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ALPHA MICROSYSTEMS
1993 DIRECTORS' STOCK OPTION PLAN
1. PURPOSE
The purpose of the Plan is to assist Alpha Microsystems in attracting
and retaining talented individuals to serve as Directors of the Corporation, to
provide additional compensation to non-employee directors for their services and
to unify the interests of Directors and shareholders through increased Director
share ownership.
2. DEFINITIONS
Unless otherwise defined herein or the context otherwise requires, the
capitalized terms used herein shall have the following meanings:
(a) "Additional Grant" shall mean any Option granted pursuant to
Section 4(b)(ii).
(b) "Automatic Grant Date" shall mean the date on which an Option is
granted hereunder pursuant to Section 4(b).
(c) "Board" shall mean the Board of Directors of the Corporation.
(d) "Change in Control of the Corporation" shall mean a change in
control of a nature that would be required to be reported in response to
Item I of Form 8-K required to be filed pursuant to the Securities
Exchange Act of 1934, as amended ("1934 Act"); provided that, without
limitation, such a change in control shall be deemed to have occurred
if:
(i) the Corporation shall sell, transfer, or otherwise dispose
of fifty percent (50%) or more of its assets and properties
(calculated on the basis of book value); or
(ii) any "person" (as such term is used in Sections 13(d) and
14(d) of the 1934 Act), other than the Corporation, is or becomes the
"beneficial owner"' (as defined in Rule 13d-3 under the 1934 Act),
directly or indirectly, of securities of the Corporation representing
thirty percent (30%) or more of the combined voting power of the
Corporation's then outstanding securities; or
(iii) during the period of two (2) consecutive years during the
term of this Plan, individuals who at the beginning of such period
constitute the Board cease for any reason to constitute at least a
majority thereof, unless the election of each director who was not a
director at the beginning of such period has been approved in advance
by directors representing at least two-thirds of the directors then
in office who were directors at the beginning of the period.
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(e) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(f) "Common Stock" shall mean, unless otherwise specifically
provided, the common stock of the Corporation and any class of common
shares into which such common stock may hereafter be converted.
(g) "Corporation" shall mean Alpha Microsystems, a California
corporation.
(h) "Director" shall mean a person who is a member of the Board.
(i) Disability" shall mean such physical or mental condition
affecting an Optionee as determined by the Board in its sole discretion.
(j) "Exercise Price" shall mean the price per Share of Common Stock,
at which an Option may be exercised.
(k) "Fair Market Value" shall mean the value of one (l) Share of
Common Stock, determined as follows:
(l) If the Shares are traded on an exchange or the National
Market System ("NMS") of the NASDAQ System, (A) if listed on an
exchange, the closing price as reported or as composite transaction
on the date of valuation or, if no sale occurred on that date, then
the mean between the closing bid and asked prices on such exchange on
such date, and (B) if traded on the NMS, the last sales price on the
date of valuation or, if no sale occurred on such date, the mean
between the highest bid and lowest asked prices as of the close of
business on the date of valuation, as reported on the NASDAQ System;
and
(2) If the Shares are traded over-the-counter on the NASDAQ
System, the mean between the bid and asked prices on the NASDAQ
System at the close of business on the date of valuation. If the date
of valuation is not a business day, the price on the last business
day preceding the date of valuation shall be utilized.
(l) "Initial Grant" shall mean any Option granted pursuant to Section
4(b) (i).
(m) "Option" shall mean any stock option granted pursuant to the
Plan.
(n) "Option Agreement" shall mean a written stock option agreement
evidencing a particular Option.
(o) "Optionee" shall mean a Director who has received an Option.
(p) "Plan" shall mean this Alpha Microsystems 1993 Directors' Stock
Option Plan, as it may be amended from time to time.
(q) "Phase Price" shall mean the Exercise Price times the number of
Shares with respect to which an Option is exercised.
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(r) "Share" shall mean one (l) share of Common Stock, adjusted in
accordance with Section 9 of the Plan (if applicable).
3. EFFECTIVE DATE
The Plan was adopted by the Board effective April 14,1994, subject to
the approval of the Corporation's shareholders pursuant to Section 15 hereof.
The Plan shall terminate as provided in Section 8 below.
4. PARTICIPATION
(a) Eligibility. All Directors who are not employees of the
Corporation or any subsidiary of the Corporation shall be eligible to
receive automatic grants of Option.
(b) Automatic Grants.
(i) Initial Grant. An Option to purchase 10,000 Shares will be
granted automatically to:
(A) each person who is a Director on the date the Plan is
approved by the shareholders of the Company, provided such
Director is not an employee of the Company and is elected to
serve as a Director for the following year;
(B) each person who thereafter becomes a Director, as of the
date he or she first becomes a director if such date is the date
of an annual meeting of shareholders, or otherwise on the date of
the next succeeding annual meeting of shareholders of the
Company, provided that the Director is not an employee of the
Company and is re-elected.
(ii) Additional Grants. Additional Options to purchase 2,500
Shares will be granted automatically to each non-employee Director
each year thereafter on the date of the Annual Meeting of
Shareholders, providing that the Director is reelected to serve as a
Director for the following year.
5. OPTION TERMS
(a) Option Price. The purchase price of each Share under each of the
Options shall be equal to one hundred percent (100%) of the Fair Market
Value of a Share on the Automatic Grant Date.
(b) Period of Exercise.
(i) Initial Grants. Options granted as of the date this Plan is
approved by the Shareholders to a Director who has been a Director of
the Company for at least three (3) years prior to the date such
shareholder approval is obtained shall be immediately exercisable.
Options granted as of the date this Plan is approved by the
Shareholders to a Director who has not been a Director of the Company
for at least three (3) years prior to
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the date such shareholder approval is obtained, and Options granted
upon a Director's first election to the Board, shall become
exercisable a follows: (A) fifty percent (50%) on the day immediately
prior to the first annual meeting of shareholders after the date of
grant; (B) twenty-five percent (25%) on the day immediately prior to
the second annual meeting of shareholders after the date of grant;
and (C) twenty-five percent (25%) on the day immediately prior to the
third annual meeting of shareholders after the date of grant. Subject
to Section 5(e) each such Option shall continue to be exercisable for
a period of five (5) years after the date of grant
(ii) Additional Grants. Automatic Options granted to a Director
subsequent to Initial Grants shall become exercisable as follows: (A)
fifty percent (50%) on the day immediately prior to the first annual
meeting of shareholders after the date of grant; (B) twenty-five
percent (25%) on the day immediately prior to the second annual
meeting of shareholders after the date of grant; and (C) twenty-five
percent (25%) on the day immediately prior to the third annual
meeting of shareholders after the date of grant Subject to Section
5(e) each such Option shall continue to be exercisable for a period
of five (5) years after the date of grant.
(c) Medium and Time of Payment. The Purchase Price shall be payable
in full in United States dollars or by certified check upon the exercise
of the Option; or by (i) the surrender of Shares in good form for
transfer, owned by the person exercising the Option and having a Fair
Market Value on the date of exercise equal to the Purchase Price, or
(ii) in any combination of cash and Shares, as long as the sum of the
cash so paid and the Fair Market Value of the Shares so surrendered
equals the Purchase Price.
(d) Non-transferability of Options. During the lifetime of the
Optionee, the Option shall be exercisable only by the Optionee and shall
not be assignable or transferable. In the event of the Optionee's death,
the Option shall not be transferable by the Optionee other than by will
or the laws of descent and distribution. Any other attempted alienation,
assignment, pledge, hypothecation, attachment, execution or similar
process, whether voluntary or involuntary, with respect to all or any
part of any Option or right hereunder, shall be null and void and, at
the Corporation's option shall cause all of the Optionee's rights under
the Option to terminate.
(e) Cessation of Directorship. After a Optionee ceases to be a
Director, his or her rights to exercise any unexercised Option then held
by the Optionee shall be determined as provided in this Section 5(e). No
Option, however, may be exercised after the Optionee ceases to be a
Director except to the extent that the Option was exercisable at the
time of such cessation. No Option may be exercised after its term
expires or is otherwise cancelled.
(i) Death. If an Optionee dies while he or she is an Director
or having ceasing to be an Director but during the period during
which he or she could have exercised the Option under this Section 5,
and has not fully exercised the Option, then the Option may be
exercised in full, at any time within twelve (12) months after the
Optionee's death by the executor or administrator of his or her
estate or by any person or persons who have acquired the Option
directly from the Optionee by bequest or inheritance, but only to the
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extent that, at the date of death, the Optionee's right to exercise
such Option had accrued and had not been previously exercised.
(ii) Disability. If an Optionee ceases active service as a
Director by reason of Disability, such Optionee shall have the right,
to exercise the Option at any time within twelve (12) months after
such cessation of employment, but only to the extent that, at the
date of such cessation of employment, the Optionee's right to
exercise such Option had accrued pursuant to the terms of the
applicable Option Agreement and had not previously been exercised.
(iii) Other Reasons. If an Optionee ceases to be a Director for
any reason other than those mentioned above in subsections (i), (ii)
or (iii), the Optionee shall have the right, subject to the
restrictions referred to in this Section 5(e) to exercise the Option
at any time within thirty (30) days following such cessation,
discharge or termination, but, only to the extent that, at the date
of cessation, discharge or termination, the Optionee's right to
exercise such Option had accrued pursuant to the terms of the
applicable Option Agreement and had not previously been exercised.
(f) Rights as a Shareholder. No one shall have rights as a
shareholder with respect to any Shares covered by his or her Option
until the date of the issuance of a stock certificate for such Shares.
No adjustment shall be made for dividends (ordinary or extraordinary,
whether in cash, securities or other property), distributions or other
rights for which the record date is prior to the date such stock
certificate is issued, except as provided in Section 9 hereof.
(g) Six-Month Holding Period. No Option nor any share issuable upon
exercise of any Option, may be sold or otherwise disposed of prior to
the date that is six (6) months and one (1) day following the Automatic
Grant Date.
6. STOCK
The stock subject to Options granted under the Plan shall be Shares of
the Corporation's authorized but unissued or reacquired Common Stock. The
aggregate number of Shares which may be issued upon exercise of Options under
the Plan shall not exceed One Hundred Thousand (100,000). The number of Shares
subject to Options outstanding at any time shall not exceed the number of Shares
remaining available for issuance under the Plan. Whenever an Optionee's rights
to exercise an Option as to any Shares shall cease for any reason before he or
she has exercised such Option as to such Shares, the Option shall be deemed
terminated to that extent and such Shares shall again be subject to Option under
the Plan. The limitations established by this Section 6 shall be subject to
adjustment in the manner provided in Section 9 hereof upon the occurrence of an
event specified therein.
7. STOCK OPTION AGREEMENTS
Options shall be evidenced by written Option Agreements consistent with
the terms of the Plan.
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8. TERM OF PLAN
Options may be granted pursuant to the Plan until the expiration of the
Plan on August 27, 2003.
9. RECAPITALIZATIONS
Subject to any required action by shareholders, the number of Shares
covered by the Plan as provided in Section 6 hereof, the number of Shares
covered by each outstanding Option and the Exercise Price thereof shall be
proportionately adjusted for any increase or decrease in the number of issued
Shares resulting from a subdivision or consolidation of Shares or the payment of
a stock dividend (but only of Common Stock) or any other increase or decrease in
the number of issued Shares effected without receipt of consideration by the
Corporation.
Subject to any required action by shareholders, if the Corporation is
the surviving corporation in any merger or consolidation, each outstanding
Option shall pertain and apply to the securities to which a holder of the number
of Shares subject to the Option would have been entitled. If the Corporation is
not the surviving corporation in any merger or consolidation, then any
outstanding Options shall be fully vested and exercisable until five days prior
to such merger or consolidation (but shall terminate thereafter) unless
provisions are made in connection with such transaction for the continuance of
the Plan or the assumption or the substitution for outstanding Options of new
options covering the stock of a successor employer corporation, or a parent or
subsidiary thereof, with appropriate adjustments as to the number and land of
shares and prices. A dissolution or liquidation of the Corporation shall cause
each outstanding Option to terminate.
Except as expressly provided in this Section 9, the Optionee shall have
no rights by reason of any subdivision or consolidation of shares of stock of
any class, the payment of any stock dividend or any other increase or decrease
in the number of shares of stock of any class or by reason of any dissolution,
liquidation, merger or consolidation or spin-off of assets or stock of another
corporation, and any issue by the Corporation of shares of stock of any class,
or securities convertible into shares of stock of any class, shall not affect,
and no adjustment by reason thereof shall be made with respect to, the number or
Exercise Price of Shares subject to an Option
The grant of an Option pursuant to the Plan shall not affect in any way
the right or power of the Corporation to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure, to merge or
consolidate or to dissolve, liquidate, sell or transfer all or any part of its
business or assets.
10. SECURITIES LAW REQUIREMENTS
(a) Securities Act Requirements. No Option granted pursuant to this Plan
shall be exercisable in whole or in part, and the Corporation shall not be
obligated to sell any Shares subject to any such Option, if such exercise and
sale would, in the opinion of counsel for the Corporation, violate the
Securities Act of 1933 (or other Federal or State statutes having similar
requirements) as it may be in effect at that time.
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As a condition to the issuance of any Shares upon exercise of an Option
under this Plan, the Company may require the Optionee to furnish written
representation that he or she is acquiring the shares for investment and not
with a view to distribution to the public. Such representations shall be
required in cases where, in the opinion of the Company, they are necessary to
enable the Corporation to comply with the provisions of the Securities Act of
1933, and any shareholder who gives such representation shall be released from
it at such a time as the shares to which it applies are registered pursuant to
the Securities Act of 1933.
(b) Listing and Regulatory Requirements. Each Option shall be subject to
the further requirements that, if at any time the Company shall determine in its
discretion that the listing or qualification of the shares of stock subject to
such Option under any securities exchange requirements or under any applicable
law, or the consent or approval of any governmental regulatory body, is
necessary or desirable as a condition of, or in connection with, the granting of
such Option or the issue of Shares thereunder, such Option may not be exercised
in whole or in part unless and until such listing, qualification, consent or
approval shall have been effected or obtained free of any conditions not
acceptable to the Company.
(c) Section 16. Transactions under this Plan are intended to comply with
all applicable conditions of Rule 16b-3 or its successors under the 1934 Act. To
the extent any provision of the Plan fails to so comply, it shall be deemed null
and void, to the extent permitted by law and deemed advisable by the Company.
11. CHANGE IN CONTROL
In the event any Change in Control of the Corporation should occur, then
the exercise dates of all Options granted pursuant to this Plan shall
automatically accelerate and all Options granted pursuant to this Plan shall
become exercisable in full, notwithstanding any other provision of this Plan or
of any outstanding Options granted hereunder.
Notwithstanding the foregoing, in no event shall any Option be
exercisable after the date of termination of the exercise period of such Option
specified in Sections 5(b) and 5(e) of this Plan.
12. APPLICATION OF FUNDS
The proceeds received by the Corporation from the sale of Common Stock
pursuant to the exercise of an Option will be used for general corporate
purposes.
13. APPROVAL OF SHAREHOLDERS
The Plan shall be subject to approval by the affirmative vote of the
holders of a majority of the outstanding shares present and entitled to vote at
the first annual meeting of shareholders of the Corporation following the
adoption of the Plan, and in no event later than August 27, 1994.
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14. AMENDMENT
The Board may amend, suspend, alter or terminate this Plan at any time;
provided, however, as follows:
(a) Unless required by applicable law, rule or regulation, the Board
shall not amend the Plan in the following respects without approval of
the amendment by a majority of the vote cast at a duly held shareholders
meeting at which a quorum representing a majority of all outstanding
voting stock of the Company is, either in person or by proxy, present
and voting on the amendment
(i) to reduce the Exercise Price;
(ii) to increase the maximum number of shares subject to Options
(except pursuant to the provisions of the Plan providing for
adjustments upon the occurrence of certain events);
(iii) to change the persons who may receive the Options pursuant
to the Plan, the date on which such Options shall be granted, or the
number of shares which shall be subject to each Initial Grant or
Additional Grant; or
(iv) to extend the maximum period during which the Options may
be exercised or to extend the term of the Plan.
(b) Unless required by applicable law, rule or regulation, no
amendment of the Plan or any Option shall, without the consent of the
Optionee holding such affected Option, be permitted if such amendment
would affect in a material and adverse manner an Option granted prior to
the date of such amendment; and
(c) The provisions of this Plan may not be amended more than one time
during any six-month period except for any amendments to conform with
changes in the Internal Revenue Code, the Employee Retirement Income
Security Act of 1974, as amended, or the rules thereunder.
15. EXECUTION
To record the adoption of the Plan by the Board on April 14, 1994,
the Corporation has caused its authorized officers to affix the
corporate name and seal hereto.
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ALPHA MICROSYSTEMS, a California
corporation
By: /s/DOUGLAS J. TULLIO
Name: Douglas J. Tullio
Title: President and Chief Executive Officer
By: /s/JOHN F. GLADE
Name: John F. Glade
Title: Vice President, Engineering
& Mfg. and Secretary
[Seal]
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