EXHIBIT 10.2
Restatement #3 Effective:
October 16, 1990 &
January 28, 1992
Restatement #4 Effective:
August 1, 1995
STRATUS COMPUTER, INC.
NON-QUALIFIED COMMON STOCK OPTION PLAN
RESTATEMENT NUMBER FOUR
1. Purpose. The purpose of this Plan is to advance the interests of
Stratus Computer, Inc. (the "Company") by providing an opportunity
to selected employees and directors of the Company and its
subsidiaries (including foreign subsidiaries) to purchase common
stock of the Company through the exercise of options granted under
this Plan. By encouraging such stock ownership, the Company seeks
to attract, retain and motivate employees and directors of
experience and ability. It is intended that this purpose will be
effected by the granting of non-qualified stock options as
provided herein.
2. Amendment and Restatement of Prior Plan. The Stratus Computer,
Inc. Non-qualified Stock Option Plan initially adopted on November
27, 1984 (the "Plan") continues as previously amended and restated
effective October 16, 1990 ( Restatement Number 2 ) and most
recently on January 28, 1992 ( Restatement Number 3 ) to extend
the termination date of the Plan until December 31, 2004. This
Restatement Number Four of the Plan reflects further Amendments to
the Plan, the sole purpose of which is to cause the Plan to comply
with the requirements of Rule 16b-3 promulgated under Section 16
of the Securities Exchange Act of 1934, as Amended ( Rule 16b-3 ).
3. Effective Date. The Plan originally became effective as of
November 27, 1984. This restatement of the Plan became effective
on August 1, 1995, the date the last amendment incorporated in
this restatement was adopted by the Board.
4. Stock Subject to the Plan. The number of shares that may be
granted under this Plan shall not exceed in the aggregate
9,380,200 shares of the Common Stock, $.01 par value, of the
Company ("the "Shares"); provided, however, that such maximum
number of Shares shall be reduced by the number of any Shares that
are made subject to options (which have not subsequently expired
or been terminated before exercise) pursuant to the Stratus
Computer, Inc. Stock Option Plan (January 1983). Any Shares
subject to an option which for any reason expires or is terminated
unexercised as to such Shares may again be the subject of an
option under the Plan. In addition any Shares purchased by an
optionee upon exercise of an option under this Plan that are
subsequently repurchased by the Company pursuant to the terms of
such option may again be the subject of an option under the Plan.
The Shares delivered upon exercise of options under this Plan may,
in whole or in part, be either authorized but unissued Shares or
issued Shares reacquired by the Company.
5. Administration. This Plan shall be administered by a committee
consisting of two (2) or more members of the Board of Directors of
the Company (the Board ), all of whom are disinterested persons
as defined under Rule 16b-3 (the "Committee"). Subject to the
provisions of this Plan, the Committee shall have full power to
construe and interpret the Plan and to establish, amend and
rescind rules and regulations for its administration. Any
decisions made with respect thereto shall be final and binding on
the Company, the optionee and all other persons.
6. Eligible Participants. Options may be granted to such employees
and directors of the Company or of any of its subsidiaries as are
selected by the Committee.
7. Options Granted to Outside Directors. The provisions of this
paragraph 7 govern the granting and terms of options for
nonemployee members of the Board ("Outside Directors"). These
provisions supersede all other provisions of the Plan to the
extent such other provisions are inconsistent with this Paragraph
7. For purposes of this Paragraph 7, "Shares" shall mean the
total number of Shares available under the Plan as such number may
be affected by stock splits or combinations, stock dividends, and
similar recapitalizations.
(a) any options granted to an Outside Director shall have a term
of ten (10) years and shall be immediately exercisable in
full or in part.
(b) The following vesting and repurchase provisions shall be
imposed upon any Shares purchased by an Outside Director
upon exercise of any option granted under the Plan:
(i) The number of "Vested Shares" subject to the option
shall be determined as follows: Twenty percent (20%)
of the Shares subject to the option shall become
Vested Shares on the first anniversary of the
effective date of the option agreement. An additional
five percent (5%) of such Shares shall become Vested
Shares at the end of each consecutive three-month
period thereafter, so long as the Director continues
to perform services for the Company, until the fifth
anniversary of such effective date at which time one
hundred percent (100%) of such Shares will be Vested
Shares. If the Director's performance of services for
the Company ceases by reason of death or disability
(as determined by the Committee), an additional thirty
percent (30%) of such Shares shall become Vested
Shares (or, if more than seventy percent (70%) of such
Shares had previously become Vested Shares, the
balance of such Shares shall become Vested Shares).
If, at the time the Outside Director ceases to perform
services for the Company or any of its subsidiaries,
the Outside Director owns Shares acquired pursuant to
the option that are not Vested Shares, the Company
shall have the right, but not the obligation, to
repurchase such nonvested Shares for a purchase price
equal to the option price per share at which the
Outside Director acquired such Shares. All Shares
issued upon exercise of such an option will bear an
appropriate legend which describes this restriction.
(ii) Upon notice from the Company of exercise of its
repurchase rights described in this paragraph 7(d),
certificates for the Shares to be repurchased shall be
transferred by the holder to the Company against
payment by the Company of the purchase price. If the
Company shall fail to exercise its repurchase rights
within thirty (30) days after being notified of the
Outside Director's cessation of services or sixty (60)
days after the acquisition of Shares pursuant to such
option, whichever occurs later, the repurchase rights
of this paragraph with respect to such Shares shall
terminate.
(iii) No Shares subject to repurchase rights pursuant to the
provisions of this paragraph 7(d) shall be transferred
unless the transferee acknowledges to the Company in
writing that such Shares are subject to such rights.
(iv) If the holder of Shares subject to such repurchase
rights fails to comply with any of the provisions of
this paragraph, the Company, at its election and in
addition to its other remedies, may suspend the right
to receive dividends on such Shares, or may refuse to
register on its books any transfer of such Shares or
otherwise to recognize any transfer or change of
ownership of such Shares, until the provisions of this
paragraph are complied with to the satisfaction of the
Company.
(v) The Company may, at its election, cause the
certificate or certificates for any Shares issued
pursuant to the option, so long as such Shares are
subject to the right of repurchase by the Company
pursuant to this paragraph, to be held in escrow by an
agent chosen by the Company, which escrow agent may
be, without limitation, an officer of the Company or
the stock transfer agent of the Company. The escrow
agent shall furnish the registered holder of the
Shares represented by such escrowed certificate(s) a
written agreement to deliver, free of escrow, (i) a
certificate or certificates for any such Shares that
are Vested Shares and (ii) amounts equal to the
purchase price paid for any such Shares repurchased by
the Company pursuant to this paragraph.
(c) Each Outside Director shall be granted an annual stock
option award of 3,000 shares at the fair market value of the
Company s stock on the date of each annual shareholder
meeting and each new Outside Director shall be awarded a
onetime stock option grant of 6,000 shares at the fair
market value of such Company s stock on the date he or she
first joins the Board.
8. Duration of the Plan. This Plan shall terminate on December 31,
2004, unless terminated earlier pursuant to Paragraph 11 hereof,
and no options may be granted thereafter.
9. Terms and Conditions of Options. Subject to the provisions of
Paragraph 7 concerning options granted to Outside Directors,
options granted under this Plan shall be evidenced by stock option
agreements in such form and not inconsistent with the Plan as the
Committee shall approve from time to time, which agreements shall
evidence the following terms and conditions:
(a) Price. Each option agreement shall specify the purchase
price per share of stock payable upon the exercise of the
option granted thereunder, which price shall not be less
than 50% of the fair market value of one share on the date
of grant in the case of options granted to individuals whose
transactions in Company stock could subject the individual
to suit under Section 16(b) of the Securities Exchange Act
of 1934 ( Section 16 Persons ).
(b) Number of Shares. Each option agreement shall specify the
number of Shares to which it pertains.
(c) Exercise of Options. Except as provided in Paragraph 7 each
option shall be exercisable for the full amount or for any
part thereof and at such intervals or in such installments
as is specified in the option agreement pertaining thereto;
provided, however, that no option shall be exercisable with
respect to any shares later than ten (10) years after the
date of grant of such option.
(d) Notice of Exercise and Payment. Each option hereunder shall
be exercisable only by delivery of a written notice to the
Company's Treasurer or any other officer of the Company
designated by the Committee to accept such notices on its
behalf, specifying the number of Shares for which it is
exercised. If said Shares are not at that time effectively
registered under the Securities Act of 1933, as amended, the
optionee shall include with such notice a letter, in form
and substance satisfactory to the Company, confirming that
the Shares are being purchased for the optionee's own
account for investment and not with a view to distribution.
Payment shall be made in full at the time the option is
exercised. Payment shall be made (i) by cash or check, (ii)
if permitted by the Committee, by delivery and assignment to
the Company of Shares of Company stock having a fair market
value (as determined by the Committee) equal to the option
price, (iii) only with respect to optionees who are Section
16 Persons, and if permitted by the Committee, by promissory
note, or (iv) by a combination of (i), (ii) and (iii) (if
applicable).
(e) Withholding Taxes; Delivery of Shares. The Company's
obligation to deliver Shares of Common Stock upon exercise
of the option, in whole or in part, shall be subject to the
optionee's satisfaction of all applicable federal, state and
local income and employment tax withholding obligations.
The optionee may satisfy the obligation, in whole or in
part, by electing to have the Company withhold Shares of
Common Stock having a value equal to the amount required to
be withheld. The value of Shares to be withheld shall be
based on the fair market value of the Shares on the date the
amount of tax to be withheld is to be determined (the "Tax
Date"). The optionee's election to have Shares withheld for
this purpose will be subject to the following restrictions:
(1) the election must be made prior to the Tax Date, (2) the
election must be irrevocable, (3) the election will be
subject to the right of the Committee to disapprove the
election, and (4) if a participant is a Section 16 Person,
such election must comply in all respects with the
requirements of Rule 16b-3.
(f) Termination of Options. Each option shall terminate and may
no longer be exercised if the optionee ceases for any reason
to be an employee or director of the Company or any of its
subsidiaries, subject to the following provisions:
(i) if the optionee's employment or service as a director
shall have been terminated for any reason other than
cause, death or disability, the optionee may at any
time within a period of thirty (30) days after such
termination of employment or service as a director, if
and to the extent permitted by the option agreement,
exercise the option to the extent it was exercisable
on the date of termination of the optionee's
employment or service as a director;
(ii) if the optionee's employment or service as a director
shall have been terminated because of disability
within the meaning of Section 22(e) (3) of the
Internal Revenue Code of 1986, as amended (the
Code ), the optionee may at any time within a period
not longer than one (1) year and one day after such
termination of employment or service as a director, if
and to the extent permitted by the option agreement,
exercise the option to the extent that the option was
exercisable on the date of termination of the
optionee's employment or service as a director; and
(iii) if the optionee dies at a time when he might have
exercised the option, then his estate, personal
representative or beneficiary to whom it has been
transferred pursuant to Paragraph 8(h) hereof may at
any time within a period not longer than one (1) year
after the optionee's death, if and to the extent
permitted by the option agreement, exercise the option
to the extent the optionee might have exercised it at
the time of this death; provided, however, that no
option may be exercised to any extent by anyone after
the date of expiration of the option.
(g) Rights as Shareholder. The optionee shall have no rights as
a shareholder with respect to any Shares covered by his
option until the purchase thereof.
(h) Non-Transferability. No option shall be transferable by the
optionee otherwise than by will or the laws of descent or
distribution, and each option shall be exercisable during
his lifetime only by him.
(i) Repurchase of Shares by the Company. Subject to the
provisions in Paragraph 7, any Shares purchased by an
optionee upon exercise of an option may in the discretion of
the Committee be subject to repurchase by the Company if and
to the extent specifically set forth in the option agreement
pursuant to which the Shares were purchased.
9. Stock Dividends; Stock Splits; Stock Combinations;
Recapitalizations. Appropriate adjustment shall be made in the
maximum number of Shares of Common Stock subject to the Plan and
to the number of Shares of Common Stock fixed in Section 7(c)
above, to give effect to any stock dividends, stock splits, stock
combinations, recapitalizations and other similar changes in the
capital structure of the Company. Appropriate adjustment shall be
made in the number, kind, and option price of Shares covered by
any outstanding option hereunder to give effect to any stock
dividends, stock splits, stock combinations, recapitalizations and
other similar changes in the capital structure of the Company
after the date such option is granted.
10. Merger; Sales of Assets; Dissolution. In the event of a change of
the Common Stock resulting from a merger or similar reorganization
as to which the Company is the surviving corporation, the number
and kind of Shares which thereafter may be optioned and sold under
the Plan and the number and kind of Shares then subject to options
granted hereunder and the price per share thereof shall be
appropriately adjusted in such manner as the Board may deem
equitable to prevent substantial dilution or enlargement of the
rights available or granted hereunder. Except as otherwise
determined by the Board of Directors, a merger or a similar
reorganization which the company does not survive, or a sale of
all or substantially all of the assets of the Company, shall cause
every option outstanding hereunder to terminate, to the extent
not then exercised, unless any surviving entity agrees to assume
the obligations hereunder.
11. Termination or Amendment of Plan. The Board may at any time
terminate the Plan or make such changes in or additions to the
Plan as it deems advisable without further action on the part of
the Shareholders of the Company provided:
(a) that no such termination or amendment shall adversely affect
or impair any then outstanding option without the consent of
the optionee holding such option;
(b) that any such amendment which:
(i) increases the maximum number of Shares subject to the
Plan (subject to the provisions of Section 9);
(ii) changes the class of person eligible to participate in
the Plan; or
(iii) materially increases the benefits accruing to
participants under the Plan shall be subject to
approval by the shareholders of the Company within one
(1) year from the effective date of such amendment and
shall be null and void if such approval is not
obtained; and
(c) that Section 7(c) of the Plan may not be amended or modified
more than once in any six-month period.