1992 INCENTIVE STOCK OPTION PLAN
ASTRONICS CORPORATION (the Company), a New York corporation, establishes this 1992
Incentive Stock Option Plan (the Plan) to further the Companys growth and development by
providing to officers and other key employees of the Company and its subsidiaries who are in a
position to contribute materially to the prosperity of the Company, through ownership of common
stock of the Company (Common Stock), an incentive to increase their interest in the Companys
welfare and continue their services and to afford a means through which the Company can attract to
its service other employees of outstanding ability.
2.1 Stock Option Committee. The Plan shall be administered by the Stock Option committee
(the Committee) which shall be composed of at least three directors of the Company who are not
eligible to participate in the Plan. The committee shall be appointed by the Board of Directors of
the Company. Subject to the provisions of the Plan, the Committee shall have full and complete
power and authority to do all things necessary and proper for the administration of the Plan,
including the power to interpret and construe its terms and provisions and to determine the
individuals selected to receive options, the times when they shall receive them, the number of
shares to be subject to each option, and the option price.
2.2 Rules and Regulations. The Committee, as it may deem advisable, may issue rules and
regulations for the administration of the Plan. When so directed by the Committee, appropriate
officers of the Company shall execute and deliver on behalf of the Company such options, agreements
and other instruments as the Committee may determine necessary to the implementation of the Plan.
The Committee may adopt and /or construe an appropriate form for any such options or agreements and
instruments, which forms shall contain such provisions or conditions as the Committee deems
necessary or advisable in carrying out the purposes of the Plan, provided, however, that no such
provision or condition shall be inconsistent with the Plan.
2.3 Defects or Omissions. The Committee may correct any defect or supply any omission or
reconcile any inconsistency in the Plan or in any option or agreement in the manner and to the
extent it shall deem expedient to carry it into effect, and shall be the sole and final judge of
such expediency. The Committees determination shall be conclusive.
III. STOCK SUBJECT TO THE PLAN
3.1 Number of Shares. The total number of shares of Common Stock of the Company which may
be sold pursuant to options granted under the Plan shall not exceed 250,000 shares, adjusted as
provided in Section 3.2. The shares of Common Stock sold under the Plan may either be authorized
and unissued shares or issued shares reacquired by the Company (treasury shares). Unless and
until the Board of Directors shall determine to purchases shares of Common Stock in the market for
the purpose of the Plan or to use treasury shares, the shares of Common Stock sold under the Plan
shall be authorized and unissued shares reserved for this purpose. In the event that any options
granted under the Plan shall terminate or expire for any reason without having been exercised in
full, the shares not purchased under those options shall be available again for the purpose of the
3.2 Adjustments. Notwithstanding any other provision of the Plan, in the event of any change
in any shares of the outstanding Common Stock of the Company by reason of a stock dividend,
recapitalization, merger, consolidation, split-up, combination or exchange of shares, or action of
like nature, the aggregate number and class of shares of Common Stock as to which options may be
granted to any individual and the number and class of shares of Common Stock subject to each
outstanding option and the option prices shall be appropriately adjusted by the Committee, whose
determination shall be conclusive.
IV. ELIGIBILITY AND PARTICIPATION
4.1 Officers and Certain Employees. Options may be granted only to full-time salaried
officers and key employees of the Company or any of its subsidiaries. Directors of the Company who
are not also full-time salaried officers or employees of the Company will not be eligible to
4.2 Annual Limitation. The aggregate fair market value (determined as of the time the option
is granted) of the Common Stock with respect to which options) under the Plan and any other
incentive stock option plan of the Company) are exercisable for the first time by an individual in
any calendar year shall not exceed $100,000, or such other limit as may then be in effect under
Section 422 of the Internal Revenue Code of 1986, as amended (the Code).
4.3 Voting Power Limitation. If an option is to be granted to an individual who at the time
the option is granted owns stock possessing more than 10 percent of the total combined voting power
of all classes of stock of the Company (as determined under Section 424(d) of the Code), the option
price set out in the applicable portion of Article V hereof shall read but shall not be less than
110 percent of its Fair Market Value and the period of exercise set out in the applicable portion
of Article VI hereof shall read and ending not more than 5 years after the date on which the
option is granted.
The purchase price of the Common Stock under each option shall be as determined by the
Committee, but in no event less than the fair market value of the shares optioned on the date of
granting. Fair market value shall be deemed to be:
1. The closing price on the date of grant as reflected in
reports of the automated quotation service or
national securities exchange on which the price of the Common Stock is reported.
In all cases where the Common Stock is selling ex-dividend on the date of grant, the
amount of the dividend shall be added to the ex-dividend quotation to determine the fair
market value of the Common Stock as of the date of grant; or
2. If the fair market value cannot be established under the
provisions of (1) above, then the fair
market value shall be that value determined in good faith by the Board of Directors based on
a consideration of the following relevant factors: the Companys net worth, prospective
earning power, its dividend paying capacity, the value of its underlying assets, and any
other factors such as the goodwill of the business, the economic outlook in the industry, the
Companys position in the industry and its management, and the value of securities of
corporations engaged in the same or similar businesses which are listed on a national
securities exchange. The weight to be accorded by comparisons or any other evidentiary
factors considered by the Board of Directors in the determination of value will depend on the
particular circumstances applying at the time. In every case, the determination of the Board
of Directors shall be final.
The purchase price of the shares purchased shall be paid in full upon exercise of the option
with cash or, if
permitted by the Committee, with stock of the Company. The proceeds of the issuance of Common
Stock subject to option are to be added to the funds of the Company available for its general
VI. EXERCISE OF OPTION
Each option granted under the Plan shall be exercisable only during such period as the
Committee may determine beginning not less than one year and ending not more than ten years after
the date upon which the option is granted, except as such period may be modified under the
provisions of Articles VII and IX hereof. Within such limits, each option shall provide, as
determined by the Committee, the time or times at which and the number of shares for which it may
be exercised. Unless otherwise provided in the Committees action, each option shall be
exercisable in whole at any time or in part from time to time (in blocks of 1,000 shares or any
multiple thereof) during the term of the option. The holder of an option shall have no rights as a
shareholder with respect to shares subject to the option until such shares shall have been issued
to such holder upon exercise of the option. An option may be exercised during the lifetime of the
holder thereof only by such holder, except as otherwise provided in Sections 9.1 and 9.2 hereof.
VII. NON TRANSFERABILITY OF OPTIONS
No option granted under the Plan shall be transferable otherwise than by will or the
applicable laws of descent and distribution.
VIII. TERMINATION OF EMPLOYMENT
If employment of the holder of an option is terminated by the Company for any reason,
other than by death or disability, the holders option may be exercised only within three months
from the date of such termination of employment, but in no event after ten years from the granting
of the option; provided, however, that if the holder is dismissed for cause, as to which the
Committee shall be sole and exclusive judge, the option shall expire immediately.
IX. DEATH OR DISABILITY OF OPTION HOLDER
9.1 Death While Employed. If the holder of an option dies while employed by the Company,
the option may be exercised by the personal representative of the option holder for a period of one
year from the date of death, but in no event after the expiration date of the option.
9.2 Death After Termination. If the holder of an option dies within three months after
termination of employment other than for cause, the option may be exercised by the personal
representative of the option holder for a period of one year from the date the option holder was
terminated by the Company, but in no event after the expiration date of the option.
9.3 Disability. If the holder of an option becomes disabled within the meaning of Section 22
(e) of the Code, the option may be exercised by the option holder, within one year after becoming
disabled, but in no event after the expiration date of the option.
X. AMENDMENT AND TERMINATION
Unless the Plan has been terminated as hereinafter provided, the Plan shall terminate on
December 31, 2002 and no option under it shall be granted thereafter. The Board of Directors of
the Company at any time prior to that date may terminate the Plan, or make such changes in it and
additions to it as the Board of Directors shall deem advisable; provided, however, the except as
provided in Section 3.2 hereof, the Board of Directors may not, without further approval of the
shareholders of the Company, increase the maximum number of shares as to which options may be
granted under the Plan; and provided further that any such change or addition does not affect the
Plans status under Section 422 of the Code. No termination or amendment of the Plan may, without
the consent of the holder of an option then existing, terminate such holders option or materially
and adversely affect such holders rights under the option.
XI. MISCELLANEOUS PROVISIONS
11.1 Option Date. An option shall have been deemed to have been granted on the date fixed
in the resolution of the Committee authorizing the granting of such option, provided such date
shall not be prior to the date of the adoption of such resolution. If no date is fixed by such
resolution, the option shall be deemed to have been granted on the date of adoption of the
resolution, provided that the agreement relating to the option shall be executed and delivered
within thirty days therefrom, otherwise the option shall be deemed to have been granted on the date
of delivery of such agreement to the optionee.
11.2 Indemnification of Committee. Without limiting any other rights of indemnification, the
members of the Committee shall be indemnified by the Company against the reasonable expenses
(including attorneys fees, judgments, fines, and amounts paid in settlement) actually incurred as
a result of any action, suit or proceeding, or any appeal or in connection with the Plan, and
against all amounts paid by them in settlement of such claim, to the full extent permissible under
Section 721 through 726 of the Business Corporation Law of the State of New York; provided that
within sixty days after institution of any such claim, the Committee member involved in writing
offers the Company the opportunity, at its own expense, to handle and defend the same.
XII. EFFECTIVE DATE
The plan shall become effective when it shall have been approved by the affirmative vote
of a majority of the total votes cast by the holders of record of the shares of Common Stock and
Class B Stock of the Company outstanding and entitled to vote at a meeting of shareholders, which
approval takes place within twelve months before or after the date the Plan is adopted by the
XIII. TIME OF GRANTING OF OPTIONS
13.1 Ten Year Limit. Options may only be granted under the Plan within ten years from the
date the Plan is adopted by the Board of Directors of the Company or the date the Plan is approved
by the Companys shareholders, whichever is earlier.
13.2 Formal Granting. Nothing contained in the Plan or in any resolution adopted or to be
adopted by the Board of Directors or the shareholders of the Company shall constitute the granting
of an option hereunder. The granting of an option pursuant to the Plan and the acquisition of any
rights as an option holder shall take place only when the Committee authorizes the issuance of the
option, and a formal written and executed option agreement is delivered to the then holder of the