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Exhibit 10.1
RADISYS CORPORATION
1995 STOCK INCENTIVE PLAN
(As Amended Through May 16, 2000)
1. PURPOSE. The purpose of this Stock Incentive Plan (the "Plan")
is to enable RadiSys Corporation (the "Company") to attract and retain the
services of (1) selected employees, officers and directors of the Company or
of any subsidiary of the Company and (2) selected nonemployee agents,
consultants, advisors, persons involved in the sale or distribution of the
Company's products and independent contractors of the Company or any
subsidiary.
2. SHARES SUBJECT TO THE PLAN. Subject to adjustment as provided
below and in paragraph 13, the shares to be offered under the Plan shall
consist of Common Stock of the Company, and the total number of shares of
Common Stock that may be issued under the Plan shall not exceed 5,425,000(*)
shares. The shares issued under the Plan may be authorized and unissued
shares or reacquired shares. If an option, stock appreciation right or
performance unit granted under the Plan expires, terminates or is canceled,
the unissued shares subject to such option, stock appreciation right or
performance unit shall again be available under the Plan. If shares sold or
awarded as a bonus under the Plan are forfeited to the Company or repurchased
by the Company, the number of shares forfeited or repurchased shall again be
available under the Plan.
3. EFFECTIVE DATE AND DURATION OF PLAN.
(a) EFFECTIVE DATE. The Plan shall become effective as of
August 7, 1995. No option, stock appreciation right or performance unit
granted under the Plan to an officer who is subject to Section 16(b) of the
Securities Exchange Act of 1934, as amended (an "Officer") or a director, and
no incentive stock option, shall become exercisable, however, until the Plan
is approved by the affirmative vote of the holders of a majority of the
shares of Common Stock represented at a shareholders meeting at which a
quorum is present and any such awards under the Plan prior to such approval
shall be conditioned on and subject to such approval. Subject to this
limitation, options, stock appreciation rights and performance units may be
granted and shares may be awarded as bonuses or sold under the Plan at any
time after the effective date and before termination of the Plan.
(b) DURATION. The Plan shall continue in effect until all
shares available for issuance under the Plan have been issued and all
restrictions on such shares have lapsed. The
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(*) Adjusted to reflect a 3-for-2 stock split of the shares of
Common Stock, without par value, of the Company, effected in
the form of a 50% share dividend in accordance with ORS 60.154,
declared by the Board of Directors on October 19, 1999, and paid
on November 29, 1999 to shareholders of record at the close of
business on November 8, 1999.
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Board of Directors may suspend or terminate the Plan at any time except with
respect to options, performance units and shares subject to restrictions then
outstanding under the Plan. Termination shall not affect any outstanding
options, any right of the Company to repurchase shares or the forfeitability
of shares issued under the Plan.
4. ADMINISTRATION.
(a) BOARD OF DIRECTORS. The Plan shall be administered by
the Board of Directors of the Company, which shall determine and designate
from time to time the individuals to whom awards shall be made, the amount of
the awards and the other terms and conditions of the awards. Subject to the
provisions of the Plan, the Board of Directors may from time to time adopt
and amend rules and regulations relating to administration of the Plan,
advance the lapse of any waiting period, accelerate any exercise date, waive
or modify any restriction applicable to shares (except those restrictions
imposed by law) and make all other determinations in the judgment of the
Board of Directors necessary or desirable for the administration of the Plan.
The interpretation and construction of the provisions of the Plan and
related agreements by the Board of Directors shall be final and conclusive.
The Board of Directors may correct any defect or supply any omission or
reconcile any inconsistency in the Plan or in any related agreement in the
manner and to the extent it shall deem expedient to carry the Plan into
effect, and it shall be the sole and final judge of such expediency.
(b) COMMITTEE. The Board of Directors may delegate to a
committee of the Board of Directors or specified officers of the Company, or
both (the "Committee") any or all authority for administration of the Plan.
If authority is delegated to a Committee, all references to the Board of
Directors in the Plan shall mean and relate to the Committee except (i) as
otherwise provided by the Board of Directors, (ii) that only the Board of
Directors may amend or terminate the Plan as provided in paragraphs 3 and 15
and (iii) that a Committee including officers of the Company shall not be
permitted to grant options to persons who are officers of the Company. If
awards are to be made under the Plan to Officers or directors, authority for
selection of Officers and directors for participation and decisions
concerning the timing, pricing and amount of a grant or award, if not
determined under a formula meeting the requirements of Rule 16b-3 under the
Securities Exchange Act of 1934, as amended, shall be delegated to a
committee consisting of two or more disinterested directors.
5. TYPES OF AWARDS; ELIGIBILITY. The Board of Directors may, from
time to time, take the following action, separately or in combination, under
the Plan: (i) grant Incentive Stock Options, as defined in Section 422 of
the Internal Revenue Code of 1986, as amended (the "Code"), as provided in
paragraphs 6(a) and 6(b); (ii) grant options other than Incentive Stock
Options ("Non-Statutory Stock Options") as provided in paragraphs 6(a) and
6(c); (iii) award stock bonuses as provided in paragraph 7; (iv) sell shares
subject to restrictions as provided in paragraph 8; (v) grant stock
appreciation rights as provided in paragraph 9; (vi) grant cash bonus rights
as provided in paragraph 10; (vii) grant performance units as provided in
paragraph 11 and (viii) grant foreign qualified awards as provided in
paragraph 12.
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Any such awards may be made to employees, including employees who are
officers or directors, and to other individuals described in paragraph 1 who
the Board of Directors believes have made or will make an important
contribution to the Company or any subsidiary of the Company; provided,
however, that only employees of the Company or any subsidiary shall be
eligible to receive Incentive Stock Options under the Plan. The Board of
Directors shall select the individuals to whom awards shall be made and shall
specify the action taken with respect to each individual to whom an award is
made. At the discretion of the Board of Directors, an individual may be
given an election to surrender an award in exchange for the grant of a new
award; provided, however, that, notwithstanding anything to the contrary
contained herein, in no event shall any option or stock appreciation right
granted under the Plan be repriced, replaced or regranted through the
cancellation and reissuance thereof at a lower exercise price, or by lowering
the exercise price of a previously granted option or stock appreciation
right, without the prior approval of the shareholders of the Company. No
employee may be granted options or stock appreciation rights under the Plan
for more than an aggregate of 450,000 shares of Common Stock in connection
with the hiring of the employee or 100,000 shares of Common Stock in any
calendar year otherwise.
6. OPTION GRANTS.
(a) GENERAL RULES RELATING TO OPTIONS.
(i) TERMS OF GRANT. The Board of Directors may grant
options under the Plan. With respect to each option grant, the Board of
Directors shall determine the number of shares subject to the option, the
option price, the period of the option, the time or times at which the
option may be exercised and whether the option is an Incentive Stock
Option or a Non-Statutory Stock Option. At the time of the grant of an
option or at any time thereafter, the Board of Directors may provide that
an optionee who exercised an option with Common Stock of the Company
shall automatically receive a new option to purchase additional shares
equal to the number of shares surrendered and may specify the terms and
conditions of such new options.
(ii) EXERCISE OF OPTIONS. Except as provided in
paragraph 6(a)(iv) or as determined by the Board of Directors, no option
granted under the Plan may be exercised unless at the time of such
exercise the optionee is employed by or in the service of the Company or
any subsidiary of the Company and shall have been so employed or provided
such service continuously since the date such option was granted.
Absence on leave or on account of illness or disability under rules
established by the Board of Directors shall not, however, be deemed an
interruption of employment or service for this purpose. Unless otherwise
determined by the Board of Directors, vesting of options shall not
continue during an absence on leave (including an extended illness) or on
account of disability. Except as provided in paragraphs 6(a)(iv) and 13,
options granted under the Plan may be exercised from time to time over
the period stated in each option in such amounts and at such times as
shall be prescribed by the
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Board of Directors, provided that options shall not be exercised for
fractional shares. Unless otherwise determined by the Board of
Directors, if the optionee does not exercise an option in any one year
with respect to the full number of shares to which the optionee is
entitled in that year, the optionee's rights shall be cumulative and the
optionee may purchase those shares in any subsequent year during the term
of the option. Unless otherwise determined by the Board of Directors, if
an Officer exercises an option within six months of the grant of the
option, the shares acquired upon exercise of the option may not be sold
until six months after the date of grant of the option.
(iii) NONTRANSFERABILITY. Each Incentive Stock Option
and, unless otherwise determined by the Board of Directors with respect
to an option granted to a person who is neither an Officer nor a director
of the Company, each other option granted under the Plan by its terms
shall be nonassignable and nontransferable by the optionee, either
voluntarily or by operation of law, except by will or by the laws of
descent and distribution of the state or country of the optionee's
domicile at the time of death, and shall be exercisable during the
optionee's lifetime only by the optionee.
(iv) TERMINATION OF EMPLOYMENT OR SERVICE.
(A) GENERAL RULE. Unless otherwise determined by
the Board of Directors, in the event the employment or service of
the optionee with the Company or a subsidiary terminates for any
reason other than because of physical disability or death as
provided in subparagraphs 6(a)(iv)(B) and (C), the option may be
exercised at any time prior to the expiration date of the option
or the expiration of 30 days after the date of such termination,
whichever is the shorter period, but only if and to the extent the
optionee was entitled to exercise the option at the date of such
termination.
(B) TERMINATION BECAUSE OF TOTAL DISABILITY.
Unless otherwise determined by the Board of Directors, in the
event of the termination of employment or service because of total
disability, the option may be exercised at any time prior to the
expiration date of the option or the expiration of 12 months after
the date of such termination, whichever is the shorter period, but
only if and to the extent the optionee was entitled to exercise
the option at the date of such termination. The term "total
disability" means a medically determinable mental or physical
impairment which is expected to result in death or which has
lasted or is expected to last for a continuous period of 12 months
or more and which causes the optionee to be unable, in the opinion
of the Company and two independent physicians, to perform his or
her duties as an employee, director, officer or consultant of the
Company and to be engaged in any substantial gainful activity.
Total disability shall be deemed to have
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occurred on the first day after the Company and the two
independent physicians have furnished their opinion of total
disability to the Company.
(C) TERMINATION BECAUSE OF DEATH. Unless
otherwise determined by the Board of Directors, in the event of
the death of an optionee while employed by or providing service to
the Company or a subsidiary, the option may be exercised at any
time prior to the expiration date of the option or the expiration
of 12 months after the date of death, whichever is the shorter
period, but only if and to the extent the optionee was entitled to
exercise the option at the date of death and only by the person or
persons to whom such optionee's rights under the option shall pass
by the optionee's will or by the laws of descent and distribution
of the state or country of domicile at the time of death.
(D) AMENDMENT OF EXERCISE PERIOD APPLICABLE TO
TERMINATION. The Board of Directors, at the time of grant or,
with respect to an option that is not an Incentive Stock Option,
at any time thereafter, may extend the 30-day and 12-month
exercise periods any length of time not longer than the original
expiration date of the option, and may increase the portion of an
option that is exercisable, subject to such terms and conditions
as the Board of Directors may determine.
(E) FAILURE TO EXERCISE OPTION. To the extent
that the option of any deceased optionee or of any optionee whose
employment or service terminates is not exercised within the
applicable period, all further rights to purchase shares pursuant
to such option shall cease and terminate.
(v) PURCHASE OF SHARES. Unless the Board of Directors
determines otherwise, shares may be acquired pursuant to an option
granted under the Plan only upon receipt by the Company of notice in
writing from the optionee of the optionee's intention to exercise,
specifying the number of shares as to which the optionee desires to
exercise the option and the date on which the optionee desires to
complete the transaction, and if required in order to comply with the
Securities Act of 1933, as amended, containing a representation that it
is the optionee's present intention to acquire the shares for investment
and not with a view to distribution. Unless the Board of Directors
determines otherwise, on or before the date specified for completion of
the purchase of shares pursuant to an option, the optionee must have paid
the Company the full purchase price of such shares in cash (including,
with the consent of the Board of Directors, cash that may be the proceeds
of a loan from the Company (provided that, with respect to an Incentive
Stock Option, such loan is approved at the time of option grant)) or,
with the consent of the Board of Directors (which, in the case of an
Incentive Stock Option, shall be given only at the time of option grant),
in whole or in
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part, in Common Stock of the Company valued at fair market
value(*), restricted stock, performance units or other contingent awards
denominated in either stock or cash, promissory notes and other forms of
consideration. The fair market value of Common Stock provided in payment
of the purchase price shall be determined by the Board of Directors. If
the Common Stock of the Company is not publicly traded on the date the
option is exercised, the Board of Directors may consider any valuation
methods it deems appropriate and may, but is not required to, obtain one
or more independent appraisals of the Company. If the Common Stock of
the Company is publicly traded on the date the option is exercised, the
fair market value of Common Stock provided in payment of the purchase
price shall be the closing price of the Common Stock as reported in THE
WALL STREET JOURNAL on the last trading day preceding the date the option
is exercised, or such other reported value of the Common Stock as shall
be specified by the Board of Directors. No shares shall be issued until
full payment for the shares has been made. With the consent of the Board
of Directors (which, in the case of an Incentive Stock Option, shall be
given only at the time of option grant), an optionee may request the
Company to apply automatically the shares to be received upon the
exercise of a portion of a stock option (even though stock certificates
have not yet been issued) to satisfy the purchase price for additional
portions of the option. Each optionee who has exercised an option shall
immediately upon notification of the amount due, if any, pay to the
Company in cash amounts necessary to satisfy any applicable federal,
state and local tax withholding requirements. If additional withholding
is or becomes required beyond any amount deposited before delivery of the
certificates, the optionee shall pay such amount to the Company on
demand. If the optionee fails to pay the amount demanded, the Company
may withhold that amount from other amounts payable by the Company to the
optionee, including salary, subject to applicable law. With the consent
of the Board of Directors (which in the case of an Incentive Stock
Option, shall be given only at the time of option grant), an optionee may
satisfy this obligation, in whole or in part, by having the Company
withhold from the shares to be issued upon the exercise that number of
shares that would satisfy the withholding amount due or by delivering to
the Company Common Stock to satisfy the withholding amount. Upon the
exercise of an option, the number of shares reserved for issuance under
the Plan shall be reduced by the number of shares issued upon exercise of
the option.
(b) INCENTIVE STOCK OPTIONS. Incentive Stock Options shall be
subject to the following additional terms and conditions:
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(*) The Board of Directors has consented to the use of Common Stock in
payment of the purchase price, at a fair market value equal to the
closing price of the Common Stock as reported in THE WALL STREET
JOURNAL on the last trading day preceding the date the option is
exercised.
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(i) LIMITATION ON AMOUNT OF GRANTS. No employee may be
granted Incentive Stock Options under the Plan if the aggregate fair
market value, on the date of grant, of the Common Stock with respect to
which Incentive Stock Options are exercisable for the first time by that
employee during any calendar year under the Plan and under all incentive
stock option plans (within the meaning of Section 422 of the Code) of the
Company or any parent or subsidiary of the Company exceeds $100,000.
(ii) LIMITATIONS ON GRANTS TO 10 PERCENT SHAREHOLDERS.
An Incentive Stock Option may be granted under the Plan to an employee
possessing more than 10 percent of the total combined voting power of all
classes of stock of the Company or of any parent or subsidiary of the
Company only if the option price is at least 110 percent of the fair
market value, as described in paragraph 6(b)(iv), of the Common Stock
subject to the option on the date it is granted and the option by its
terms is not exercisable after the expiration of five years from the date
it is granted.
(iii) DURATION OF OPTIONS. Subject to paragraphs 6(a)(ii)
and 6(b)(ii), Incentive Stock Options granted under the Plan shall
continue in effect for the period fixed by the Board of Directors, except
that no Incentive Stock Option shall be exercisable after the expiration
of 10 years from the date it is granted.
(iv) OPTION PRICE. The option price per share shall be
determined by the Board of Directors at the time of grant. Except as
provided in paragraph 6(b)(ii), the option price shall not be less than
100 percent of the fair market value of the Common Stock covered by the
Incentive Stock Option at the date the option is granted. The fair
market value shall be determined by the Board of Directors. If the
Common Stock of the Company is not publicly traded on the date the option
is granted, the Board of Directors may consider any valuation methods it
deems appropriate and may, but is not required to, obtain one or more
independent appraisals of the Company. If the Common Stock of the
Company is publicly traded on the date the option is exercised, the fair
market value shall be deemed to be the closing price of the Common Stock
as reported in THE WALL STREET JOURNAL on the day preceding the date the
option is granted, or, if there has been no sale on that date, on the
last preceding date on which a sale occurred or such other value of the
Common Stock as shall be specified by the Board of Directors.
(v) LIMITATION ON TIME OF GRANT. No Incentive Stock
Option shall be granted on or after the tenth anniversary of the
effective date of the Plan.
(vi) CONVERSION OF INCENTIVE STOCK OPTIONS. The Board of
Directors may at any time without the consent of the optionee convert an
Incentive Stock Option to a Non-Statutory Stock Option.
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(c) NON-STATUTORY STOCK OPTIONS. Non-Statutory Stock Options
shall be subject to the following terms and conditions in addition to those set
forth in paragraph 6(a) above:
(i) OPTION PRICE. The option price for Non-Statutory
Stock Options shall be determined by the Board of Directors at the time
of grant and may be any amount determined by the Board of Directors.
(ii) DURATION OF OPTIONS. Non-Statutory Stock Options
granted under the Plan shall continue in effect for the period fixed by
the Board of Directors.
7. STOCK BONUSES. The Board of Directors may award shares under
the Plan as stock bonuses. Shares awarded as a bonus shall be subject to the
terms, conditions, and restrictions determined by the Board of Directors.
The restrictions may include restrictions concerning transferability and
forfeiture of the shares awarded, together with such other restrictions as
may be determined by the Board of Directors. If shares are subject to
forfeiture, all dividends or other distributions paid by the Company with
respect to the shares shall be retained by the Company until the shares are
no longer subject to forfeiture, at which time all accumulated amounts shall
be paid to the recipient. The Board of Directors may require the recipient
to sign an agreement as a condition of the award, but may not require the
recipient to pay any monetary consideration other than amounts necessary to
satisfy tax withholding requirements. The agreement may contain any terms,
conditions, restrictions, representations and warranties required by the
Board of Directors. The certificates representing the shares awarded shall
bear any legends required by the Board of Directors. Unless otherwise
determined by the Board of Directors, shares awarded as a stock bonus to an
Officer may not be sold until six months after the date of the award. The
Company may require any recipient of a stock bonus to pay to the Company in
cash upon demand amounts necessary to satisfy any applicable federal, state
or local tax withholding requirements. If the recipient fails to pay the
amount demanded, the Company may withhold that amount from other amounts
payable by the Company to the recipient, including salary or fees for
services, subject to applicable law. With the consent of the Board of
Directors, a recipient may deliver Common Stock to the Company to satisfy
this withholding obligation. Upon the issuance of a stock bonus, the number
of shares reserved for issuance under the Plan shall be reduced by the number
of shares issued.
8. RESTRICTED STOCK. The Board of Directors may issue shares
under the Plan for such consideration (including promissory notes and
services) as determined by the Board of Directors. Shares issued under the
Plan shall be subject to the terms, conditions and restrictions determined by
the Board of Directors. The restrictions may include restrictions concerning
transferability, repurchase by the Company and forfeiture of the shares
issued, together with such other restrictions as may be determined by the
Board of Directors. If shares are subject to forfeiture or repurchase by the
Company, all dividends or other distributions paid by the Company with
respect to the shares shall be retained by the Company until the
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shares are no longer subject to forfeiture or repurchase, at which time all
accumulated amounts shall be paid to the recipient. All Common Stock issued
pursuant to this paragraph 8 shall be subject to a purchase agreement, which
shall be executed by the Company and the prospective recipient of the shares
prior to the delivery of certificates representing such shares to the
recipient. The purchase agreement may contain any terms, conditions,
restrictions, representations and warranties required by the Board of
Directors. The certificates representing the shares shall bear any legends
required by the Board of Directors. Unless otherwise determined by the Board
of Directors, shares issued under this paragraph 8 to an Officer may not be
sold until six months after the shares are issued. The Company may require
any purchaser of restricted stock to pay to the Company in cash upon demand
amounts necessary to satisfy any applicable federal, state or local tax
withholding requirements. If the purchaser fails to pay the amount demanded,
the Company may withhold that amount from other amounts payable by the
Company to the purchaser, including salary, subject to applicable law. With
the consent of the Board of Directors, a purchaser may deliver Common Stock
to the Company to satisfy this withholding obligation. Upon the issuance of
restricted stock, the number of shares reserved for issuance under the Plan
shall be reduced by the number of shares issued.
9. STOCK APPRECIATION RIGHTS.
(a) GRANT. Stock appreciation rights may be granted under the
Plan by the Board of Directors, subject to such rules, terms, and conditions as
the Board of Directors prescribes.
(b) EXERCISE.
(i) Each stock appreciation right shall entitle the
holder, upon exercise, to receive from the Company in exchange therefor
an amount equal in value to the excess of the fair market value on the
date of exercise of one share of Common Stock of the Company over its
fair market value on the date of grant (or, in the case of a stock
appreciation right granted in connection with an option, the excess of
the fair market value of one share of Common Stock of the Company over
the option price per share under the option to which the stock
appreciation right relates), multiplied by the number of shares covered
by the stock appreciation right or the option, or portion thereof, that
is surrendered. No stock appreciation right shall be exercisable at a
time that the amount determined under this subparagraph is negative.
Payment by the Company upon exercise of a stock appreciation right may be
made in Common Stock valued at fair market value, in cash, or partly in
Common Stock and partly in cash, all as determined by the Board of
Directors.
(ii) A stock appreciation right shall be exercisable only
at the time or times established by the Board of Directors. If a stock
appreciation right is granted in connection with an option, the following
rules shall apply: (1) the stock appreciation
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right shall be exercisable only to the extent and on the same
conditions that the related option could be exercised; (2) the stock
appreciation rights shall be exercisable only when the fair market
value of the stock exceeds the option price of the related option;
(3) the stock appreciation right shall be for no more than 100 percent
of the excess of the fair market value of the stock at the time of
exercise over the option price; (4) upon exercise of the stock
appreciation right, the option or portion thereof to which the stock
appreciation right relates terminates; and (5) upon exercise of the
option, the related stock appreciation right or portion thereof
terminates. Unless otherwise determined by the Board of
Directors, no stock appreciation right granted to an Officer or director
may be exercised during the first six months following the date it is
granted.
(iii) The Board of Directors may withdraw any stock
appreciation right granted under the Plan at any time and may impose any
conditions upon the exercise of a stock appreciation right or adopt rules
and regulations from time to time affecting the rights of holders of
stock appreciation rights. Such rules and regulations may govern the
right to exercise stock appreciation rights granted prior to adoption or
amendment of such rules and regulations as well as stock appreciation
rights granted thereafter.
(iv) For purposes of this paragraph 9, the fair market
value of the Common Stock shall be determined as of the date the stock
appreciation right is exercised, under the methods set forth in paragraph
6(b)(iv).
(v) No fractional shares shall be issued upon exercise
of a stock appreciation right. In lieu thereof, cash may be paid in an
amount equal to the value of the fraction or, if the Board of Directors
shall determine, the number of shares may be rounded downward to the next
whole share.
(vi) Each stock appreciation right granted in connection
with an Incentive Stock Option, and unless otherwise determined by the
Board of Directors with respect to a stock appreciation right granted to
a person who is neither an Officer nor a director of the Company, each
other stock appreciation right granted under the Plan by its terms shall
be nonassignable and nontransferable by the holder, either voluntarily or
by operation of law, except by will or by the laws of descent and
distribution of the state or country of the holder's domicile at the time
of death, and each stock appreciation right by its terms shall be
exercisable during the holder's lifetime only by the holder.
(vii) Each participant who has exercised a stock
appreciation right shall, upon notification of the amount due, pay to the
Company in cash amounts necessary to satisfy any applicable federal,
state and local tax withholding requirements. If the participant fails
to pay the amount demanded, the Company may withhold that amount from
other amounts payable by the Company to the participant
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including salary, subject to applicable law. With the consent of the
Board of Directors a participant may satisfy this obligation, in whole
or in part, by having the Company withhold from any shares to be issued
upon the exercise that number of shares that would satisfy the
withholding amount due or by delivering Common Stock to the Company to
satisfy the withholding amount.
(viii) Upon the exercise of a stock appreciation right for
shares, the number of shares reserved for issuance under the Plan shall
be reduced by the number of shares issued. Cash payments of stock
appreciation rights shall not reduce the number of shares of Common Stock
reserved for issuance under the Plan.
10. CASH BONUS RIGHTS.
(a) GRANT. The Board of Directors may grant cash bonus rights
under the Plan in connection with (i) options granted or previously granted,
(ii) stock appreciation rights granted or previously granted, (iii) stock
bonuses awarded or previously awarded and (iv) shares sold or previously sold
under the Plan. Cash bonus rights will be subject to rules, terms and
conditions as the Board of Directors may prescribe. Unless otherwise determined
by the Board of Directors with respect to a cash bonus right granted to a person
who is neither an Officer nor a director of the Company, each cash bonus right
granted under the Plan by its terms shall be nonassignable and nontransferable
by the holder, either voluntarily or by operation of law, except by will or by
the laws of descent and distribution of the state or country of the holder's
domicile at the time of death. The payment of a cash bonus shall not reduce the
number of shares of Common Stock reserved for issuance under the Plan.
(b) CASH BONUS RIGHTS IN CONNECTION WITH OPTIONS. A cash
bonus right granted in connection with an option will entitle an optionee to
a cash bonus when the related option is exercised (or terminates in
connection with the exercise of a stock appreciation right related to the
option) in whole or in part if, in the sole discretion of the Board of
Directors, the bonus right will result in a tax deduction that the Company
has sufficient taxable income to use. If an optionee purchases shares upon
exercise of an option and does not exercise a related stock appreciation
right, the amount of the bonus, if any, shall be determined by multiplying
the excess of the total fair market value of the shares to be acquired upon
the exercise over the total option price for the shares by the applicable
bonus percentage. If the optionee exercises a related stock appreciation
right in connection with the termination of an option, the amount of the
bonus, if any, shall be determined by multiplying the total fair market value
of the shares and cash received pursuant to the exercise of the stock
appreciation right by the applicable bonus percentage. The bonus percentage
applicable to a bonus right, including a previously granted bonus right, may
be changed from time to time at the sole discretion of the Board of Directors
but shall in no event exceed 75 percent.
(c) CASH BONUS RIGHTS IN CONNECTION WITH STOCK BONUS. A cash
bonus right granted in connection with a stock bonus will entitle the recipient
to a cash bonus payable
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when the stock bonus is awarded or restrictions, if any, to which the stock
is subject lapse. If bonus stock awarded is subject to restrictions and is
repurchased by the Company or forfeited by the holder, the cash bonus right
granted in connection with the stock bonus shall terminate and may not be
exercised. The amount and timing of payment of a cash bonus shall be
determined by the Board of Directors.
(d) CASH BONUS RIGHTS IN CONNECTION WITH STOCK PURCHASES. A
cash bonus right granted in connection with the purchase of stock pursuant to
paragraph 8 will entitle the recipient to a cash bonus when the shares are
purchased or restrictions, if any, to which the stock is subject lapse. Any
cash bonus right granted in connection with shares purchased pursuant to
paragraph 8 shall terminate and may not be exercised in the event the shares are
repurchased by the Company or forfeited by the holder pursuant to applicable
restrictions. The amount of any cash bonus to be awarded and timing of payment
of a cash bonus shall be determined by the Board of Directors.
(e) TAXES. The Company shall withhold from any cash bonus paid
pursuant to paragraph 10 the amount necessary to satisfy any applicable federal,
state and local withholding requirements.
11. PERFORMANCE UNITS. The Board of Directors may grant
performance units consisting of monetary units which may be earned in whole
or in part if the Company achieves certain goals established by the Board of
Directors over a designated period of time, but not in any event more than 10
years. The goals established by the Board of Directors may include earnings
per share, return on shareholders' equity, return on invested capital, and
such other goals as may be established by the Board of Directors. In the
event that the minimum performance goal established by the Board of Directors
is not achieved at the conclusion of a period, no payment shall be made to
the participants. In the event the maximum corporate goal is achieved, 100
percent of the monetary value of the performance units shall be paid to or
vested in the participants. Partial achievement of the maximum goal may
result in a payment or vesting corresponding to the degree of achievement as
determined by the Board of Directors. Payment of an award earned may be in
cash or in Common Stock or in a combination of both, and may be made when
earned, or vested and deferred, as the Board of Directors determines.
Deferred awards shall earn interest on the terms and at a rate determined by
the Board of Directors. Unless otherwise determined by the Board of
Directors with respect to a performance unit granted to a person who is
neither an Officer nor a director of the Company, each performance unit
granted under the Plan by its terms shall be nonassignable and
nontransferable by the holder, either voluntarily or by operation of law,
except by will or by the laws of descent and distribution of the state or
country of the holder's domicile at the time of death. Each participant who
has been awarded a performance unit shall, upon notification of the amount
due, pay to the Company in cash amounts necessary to satisfy any applicable
federal, state and local tax withholding requirements. If the participant
fails to pay the amount demanded, the Company may withhold that amount from
other amounts payable by the Company to the participant, including salary or
fees for services, subject to
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applicable law. With the consent of the Board of Directors a participant may
satisfy this obligation, in whole or in part, by having the Company withhold
from any shares to be issued that number of shares that would satisfy the
withholding amount due or by delivering Common Stock to the Company to
satisfy the withholding amount. The payment of a performance unit in cash
shall not reduce the number of shares of Common Stock reserved for issuance
under the Plan. The number of shares reserved for issuance under the Plan
shall be reduced by the number of shares issued upon payment of an award.
12. FOREIGN QUALIFIED GRANTS. Awards under the Plan may be granted to
such officers and employees of the Company and its subsidiaries and such other
persons described in paragraph 1 residing in foreign jurisdictions as the Board
of Directors may determine from time to time. The Board of Directors may adopt
such supplements to the Plan as may be necessary to comply with the applicable
laws of such foreign jurisdictions and to afford participants favorable
treatment under such laws; provided, however, that no award shall be granted
under any such supplement with terms which are more beneficial to the
participants than the terms permitted by the Plan.
13. CHANGES IN CAPITAL STRUCTURE.
(a) STOCK SPLITS; STOCK DIVIDENDS. If the outstanding
Common Stock of the Company is hereafter increased or decreased or changed
into or exchanged for a different number or kind of shares or other
securities of the Company by reason of any stock split, combination of shares
or dividend payable in shares, recapitalization or reclassification
appropriate adjustment shall be made by the Board of Directors in the number
and kind of shares available for grants under the Plan. In addition, the
Board of Directors shall make appropriate adjustment in the number and kind
of shares as to which outstanding options, or portions thereof then
unexercised, shall be exercisable, so that the optionee's proportionate
interest before and after the occurrence of the event is maintained.
Notwithstanding the foregoing, the Board of Directors shall have no
obligation to effect any adjustment that would or might result in the
issuance of fractional shares, and any fractional shares resulting from any
adjustment may be disregarded or provided for in any manner determined by the
Board of Directors. Any such adjustments made by the Board of Directors
shall be conclusive.
(b) MERGERS, REORGANIZATIONS, ETC. In the event of a
merger, consolidation, plan of exchange, acquisition of property or stock,
separation, reorganization or liquidation to which the Company or a
subsidiary is a party or a sale of all or substantially all of the Company's
assets (each, a "Transaction"), the Board of Directors shall, in its sole
discretion and to the extent possible under the structure of the Transaction,
select one of the following alternatives for treating outstanding options
under the Plan:
(i) Outstanding options shall remain in effect in
accordance with their terms.
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(ii) Outstanding options shall be converted into options
to purchase stock in the corporation that is the surviving or acquiring
corporation in the Transaction. The amount, type of securities subject
thereto and exercise price of the converted options shall be determined
by the Board of Directors of the Company, taking into account the
relative values of the companies involved in the Transaction and the
exchange rate, if any, used in determining shares of the surviving
corporation to be issued to holders of shares of the Company. Unless
otherwise determined by the Board of Directors, the converted options
shall be vested only to the extent that the vesting requirements relating
to options granted hereunder have been satisfied.
(iii) The Board of Directors shall provide a 30-day period
prior to the consummation of the Transaction during which outstanding
options may be exercised to the extent then exercisable, and upon the
expiration of such 30-day period, all unexercised options shall
immediately terminate. The Board of Directors may, in its sole
discretion, accelerate the exercisability of options so that they are
exercisable in full during such 30-day period.
(c) DISSOLUTION OF THE COMPANY. In the event of the
dissolution of the Company, options shall be treated in accordance with
paragraph 13(b)(iii).
(d) RIGHTS ISSUED BY ANOTHER CORPORATION. The Board of
Directors may also grant options, stock appreciation rights, performance units,
stock bonuses and cash bonuses and issue restricted stock under the Plan having
terms, conditions and provisions that vary from those specified in this Plan
provided that any such awards are granted in substitution for, or in connection
with the assumption of, existing options, stock appreciation rights, stock
bonuses, cash bonuses, restricted stock and performance units granted, awarded
or issued by another corporation and assumed or otherwise agreed to be provided
for by the Company pursuant to or by reason of a Transaction.
14. AMENDMENT OF PLAN. The Board of Directors may at any time, and
from time to time, modify or amend the Plan in such respects as it shall deem
advisable because of changes in the law while the Plan is in effect or for any
other reason, except that without the approval of the shareholders of the
Company, the Board of Directors may not increase the number of shares authorized
to be issued under paragraph 2 of the Plan (except for adjustments permitted
under paragraph 13(a) of the Plan). Except as provided in paragraphs 6(a)(iv),
9, 10 and 13, however, no change in an award already granted shall be made
without the written consent of the holder of such award.
15. APPROVALS. The obligations of the Company under the Plan are
subject to the approval of state and federal authorities or agencies with
jurisdiction in the matter. The Company will use its best efforts to take steps
required by state or federal law or applicable regulations, including rules and
regulations of the Securities and Exchange Commission and any stock exchange on
which the Company's shares may then be listed, in connection with the
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grants under the Plan. The foregoing notwithstanding, the Company shall not
be obligated to issue or deliver Common Stock under the Plan if such issuance
or delivery would violate applicable state or federal securities laws.
16. EMPLOYMENT AND SERVICE RIGHTS. Nothing in the Plan or any award
pursuant to the Plan shall (i) confer upon any employee any right to be
continued in the employment of the Company or any subsidiary or interfere in any
way with the right of the Company or any subsidiary by whom such employee is
employed to terminate such employee's employment at any time, for any reason,
with or without cause, or to decrease such employee's compensation or benefits,
or (ii) confer upon any person engaged by the Company any right to be retained
or employed by the Company or to the continuation, extension, renewal, or
modification of any compensation, contract, or arrangement with or by the
Company.
17. RIGHTS AS A SHAREHOLDER. The recipient of any award under the
Plan shall have no rights as a shareholder with respect to any Common Stock
until the date of issue to the recipient of a stock certificate for such
shares. Except as otherwise expressly provided in the Plan, no adjustment
shall be made for dividends or other rights for which the record date occurs
prior to the date such stock certificate is issued.
18. OPTION GRANTS TO NON-EMPLOYEE DIRECTORS.
(a) INITIAL BOARD GRANTS. Each person who becomes a
Non-Employee Director after the Plan is adopted shall be automatically
granted an option to purchase 15,000 shares of Common Stock when he or she
becomes a Non-Employee Director, so long as such person has not previously
served as a director of the Company. A "Non-Employee Director" is a director
who is not an employee of the Company or any of its subsidiaries, but does
not include such a director whose employer prohibits such director from
receiving any grant of an option to purchase shares of Common Stock of the
Company.
(b) ADDITIONAL GRANTS. Each Non-Employee Director shall be
automatically granted an option to purchase additional shares of Common Stock in
each calendar year subsequent to the year in which such Non-Employee Director
was granted an option pursuant to paragraph 18(a), such option to be granted as
of the date of the Company's annual meeting of shareholders held in such
calendar year, provided that the Non-Employee Director continues to serve in
such capacity as of such date. The number of shares subject to each additional
grant shall be 5,000 shares for each Non-Employee Director.
(c) EXERCISE PRICE. The exercise price of all options granted
pursuant to this paragraph 18 shall be equal to 100 percent of the fair market
value of the Common Stock determined pursuant to paragraph 6(b)(iv).
(d) TERM OF OPTION. The term of each option granted pursuant
to this paragraph 18 shall be 10 years from the date of grant.
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(e) EXERCISABILITY. Until an option expires or is terminated
and except as provided in paragraphs 18(g) and 13, an option granted under this
paragraph 18 shall be exercisable in full on the date one year following the
grant of the option.
(f) TERMINATION AS A DIRECTOR. If an optionee ceases to be a
director of the Company for any reason, including death, the option may be
exercised at any time prior to the expiration date of the option or the
expiration of 30 days (or 12 months in the event of death) after the last day
the optionee served as a director, whichever is the shorter period, but only if
and to the extent the optionee was entitled to exercise the option as of the
last day the optionee served as a director.
(g) NONTRANSFERABILITY. Each option by its terms shall be
nonassignable and nontransferable by the optionee, either voluntarily or by
operation of law, except by will or by the laws of descent and distribution of
the state or country of the optionee's domicile at the time of death, and each
option by its terms shall be exercisable during the optionee's lifetime only by
the optionee.
(h) EXERCISE OF OPTIONS. Options may be exercised upon payment
of cash or shares of Common Stock of the Company in accordance with paragraph
6(a)(v).
Adopted: August 7, 1995.
Amended: May 20, 1997 (to increase shares in paragraph 2 to 1,500,000).
Amended: May 18, 1999 (to increase shares in paragraph 2 to 2,250,000 and to
increase individual limits in paragraph 5 to 450,000 and 100,000 shares).
Amended: August 12, 1999 (to increase shares in paragraph 2 to 2,750,000).
Amended: February 25, 2000 (amendments to paragraphs 6(a)(iii), 6(a)(v) and 14).
Amended: May 16, 2000 (to increase shares in paragraph 2 to 5,425,000 and to
make certain other changes to paragraph 5).
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