EXHIBIT 99.1
RECOVERY ENGINEERING, INC.
1993 DIRECTOR STOCK OPTION PLAN
AS AMENDED
RECOVERY ENGINEERING, INC.
1993 DIRECTOR STOCK OPTION PLAN
The purpose of the Recovery Engineering, Inc. 1993 Director Stock
Option Plan (the "Option Plan") is to attract and retain persons of outstanding
competence to serve on the Board of Directors of Recovery Engineering, Inc. (the
"Company").
1. ADMINISTRATION. The Option Plan will be administered by the Board of
Directors of the Company. Grants of stock options under the Option Plan
("Options") and the amount and nature of the Options so granted will be
automatic, as described below.
2. STOCK SUBJECT TO THE OPTION PLAN. An aggregate of 100,000 shares of
Common Stock, par value $.01 per share ("Common Stock"), of the Company are
reserved for issuance under the Option Plan. The number of shares authorized for
issuance under the Option Plan may be increased from time to time by approval of
the Board of Directors and, if required pursuant to Rule 16b-3 under the
Securities Exchange Act of 1934 or the applicable rules of any securities
exchange or the NASD, the shareholders of the Company. In the event of any
reorganization, merger, recapitalization, stock dividend, stock split, or
similar change in the corporate structure or shares of the Company, appropriate
adjustments will be made to the number and kind of shares reserved for issuance
under the Option Plan and pursuant to outstanding Options and to the exercise
price of outstanding Options.
3. AUTOMATIC OPTION GRANTS. Under the Option Plan, each non-employee
director will automatically be granted Options to purchase shares of Common
Stock as follows:
a. INITIAL OPTION GRANTS. Under the Option Plan, each current
and future non-employee director will be granted an initial Option (the
"Initial Grant") as follows:
i. CURRENT NON-EMPLOYEE DIRECTORS. Each person
serving as a non-employee director on the effective date of
the Option Plan will automatically be granted an Option on the
effective date to purchase the number of shares set forth
below:
Name Number of shares
---------------------- ----------------
Eugene E. Erickson 1,000 shares
John E. Gherty 2,000 shares
William F. Wanner, Jr. 1,000 shares
Ronald W. Weber 1,000 shares
Richard J. Zeckhauser 0 shares
ii. FUTURE NON-EMPLOYEE DIRECTORS. Each person who is
first elected or appointed to serve as a non-employee director
after the effective date of the Option Plan will automatically
be granted an Option on the date of his or her initial
election
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or appointment to the Company's Board of Directors to purchase
1,000 shares of Common Stock.
b. ADDITIONAL OPTION GRANTS. Under the Option Plan, each
non-employee director will automatically be granted additional Options
to purchase shares of Common Stock as follows:
i. On the date of the first annual meeting of
shareholders occurring after the Initial Grant to a
non-employee director under the Option Plan, such non-employee
director, if reelected at such meeting, will automatically be
granted an additional Option to purchase 1,000 shares of
Common Stock.
ii. Thereafter, on the date of each subsequent annual
meeting of shareholders at which the non-employee director is
reelected to the Board of Directors, the non-employee director
shall automatically be granted an additional Option to
purchase 1,000 shares of Common Stock.
4. VESTING, EXERCISABILITY AND EXPIRATION. All Options granted under
the Option Plan shall be fully vested when granted, but may not be exercised
until six months following the date of grant. All Options granted under the
Option Plan shall expire five years after the date of grant.
5. TRANSFERABILITY. No Option granted under the Option Plan is
assignable or transferable during the lifetime of the director, either
voluntarily or involuntarily. Options shall be exercisable during a director's
lifetime only by such director. In the event of the death of a non-employee
director, Options granted under the Option Plan may be transferred by will or
the laws of descent and distribution and may only be exercised by the executors
or administrators of such director's estate or by the person or persons to whom
such director's rights under the Option shall pass by the director's will or the
laws of descent and distribution.
6. EXERCISE PRICE. The exercise price of Options granted under the
Option Plan shall be 85% of the fair market value of one share of Common Stock
on the date of grant; provided, however, that the exercise price of 1,000 of the
shares included in the initial option grant to Mr. Gherty shall be $2.50 per
share. For purposes of the Option Plan, "fair market value" is the average of
the high and low sales price of the Common Stock, as reported by the NASDAQ
National Market System on the date of grant. Payment for the exercise of Options
may be made in cash, by personal check payable to the Company, by delivery of
shares of Common Stock having an aggregate fair market value on the date of
exercise which is not less than the option price, or by a combination thereof.
7. PLAN AMENDMENT AND TERMINATION. The Board of Directors may suspend
or terminate the Option Plan or any portion thereof at any time, and may amend
the Option Plan from time to time in any respect, provided that no such
amendment will be effective without approval of the shareholders, if shareholder
approval is required pursuant to Rule 16b-3 under the Securities Exchange Act of
1934 or the applicable rules of any securities exchange or the NASD. To the
extent prohibited under Rule 16b-3 under the Securities Exchange Act of 1934,
the Option Plan may not be amended more than once every six months. No
termination, suspension or amendment of the
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Option Plan will alter an outstanding Option without the consent of the holder
of such Option. Unless earlier terminated by action of the Board, the Option
Plan will terminate on September 7, 2003, and no Option shall be granted after
any such termination. Options outstanding upon termination of the Option Plan
may continue to be exercised in accordance with their terms.
8. COMPLIANCE WITH SEC REGULATIONS. It is the Company's intent that the
Option Plan comply in all respects with Rule 16b-3 of the Act and any
regulations promulgated thereunder. If any provision of this plan is later found
not to be in compliance with the Rule, the provision shall be deemed null and
void. All grants and exercises of Options under the Option Plan shall be
executed in accordance with the requirements of Section 16 of the Act, as
amended, and any regulations promulgated thereunder.
9. SHAREHOLDER APPROVAL. The Option Plan shall be subject to approval
by the shareholders holding at least a majority of the voting stock of the
Company represented in person or by proxy at a duly held shareholders' meeting,
and any Option granted under the Option Plan prior to the date of such approval
shall be contingent upon such approval.
10. EFFECTIVE DATE. This Option Plan shall be effective as of September
7, 1993, subject to shareholder approval of the Option Plan as described above
on or before September 7, 1994.
11. MISCELLANEOUS. Except as otherwise provided herein, no non-employee
director shall have any claim or right to be granted an Option under the Option
Plan. Neither the Option Plan nor any action hereunder shall be construed as
giving any director any right to be retained in the service of the Company.
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FIRST AMENDMENT TO THE
RECOVERY ENGINEERING, INC.
1993 DIRECTOR STOCK OPTION PLAN
April 24, 1997
RECITALS:
A. The Recovery Engineering, Inc. 1993 Director Stock Option Plan (the
"Plan") was adopted by the Board of Directors of Recovery Engineering,
Inc. (the "Company") on September 7, 1993, and was approved by the
shareholders of the Company on April 12, 1994. The Plan is now in full
force and effect.
B. This First Amendment is adopted in order to increase the number of
shares subject to each option hereafter granted under the Plan.
AMENDMENT:
THEREFORE, the Plan is hereby amended as follows:
1. Amendment No. 1: Section 3.a.ii of the Plan is hereby amended to read
as follows:
"ii. FUTURE NON-EMPLOYEE DIRECTORS. Each person who
is first elected or appointed to serve as a non-employee
director on or after the effective date of the First Amendment
to the Option Plan will automatically be granted an Option on
the date of his or her initial election or appointment to the
Company's Board of Directors to purchase 4,000 shares of
Common Stock."
2. Amendment No. 2: Section 3.b of the Plan is hereby amended to read as
follows:
"b. ADDITIONAL OPTION GRANTS. Under the Option Plan, each
non-employee director will automatically be granted additional Options
to purchase shares of Common Stock as follows:
"i. On the date of the first annual meeting of
shareholders occurring (A) after the Initial Grant to a
non-employee director under the Option Plan and (B) on or
after the effective date of the First Amendment to the Option
Plan, such non-employee director, if reelected at such
meeting, will automatically be granted an additional Option to
purchase 4,000 shares of Common Stock.
"ii. Thereafter, on the date of each subsequent
annual meeting of shareholders at which the non-employee
director is reelected to the Board of Directors, the
non-employee director will automatically be granted an
additional Option to purchase 4,000 shares of Common Stock."
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3. Effective Date. This First Amendment shall be effective as of April 24,
1997, and with respect to Options granted under the Plan on or after
such effective date. If shareholder approval of this First Amendment is
required pursuant to Rule 16b-3 under the Securities Act of 1934 or the
applicable rules of any securities exchange or the NASD, then this
First Amendment and any Option granted under the Plan on or after the
date of this First Amendment (but only to the extent of the additional
shares which are subject to such Option as a result of this First
Amendment) shall be subject to and contingent upon such shareholder
approval.
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SECOND AMENDMENT TO THE
RECOVERY ENGINEERING, INC.
1993 DIRECTOR STOCK OPTION PLAN
January 28, 1999
RECITALS:
A. The Recovery Engineering, Inc. 1993 Director Stock Option Plan (the
"Option Plan") was adopted by the Board of Directors of Recovery
Engineering, Inc. (the "Company") on September 7, 1993, and was
approved by the shareholders of the Company on April 12, 1994. The
First Amendment to the Option Plan, increasing the number of shares of
Common Stock subject to each option thereafter granted under the Option
Plan, was adopted by the Board of Directors on April 24,1997, and was
approved by the shareholders of the Company on April 23, 1998. The
Option Plan, as amended, is now in full force and effect,
B. This Second Amendment is adopted in order to increase the number of
shares of Common Stock available for issuance under the Option Plan.
AMENDMENT:
THEREFORE, the Option Plan is hereby amended as follows.
1. The first sentence of paragraph 2 of the Option Plan is hereby amended
to read as follows:
"2. STOCK SUBJECT TO THE OPTION PLAN. An aggregate of 130,000
shares of Common Stock, par value $.01 per share, ("Common Stock") of
the Company are reserved for issuance under the Option Plan."
2. The foregoing amendment shall be effective as of January 28, 1999, and
shall be subject to approval by the shareholders of the Company at its
next Annual or Special Meeting of shareholders.