Exhibit 10.2

Teledyne Technologies Incorporated

Form of Terms and Conditions of Stock Option Grant

These Terms and Conditions apply to Stock Options granted on __________, under the Teledyne Technologies Incorporated 2014 Incentive Award Plan.

[date of grant]

SECTION 1:      Definitions     

Capitalized words used but not defined in below or elsewhere in these Terms and Conditions shall have the meanings ascribed to them in the Plan.

Committee-Personnel and Compensation Committee of the Board of Directors of the Company.

Common Stock or Shares -common stock, $0.01 par value per share, of the Company.

Company-Teledyne Technologies Incorporated and its successors.

Disability-disability of the Optionee, as determined by the Committee in its sole and absolute discretion.

Fair Market Value-the closing price of a share of Common Stock on the New York Stock Exchange on the relevant date or, if the relevant date is not a trading day or no shares of Common Stock were traded on such date, on the next preceding date on which shares of Common Stock were traded on the New York Stock Exchange.

Option Period-period of time beginning on [date of grant] and ending on [10 years from date of grant] (if not before pursuant to these Terms and Conditions), inclusive of such dates.

Option Shares-shares of Common Stock that may be acquired on the exercise of Stock Options.

Plan- refers to the Teledyne Technologies Incorporated 2014 Incentive Award Plan, as the same may be amended from time to time.

Retirement-shall mean early or normal retirement under a pension plan or arrangement of the Company or one of its Subsidiaries in which the Optionee participates. For purposes of the Plan, the Committee interprets retirement to mean termination of employment with the Company or one of its Subsidiaries after the Optionee attains the age of 55.

Stock Options-nonqualified stock options to purchase shares of Common Stock evidenced by the Stock Option Agreement. The Stock Options are not intended to be incentive stock options within the meaning of Section 422 of the Internal Revenue Code.

Stock Option Agreement-the agreement between the Company and Optionee evidencing the grant of Stock Options pursuant to one of the Plans and Optionee’s acceptance of Stock Options on the Terms and Conditions set forth herein.

Subsidiary-direct or indirect subsidiary of the Company within the meaning of Section 424(f) of the Internal Revenue Code.

Termination of Employment-voluntary or involuntary termination of the Optionee’s employment with the Company or a Subsidiary for any reason, including death, Disability, Retirement or as the result of the divestiture of the Optionee’s employer or similar transaction in which the Optionee’s employer ceases to be the Company or one of its Subsidiaries.

SECTION 2: Vesting     

    

2.1      The Stock Options shall become exercisable cumulatively in accordance with the vesting schedule set forth in the Stock Option Agreement (rounded down to the nearest whole share). On the death of the

Optionee, all Stock Options shall become immediately and fully exercisable. Vesting of the Stock Options will be accelerated in

full on a Change of Control in accordance with the provisions of the Plan and Section 5 hereof.

2.2      The Committee, in its sole discretion, shall have the right (but shall not in any case be obligated), exercisable at any time after the date of grant, to vest the Stock Options, in whole or in part, prior to the time the Stock Options would otherwise vest under the terms of the Stock Option Agreement. The Committee is not obligated to exercise its discretion in any particular circumstance and is not obligated to make the same or similar determinations with respect to similarly situated participants in the Plan.

SECTION 3: Exercise and Withholding     

3.1      The Optionee shall exercise the Stock Options through Computershare either by contacting a customer service representative via telephone at (866) 867-6515, or via the internet, located on the Web at https://www.computershare.com/employee/u s. The Company reserves the right to change the means of exercising options or the option administration at any time. The Optionee shall pay the full exercise price by: (a) delivering funds to Computershare in the form of cash or a check payable to the “Teledyne ESOP”; (b) delivering to Computershare one or more certificates for shares of Common Stock, together with a stock power executed in blank, having a Fair Market Value equal to the exercise price for the Stock Options being exercised; (c) delivering a combination of cash and Common Stock; or (d) at the Company’s discretion and subject to certain conditions, delivering payment to Computershare in accordance with a “cashless exercise” or “same-day sale” exercise program. Shares of Common Stock delivered or withheld in payment of the exercise price of the Stock      Options shall be valued at their Fair Market Value on the date of exercise.

3.2      Computershare, on behalf of the Company, shall be entitled to withhold (or secure payment from the Optionee in lieu of withholding) the amount of any withholding or other tax required by law to be withheld or paid by the Company with respect to any Option Shares under rules prescribed by the Committee. The Company may defer issuance of shares of Common Stock upon exercise unless indemnified to its satisfaction with respect to any such tax. The amount of such withholding or tax payment shall be determined by the Committee or its designee. At the Company’s discretion, the Optionee shall have the right to elect to meet the Optionee’s withholding requirement (a) by having withheld from the shares issuable upon the exercise of the Stock Options at the appropriate time that number of shares of Common Stock, rounded up to the next whole share, whose Fair Market Value is equal to the minimum amount of withholding taxes due, (b) by direct payment to Computershare of the amount of any taxes required to be withheld with respect to such exercise, or (c) by a combination of shares and cash. Regardless of any action the Company or Optionee’s employer (“Employer”) takes with respect to any or all income tax, social insurance, payroll tax, payment on account or other tax-related items related to Optionee’s participation in the Plan and leally applicable to Optionee (“Tax-Related Items”), Optionee acknowledges and agrees that the ultimate liability for all Tax-Related Items legally due by Optionee is and remains Optionee’s responsibility and may exceed the amount actually withheld by the Company or the Employer. Optionee further acknowledges that the Company and/or the Employer (a) makes no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Option, including the grant, vesting, or exercise of the Option, the subsequent sale of Shares acquired under the Plan and the receipt of dividends, if any; and (b) does not commit to and is under no obligation to structure the terms of the Option or any aspect of the Option to reduce or eliminate Optionee’s liability for Tax-Related Items, or achieve any particular tax result. Further, if Optionee has become subject to tax in more than one jurisdiction between the date of grant and the date of any relevant

taxable event, Optionee acknowledges that the Company and/or the Employer (or former employer, as applicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction.

No payment will be made to Optionee (or his or her estate or beneficiary) for an Option unless and until satisfactory arrangements (as determined by the Company) have been made by Optionee with respect to the payment of any Tax-Related Items obligations of the Company and/or the Employer with respect to the Option. In this regard, Optionee authorizes the Company and/or the Employer, or their respective agents, at their discretion, to satisfy the obligations with regard to all Tax-Related Items by one or a combination of the following:

(i) withholding from Optionee’s wages or other cash compensation paid to Optionee by the Company or the Employer; or (ii) withholding from proceeds of the sale of Shares acquired upon exercise of the Option, either through a voluntary sale or through a mandatory sale arranged by the Company (on Optionee’s behalf pursuant to this authorization); or (iii) withholding in Shares to be issued upon exercise of the Option; or (iv) surrendering already-owned Shares having a Fair Market Value equal to the Tax-Related Items that have been held for such period of time to avoid adverse accounting consequences.

If the obligation for Tax-Related Items is satisfied by withholding Shares, the Optionee is deemed to have been issued the full number of Shares purchased for tax purposes, notwithstanding that a number of the Shares is held back solely for the purpose of paying the Tax-Related Items due as a result of the Optionee’s participation in the Plan. Optionee shall pay to the Company or Employer any amount of Tax-Related Items that the Company may be required to withhold as a result of Optionee’s participation in the Plan that cannot be satisfied by one or more of the means previously described in this section. Optionee acknowledges and agrees that the Company may refuse to honor the exercise and refuse to issue or deliver the Shares or the proceeds of the sale of Shares if Optionee fails to comply with his or her obligations in connection with the Tax-Related Items.

If the Optionee is a statutory insider of the Company for the purposes of Section 16 of the Securities Exchange Act of 1934, the Committee may impose such limitations and restrictions as it deems necessary or appropriate with respect to the delivery or withholding of shares of Common Stock to meet tax withholding obligations.     

3.3      As soon as practicable after each exercise of Stock Options and compliance by the Optionee with all applicable conditions, including, but not limited to, the satisfaction of all withholding obligations, the Company will mail or cause to be delivered or electronically transmitted to the Optionee, at the address specified by the Optionee in writing, the number of shares of Common Stock which the Optionee shall be entitled to receive (subject to reduction for withholding, if any, as provided in Section 3.2) upon such exercise under the provisions of the Stock Option Agreement. Such shares, and any certificates issued to evidence such shares, shall be registered in the name of the Optionee or such other person or entity as the Optionee shall specify at the time such Stock Options are exercised.

3.4      The exercise of Stock Options is subject to the Company’s Insider Trading Policy.

SECTION 4: Termination of Employment     

4.1      In the event of Termination of Employment of the Optionee other than by reason of death, Disability, or Retirement, the right of the Optionee to exercise the Stock Options that the Optionee was entitled to exercise upon Termination of Employment shall terminate on the 30th day (or, if such day is not a business day, the next business day) after the date of such Termination of Employment, but in no event may such Stock Options be exercised after the expiration of the Option Period. To the extent the

right to exercise all or any of the Stock Options has not vested as of the date of Termination of Employment, such right shall expire on the date of Termination of Employment.

4.2      In the event of an Optionee's Termination of Employment by reason of Disability, the Stock Options shall continue to vest in accordance with the schedule set forth in the Stock Option Agreement and the right of the Optionee to exercise the Stock Options shall continue, but in no event may such Stock Options be exercised after the expiration of the Option Period.

4.3      In the event of an Optionee’s Termination of Employment by reason of Retirement, the right of the Optionee to exercise the vested Stock Options shall continue, but in no event may such vested Stock Options be exercised after the expiration of the Option Period. Any unvested Stock Options are forfeited upon Retirement.

4.4      In the event of the death of the Optionee, all outstanding Stock Options shall vest in full and the right of the Optionee’s beneficiary (as defined in the Plan) to exercise the Stock Options shall terminate upon the expiration of twelve months from the date of the Optionee’s death, but in no event may such Stock Options be exercised after the expiration of the Option Period.

4.5      In the event of Termination of Employment, the Committee, in its sole discretion, shall have the right (but shall not in any case be obligated), exercisable on or any time after the date of grant of the Stock Options, to permit the Stock Options to be exercised, in whole or in part, after the expiration date described in Section 4.1 or Section 4.4, but not after the expiration of the Option Period.

SECTION 5: Miscellaneous     

5.1      The number and kind of Option Shares issuable upon the exercise of the Stock Options and the exercise price for such shares shall be appropriately adjusted to reflect any stock dividend, stock split, combination or exchange of shares, merger, consolidation or other change in capitalization with a similar substantive effect upon the shares issuable upon the exercise of the Stock Options as set forth in the Plan. In the event of a Change in Control (as defined in the Plan), each outstanding Option shall be assumed or an equivalent Option substituted by the successor corporation or a parent or subsidiary of the successor corporation. In the event that the successor corporation refuses to assume or substitute for the Option, the Committee may cause any or all of such Options to become fully exercisable immediately prior to the consummation of such transaction and all forfeiture restrictions on any or all of such Options to lapse. If an Option is exercisable in lieu of assumption or substitution in the event of a Change in Control, the Committee shall notify the Optionee that the Option shall be fully exercisable beginning prior to the Change in Control contingent on the occurrence of the Change in Control, and the Option shall terminate on the Change in Control. An Option shall be considered assumed if, following the Change in Control, the Option confers the right to purchase or receive, for each share of Common Stock subject to the Option immediately prior to the Change in Control, the consideration (whether stock, cash, or other securities or property) received in the Change in Control by holders of Common Stock for each share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding shares); provided , however , that if such consideration received in the Change in Control was not solely common stock of the successor corporation or its parent, the Committee may, with the consent of the successor corporation, provide for the consideration to be received upon the exercise of the Option, for each share of Common Stock subject to an Option, to be solely common stock of the successor corporation or its parent equal in fair market value to the per share consideration received by holders of Common Stock in the Change in Control.

5.2      Whenever the word "Optionee" is used in any provision of the Stock Option Agreement under circumstances where the provision should logically be construed to apply to the executors, the administrators, or the person or persons to whom the Stock Options may be transferred by will or by the laws of descent and distribution or pursuant to Section 5.3 hereof, the word "Optionee" shall be deemed to include such person or persons.

5.3      The Stock Options granted hereunder are not transferable by the Optionee otherwise than by will or the laws of descent and distribution and are exercisable during the Optionee's lifetime only by the Optionee. Except as provided in this paragraph, no assignment or transfer of the Stock Options granted hereunder, or of the rights represented thereby, whether voluntary or involuntary, by the operation of law or otherwise (except by will or the laws of descent and distribution) shall vest in the assignee or transferee any interest or right herein whatsoever, but immediately upon any such assignment or transfer the Stock Options shall terminate and become of no further effect.

5.4      The Optionee shall not be deemed for any purpose to be a stockholder of the Company in respect of any shares as to which the Stock Options evidenced hereby shall not have been exercised, as herein provided, until such shares have been issued to Optionee by the Company hereunder.

5.5      The existence of the Stock Options shall not affect in any way the right or the 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 stocks ahead of or affecting the Common Stock or the rights thereof, 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.

5.6      Notwithstanding any other provision hereof, the Optionee hereby agrees that the Optionee will not exercise the Stock Options, and that the Company will not be obligated to issue any shares to the Optionee hereunder, if the exercise thereof or the issuance of such shares shall constitute a violation by the Optionee or the Company of any provision of any law or regulation of any governmental authority. Any determination in this connection by the Committee shall be final, binding and conclusive. The Company shall in no event be obligated to register any securities pursuant to the Securities Act of 1933 (as in the same shall be in effect from time to time) or to take any other affirmative action in order to cause the exercise of the Stock Options or the issuance of shares pursuant thereto to comply with any law or regulation of any governmental authority.

5.7      The Optionee shall deliver to the Committee, upon demand by the Committee, at the time of delivery of Option Shares acquired pursuant to Stock Options evidenced hereby, a written representation that the shares to be acquired are to be acquired for investment and not for resale or with a view to the distribution thereof. Upon such demand, delivery of such representation prior to delivery of any such shares shall be a condition precedent to the right of Optionee to receive any shares. All certificates for Option Shares delivered under the Plan shall be subject to such restrictions as the Committee may deem advisable under any applicable federal or state securities law, and the Committee may cause a legend or legends to be endorsed on any such certificates making appropriate reference to such restrictions.

5.8      No amounts of income received by an Optionee pursuant to the Stock Option Agreement shall be considered compensation for purposes of any pension or retirement plan, insurance plan or any other employee benefit plan of the Company or any of its affiliates, unless otherwise expressly provided in such plan.

5.9      Nothing in the Plan or in the Stock Option Agreement shall confer upon the Optionee the right to continue in the employ of the Company or any Subsidiary or affect any right that the Company or a Subsidiary may have to terminate the employment of the Optionee.

5.10      The Board may at any time terminate the Plan or any part thereof and may, from time to time, amend the Plan as it may deem advisable; provided, however, the termination or amendment of the Plan shall not, without the consent of the Optionee, adversely affect the Optionee's rights under the Stock Option Agreement.

5.11      Every notice or other communication relating to the Stock Option Agreement shall be in writing and shall be mailed or delivered to the party for whom it is intended at such address as may from time to time be designated by the party in a notice mailed or delivered to the other party as herein provided; provided however, that unless and until some other address be so designated, all notices or communications by Optionee to the Company shall be mailed, faxed or delivered to Company at its executive offices directed to the attention of Executive Vice President, General Counsel and Secretary, or his designee, and all notices or communications by the Company to the Optionee may be given to the Optionee personally or may be mailed or delivered to the Optionee at the address printed by the Optionee on the Stock Option Agreement unless the Optionee, in writing, provides the Company with a different address.

5.12      Nothing in the Stock Option Agreement, these Terms and Conditions or otherwise shall obligate the Committee to vest any of the Stock Options, or to permit the Stock Options to be exercised other than in accordance with the terms hereof or to grant any waivers of the terms of the Stock Option Agreement, regardless of what actions the Company, the Board or the Committee may take or waivers the Company, the Board or the Committee may grant under the terms of or with respect to any stock options now or hereafter granted to the Optionee or any other person.

5.13      The terms of the Plan shall govern the Stock Option Agreement and the Stock Options. In the event any provisions of the Stock Option Agreement or the Stock Options shall conflict with any term in the Plan as constituted on the date of the Stock Option Agreement, the term in the Plan as constituted on the date of the Stock Option Agreement shall control. Except as set forth in the Plan, the terms of the Stock Options may not be changed so as to materially decrease the value of the Stock Options without the express approval of the Optionee. The Stock Option, Option Shares and any proceeds therefrom shall be subject to the provisions of any claw-back policy implemented by the Company, as contemplated by the Plan, including, without limitation, the Executive Compensation Recoupment (Clawback) Policy adopted on February 25, 2014 or any successor policy.

5.14      No rule of strict construction shall be implied against the Company, the Committee or any other person in the interpretation of the Stock Option Agreement, including these Terms and Conditions, or the Stock Options or any rule or procedure established by the Committee.

5.15      Wherever possible, the Stock Option Agreement, including these Terms and Conditions, and the Stock Options shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of thereof shall be held to be prohibited by or invalid under applicable law, then (a) such provision shall be deemed amended to accomplish the objectives of the provision as originally written to the fullest extent permitted by law and (b) all other provisions of the Stock Option Agreement, including these Terms and Conditions, and the Stock Options shall remain in full force and effect.

5.16      The Stock Option Agreement shall be governed by the laws of the State of Delaware applicable to agreements made and performed wholly within the State of Delaware (regardless of the laws that might otherwise govern under applicable conflicts of law principles).

5.17      The Stock Option Agreement, including these Terms and Conditions, sets forth a complete understanding between the parties with respect to its subject matter and supersedes all prior and contemporaneous agreements and understandings with respect thereto. Except as expressly set forth in the Stock Option Agreement, the Company makes no representations, warranties or covenants with the Optionee with respect to the Stock Option Agreement or its subject matter, including with respect to the current or future value of the shares subject to the Stock Options. Any modification, amendment or waiver to the Stock Option Agreement will be effective only if it is in writing signed by the Company and the Optionee. The failure of any party to enforce at any time any provision of the Stock Option Agreement shall not be construed to be a waiver of that or any other provision of the Stock Option Agreement.

5.18      The Stock Option Agreement may be executed by the Company by facsimile signature. The Stock Options will be subject to these terms and conditions and the Plan whether or not this Stock Option Agreement is executed by you or the Company.

5.19      The Company may, in its sole discretion, decide to deliver any documents related to Options awarded under the Plan or future options that may be awarded under the Plan by electronic means or request Optionee’s consent to participate in the Plan by electronic means. Optionee hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through any on-line or electronic system established and maintained by the Company or another third party designated by the Company.

Exhibit 10.3

TELEDYNE TECHNOLOGIES INCORPORATED

ADMINISTRATIVE RULES OF THE 2014 INCENTIVE AWARD PLAN RELATED TO NON-EMPLOYEE DIRECTOR STOCK COMPENSATION

(As of February 18, 2014)

ARTICLE I.

GENERAL

1.1. Purpose . The terms of the Company’s 2014 Incentive Award Plan shall be applied in accordance with the following Rules for the purpose of providing an opportunity for Non-Employee Directors to elect to receive Options and/or Common Stock in lieu of Director's Retainer Fee Payments and Meeting Fees, the automatic payment of a portion of the Director's Retainer Fee Payment in the form of Common Stock to those Non-Employee Directors not electing to receive such portion in the form of Options and/or Common Stock and granting each Non-Employee Director annually an option covering 4,000 shares of Common Stock. It is the purpose of these Rules to promote the interests of the Company and its stockholders by attracting, retaining and providing an incentive to Non-Employee Directors through the acquisition of a proprietary interest in the Company and an increased personal interest in its performance. It is recognized that Non-Employee Directors dedicate time and provide significant and valuable services to the Company, its subsidiaries and its stockholders.

1.2. Adoption and Term . These Rules have been approved by the Personnel and Compensation Committee of the Board and shall become effective as of the Effective Date (as hereinafter defined). These Rules shall terminate without further action upon the earlier of (a) the tenth anniversary of the effective date of the Plan, and (b) the first date upon which no shares of Common Stock remain available for issuance under these Rules.

1.3. Definitions . Capitalized terms not otherwise defined herein shall have the same meaning as those terms defined in the Plan. As used herein the following terms have the following meanings:

(a) "Annual Options" means the Options issuable under Section 4.4(a) of these Rules.

(b) "Board" means the Board of Directors of the Company.

(c) "Code" means the Internal Revenue Code of 1986, as amended. References to a section of the Code shall include that section and any comparable section or sections of any future legislation that amends, supplements or supersedes said section.

(d) “Committee” means the Nominating and Governance Committee of the Board.

(e) "Common Stock" means the common stock, par value $0.01 per share, of the Company.

(f) "Company" means Teledyne Technologies Incorporated, a Delaware corporation, and any successor thereto.

(g) "Compensation Year" means each calendar year or portion thereof during which these Rules are in effect.

(h) "Director" means a member of the Board.

(i) "Director's Retainer Fee Payment" means the dollar value of that portion of the annual retainer fee payable by the Company to a Non-Employee Director for serving as a Director and for serving as the chair of the Board or any committee of the Board as of a particular Payment Date, as established by the Board and in effect from time to time.

(j) "Effective Date" means the date the Plan is approved by the stockholders of the Company.

(k) "Employee" means any employee of the Company or an affiliate.

(l) "Exchange Act" means the Securities Exchange Act of 1934, as amended. References to a section of the Exchange Act or rule promulgated thereunder shall include that section or rule and any comparable section(s) or rule(s) of any future legislation or rulemaking that amends, supplements or supersedes said section or rule.

(m) "Non-Employee Director" means a Director who is not an Employee.

(n) "Non-Employee Director Notice" means a written notice delivered in accordance with Section 4.2.

(o) "Payment Date" means the first business day of January and July of each Compensation Year on which the Director's Retainer Fee Payment for serving as a Director is paid by the Company and the first business day of January of each Compensation Year on which the Director's Retainer Fee Payment for serving as the chair of the Board or any committee of the Board is paid by the Company.

(p) "Plan" means the Teledyne Technologies Incorporated 2014 Incentive Award Plan, as it may hereafter be amended from time to time.

(q) "Retainer Fee Options" means the Options issuable under Section 4.3 of these Rules.

(r) "Rules" means these administrative rules under the Teledyne Technologies Incorporated 2014 Incentive Award Plan, as they may hereafter be amended from time to time.

(s) “TDY Deferred Compensation Plan” shall mean the Teledyne Technologies Incorporated Executive Deferred Compensation Plan, as amended and as may be amended from time to time

1.4. Shares Subject to these Rules . The shares to be offered under the Plan pursuant to these Rules shall consist of the Company’s authorized but unissued Common Stock or treasury shares that are available to be offered under the Plan and, subject to adjustment as provided in Section 5.1 hereof, the aggregate amount of such stock which may be issued or subject to Options issued hereunder shall not exceed 200,000 shares. If any Option granted under the Plan pursuant to these Rules shall expire or terminate for any reason, without having been exercised or vested in full, as the case may be, the underlying shares subject thereto shall again be available for issuance under the Plan pursuant to these Rules. Options granted under the Plan pursuant to these Rules will not be qualified as “incentive stock options” under Section 422 of the Code.

ARTICLE II.

ADMINISTRATION

2.1. The Committee . Subject to the provisions of these Rules and the Plan, the Committee shall interpret the Rules, promulgate, amend, and rescind other rules and regulations relating to the Rules and make all other determinations necessary or advisable for their administration and implementation. Interpretation and construction of any provision of these Rules by the Committee shall be final and conclusive. Notwithstanding the foregoing, the Committee shall have or exercise no discretion with respect to the selection of persons eligible to participate hereunder, the determination of the number of

shares of Common Stock or number of Options issuable to any person or any other aspect of the administration of the Rules with respect to which such discretion is not permitted in order for grants of shares of Common Stock and Options to be exempt under Rule 16b-3 promulgated under the Exchange Act.

ARTICLE III.

PARTICIPATION

3.1. Participants . Each Non-Employee Director shall participate in the Plan pursuant to these Rules on the terms and conditions hereinafter set forth.

ARTICLE IV.

PAYMENT OF DIRECTOR'S FEES

4.1. General . The Director's Retainer Fee Payment shall be paid to each Non-Employee Director, as of each Payment Date, as set forth in these Rules and subject to such other payment policies and procedures as the Board may establish from time to time. If, for the applicable Compensation Year, a Non-Employee Director has not made an election pursuant to Section 4.2 to receive Options or Common Stock in lieu of at least twenty-five percent (25%) of the Director's Retainer Fee Payment, then seventy-five percent (75%) of such Director's Retainer Fee Payment shall be paid in cash and twenty-five percent (25%) of the Director's Retainer Fee Payment shall be paid in the form of Common Stock.

4.2. Non-Employee Director Notice . A Non-Employee Director may file with the Secretary of the Company or other designee of the Board of Directors prior to the commencement of a Compensation Year a Non-Employee Director Notice making an election to receive either twenty-five percent (25%), fifty percent (50%), seventy-five percent (75%) or one hundred (100%) of his or her Director's Retainer Fee Payment in the form of Options and/or Common Stock with the balance to be paid in cash. Notwithstanding the foregoing, elections to receive Common Stock or Options may be made at any time during a Compensation Year so long as such elections are made irrevocably in advance of receiving the corresponding Common Stock or Options and approved in accordance with Rule 16b-3 under the Exchange Act.

4.3 Conversion of Retainer Fee Payment to Shares . Each Non-Employee Director who pursuant to Section 4.1 or 4.2 is to receive Common Stock as all or part of his or her Director's Retainer Fee Payment with respect to a Compensation Year and who is elected or reelected or is a continuing Non-Employee Director as of the date of commencement of such Compensation Year as of the applicable Payment Date, shall receive as of each Payment Date during such Compensation Year a number of shares of Common Stock equal to the quotient obtained by dividing (i) the amount of the Director's Retainer Fee Payment to be paid in the form of Common Stock by (ii) the Fair Market Value of the Common Stock per share on such Payment Date. Cash shall be paid in lieu of any fractional shares.

4.4 Options .

(a) Annual Option Grants . An Annual Option covering 4,000 shares of Common Stock will be granted to each Non-Employee Director automatically at the conclusion of each Company Annual Meeting. If, after the Effective Date, a director first becomes a Non-Employee Director on a date other than an Annual Meeting date, an Annual Option covering 2,000 shares of Common Stock will be granted to such director on his or her first date of Board service. The purchase price of the Common Stock covered by each Annual Option will be the Fair Market Value of a share of Common Stock as of the date of grant of the Annual Option.

(b) Retainer Fees Options . Retainer Fee Options will be granted on the Payment Dates of each Compensation Year. The number of shares of Common Stock to be subject to a Retainer Fee Option shall be equal to the nearest number of whole shares determined by multiplying the Fair Market Value of a

share of Company Common Stock on the date of grant by 0.3333 and dividing the result into the applicable portion of the Director's Retainer Fee Payment elected to be received as Options by the Non-Employee Director for the Compensation Year. The purchase price of each share covered by each Retainer Fee Option shall be equal to the Fair Market Value of a share of Common Stock on the date of grant of the Retainer Fee Option multiplied by 0.6666. The Retainer Fee Options shall be deemed granted at Fair Market Value and any difference between Fair Market Value and the recorded exercise price of the Retainer Fee Option shall be as a result of the prepayment of a portion of the aggregate exercise price of the Retainer Fee Option equal to the amount of the Retainer Fee paid.

(c) Duration and Exercise of Options . Subject to Section 4.4(f) below, Annual Options and Retainer Fee Options become exercisable on the first anniversary of the date on which they were granted. Options shall terminate upon the expiration of ten years from the date of grant. No Options may be exercised for a fraction of a share and no partial exercise of any Options may be for less than one hundred (100) shares. The Committee shall determine the time period, including the time period following a Termination of Service, during which the Non-Employee Director has the right to exercise the vested Options issued pursuant to these Rules, which time period may not extend beyond the term of the Option term. Except as limited by requirements of Section 409A or Section 422 of the Code and regulations and rulings thereunder, the Committee may extend the term of any outstanding Option issued pursuant to these Rules, and may extend the time period during which vested Options issued under these Rules may be exercised, in connection with any Termination of Service of the Non-Employee Director, and may amend any other term or condition of such Option issued under these Rules relating to such a Termination of Service.

(d) Purchase Price . The purchase price for the shares shall be paid in full at the time of exercise (i) in cash or by check payable to the order of the Company, (ii) by delivery of shares of Common Stock of the Company already owned by, and in the possession of Options holder, or (iii) by delivering a properly executed exercise notice together with irrevocable instructions to a broker to deliver promptly to the Company the amount of sale or loan proceeds to pay the Options price (in which case the exercise will be effective upon receipt of such proceeds by the Company). Shares of Common Stock used to satisfy the exercise price of an Option shall be valued at their Fair Market Value on the date of exercise.

(e) Transferability . Options granted hereunder shall not be transferable, other than by will or the laws of descent and distribution, and shall be exercisable during a Options holder's lifetime only by the Options holder or by his or her guardian or legal representative, except to the extent transfer is permitted by Rule 16b-3 promulgated under the Exchange Act and approved by the Board or its designee. Subject to the foregoing, Options shall not be assigned, pledged or otherwise encumbered by the holder thereof, either voluntarily or by operation of law.

(f) Termination of Directorship . If a director ceases to be a director of the Company for any reason other than death or removal by the Board of Directors or the stockholders, the director's Options shall continue to vest as provided in Section 4.4 (c) above and the right of the holder of the Option to exercise such Options shall continue until the options expire in accordance with Section 4.4(c). In no event may an Options be exercised after the expiration of the period specified in Section 4.4(c). In the event of death of a director or former director who holds an outstanding Options, all unvested Options shall automatically become fully vested as of the date of death and the right of his or her estate or beneficiary to exercise the Options shall terminate upon the expiration of twelve months from the date of death, but in no event may a Options be exercised after the expiration of the term of the Option. In the event of removal of a director from the Board of Directors, all rights of such director in a Options that the director was entitled to exercise on the date of removal shall terminate on the 30th day (or, if such day is not a business day, on the next business day) after the date of removal, but in no event may such Options be exercised after the expiration of the term of the Option.

4.5 Meeting Fees .

4.6     Deferral of Director’s Retainer Fee Payment

4.7 Deferral of Meeting Fees

 

ARTICLE V.

MISCELLANEOUS

5.1. Adjustments Upon Changes in Common Stock . The number and kind of shares available for issuance under the Plan pursuant to these Rules, and the number and kind of shares subject to, and the exercise price of, outstanding Options, shall be appropriately adjusted to prevent dilution or enlargement of rights by reason of any stock dividend, stock split, combination or exchange of shares, recapitalization, merger, consolidation or other change in capitalization with a similar substantive effect upon the Plan or the shares issuable under the Plan.

5.2. Amendment and Termination . The Committee shall have complete power and authority to amend these Rules at any time; provided, however, that the Committee shall not, without the affirmative approval of the shareholders of the Company, make any amendment which requires shareholder approval under any applicable law or regulation of a national stock exchange on which the Common Stock is traded. The Committee shall have the right and the power to terminate these Rules at any time. No amendment or termination of the Rules may, without the consent of the Non-Employee Director, adversely affect the right of such Non-Employee Director with respect to any Options then outstanding.

5.3. Requirements of Law . The issuance of Common Stock under the Plan pursuant to these Rules shall be subject to all applicable laws, rules and regulations and to such approval by governmental agencies as may be required.

5.4. No Guarantee of Membership . Nothing in these Rules or in the Plan shall confer upon a Non-Employee Director any right to continue to serve as a Director.

5.5 Construction . Words of any gender used in these Rules shall be construed to include any other gender, unless the context requires otherwise.

5.6 Governing Law . These Rules shall be governed by, construed and interpreted in accordance with the laws of the State of Delaware, without regard to its principles of conflict of law, as to all matters, including matters of validity, construction, effect, performance and remedies.