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THOMAS MEDICAL PRODUCTS INVESTMENT PLAN
ARTICLE 1. ESTABLISHMENT, PURPOSE, AND DURATION
1.1 Establishment of the Plan. Thomas Medical Products, a Pennsylvania
corporation (hereinafter referred to as the "Company"), pursuant to
authorization by its Board of Directors, hereby establishes a stock purchase and
stock option plan to be known as the "Thomas Medical Products Plan" (hereinafter
referred to as the "Plan"), as set forth in this document. The Plan permits the
grant of options solely to the Participants expressly designated herein. The
Plan is not open or available to any other Employees of the Company.
The Plan shall become effective as of June 1, 2000 (the "Effective
Date"), and shall remain in effect as provided in Section 1.3 hereof.
1.2 Purpose of the Plan. The purpose of the Plan is to promote the
success, and enhance the value, of the Company by providing Participants with an
incentive for outstanding performance.
1.3 Duration of the Plan. The Plan shall commence on the Effective
Date, as described in Section 1.1 hereof, and shall remain in effect, subject to
the right of the Board of Directors to terminate the Plan at any time pursuant
to Article 11 hereof. In the absence of an amendment adopted by the Board to
extend the Plan, the Plan shall end ten years after the Effective Date.
ARTICLE 2 DEFINITIONS
Wherever used in the Plan, the following terms shall have the meanings
set forth below and, when the meaning is intended, the initial letter of the
word is capitalized:
(a) "Option Agreement" means an agreement to be entered
into by and between the Company and each Participant,
setting forth the terms and conditions applicable to
the grant of Options.
(b) "Board" or "Board of Directors" means the Board of
Directors of the Company.
(c) "Change in Control" shall mean the approval by the
stockholders of the Company of (i) any consolidation or
merger of the Company in which the holders of voting
stock of the Company immediately before the
consolidation or merger will not own 80% or more of the
voting shares of the continuing or surviving
corporation immediately after such consolidation or
merger, or (ii) any sale, lease, exchange or other
transfer (in one transaction or series of related
transactions) of all or substantially all of the assets
of the Company.
(d) "Code" means the Internal Revenue Code of 1986, as
amended from time to time.
(e) "Committee" means a committee of the Board of Directors
consisting of Terence D. Wall and Anthony Dimun, or
such other individuals as the Board shall designate
from time to time.
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(f) "Director" means any individual who is a member of the
Board of Directors of the Company.
(g) "Disability" shall mean total and permanent disability
as determined by the Committee.
(h) "Disqualifying Termination" shall mean a termination of
employment for: (i) an act or acts of dishonesty
committed by a Participant; or (ii) violations by a
Participant of the policies and procedures of the
Company which are either grossly negligent or willful
and deliberate.
(i) "Employee" means any employee of the Company.
(j) "Fair Market Value" means $12 per share.
(k) "Option" means an option to purchase Shares granted
under Article 6 hereof.
(l) "Option Price" means the price at which a Share may be
purchased by a Participant pursuant to an Option, as
determined by the Committee.
(m) "Participant" means solely and exclusively the
following Employees of the Company who are being
granted Options under the Plan:
Joseph Thomas
Theresa Holowis
Andrew Armour
(n) "Plan Administrator" means the individual or committee
designated by the Committee to administer this Plan.
(o) "Shares" means the shares of common stock of the
Company.
ARTICLE 3 ADMINISTRATION
3.1 The Committee. The Plan shall be administered by the Committee, or
by a Plan Administrator appointed by the Committee.
3.2 Authority of the Committee. The Committee shall have the power to
determine the terms and conditions applicable to the grants of Options in a
manner consistent with the Plan; to construe and interpret the Plan and any
agreement or instrument entered into under the Plan; to establish, amend, or
waive rules and regulations for the Plan's administration; and (subject to the
provisions of Article 11 hereof) to amend the terms and conditions of any
outstanding Option to the extent such terms and conditions are within the
discretion of the Committee as provided in the Plan.
3.3 Decisions Binding. All interpretations of the Plan, determinations
and decisions made by the Committee pursuant to the provisions of the Plan and
all related orders or resolutions of the Board of Directors shall be final,
conclusive, and binding on all Participants.
ARTICLE 4 SHARES SUBJECT TO THE PLAN
4.1 Number of Shares. The total number of Shares available for grant
under Options pursuant to the Plan may not exceed 125,000.
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4.2 Lapsed Awards. If any Option grant under this Plan is canceled,
terminates, expires, or lapses for any reason, any Shares subject to such Option
shall again be available for grant under the Plan.
ARTICLE 5 PARTICIPATION
Only the three Participants specifically identified above shall be
given the opportunity to participate in the Plan.
ARTICLE 6 STOCK OPTIONS
6.1 Option Grants. Subject to the terms and provisions of the Plan,
Options are hereby granted to the Participants, subject to each Participant's
execution of an Option agreement, as follows:
<TABLE>
<CAPTION>
PARTICIPANT NUMBER OF OPTIONS GRANTED
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<S> <C>
Joseph Thomas 50,000
Theresa Holowis 18,300
Andrew Armour 22,000
</TABLE>
6.2 Option Price. The Option Price for each option granted under this
Plan shall equal the Fair Market Value of a Share.
6.3 Duration of Options. Each Option shall expire no later than ten
years from the date on which the Option was granted.
6.4 Exercise of Options. Options granted under the Plan shall be
exercisable according to the Vesting Schedule set forth below, and shall be
subject to such restrictions and conditions as the Committee shall approve:
<TABLE>
<CAPTION>
VESTING SCHEDULE
<S> <C>
On October 1, 2000 30%
On October 1, 2001 10%
On October 1, 2002 60%
</TABLE>
6.5 Payment. Options shall be exercised by the delivery of a written
notice of exercise to the Plan Administrator, setting forth the number of Shares
with respect to which the Option is to be exercised, including a statement of
Participant's agreement to deliver full payment for the Shares within ninety
(90) days of the date of the notice. The Option Price upon exercise of any
Option shall be payable to the Company in full in cash or its equivalent. The
Committee also may allow any other means which the Committee determines to be
consistent with the Plan's purposes and applicable law.
6.6 Restrictions on Share Transferability. The Committee shall impose
such restrictions on any Shares acquired pursuant to the exercise of an Option
under the Plan as it may deem advisable, including, without limitation,
restrictions required under any federal blue sky or state securities laws
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applicable to such Shares. Such restrictions shall be set forth in the Option
Agreement entered into with each of the Participants.
6.7 Nontransferability of Options. No Option granted under the Plan may
be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated,
other than by will or by the laws of descent and distribution. During a
Participant's lifetime, all Options granted to a Participant under the Plan
shall be exercisable only by such Participant, except as set forth in Section
6.9 hereof.
6.8 No Rights as a Shareholder. Prior to the purchase of Shares
pursuant to an Option, a Participant shall not have the rights of a shareholder
with respect to such Shares.
6.9 Exercise of Options With Respect to Incapacitated Participants. If
a Participant, who has met the vesting requirements described in Section 6.4
hereof, is under a legal disability or in the Committee's opinion incapacitated
in any way so as to be unable to manage his or her financial affairs, the
Committee may allow such Participant's legal representative to exercise the
Participant's Options on behalf of the Participant. Actions taken pursuant to
this Section by the Committee shall discharge all liabilities under the Plan.
ARTICLE 7 PUT AND CALL RIGHTS
7.1 Sale to the Company by Participants. Any vested options may be sold
to the Company upon the Participant's written notice of demand. The purchase
price per Option share shall be calculated as follows:
(The Company's pre-tax income, determined in accordance with generally accepted
accounting principles consistently applied, for the 12 calendar months preceding
the calendar month in which notice is given x 7.26)
divided by
Total Shares Outstanding = Purchase Price per option
7.2 Call Right by the Company. In the event that a
Participant's employment with the Company is terminated
for any reason, the Company shall have the right but
not the obligation to purchase the Participant's vested
Option shares. The calculation of the purchase price
per Option share shall be as set forth in paragraph 7.1
above.
7.3 The foregoing calculations as set forth in and
described in paragraphs 7.1 and 7.2 are based upon the
assumption that the Company has 1,000,000 Shares issued
and outstanding. In the event of any change or
adjustment to the number of shares issued and
outstanding of the Company, the foregoing formula shall
be adjusted ratably.
ARTICLE 8 TERMINATION OF EMPLOYMENT
8.1 Termination by Reason of Death, Disability or Retirement. In the
event the employment of a Participant is terminated by reason of death,
Disability, or Retirement, the following provisions shall apply:
(a) Treatment of Stock Options. All outstanding
Options granted to the Participant which have vested
pursuant to the Vesting Schedule set forth above
prior to the date of Participant's termination of
employment) (the "Covered Options"), shall not be
forfeitable in the event of death or Disability, but
shall be forfeitable in the event of Retirement and,
if not so forfeitable, shall remain exercisable at
any time
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prior to their expiration date, or for one
(1) year after the date of death, Disability, or
Retirement, whichever period is shorter, by the
Participant or by such person or persons that have
acquired the Participant's rights under the Option by
will or by the laws of descent and distribution. The
Plan Administrator shall, in all cases, determine the
date of employment termination. All Options granted
to the Participant pursuant to the Plan other than
the Covered Options shall be forfeited and shall once
again be available for grant under the Plan.
(b) Amounts Subject to Dispute. If at the time of a
Participant's death, the Plan Administrator is unable
to determine what person, persons or entity is
entitled to exercise Options on behalf of the
Participant, the Plan Administrator shall not be
required to implement any directions to exercise such
Options to any such person, persons or entity during
the pendency of such dispute. Neither the Plan
Administrator, the Committee or the Company shall be
responsible for a failure to implement such exercise
instructions during the pendency of such dispute,
notwithstanding the fact that Options may diminish in
value or expire during the pendency of such dispute.
8.2 Disqualifying Termination. In the event
that the Company terminates the employment of a
Participant as a result of a Disqualifying
Termination, a Participant shall forfeit all Unvested
Options. Any Covered Options may not be exercised at
any time after the expiration of 90 days from the
date of termination.
8.3 Other Termination. In the event a Participant's employment is
terminated for reasons other than death, Disability, Retirement or Disqualifying
Termination,
A Participant shall forfeit all unvested Options
granted to the Participant under the Plan which do
not constitute Covered Options. Covered Options may
be exercised by the Participant within the period
beginning on the effective date of employment
termination, and ending three (3) months after such
date.
8.4 Retirement of Joseph Thomas. In the event of the retirement of
Joseph Thomas, the Committee shall have the right, exercisable at its sole and
absolute discretion, to cause the forfeiture of all unvested Options of each of
the other Participants. In the event the Committee shall exercise this right,
neither it nor the Company shall have any liability or obligation in respect
thereof, except that it shall provide written notice to the Participants
notifying each of them that their Unvested Options have been forfeited.
ARTICLE 9 RIGHTS OF PARTICIPANTS
Nothing in the Plan shall interfere with or limit in any way the right
of the Company to terminate any participating Employee's employment at any time,
nor confer upon any Participant any right to continue in the employ of the
Company.
ARTICLE 10. CHANGE IN CONTROL
If the Board so determines at any time in its discretion, the following
provisions shall apply if a Change in Control occurs after such determination:
(a) Any and all Options granted hereunder shall
become immediately exercisable (and shall remain
exercisable throughout their entire term);
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(b) Subject to the other provisions of this Plan, the
Committee shall have the authority to make any
modifications to the Options as are determined by the
Committee to be appropriate before the effective date
of the Change in Control.
ARTICLE 11 AMENDMENT, MODIFICATION AND TERMINATION
11.1 Amendment. Modification and Termination. With the approval of the
Board, at any time and from time to time, the Committee may terminate, amend or
modify the Plan.
11.2 Awards Previously Granted. No termination, amendment or
modification of the Plan shall adversely affect in any material way any Option
previously granted under the Plan, without the written consent of the
Participant holding such Option.
ARTICLE 12 WITHHOLDING
12.1 Tax Withholding. The Company shall have the power and the right to
deduct or withhold, or require a Participant to remit to the Company, an amount
sufficient to satisfy Federal, state, and local taxes (including the
Participant's FICA obligation) required by law to be withheld with respect to
any taxable event arising as a result of this Plan.
ARTICLE 13 INDEMNIFICATION
Each person who is or shall have been a member of the Committee, the
Board, or the Plan Administrator, and each agent retained by the Plan
Administrator, shall be indemnified and held harmless by the Company against and
from any loss, cost, liability, or expense that may be imposed upon or
reasonably incurred by him or her in connection with or resulting from any
claim, action, suit, or proceeding to which he or she may be a party or in which
he or she may be involved by reason of any action taken in good faith or any
good faith failure to act under the Plan and against and from any and all
amounts paid by him or her in settlement thereof, with the Company's approval,
or paid by him or her in satisfaction of any judgment in any such action, suit,
or proceeding against him or her, provided he or she shall give the Company an
opportunity, at its own expense, to handle and defend the same before he or she
undertakes to handle and defend it on his or her own behalf. The foregoing right
of indemnification shall not be exclusive of any other rights of indemnification
to which such persons may be entitled under the Company's Certificate of
Incorporation or By-Laws, as a matter of law, or otherwise, or any power that
the Company may have to indemnify them or hold them harmless.
ARTICLE 14 SUCCESSORS
All obligations of the Company under the Plan, with respect to Plan
Shares purchased and Options granted hereunder, shall be binding on any
successor to the Company, whether the existence of such successor is the result
of a direct or indirect purchase, merger, consolidation, or otherwise, of all or
substantially all of the business and/or assets of the Company.
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ARTICLE 15 LEGAL CONSTRUCTION
15.1 Gender and Number. Except where otherwise indicated by the
context, any masculine term used herein also shall include the feminine, the
plural shall include the singular and the singular shall include the plural.
15.2 Severability. In the event any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of the Plan, and the Plan shall be construed and enforced as
if the illegal or invalid provision had not been included.
15.3 Requirements of Law. The granting of Options, and the issuance of
Shares under the Plan, shall be subject to all applicable laws, rules, and
regulations, and to such approvals by any governmental agencies or national
securities exchanges as may be required.
15.4 Governing Law. To the extent not preempted by Federal law, the
Plan, and all agreements hereunder, shall be construed in accordance with and
governed by the laws of the Commonwealth of Pennsylvania.
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