RICHARDSON ELECTRONICS, LTD.
EMPLOYEES 1999 STOCK PURCHASE PLAN
Richardson Electronics, Ltd. (the "Company") hereby
establishes the Richardson Electronics, Ltd. Employees 1999 Stock
Purchase Plan (the "Plan"), an employee stock purchase plan as
defined in Section 423(b) of the Internal Revenue Code of 1954.
Article I
Purpose
The purpose of the Plan is to provide Employees with an
opportunity to acquire a proprietary interest in the Company
through the exercise of options to purchase shares of the Common
stock of the Company. It is the judgment of the Board that the
acquisition of a proprietary interest in the Company by its
Employees will increase their personal interest in its growth and
progress and encourage them to remain in the Company's employ,
thereby promoting the interests of the Company and all its
stockholders. The Company intends that the Plan shall qualify as
an "employee stock purchase plan" within the meaning of Section
423(b) of the Code.
Article II
Definitions
The following words and terms, as used in the Plan, shall have
the respective meanings hereinafter set forth unless a different
meaning is clearly required by the context. Whenever appropriate,
words used in the singular shall be deemed to include the plural,
and the masculine gender shall be deemed to include the feminine
gender.
2.1 Board. The Board of Directors of the Company.
2.2 Code. The Internal Revenue Code of 1954, as now in
effect or as hereafter amended.
2.3 Committee. The Stock Option Committee or such other
committee appointed by the Board in accordance with the provisions
of Article IV to administer the Plan.
2.4 Common Stock. The common stock, $.05 per share par
value, of the Company.
2.5 Company. Richardson Electronics, Ltd., a corporation
organized and existing under the laws of the State of Delaware, and
any successor to it.
2.6 Employee. Any individual employed by and receiving
compensation from the Company or a Related Company.
2.7 Exercise Date. The last business day prior to the
expiration of the term of an Option, or, if an Option expires on a
pay day, the day of expiration of the term of such Option.
2.8 Grant Date. The date on which the Company makes an
Offering under the Plan.
2.9 Offering. A grant of Options under the Plan to all
Participants.
2.10 Option. An option to purchase shares of the Common Stock
granted by the Company pursuant to an Offering under the Plan .
2.11 Option Price. The purchase price of the Common Stock
subject to an Option, as set forth in Article XII.
2.12 Optionee. A Participant who elects to participate in an
Offering under the Plan in accordance with the provisions of
Article VII.
2.13 Participant. An Employee who satisfies the eligibility
requirements set forth in Article V.
2.14 Plan. The Richardson Electronics, Ltd. Employees 1999
Stock Purchase Plan, as set forth herein, as may be amended from
time to time hereafter.
2.15 Related Company. As of any Grant Date, the term "Related
Company" shall include all "parents" and "subsidiaries" (as
hereinafter defined) of the Company. A "parent" shall be any
corporation that owns stock possessing at least 50% of the total
combined voting power of all stock of the Company or of another
parent. A "subsidiary" shall be any corporation if stock
possessing at least 50% of the total combined voting power of all
stock of such corporation is owned by the Company or by another
subsidiary.
Article III
Shares Subject to Plan
3.1 The total number of shares of the Common Stock which are
available for purchase upon the exercise of Options under the Plan
shall be One Hundred Fifty Thousand (150,000) shares, subject to
appropriate adjustment as provided in Article XIX
3.2 The shares of the Common Stock issued to an Optionee upon
the exercise of an Option shall be made available, in the
discretion of the Board, either from the authorized but unissued
Common Stock or from any Common Stock reacquired by the Company,
including Common Stock purchased in the open market by the Company.
3.3 If an Offering shall terminate and all shares of the
Common Stock available for purchase thereunder are not purchased by
the Optionees, the unpurchased shares of the Common Stock subject
to the Offering shall become available for the granting of Options
in other Offerings.
3.4 Anything to the contrary notwithstanding, if at any time
during the term of the Plan the available shares of the Common
Stock in connection with any Offering are oversubscribed for by the
Optionees, the Committee may, in its sole discretion, either:
(a) increase the number of shares of the Common Stock in the
Offering, provided that the Committee shall not have the authority
to increase the total number of shares of the Common Stock which
are available for purchase under the Plan, as set forth in Section
3.1 above, or the maximum number of shares of Common Stock which an
Optionee may purchase in the Offering, as set forth in Sections
10.1 and 10.2 below; or
(b) make a pro rata allocation of the available shares of the
Common Stock allocated to such Offering in as nearly a uniform
manner as shall be practicable and as it shall determine to be
equitable.
3.5 In the event that the Committee elects to make a pro rata
allocation (as described in Section 3.4(b) above), the payroll
deductions elected by the Optionees shall be appropriately reduced
to properly effectuate such allocation and the Committee shall give
written notice of such reduction to each Optionee.
Article IV
Administration
4.1 The authority to control and manage the operations and
administration of the Plan shall be vested exclusively in the
Committee.
4.2 The Committee shall be appointed by the Board and shall
consist of not fewer than two (2) members of the Board. All
members of the Committee shall be persons who are "Non-Employee
Directors" as that term is defined by Rule 16b-3 of the Securities
and Exchange Commission as in effect and interpreted from time to
time. In the event of any vacancy in the membership of the
Committee, a successor member shall be appointed by the Board to
fill such vacancy as promptly as practical.
4.3 The Committee shall fix the Grant Dates and shall give
written notice to the Participants of each Offering, specifying the
number of shares of the Common Stock available for purchase in such
Offering.
4.4 The Committee shall be authorized to interpret the Plan
and may from time to time adopt such rules and regulations for
carrying out the purpose of the Plan as it deems appropriate in its
sole discretion. Any such interpretations shall be final and
binding unless otherwise determined by the Board.
4.5 No member of the Committee or the Board shall be liable
for any action or determination made in good faith with respect to
the Plan.
4.6 The Committee may in its discretion from time to time
determine the method and timing of fixing the applicable exchange
rates for Optionees whose compensation is not paid in United States
currency.
Article V
Eligibility
5.1 Each Employee who is employed by the Company or a Related
Company who the Committee has designated as a Related Company whose
employees may participate shall be eligible to participate in, and
be granted an Option under, the Plan. For purposes of this Plan,
an Employee shall not include any individual whose customary
employment with the Company or a Related Company is for twenty (20)
hours or less per week or is for not more than five (5) months in
any calendar year.
5.2 Anything to the contrary notwithstanding, no Employee may
participate in, and be granted an Option under, the Plan if,
immediately after the Option is granted, such Employee would own
stock possessing 5% or more of the total voting power of all
classes of stock of the Company or of any Related Company. For
purposes of determining the ownership of the Common Stock by an
Employee, the stock attribution rules of Section 425(d) of the Code
shall apply and the maximum number of shares of the Common Stock
which the Employee could purchase under such Option pursuant to
Section 10.1, and the maximum number of shares of stock which the
Employee could purchase under all other outstanding options
(whether or not issued under this Plan) granted by the Company or
by any Related Company, shall be treated as then owned by such
Employee.
Article VI
Common Stock Offerings
6.1 The Committee shall, from time to time, fix a Grant Date
on which the Company shall grant Options to purchase such aggregate
number of shares of the Common Stock as the Company, in its sole
discretion, shall determine. The Committee shall, at least thirty
(30) days prior to any Grant Date fixed by it, give written notice
of the Offering to all Participants.
6.2 No Grant Date shall precede or coincide with the
Expiration Date of a previously granted Option.
Article VII
Participation in Plan
7.1 Participants may become Optionees by completing and
delivering to the Personnel Department of the Company such election
and other forms as may be required by the Committee, including a
payroll deduction form, no later than ten (10) days prior to a
Grant Date or such earlier date as the Committee may require in its
written notice of the Offering. Such payroll deduction form shall
become effective as of the Grant Date. An Optionee may not have
more than one payroll deduction form in effect simultaneously.
7.2 Payroll deductions for an Optionee shall commence on the
first pay day on or after the Grant Date and shall end on the last
pay day prior to the expiration of the Option (as set forth in
Article XI below) or, if the Option expires on a pay day, on that
day, unless sooner terminated by the Optionee as provided in
Article XV below.
Article VIII
Payroll Deductions
8.1 Each payroll deduction form delivered by an Optionee
shall (a) state the percentage of the Optionee's base compensation
which shall be deducted from his regular paycheck on each pay day
during the term of the Option, (b) authorize the purchase of shares
of the Common Stock for the Optionee on the Exercise Date and (c)
specify the exact name (or names, subject to Section 16.3 below) in
which the shares of the Common Stock purchased for the Optionee are
to be issued by the Company.
8.2 An Optionee may authorize payroll deductions in any full
percentage of his base compensation (before withholding and any
other deductions), up to but not more than ten percent (10%), in
effect on the Grant Date; provided, however, that for purposes of
determining base compensation hereunder, an Optionee's annual base
compensation in excess of Two Hundred Fifty Thousand Dollars
($250,000) shall be excluded. Notwithstanding the preceding, if
amounts withheld are in excess of the amount necessary to acquire
the maximum number of shares of Common Stock set forth in Section
10.1 or 10.2, no further amounts shall be withheld, and any excess
shall be refunded to such Optionee.
8.3 An Optionee shall not be entitled to increase or decrease
the amount of his payroll deduction during the term of an Option.
8.4 Whenever an adjustment in an Optionee's base compensation
occurs during the term of an Option, the amount of such Optionee's
payroll deduction shall be automatically adjusted to reflect such
change, unless the Optionee indicates otherwise. Notwithstanding
the preceding sentence, if increases in an Optionee's base
compensation during the term of an Option would result in amounts
being withheld in excess of the amount necessary to acquire the
maximum number of shares of Common Stock set forth in Section 10.1
or 10.2, no further amounts shall be withheld, and any excess shall
be refunded to such Optionee.
8.5 All payroll deductions made on behalf of an Optionee
shall be credited to his separate account maintained under the
Plan, as set forth in Article XVIII below.
8.6 An Optionee may discontinue his participation in an
Offering as provided in Article XV below, but no other change can
be made by the Optionee during the term of an Option.
Article IX
Conditions to Options
All Options granted in an Offering under this Plan shall be
evidenced by agreements in such form as the Committee shall from
time to time recommend and the Board shall approve; provided,
however, that all Optionees shall have the same rights and
privileges (except in connection with the number of shares of the
Common Stock which may be purchased by an Optionee on the basis of
his annual base compensation).
Article X
Granting of Options
10.1 As of each Grant Date, the Optionees shall be granted
Options for as many full shares of the Common Stock as they shall
be able to purchase with the amount of payroll deductions
previously authorized by them and credited to their respective
separate accounts during the term of the Option; provided, however,
that the maximum number of full shares of Common Stock which may be
purchased by an Optionee under the Option granted on any Grant Date
shall not exceed the amount which could be purchased by the amount
of payroll deductions authorized by such Optionee if his base
compensation during the period of the Option were equal to 150% of
the amount of his base compensation on such Grant Date. The
Committee may set a different uniform percentage of base
compensation for any Offering by written notice included in the
notice specified in Section 6.1, but may not thereafter alter such
percentage for such Offering.
10.2 Anything to the contrary notwithstanding, no Optionee
shall be granted an Option which would permit his right to purchase
shares of the Common Stock or any other class of stock under the
Plan or any other employee stock purchase plan (as defined in
Section 423(b) of the Code) maintained by the Company or by a
Related Company to accrue at a rate which exceeds Twenty-Five
Thousand Dollars ($25,000) of fair market value of such stock
(determined on the Grant Date) for each calendar year in which such
Option is outstanding. For purposes of this Section 10.2, (a) the
right to purchase stock under an option accrues when the option (or
any portion thereof) first becomes exercisable during the calendar
year, (b) the right to purchase stock under an option accrues at
the rate provided in the option but in no case may such rate exceed
Twenty-Five Thousand Dollars ($25,000) of fair market value of such
stock (determined on the Grant Date) for any one calendar year, and
(c) a right to purchase Common Stock which has accrued under an
Option granted pursuant to the Plan may not be carried over to any
other Option.
Article XI
Term of Options
The term of each Option shall expire on the last business day
of the eleventh calendar month commencing after the calendar month
which includes the Grant Date.
Article XII
Option Price
The Option Price shall be equal to the lesser of:
(i) an amount equal to eighty-five percent (85%) of the Fair
Market Value (as that term is defined below) of the Common Stock at
the time such Option is granted; or
(ii) an amount equal to eighty-five percent (85%) of the Fair
Market Value of the Common Stock at the time of the exercise of the
Option.
For purposes of this Article XII, the term "Fair Market Value" of
the Common Stock shall be defined as an amount equal to either (a)
the mean of the closing bid and asked quotations in the
over-the-counter market on such date (rounded up to the nearest
cent), as reported by the National Association of Securities
Dealers Automated Quotation System, or (b) in the event the Common
Stock is listed on any exchange, the last sale price on such
exchange on such date or, if there are no sales on such date, the
mean of the bid and asked prices (founded up to the nearest cent)
for the Common Stock on such exchange at the close of business on
such date.
Article XIII
Exercise of Options
Unless an Optionee gives written notice of termination to the
Company as provided in Article XV below, Options shall be exercised
automatically for him on the Exercise Date for the purchase of the
number of full shares of the Common Stock which the balance of the
payroll deductions credited to such Optionee's separate account
during the term of the Option shall purchase at the Option Price.
Article XIV
Delivery of Certificates
The Company shall deliver to an Optionee certificates
representing the shares of the Common Stock purchased by him upon
the exercise of an Option as soon as practical after the end of an
Offering. At the expiration of the term of an Option the Company
shall make a cash payment equal to the balance of any payroll
deductions previously credited to such Optionee's separate account
during the term of the Option which have not been used for the
purchase of shares of the Common Stock.
Article XV
Termination of Options
An Optionee may terminate an Option by giving written notice
of termination to the Committee prior to the Exercise Date, in such
manner as the Committee may require. Such written notice shall
terminate the Optionee's participation in an Offering and his
payroll deductions shall terminate effective as of the end of the
next pay period in the fiscal quarter of the Company in which the
written notice of termination is received by the Committee. After
the termination of an Option the Company shall make a cash payment
equal to the balance of any amount held in the Optionee's separate
account. An Optionee's termination of employment with the Company
or a Related Company for any reason (including death or disability)
while an Offering is outstanding shall be deemed the equivalent of
the written notice of termination described above and shall be
effective as of the date of the Optionee's termination of
employment.
Article XVI
Rights as Stockholder
16.1 An Optionee shall not have any interest in shares of the
Common Stock subject to an Option until such Option is exercised by
him.
16.2 An Optionee who has exercised an Option shall not be
entitled to any of the rights or privileges of a stockholder of the
Company, including but not limited to the right to vote the shares
and the right to receive any dividends which may be declared by the
Company with respect to the shares, until such time as stock
certificates representing the shares are issued to him.
16.3 Certificates for shares of the Common Stock shall be
issued to an Optionee as soon as practical after the end of the
Offering and, when issued, shall be registered in the name of the
Optionee or, if the Optionee so directs in his payroll deduction
form, in the names of the Optionee and such other person as may be
designated by the Optionee, as joint tenants with right of
survivorship, to the extent permitted by applicable law.
Article XVII
Non-Transferability of Options
An Optionee's rights with regard to the exercise of an Option
are exercisable only by him during his lifetime and such rights may
not be assigned, transferred, pledged or otherwise disposed of in
any way by the Optionee other than by his last will and testament
or by the laws of descent and distribution. Any such attempted
assignment, transfer, pledge or other disposition by the Optionee
shall be without effect, except that the Company may treat such act
as an election to terminate an Option in accordance with Article XV
above.
Article XVIII
Accounts of Optionees
Payroll deductions received or held by the Company under this
Plan shall not be used by the Company for any corporate purpose and
the Company shall segregate such payroll deductions in separate
accounts. On the Exercise Date, payroll deductions shall be
withdrawn in accordance with Article XIII above. No interest shall
be paid to an Optionee in connection with any payroll deductions
held in such separate accounts by the Company.
Article XIX
Anti-Dilution
In the event that the number of outstanding shares of the
Common Stock shall be changed by reason of split-ups or
combinations of shares or recapitalizations or by reason of stock
dividends, the number of shares of the Common Stock subject to the
Plan not yet granted as Options, the number of shares of the Common
Stock then subject to Options granted under an Offering and the
Option Price payable upon the exercise of an Option by an Optionee
shall be appropriately adjusted, as determined by the Board, so as
to give proper effect to such changes. Anything to the contrary
notwithstanding, no adjustment shall be made hereunder which would
result in a modification of the Options in a manner which would
disqualify the Plan as an "employee stock purchase plan" under the
provisions of Section 423(b) of the Code or which would cause the
Options to be considered new options under Section 425(b) of the
Code.
Article XX
Amendment
20.1 The Company shall have the right at any time to amend the
Plan by action of its Board without obtaining the approval of the
stockholders of the Company. Any amendment to the Plan shall be
set forth in writing.
20.2 Anything to the contrary notwithstanding, the Company
shall not amend the Plan without obtaining the approval of the
stockholders of the Company if such amendment:
(a) increases the number of shares of the Common Stock that
are reserved for issuance under the Plan;
(b) alters the classification of Employees eligible to be
Participants;
(c) increases the Option Price;
(d) impairs the rights of any Optionee without his consent;
or
(e) would cause the Plan to fail to qualify as an "employee
stock purchase plan" as defined in Section 423(b) of the Code.
Article XXI
Termination
21.1 The Company shall have the right at any time to terminate
the Plan by action of its Board without obtaining the approval of
the stockholders of the Company.
21.2 Upon the termination of the Plan, shares of the Common
Stock purchased by Optionees shall be issued to them as if it were
the end of an Offering. Any termination of the Plan shall be
effected so that the then existing rights of all Optionees shall
not be adversely affected.
Article XXII
Application of Funds
Any proceeds received by the Company from the sale of shares
of Common Stock may be used for any corporate purpose.
Article XXIII
Notice
Any notice to the Company required under this Plan shall be in
writing and shall either be delivered in person or sent by
registered or certified mail, return receipt requested, postage
prepaid, to the Company at its offices at 40W267 Keslinger Road,
P.O. Box 393, LaFox, Illinois 60147-0393, Attention: Stock Option
Committee.
Article XXIV
Effective Date
The Plan is effective April 13, 1999. The Plan shall be
submitted to the stockholders for approval not later than April 12,
2000. If the Plan has not been approved, it shall terminate on
such date in accordance with Article XXI, and all Options
outstanding on such date shall be exercised as provided in Section
21.2.