As Amended 4/25/97
RF POWER PRODUCTS, INC.
1992 STOCK OPTION PLAN
1. Purpose. RF Power Products, Inc. (the "Company")
hereby adopts the RF Power Products, Inc. 1992 Stock Option Plan
(the "Plan"). The Plan is intended to recognize the
contributions made to the Company by employees (including
employees who are members of the Board of Directors), consultants
and advisors of the Company or any Affiliate, to provide such
persons with additional incentive to devote themselves to the
future success of the Company or an Affiliate, and to improve the
ability of the Company or an Affiliate to attract, retain, and
motivate individuals upon whom the Company's sustained growth and
financial success depend, by providing such persons with an
opportunity to acquire or increase their proprietary interest in
the Company through receipt of rights to acquire the Company's
Common Stock, par value $.01 per share (the "Common Stock").
2. Definitions. Unless the context clearly indicates
otherwise, the following terms shall have the following meanings:
(a) "Affiliate" means a corporation which is a
parent corporation or a subsidiary corporation with respect to
the Company within the meaning of section 424(e) or (f) of the
Code.
(b) "Board of Directors" means the Board of
Directors of the Company.
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(c) "Change of Control" shall have the meaning as
set forth in Section 9 of the Plan.
(d) "Code" means the Internal Revenue Code of
1986, as amended.
(e) "Committee" means the members of the Board of
Directors who are not eligible to receive options under the Plan
or a committee designated by the Board of Directors as described
in Section 3 of the Plan.
(f) "Company" means RF Power Products, Inc., a
New Jersey corporation.
(g) "Disability" shall have the meaning set forth
in section 22(e)(3) of the Code.
(h) "Fair Market Value" shall have the meaning
set forth in Section 8(b) of the Plan.
(i) "ISO" means an Option granted under the Plan
which is intended to qualify as an "incentive stock option"
within the meaning of section 422(b) of the Code.
(j) "Non-qualified Stock Option" means an option
granted under the Plan which is not intended to qualify, or
otherwise does not qualify, as an "incentive stock option" within
the meaning of section 422(b) of the Code.
(k) "Option" means either an ISO or a
Non-qualified Stock Option granted under the Plan.
(l) "Optionee" means a person to whom an option
has been granted under the Plan, which Option has not been
exercised and has not expired or terminated.
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(m) "Option Document" means the document
described in Section 8 which sets forth the terms and conditions
of each grant of Options.
(n) "Option Price" means the price at which
Shares may be purchased upon exercise of an Option, as calculated
pursuant to subsection 8(b).
(o) "Shares" means the shares of Common Stock of
the Company which are the subject of Options.
3. Administration of the Plan. The Plan shall be
administered by a committee composed of two or more of the
members of the Company's Board of Directors who are not eligible
to receive Options under the Plan; however, the Board may
designate two committees to operate and administer the Plan in
its stead, one of such committees composed of two or more of its
directors who are not eligible to receive Options under the Plan
to operate and administer the Plan with respect to each person
who is a "Principal Officer" (as defined below), and the other
such committee composed of two or more directors (which may
include directors who are also employees, consultants or advisors
of the Company) to operate and administer the Plan with respect
to each person other than a "Principal Officer." Any of such
committees designated by the Board of Directors is referred to as
the "Committee." As used herein, the term "Principal Officer"
means a person who is an "officer" of the Company, within the
meaning of Rule 16a-l(f) promulgated under the Securities
Exchange Act of 1934, as amended, or any successor regulation.
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(a) Meetings. The Committee shall hold meetings
at such times and places as it may determine. Acts approved at a
meeting by a majority of the members of the Committee or acts
approved in writing by the unanimous consent of the members of
the Committee shall be the valid acts of the Committee.
(b) Grants. The Committee shall from time to
time at its discretion direct the Company to grant Options
pursuant to the terms of the Plan. The Committee shall have
plenary authority to (i) determine the Optionees to whom, the
times at which, and the price at which Options shall be granted,
(ii) determine the type of Option to be granted and the number of
Shares subject thereto, and (iii) approve the form and terms and
conditions of the Option Documents; all subject, however, to the
express provisions of the Plan. In making such determinations,
the Committee may take into account the nature of the Optionee's
services and responsibilities, the Optionee's present and
potential contribution to the Company's success and such other
factors as it may deem relevant. The interpretation and
construction by the Committee of any provisions of the Plan or of
any Option granted under it shall be final, binding and
conclusive.
(c) Exculpation. No member of the Committee
shall be personally liable for monetary damages as such for any
action taken or any failure to take any action in connection with
the administration of the Plan or the granting of options
thereunder unless (i) the member of the Committee has breached or
failed to perform the duties of his office within the meaning of
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Chapter 6 of the Business Corporation Act of New Jersey, New
Jersey Revised Statutes Title 14A, as amended, and (ii) the
breach or failure to perform constitutes self-dealing, willful
misconduct or recklessness; provided, however, that the
provisions of this subsection 3(c) shall not apply to the
responsibility or liability of a member of the Committee pursuant
to any criminal statute or to the liability of a member of the
Committee for the payment of taxes pursuant to local, state or
federal law.
(d) Indemnification. Service on the Committee
shall constitute service as a member of the Board of Directors of
the Company. Each member of the Committee shall be entitled
without further act on his part to indemnity from the Company to
the fullest extent provided by applicable law and the Company's
Certificate of Incorporation and/or Bylaws in connection with or
arising out of any action, suit or proceeding with respect to the
administration of the Plan or the granting of Options thereunder
in which he or she may be involved by reason of his or her being
or having been a member of the Committee, whether or not he or
she continues to be such member of the Committee at the time of
the action, suit or proceeding.
4. Grants under the Plan. Grants under the Plan may
be in the form of a Non-qualified Stock Option, an ISO or a
combination thereof, at the discretion of the Committee.
5. Eligibility. All employees (including employees
who are members of the Board of Directors of the Company or its
Affiliates), consultants and advisors of the Company or its
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Affiliates shall be eligible to receive Options hereunder. The
Committee, in its sole discretion, shall determine whether an
individual qualifies as an employee, consultant or advisor of the
Company or its Affiliates.
6. Shares Subject to Plan. Prior to November 30,
1996, the aggregate maximum number of Shares for which Options
may be granted pursuant to the Plan is 1,200,000. On and after
November 30, 1996, subject to stockholder approval at the 1997
Annual Stockholders Meeting, the aggregate number of Shares which
may be issued pursuant to the Plan is (i) 1,200,000 Shares, plus
(ii) an amount equal to 1% of the total number of shares of
Common Stock outstanding on the last trading day of the fiscal
year ended November 30, 1996, plus (iii) additional amounts equal
to 1% of the total number of shares of Common Stock outstanding
on the last trading day of each succeeding fiscal year, such
amounts to be added at the end of each such year. The Shares
shall be issued from authorized and unissued Common Stock or
Common Stock held in or hereafter acquired for the treasury of
the Company. If an Option terminates or expires without having
been fully exercised for any reason, the Shares for which the
Option was not exercised may again be the subject of an Option
granted pursuant to the Plan.
7. Term of the Plan. The Plan is effective as of
July 10, 1992, the date on which it was adopted by the Board of
Directors, subject to the approval of the Plan on or before
July 10, 1993, by a majority of the votes cast at a duly called
meeting of the shareholders at which a quorum representing a
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majority of all outstanding voting stock of the Company is,
either in person or by proxy, present and voting, or by consent
in writing of shareholders representing a majority of all
outstanding voting stock of the Company. No Option may be
granted under the Plan after July 10, 2002. No Option granted
pursuant to the Plan may be exercised before the Plan is so
approved by the Company's shareholders. If the Plan is not so
approved on or before July 10, 1993, all options granted under
the Plan shall be null and void.
8. Option Documents and Terms. Each Option granted
under the Plan shall be a Non-qualified Stock Option unless the
Option shall be specifically designated at the time of grant to
be an ISO for Federal income tax purposes. Options granted
pursuant to the Plan shall be evidenced by the Option Documents
in such form as the Committee shall from time to time approve,
which Option Documents shall comply with and be subject to the
following terms and conditions and such other terms and
conditions as the Committee shall from time to time require which
are not inconsistent with the terms of the Plan.
(a) Number of Option Shares. Each Option
Document shall state the number of Shares to which it pertains.
An Optionee may receive more than one Option, which may include
options which are intended to be ISOs and Options which are not
intended to be ISOs, but only on the terms and subject to the
conditions and restrictions of the Plan.
(b) Option Price. Each Option Document shall
state the Option Price which, for all ISOs, shall be at least
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100% of the Fair Market Value of the Shares at the time the
Option is granted as determined by the Committee in accordance
with this subsection 8(b); provided, however, that if an ISO is
granted to an Optionee who then owns, directly or by attribution
under section 424(d) of the Code, shares possessing more than 10%
of the total combined voting power of all classes of stock of the
Company or an Affiliate, then the Option Price shall be at least
110% of the Fair Market Value of the Shares at the time the
option is granted. If the Common Stock is traded in a public
market, then the Fair Market Value per share shall be, if the
Shares are listed on a national securities exchange or included
in the NASDAQ National Market System, the last reported sale
price thereof on the relevant date, or, if the Shares are not so
listed or included, the mean between the last reported "bid" and
"asked" prices thereof, as reported on NASDAQ or, if not so
reported, as reported by the National Daily Quotation Bureau,
Inc., or as reported in a customary financial reporting service,
as applicable and as the Committee determines, on the relevant
date. If the Common Stock is not traded in a public market on
the relevant date, the Fair Market Value shall be as determined
in good faith by the Committee.
(c) Exercise. No Option shall be deemed to have
been exercised prior to the receipt by the Company of written
notice of such exercise and of payment in full of the Option
Price for the Shares to be purchased. Each such notice shall
specify the number of Shares to be purchased and shall (unless
the Shares are covered by a then current registration statement
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or a Notification under Regulation A under the Securities Act of
1933, as amended (the "Act")), contain the Optionee's
acknowledgment in form and substance satisfactory to the Company
that (i) such Shares are being purchased for investment and not
for distribution or resale (other than a distribution or resale
which, in the opinion of counsel satisfactory to the Company, may
be made without violating the registration provisions of the
Act), (ii) the Optionee has been advised and understands that
(A) the Shares have not been registered under the Act and are
"restricted securities" within the meaning of Rule 144 under the
Act, and are subject to restrictions on transfer and (B) the
Company is under no obligation to register the Shares under the
Act or to take any action which would make available to the
Optionee any exemption from such registration, (iii) such Shares
may not be transferred without compliance with all applicable
federal and state securities laws, and (iv) an appropriate legend
referring to the foregoing restrictions on transfer and any other
restrictions imposed under the Option Documents may be endorsed
on the certificates. Notwithstanding the foregoing, if the
Company determines that issuance of Shares should be delayed
pending (i) registration under federal or state securities laws,
(ii) the receipt of an opinion that an appropriate exemption from
such registration is available, (iii) the listing or inclusion of
the Shares on any securities exchange or in an automated
quotation system or (iv) the consent or approval of any
governmental regulatory body whose consent or approval is
necessary in connection with the issuance of such Shares, the
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Company may defer exercise of any Option granted hereunder until
any of the events described in this subsection 8(c) has occurred.
(d) Medium of Payment. An Optionee shall pay for
Shares (i) in cash, (ii) by certified check payable to the order
of the Company, or (iii) by such other mode of payment as the
Committee may approve, including payment through a broker in
accordance with procedures permitted by Regulation T of the
Federal Reserve Board. Furthermore, the Committee may provide in
an Option Document that payment may be made in whole or in part
in shares of the Company's Common Stock held by the Optionee for
at least six months. If payment is made in whole or in part in
shares of the Company's Common Stock, then the Optionee shall
deliver to the Company certificates registered in the name of
such Optionee representing the shares owned by such Optionee,
free of all liens, claims and encumbrances of every kind and
having an aggregate Fair Market Value on the date of delivery
that is at least as great as the Option Price of the Shares (or
relevant portion thereof) with respect to which such Option to be
exercised by the payment in shares of Common Stock, accompanied
by stock powers duly endorsed in blank by the Optionee.
Notwithstanding the foregoing, the Committee may impose from time
to time such limitations and prohibitions on the use of shares of
the Common Stock to exercise an Option as it deems appropriate.
(e) Termination of Options.
(i) No Option shall be exercisable after the
first to occur of the following:
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(A) Expiration of the Option term
specified in the Option Document, which for an ISO shall not
exceed (1) ten years from the date of grant, or (2) five years
from the date of grant if the Optionee on the date of grant owns,
directly or by attribution under section 424(d) of the Code,
shares possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company or
of an Affiliate;
(B) The date the Optionee's employment
or service with the Company or its Affiliates terminates for any
reason other than Disability or death or as otherwise specified
in subsection 8(e)(i)(D) or Section 9 below;
(C) Expiration of one year from the
date the Optionee's employment or service with the Company or its
Affiliates terminates due to the Optionee's Disability or death;
(D) A finding by the Committee, after
full consideration of the facts presented on behalf of both the
Company and the Optionee, that the Optionee has breached his
employment or Service contract with the Company or an Affiliate,
or has been engaged in any sort of disloyalty to the Company or
an Affiliate, including, without limitation, fraud, embezzlement,
theft, commission of a felony or proven dishonesty in the course
of his employment or Service, or has disclosed trade secrets or
confidential information of the Company or an Affiliate. In such
event, in addition to immediate termination of the Option, the
Optionee shall automatically forfeit all Shares for which the
Company has not yet delivered the share certificates upon refund
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by the Company of the Option Price of such Shares.
Notwithstanding anything herein to the contrary, the Company may
withhold delivery of share certificates pending the resolution of
any inquiry that could lead to a finding resulting in a
forfeiture; or
(E) The date, if any, set by the Board
of Directors as an accelerated expiration date pursuant to
Section 9 hereof.
(ii) Notwithstanding the foregoing, the
Committee may extend the period during which an Option may be
exercised to a date no later than the date of the expiration of
the Option term specified in the Option Documents, as they may be
amended, provided that any change pursuant to this
subsection 8(e)(ii) that would cause an ISO to become a
Non-qualified Stock Option may be made only with the consent of
the Optionee.
(A) Transfers. No Option granted under
the Plan may be transferred, except by will or by the laws of
descent and distribution. During the lifetime of the person to
whom an Option is granted, such Option may be exercised only by
him. Notwithstanding the foregoing, Non-qualified Stock Option
may be transferred pursuant to the terms of a "qualified domestic
relations order," within the meaning of sections 401(a)(13) and
414(p) of the Code or within the meaning of Title I of the
Employee Retirement Income Security Act of 1974, as amended.
(B) Holding Period. No Option granted
under the Plan may be exercised unless such period of time as may
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be specified in the Option Documents has elapsed from the date of
grant.
(C) Limitation on ISO Grants. No ISO
shall be granted if, for any calendar year during which such ISO
may be exercised, the Fair Market Value of the Shares (determined
at the time the ISO is granted) with respect to which such ISO is
exercisable for the first time by the Optionee, plus the
aggregate Fair Market Value (determined at such time) of any
Shares with respect to which any other incentive stock option of
the Company or its Affiliates are exercisable for the first time
by the Optionee, exceeds $100,000.
(D) Other Provisions. The Option
Documents shall contain such other provisions including, without
limitation, provisions authorizing the Committee to accelerate
the exercisability of all or any portion of an Option granted
pursuant to the Plan, additional restrictions upon the exercise
of the Option or additional limitations upon the term of the
Option, as the Committee shall deem advisable.
(E) Amendment. The Committee shall
have the right to amend Option Documents issued to an Optionee,
subject to the Optionee's consent if such amendment is not
favorable to the Optionee, except that the consent of the
Optionee shall not be required for any amendment made under
Section 9 of the Plan.
9. Change of Control. In the event of a Change
of Control, the Committee may take whatever action with respect
to the Options outstanding it deems necessary or desirable,
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including, without limitation, accelerating the expiration or
termination date or the date of exercisability in the respective
Option Documents.
A "Change of Control" shall be deemed to have
occurred upon the earliest to occur of the following events:
(i) the date the shareholders of the Company (or the Board of
Directors, if shareholder action is not required) approve a plan
or other arrangement pursuant to which the Company will be
dissolved or liquidated, or (ii) the date the shareholders of the
Company (or the Board of Directors, if shareholder action is not
required) approve a definitive agreement to sell or otherwise
dispose of substantially all of the assets of the Company, or
(iii) the date the shareholders of the Company (or the Board of
Directors, if shareholder action is not required) and the
shareholders of the other constituent corporation (or its board
of directors if shareholder action is not required) have approved
a definitive agreement to merge or consolidate the Company with
or into such other corporation, other than, in either case, a
merger or consolidation of the Company in which holders of shares
of the Company's Common Stock or other common voting stock
immediately prior to the merger or consolidation will hold at
least a majority of the ownership of common stock of the
surviving corporation (and, if one class of common stock is not
the only class of voting securities entitled to vote on the
election of directors of the surviving corporation, a majority of
the voting power of the surviving corporation's voting
securities) immediately after the merger or consolidation, which
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common stock (and if applicable voting securities) is to be held
in the same proportion as such holders, ownership of Common Stock
or other common voting stock of the Company immediately before
the merger or consolidation, or (iv) the date any entity, person
or group (within the meaning of Section 13(d)(3) or
Section 14(d)(2) of the Securities Exchange Act of 1934, as
amended) other than the Company or any of its subsidiaries, or
any employee benefit plan (or related trust) sponsored or
maintained by the Company or any of its subsidiaries, shall have
become the beneficial owner of, or shall have obtained voting
control over, outstanding shares of the Company's voting stock
representing more than fifty percent (50%) of the voting power of
all of the Company's outstanding voting stock.
10. Adjustments on Changes in Capitalization. The
aggregate number of Shares and class of shares as to which
Options may be granted hereunder, and the Option Price shall be
appropriately adjusted in the event of a stock dividend, stock
split, recapitalization or other change in the number or class of
issued and outstanding equity securities of the Company resulting
from a subdivision or consolidation of the Common Stock and/or,
if appropriate, other outstanding equity securities or a
recapitalization or other capital adjustment (not including the
issuance of Common Stock on the conversion of other securities of
the Company which are convertible into Common Stock) affecting
the Common Stock which is effected without receipt of
consideration by the Company. The Committee shall have authority
to determine the adjustments to be made under this Section, and
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any such determination by the Committee shall be final, binding
and conclusive; provided, however, that no adjustment shall be
made which will cause an ISO to lose its status as such without
the consent of the Optionee, except for adjustments made pursuant
to Section 9 hereof.
11. Amendment of the Plan. The Board of Directors of
the Company may amend the Plan from time to time in such manner
as it may deem advisable. Nevertheless, the Board of Directors
of the Company may not: (i) change the class of individuals
eligible to receive an ISO, (ii) increase the maximum number of
Shares as to which Options may be granted, or (iii) make any
other change or amendment as to which shareholder approval is
required in order to satisfy the conditions set forth in
Rule 16b-3 promulgated under the Securities Exchange Act of 1934,
as amended, in each case without obtaining approval, within
twelve months before or after such action, by vote of a majority
of the votes cast at a duly called meeting of the shareholders 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 matter. No amendment to the Plan shall
adversely affect any outstanding Option, however, without the
consent of the Optionee.
12. No Commitment to Retain. The grant of an Option
pursuant to the Plan shall not be construed to imply or to
constitute evidence of any agreement, express or implied, on the
part of the Company or any Affiliate to retain the Optionee in
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the employ of the Company or an Affiliate and/or as a member of
the Company's Board of Directors or in any other capacity.
13. Withholding of Taxes. Whenever the Company
proposes or is required to deliver or transfer Shares in
connection with the exercise of an Option, the Company shall have
the right to (a) require the recipient to remit or otherwise make
available to the Company an amount sufficient to satisfy any
federal, state and/or local withholding tax requirements prior to
the delivery or transfer of any certificate or certificates for
each Shares or (b) take whatever other action it deems necessary
to protect its interests with respect to tax liabilities. The
Company's obligation to make any delivery or transfer of Shares
shall be conditioned on the Optionee's compliance, to the
Company's satisfaction, with any withholding requirement.
14. Interpretation. The Plan is intended to enable
transactions under the Plan with respect to directors and
officers (within the meaning of Section 16(a) under the
Securities Exchange Act of 1934, as amended) to satisfy the
conditions of Rule 16b-3 promulgated under the Securities
Exchange Act of 1934, as amended; any provision of the Plan which
would cause a conflict with such conditions shall be deemed null
and void to the extent permitted by applicable law and in the
discretion of the Board of Directors.
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