordance therewith.

7.9 Fiscal Year. The fiscal year of the corporation shall be determined by the Board of Directors.

7.10 Corporate Seal. The Board of Directors may adopt, use, and thereafter alter, the corporate seal.

ARTICLE VIII

AMENDMENT OF BYLAWS

8.1 Adoption, Amendment, Repeal of Bylaws by Direct Bylaws may be altered, amended, or repealed, and new Bylaws may be adopted by the Directors, subject to repeal or change by action of the Shareholders.

ART1CLE IX

RULES

9.1 The rules contained in the current edition of Robert's Rules of Order Newly Revised shall govern the corporation in all cases to which they are applicable and in which they are not inconsistent with these Bylaws and any special rules of order the corporation may adopt.

EXECUTED this the _____ day of May, 1993.

/S/:
------------------------------
      President

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EXHIBIT 4.3

MICROPAC INDUSTRIES, INC.

2001 EMPLOYEE STOCK OPTION PLAN

                                TABLE OF CONTENTS

ARTICLE 1.
  PLAN.........................................................................2
  1.1. Purpose.................................................................2
  1.2. Term of Plan............................................................2
ARTICLE 2.
  DEFINITIONS..................................................................2
  2.1.  Affiliate..............................................................2
  2.2.  Board..................................................................3
  2.3.  Change of Control......................................................3
  2.4.  Change of Control Value................................................4
  2.5.  Code...................................................................4
  2.6.  Company................................................................4
  2.7.  Corporate Change.......................................................4
  2.8.  Disability.............................................................4
  2.9.  Employee...............................................................5
  2.10. Exchange Act...........................................................5
  2.11. Fair Market value......................................................5
  2.12. Incentive Option.......................................................5
  2.13. Mature Shares..........................................................5
  2.14. Non-Employee Director..................................................5
  2.15. Option.................................................................5
  2.16. Option Agreement.......................................................5
  2.17. Optionee...............................................................5
  2.18. Outside Director.......................................................5
  2.19. Plan...................................................................5
  2.20. Retirement.............................................................5
  2.21. Stock..................................................................5
  2.22. Voting Stock...........................................................6

ARTICLE 3.
  ELIGIBILITY..................................................................6

ARTICLE 4.
  GENERAL PROVISIONS RELATING TO OPTIONS.......................................6
  4.1.  Authority to Grant Options.............................................6
  4.2.  Dedicated Shares; Maximum Options......................................6
  4.3.  Non-Transferability....................................................6

  4.4.  Requirements of Law....................................................6
  4.5.  Recapitalization or Reorganization of the Company......................7

ARTICLE 5.
  OPTIONS......................................................................8
  5.1.  Exercise Price.........................................................8
  5.2.  Duration of Options....................................................8
  5.3.  Amount Exercisable.....................................................8
  5.4.  Exercise of Options....................................................8
  5.5.  Exercise on Termination of Employment..................................9
  5.6.  Substitution Options..................................................10
  5.7.  No Rights as Stockholder..............................................10

ARTICLE 6.
  ADMINISTRATION..............................................................10

ARTICLE 7.
  AMENDMENT OR TERMINATION OF PLAN............................................11

ARTICLE 8.
  MISCELLANEOUS...............................................................11
  8.1.  No Establishment of a Trust Fund......................................11
  8.2.  No Employment or Affiliation Obligation...............................12
  8.3.  Forfeiture............................................................12
  8.4.  Tax Withholding.......................................................12
  8.5.  Written Agreement.....................................................12
  8.6.  Indemnification of the Board..........................................13
  8.7.  Gender................................................................13
  8.8.  Headings..............................................................13
  8.9.  Other Compensation Plans..............................................13
  8.10. Other Options.........................................................13
  8.11. Governing Law.........................................................13

ARTICLE 1.
PLAN

1.1. Purpose. The Plan is intended to advance the best interests of the Company and its stockholders by providing those persons who have substantial responsibility for the management and growth of the Company and its Affiliates with additional incentives and an opportunity to obtain or increase their proprietary interest in the Company, thereby encouraging them to continue in the employ of the Company or any of its Affiliates.

1.2. Term of Plan. The Plan is effective January 1, 2001, if within one year of that date it shall have been approved by at least a majority vote of stockholders voting in person or by proxy at a duly held stockholders meeting, or if the provisions of the corporate charter, bylaws or applicable state law prescribes a greater degree of stockholders, approval for this action, the approval by the stockholders of that percentage, at a duly-held meeting of stockholders: No Option shall be granted under the Plan after January 1, 2011. The Plan shall remain in effect until all Options under the Plan have been satisfied or expired.

ARTICLE 2.
DEFINITIONS

The words and phrases defined in this Article shall have the meaning set out in these definitions throughout the Plan, unless the context in which any such word or phrase appears reasonably requires a broader, narrower, or different meaning.

2.1. "Affiliate" means any parent corporation and any subsidiary corporation. The term "parent corporation" means any corporation (other than the Company) in an unbroken chain of corporations ending with the Company if, at the time of the action, or transaction, each of the corporations other than the Company owns stock possessing 50 percent or more of the total combined voting power of all classes of stock in one of the other corporations in the chain. The term "subsidiary corporation" means any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company if, at the time of the action or transaction, each of the corporations other than the last corporation in the unbroken chain owns stock possessing 50 percent or more of the total combined voting power of all classes of stock in one of the other corporations in the chain.

2.2. "Board" means the board of directors of the Company.

2.3. "Change of Control" means the occurrence of any of the following after the date on which the applicable Option is granted:

(i) a report on Schedule 13D or Schedule 14D-1 (or any successor schedule, form or report) shall be filed with the Securities and Exchange Commission pursuant to the Exchange Act and that report discloses that any person (within the meaning of Section 13(d) or Section 14(d)(2) of the Exchange Act), other than the Company (or one of its subsidiaries) or any employee benefit plan sponsored by the Company (or one of its subsidiaries), is the beneficial owner (as that term is defined in Rule 13d-3 or any successor rule or regulation promulgated under the Exchange Act), directly or indirectly, of 20 percent or more of the outstanding Voting Stock;

(ii) any person (within the meaning of Section 13(d) or Section 14(d)(2) of the Exchange Act), other than the Company (or one of its subsidiaries) or any employee benefit plan sponsored by the Company (or one of its subsidiaries), shall purchase securities pursuant to a tender offer or exchange offer to acquire any Voting Stock (or any securities convertible into voting stock) and, immediately after consummation of that purchase, that person is the beneficial owner (as that term is defined in Rule 13d-3 or any successor rule or regulation promulgated under the Exchange Act), directly or indirectly, of 20 percent or more of the outstanding Voting Stock (such person's beneficial ownership to be determined, in the case of rights to acquire Voting Stock, pursuant to paragraph (d) of Rule 13d-3 or any successor rule or regulation promulgated under the Exchange Act);

(iii) the consummation of:

(x) a merger; consolidation or reorganization of the Company with or into any other person if as a result of such merger, consolidation or reorganization, 50 percent or less of the combined voting power of the then outstanding securities of such other person immediately after such merger, consolidation or reorganization are held in the aggregate by the holders of Voting stock immediately prior to such merger, consolidation or reorganization;

(y) any sale, lease, exchange or other transfer of all or substantially all the assets of the Company and its consolidated subsidiaries to any other person if as a result of such sale, lease, exchange or other transfer, 50 percent or less of the combined voting power of the then-outstanding securities of such other person immediately after such sale, lease, exchange or other transfer are held in the aggregate by the Optionees of Voting Stock immediately prior to such sale, lease, exchange or other transfer; or

(z) a transaction immediately after the consummation of which any person (within the meaning of Section 13(d) or Section 14(dX2) of the Exchange Act) would be the beneficial owner (as that term is defined in Rule 13d-3 or any successor rule or regulation promulgated under the Exchange Act), directly or indirectly, of more than 50 percent of the outstanding Voting Stock;

(iv) the stockholders of the Company approve the dissolution of the Company; or

(v) during any period of 12 consecutive months, the individuals who at the beginning of that period constituted the Board shall cease to constitute a majority of the Board, unless the election, or the nomination for election by the Company's stockholders, of each director of the Company first elected during such period was approved by a vote of at least a two-thirds majority of the directors of the Company then still in office who were directors of the Company at the beginning of any such period; or

(vi) the consummation of any other transaction which a majority of the Board determines to constitute a change in control.

2.4. "Change of Control Value" means the amount determined in clause (i),(ii) or (iii), whichever is applicable, as follows: (i) the per share price offered to stockholders of the Company in the merger, consolidation, reorganization, sale of assets or dissolution transaction, (ii) the price per share offered to stockholders of the Company in any tender offer or exchange offer whereby a Corporate Change takes place, or (iii) if a Corporate Change occurs other than pursuant to a tender or exchange offer, the fair market value per share of the shares into which such options being surrendered are exercisable, as determined by the Board as of the date determined by the Committee to be the date of cancellation and surrender of such Options. If the consideration offered to stockholders of the Company in any transaction described above consists of anything other than cash, the Board shall determine the fair cash equivalent of the portion of the consideration offered which is other than cash.

2.5. "Code" means the Internal Revenue Code of 1986, as amended.

2.6. "Company" means Micropac Industries, Inc., a Delaware corporation.

2.7. "Corporate Change" means that any of the following shall have occurred: (i) the Company shall not be the surviving entity in any merger, consolidation or other reorganization (or survives only as a subsidiary of an entity other than a previously wholly owned subsidiary of the Company), (ii) the Company sells, leases or exchanges or agrees to sell, lease or exchange all or substantially all of its assets to any other person or entity (other than a wholly owned subsidiary of the Company), (iii) the ,Company is to be dissolved and liquidated, (iv) any person or entity, including a "group" as contemplated by Section 13(d)(3) of the Exchange Act, acquires or gains ownership or control of more than 50 percent of the shares of the Voting Stock, or (v) as a result of or in connection with a contested election of directors, the persons who were directors of the Company before such election shall cease to constitute a majority of the Board.

2.8. "Disability" means a medically determinable mental or physical impairment which, in the opinion of a physician selected by the Board shall prevent the Optionee from engaging in any substantial gainful activity and which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months and which: (a) was not contracted, suffered or incurred while the Optionee was engaged in, or did not result from having engaged in, a felonious criminal enterprise; (b) did not result from alcoholism or addiction to narcotics; (c) did not result from an injury incurred while a member of the Armed Forces of the United States for which the Optionee receives a military pension; and (d) did not result from an intentionally self-inflicted injury.

2.9. "Employee" means a person employed by the Company or any Affiliate.

2.10. "Exchange Act" means the Securities Exchange Act of 1934, as amended.

2.11. "Fair Market Value" of the Stock as of any date means an amount as determined by the Board in its sole discretion.

2.12. "Incentive Option" means an Option granted under the Plan that is designated as an "Incentive Option" and satisfies the requirements of section 422 of the Code.

2.13. "Mature Shares" means shares of Stock that the Optionee has held for at least six months.

2.14. "Non-Employee Director" means a "non-employee director" as defined in Rule 16b-3 of the Exchange Act.

2.15. "Option" means an Incentive Option granted under the Plan to purchase shares of Stock.

2.16. "Option Agreement" means the written agreement which sets out the terms of an option.

2.17. "Optionee" means a person to whom an Option is granted under the Plan.

2.18. "Outside Director" means a member of the Board serving on the Committee who qualifies as an outside director as defined in Department of Treasury regulations promulgated under section 162(m) of the Code.

2.19. "Plan" means the Micropac Industries, Inc. 2001 Employee Stock Option Plan, asset forth in this document and as it may be amended from time to time.

2.20. "Retirement" means the termination of an Employee's employment relationship with the Company and all Affiliates after attaining the age of 65.

2.21. "Stock" means the common stock of the Company, $.10 par value or, in the event that the outstanding shares of common stock are later changed into or exchanged for a different class of stock or securities of the Company or another corporation, that other stock or security.

2.22. "Voting Stock" means shares of capital stock of the Company the holders of which are entitled to vote for the election of directors, but excluding shares entitled to so vote only upon the occurrence of a contingency unless that contingency shall have occurred.

ARTICLE 3.
ELIGIBILITY

The individuals who shall be eligible to receive Incentive Options shall be those employees of the Company or any of its Affiliates as the Board shall determine from time to time and who have substantial responsibility for the management and growth of the Company or any of its Affiliates as the Board shall determine from time to time. The Board may designate one or more individuals who shall not be eligible to receive an Option under the Plan.

ARTICLE 4.
GENERAL A1. PROVISIONS RELATING TO OPTIONS

4.1. Authority to Grant Options. The Board may grant to those Employees of the Company or any of its Affiliates and other eligible persons as it shall from time to time determine, Options under the tens and conditions of the Plan Subject only to any applicable limitations set out in the Plan, the number of shares of Stock to be covered by any Option to be granted to any person shall be as determined by the Board.

4.2. Dedicated Shares; Maximum Options. The total number of shares of Stock with respect to which Options may be granted under the Plan is 500,000 The shares of Stock may be treasury shares or authorized but unissued shares. The total number of shares of Stock with respect to which Incentive Options may be granted under the Plan is 500,000 shares. The maximum number of shares subject to Options which may be issued to any person under the Plan during any calendar year is 150,000 shares. If an Optionee's Option is canceled, the canceled option continues to be counted against the maximum number of shares of Stock for which Options may be granted to the Optionee under the Plan. The number of shares stated in this Section 4.2 shall be subject to adjustment in accordance with the provisions of Section 4.5. If any outstanding. Option expires or terminates for any reason or any Option is surrendered, the shares of Stock allocable to the unexercised portion of that Option may again be subject to an Option under the Plan

4.3. Non-Transferability. Except as specified in the applicable Option agreements or in domestic relations court orders, Nonqualified Options shall not be transferable by the Optionee other than by will or under the laws of descent and distribution, and shall be exercisable, during the Optionee's lifetime, only by him. In' the discretion of the Committee, any attempt to transfer an Option other than under the terms of the Plan and the applicable Option Agreement may terminate the Option.

4.4. Requirements of Law. The Company shall not be required to sell or issue any Stock under any option if issuing that Stock would constitute or result in a violation by the Optionee or the Company of any provision of any law, statute, or regulation of my governmental authority. Specifically, in connection with any applicable statute or regulation relating to the registration of securities, the Company shall register any Stock covered by the Plan pursuant to applicable securities laws of any country or any political subdivision.

4.5. Recapitalization or Reorganization of the Company.

(a) No Limitations on Company's Rights to Effect Changes. The existence of outstanding Options shall not affect in any way the right or power of the Company or its stockholders to make or authorize any or all adjustments, recapitalizations, reorganizations or other changes in the Company's capital structure or its business, or any merger or consolidation of the Company, or any issue of bonds, debentures, preferred or prior preference stock ahead of or affecting the Stock or its rights, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise

(b) Increase or Reduction of Outstanding Shares. If a stock split, reverse stock split, stock dividend, combination, recapitalization or reclassification of the Stock, or any other increase or decrease in the number of shares of the Stock outstanding, is effected without receipt of consideration by the Company, then (a) the number, class, and per share price of shares of Stock subject to outstanding Options under the Plan shall be appropriately adjusted in such a manner as to entitle an Optionee to receive upon exercise of an Option, for the same aggregate cash consideration, the equivalent total number and class of shares he would have received had he exercised his Option in full immediately prior to the event requiring the adjustment; and (b) the number and class of shares of Stock then reserved to be issued under the Plan shall be adjusted by substituting for the total number and class of shares of Stock then reserved, that number and class of shares of Stock that would have been received by the owner of an equal number of outstanding shares of each class of Stock as the result of the event requiring the adjustment. The conversion of any convertible securities of the Company shall not be deemed to have been effected without receipt of consideration by the Company. 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 Stock subject to an Option.

(c) Sale or merger of the Company Where the Company is Not the Survivor; Dissolution or Liquidation of the Company. In the event of a Corporate Change, no later than (x) ten days after the approval by the stockholders of the Company of the Corporate Change or (y) thirty days after the occurrence of a Corporate Change for which no approval by the stockholder of the Company is required, the Committee, acting in -its sole discretion without the consent or approval of any Optionee, shall act to effect one or more of the following alternatives, which may vary among individual Optionees and which may vary among Options held by any individual optionee: (1) accelerate the time at which Options then outstanding may be exercised so that such Options may be exercised in full for a limited period of time on or before a specified date (before or after the Corporate Change) fixed by the Committee, after which specified date all unexercised Options and all rights of Optionees thereunder shall terminate,
(2) require the mandatory surrender to the Company by selected Optionees of some or all of the outstanding Options held by such Optionees(irrespective of whether such options are then exercisable under the provisions of the Plan) as of a date, before or after such Corporate Change, specified by the Committee, in which event the Committee shall thereupon cancel such Options and the Company shall pay to each Optionee as amount of cash per share equal to the excess, if any, of the Change of Control Value of the shares subject to such Options over the exercise price(s) under such options for such shares, (3) make any adjustments to Options then outstanding as the Committee deems appropriate, or
(4) provide that the number and class of shares of Stock covered by an Optionee theretofore granted shall be adjusted so that such Optionee shall thereafter cover the number and class of shares of stock or other securities or property (including, without limitation, cash) to which the Optionee would have been entitled pursuant to the terms of the agreement of merger, consolidation or sale of assets and dissolution if, immediately prior to such merger, consolidation or sale of assets and dissolution, the Optionee had been the holder of record of the number of shares of Stock then covered by such Option.

(d) Merger of the Company Where the Company is the survivor. After

a merger of one or more corporations into the Company or after a consolidation of the Company and one or more corporations in which the Company shall be the surviving corporation, each Optionee shall be entitled to have his Option appropriately adjusted based on the manner in which the Stock was adjusted under the terms of the agreement of merger or consolidation.

ARTICLE 5.
OPTIONS

5.1. Exercise Price. The price at which Stock may be purchased under an Incentive Option shall not be less than 100 percent of the Fair Market Value of the shares of Stock on the date the Option is granted. In its discretion, the Committee may provide that the price at which shares of Stock may be purchased under an Option shall be more than the minimum price specified above.

5.2. Duration of Options. No option shall be exercisable after the expiration of ten years from the date the Option is granted..

5.3. Amount Exercisable. Each option may be exercised at the time, in the manner and subject to the conditions the Board specifies in the option Agreement in its sole discretion- If specified in the option Agreement, an Option will be exercisable in full upon the occurrence of a Change of Control.

5.4. Exercise of Options. Each Option shall be exercised by the delivery of written notice to the Board setting forth the number of'shares of Stock with respect to which the option is to be exercised, together with: (a) cash, certified check, bank draft, or postal or express money order payable to the order of the Company for an amount equal to the exercise price under the option, (b) Mature Shares with a Fair Market Value on the date of exercise equal to the exercise price under the Option, (c) an election to make a cashless exercise through a registered broker-dealer (if approved in advance by the Board), and/or (d) any other form of payment which is acceptable to the Board, and specifying the address to which the certificates for the shares are to be mailed. As promptly as practicable after receipt of written notification and payment, the Company shall deliver to the Optionee certificates for the number of shares with respect to which the Option has been exercised, issued in the Optionce's name. If Mature shares are used for payment by the Optionee, the aggregate Fair Market Value of the shares of Stock tendered must be equal to or less than the aggregate exercise price of the shares being purchased upon exercise of the Option, and any difference must be paid by cash, certified check, bank draft, or postal or express money order payable to the order of the Company. Delivery of the shares shall be deemed effected for all purposes when a stock transfer agent of the Company shall have deposited the certificates in the United States mail, addressed to the Optionee, at the address specified by the Optionee.

Whenever an Option is exercised by exchanging mature Shares owned by the Optionee, the Optionee shall deliver to the Company certificates registered in the name of the Optionee representing a number of shares of Stock legally and beneficially owned by the Optionee, free of all liens, claims, and encumbrances of every kind, accompanied by stock powers duly endorsed in blank by the record holder of the shares represented by the certificates (with signature guaranteed

by a commercial bank or trust company or by a brokerage firm having a membership on a registered national stock exchange). The delivery of certificates upon the exercise of options is subject to the condition that the person exercising the Option provide the Company with the information the Company might reasonably request pertaining to exercise, sale or other disposition. The Committee may permit an Optionee to elect to pay the exercise price upon exercise of an Option by authorizing a third-party broker to sell all or a portion of the shares of Stock acquired upon exercise of the Option and remit to the Company a sufficient portion of the sale proceeds to pay the exercise price and any applicable tax withholding resulting from such exercise.

An Option may not be exercised for a fraction of a share of Stock.

5.5. Exercise on Termination of Employment.

(a) Termination of Employment Other Than As a Result of Retirement, Death or Disability. Unless it is expressly provided otherwise in the Option Agreement, an Option shall terminate one day less than three months after the severance of employment or affiliation relationship between the Optionee and the Company and all Affiliates for any reason, with or without cause, other than Retirement, death or Disability. Whether authorized leave of absence or absence on military or government service shall constitute severance of the employment of an Employee shall be determined by the Board at that time.

(b) Retirement. Unless it is expressly provided otherwise in the option Agreement, an Option shall terminate one day less than one year after the Retirement of the Optionee.

(c) Death. After the death of the Optionee, his executors, administrators or any persons to whom his Option may be transferred by will or by the laws of descent and distribution shall have the right, at any time prior to the earlier of the Option's expiration or one day less than one year after the death of the Optionee, to exercise it, to the extent to which he was entitled to exercise it immediately prior to his death unless it is expressly provided otherwise in the Option Agreement.

(d) Disability. If, before the expiration of an Option, the optionee shall be severed from the employ of or affiliation with the Company and all Affiliates due to Disability, the option shall terminate on the earlier of the Optionee's expiration date or one day less than one year after the date of his severance due to Disability, unless it is expressly provided otherwise in the option Agreement. In the event that the Optionee shall be severed from the employ of or affiliation with the Company and all Affiliates for Disability, the optionee shall have the right prior to the termination of the Option to exercise the Option, to the extent to which he was entitled to exercise it immediately prior to his severance of employment or affiliation due to Disability, unless it is expressly provided otherwise in the Option Agreement.

(e) Employment With an Entity in a Section 424(a) Transaction. In determining the employment relationship between the Company and/or any Affiliate and an Employee, employment by a corporation issuing or assuming a stock option in a transaction to which section 424(a) of the Code applies shall be considered employment by the Company or an Affiliate.

5.6. Substitution Options. Options may be granted under the Plan from time to time in substitution for stock options held by employees of other corporations who are about to become employees of or affiliated with the Company or any Affiliate as the result of a merger or consolidation of the employing corporation with the Company or any Affiliate, or the acquisition by the Company or any Affiliate of the assets of the employing corporation, or the acquisition by the Company or any Affiliate of stock of the employing corporation as the result of which it becomes an Affiliate of the Company. The terms and conditions of the substitute Options granted may vary from the terns and conditions set out in the Plan to the extent the Committee, at the time of grant, may deem appropriate to conform, in whole or in part, to the provisions of the stock options in substitution for which they are granted.

5.7. No Rights as Stockholder. No Optionee shall have any rights as a stockholder with respect to Stock covered by his option until the date a stock certificate is issued for the Stock.

ARTICLE 6.
ADMINISTRATION

The Plan shall be administered by the Board. All questions of interpretation and application of the Plan and Options shall be subject to the determination of the Board. A majority of the members of the Board shall constitute a quorum. All determinations of the Board shall be made by a majority of its members. Any decision or determination reduced to writing and signed by a majority of the members shall be as effective as if it had been made by a majority vote at a meeting properly called and head. The Plan shall be administered in such a manner as to permit the Options which are designated to be Incentive Options to qualify as Incentive Options. In carrying out its authority under the Plan, the Board shall have full and final authority and discretion, including but not limited to the following rights, powers and authorities, to:

(a) determine the persons to whom and the time or times at which Options will be granted,

(b) determine the number of shares and the exercise price of Stock covered in each option, subject to the terms of the Plan,

(c) determine the terms, provisions and conditions of each option, which need not be identical,

(d) accelerate the time at which any outstanding Option may be exercised,

(e) define the effect, if any, on an Optionee of the death, disability, retirement, or termination of employment or affiliation relationship between the Optionee and the Company and Affiliates,

(f) prescribe, amend and rescind rules and regulations relating to administration of the Plan, and

(g) make all other determinations and take all other actions deemed necessary, appropriate, or advisable for the proper administration of the Plan.

The actions of the Committee in exercising all of the rights, powers, and authorities set out in this Article and all other Articles of the Plan, when performed in good faith and in its sole judgment, shall be final, conclusive and binding on all parries.

ARTICLE 7.
AMENDMENT OR TERMINATION OF PLAN

The Board may amend, terminate or suspend the Plan at any time, in its sole and absolute discretion; provided, however, that to the extent required to maintain the status of airy Incentive Option under the Code, no amendment that would: (a) change the aggregate number of shares of Stock which may be issued under Incentive Options, (b) change the class of employees eligible to receive Incentive Options, or (c) decrease the exercise price for Incentive Options below the Fair Market Value of the Stock at the time it is granted, shall be made without the approval of the Company's stockholders. Subject to the preceding sentence, the Board shall have the power to make any changes in the Plan and in the regulations and administrative provisions under it or in any outstanding Incentive Option as in the opinion of counsel for the Company may be necessary or appropriate from time to time to enable any Incentive Option granted under the Plan to continue to qualify as an incentive stock option or such other stock option as may be defined under the Code so as to receive preferential federal income tax treatment.

ARTICLE 8.
MISCELLANEOUS

8.1. No Establishment of a Trust Fund. No property shall be set aside nor shall a trust fund of any kind be established to secure the rights of any Optionee under the Plan. All Optionees shall at all times rely solely upon the general credit of the Company for the payment of any benefit which becomes payable under the Plan.

8.2. No Employment or Affiliation Obligation. The granting of any option shall not constitute an employment contract, express or implied, nor impose upon the Company or any Affiliate any obligation to employ or continue to employ, or utilize the services of, any optionee. The right of the Company or any Affiliate to terminate the employment of any person shall not be diminished or affected by reason of the fact that an option has been granted to him.

8.3. Forfeiture. Notwithstanding any other provisions of the Plan, if the Board finds by a majority vote after full consideration of the facts that the Optionee, before or after termination of his employment or affiliation relationship with the Company or an Affiliate for any reason (a) committed or engaged in fraud, embezzlement, theft, commission of a felony, or proven dishonesty in the course of his employment by the Company or an Affiliate, which conduct damaged the Company or Affiliate, or disclosed trade secrets of the Company or an Affiliate, or (b) participated, engaged in or had a material, financial or other interest, whether as an employee, officer, director, consultant, contractor, stockholder, owner, or otherwise, in any commercial endeavor in the United.

States which is competitive with the business of the Company or an Affiliate without the written consent of the Company or Affiliate, the Optionee shall forfeit all outstanding options, and including all exercised Options and other situations pursuant to which the Company has not yet delivered a stock certificate. Clause (b) shall not be deemed to have been violated solely by reason of the Optionee's ownership of stock or securities of any publicly owned corporation, if that ownership does riot result in effective control of the corporation.

The decision of the Board as to the cause of the Optionee's discharge, the damage done to the Company or an Affiliate, and the extent of the Optionee's competitive activity shall be final. No decision of the Board, however, shall affect the finality of the discharge of the Optionee by the Company or an Affiliate in any manner.

8.4. Tax Withholding. The Company or any Affiliate shall be entitled to deduct from other compensation payable to each Optionee any sums required by federal, state, or local tax law to be withheld with respect to the grant or exercise of an Option, or lapse of restrictions on Restricted Stock. In the alternative, the Company may require the Optionee to pay such sums for taxes directly to the Company or any Affiliate in cash or by check within ten days after the date of exercise or lapse of restrictions. In the discretion of the Committee, an Optionee may use shares of Stock received by the Optionee upon the exercise of an Option to satisfy any required tax withholding obligations of the Company or an Affiliate that result from the exercise. The Company shall have no obligation upon exercise of any Option until the Company or an Affiliate has received payment sufficient to cover all tax withholding amounts due with respect to that exercise. Neither the Company nor any Affiliate shall be obligated to advise an Optionee of the existence of the tax or the amount which it will be required to withhold.

8.5. Written Agreement. Each Option shall be embodied in a written agreement which shall be subject to the terms and conditions of the Plan and shall be signed by the Optionee and by a member of the Committee on behalf of the Board and the Company or an executive officer of the Company, other than the Optionee, on behalf of the Company. The agreement may contain any other provisions that the Board in its discretion shall deem advisable which are not inconsistent with the terms of the Plan.

8.6. Indemnification of the Board. With respect to administration of the Plan, the Company shall indemnify each present and future member of the Board against, and each member of the Board shall be entitled without further act on his part to indemnity from the Company for, all expenses (including attorney's fees, the amount of judgments and the amount of approved settlements made with a view to the curtailment of costs of litigation, other than amounts paid to the Company itself) reasonably incurred by him in connection with or arising out of any action, suit, or proceeding in which he may be involved by reason of his being or having been a member of the Board, whether or not he continues to be a member of the Board at the time of incurring the expenses, including, without limitation, matters as to which he shall be finally adjudged in any action, suit or proceeding to have been found to have been negligent in the performance of his duty as a member of the Board. However, this indemnity shall not include any expenses incurred by any member of the Board in respect of matters as to which he shall be finally adjudged in any action, suit or proceeding to have been guilty of gross negligence or willful misconduct in the

performance of his duty as a member of the Board. In addition, no right of indemnification under the Plan shall be available to or enforceable by any member of the Board unless, within 60 days after institution of any action, suit or proceeding, he shall have offered the Company, in writing, the opportunity to handle and defend same at its own expense. This right of indemnification shall inure to the benefit of the heirs, executors ox administrators of each member of the Board and shall be in addition to all other rights to which a member of the Board may be entitled as a matter of law, contract, or otherwise.

8.7. Gender. If the context requires, words of one gender when used in the Plan shall include the other and words used in the singular or plural shall include the other. .

8.8. Headings. Headings of Articles and Sections are included for convenience of reference only and do not constitute part of the Plan and shall not be used in construing the terms of the Plan.

8.9. Other Compensation Plans. The adoption of the Plan shall not affect any other stock option, incentive or other compensation or benefit plans in effect for the Company or any Affiliate, nor shall the Plan preclude the Company from establishing any other forms of incentive or other compensation for employees of the Company or any Affiliate.

8.10. Other Options. The grant of an Option shall not confer upon the Optionee the right to receive any future Options under the Plan, whether or not Options may be granted to similarly situated Optionees, or the right to receive future Options upon the same terms or conditions as previously granted.

8.11. Governing Law. The provisions of the Plan shall be construed, administered, and governed under the laws of the State of Texas.