Exhibit 10(a)
DIGI INTERNATIONAL INC.
STOCK OPTION PLAN
AS AMENDED AND RESTATED
AS OF NOVEMBER 27, 2006
1. Purpose of Plan. The purpose of this Digi International Inc. Stock Option
Plan (the “Plan”), is to promote the interests of Digi International Inc., a
Delaware corporation (the “Company”), and its stockholders by providing key
personnel of the Company and its subsidiaries with an opportunity to acquire a
proprietary interest in the Company and thereby develop a stronger incentive to
put forth maximum effort for the continued success and growth of the Company and
its subsidiaries. In addition, the opportunity to acquire a proprietary interest
in the Company will aid in attracting and retaining key personnel of outstanding
ability.
2. Administration of Plan. This Plan shall be administered by a committee of two
or more directors (the “Committee”) appointed by the Company’s board of
directors (the “Board”). No person shall serve as a member of the Committee
unless such person shall be a “Non-Employee Director” as that term is defined in
Rule 16b-3(a)(3)(i), promulgated under the Securities Exchange Act of 1934, as
amended (the “Act”), or any successor statute or regulation comprehending the
same subject matter. A majority of the members of the Committee shall constitute
a quorum for any meeting of the Committee, and the acts of a majority of the
members present at any meeting at which a quorum is present or the acts
unanimously approved in writing by all members of the Committee shall be the
acts of the Committee. Subject to the provisions of this Plan, the Committee may
from time to time adopt such rules for the administration of this Plan as it
deems appropriate. The decision of the Committee on any matter affecting this
Plan or the rights and obligations arising under this Plan or any option granted
hereunder, shall be final, conclusive and binding upon all persons, including
without limitation the Company, stockholders, employees and optionees. To the
full extent permitted by law, (i) no member of the Committee or the CEO Stock
Option Committee (as defined in this paragraph 2) shall be liable for any action
or determination taken or made in good faith with respect to this Plan or any
option granted hereunder and (ii) the members of the Committee and the CEO Stock
Option Committee shall be entitled to indemnification by the Company against and
from any loss incurred by such member or person by reason of any such actions
and determinations. The Committee may delegate all or any part of its authority
under this Plan to a one person committee consisting of the Chief Executive
Officer of the Company as its sole member (the “CEO Stock Option Committee”) for
purposes of granting and administering awards granted to persons other than
persons who are then subject to the reporting requirements of Section 16 of the
Exchange Act (“Section 16 Individuals”).
3. Shares Subject to Plan. The shares that may be made subject to options
granted under this Plan shall be authorized and unissued shares of common stock
(the “Common Shares”) of the Company, $.01 par value, or Common Shares held in
treasury, and they shall not

 

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exceed 4,129,400 in the aggregate, except that, if any option lapses or
terminates for any reason before such option has been completely exercised, the
Common Shares covered by the unexercised portion of such option may again be
made subject to options granted under this Plan.
4. Eligible Participants. Options may be granted under this Plan to any key
employee of the Company or any subsidiary thereof, including any such employee
who is also an officer or director of the Company or any subsidiary thereof.
Nonstatutory stock options, as defined in paragraph 5(a) hereof, also shall be
granted to directors of the Company who are not employees of the Company or any
subsidiary thereof (the “Outside Directors”) in accordance with paragraph 6
hereof and may also be granted to other individuals or entities who are not
“employees” but who provide services to the Company or a parent or subsidiary
thereof in the capacity of an Outside Director, advisor or consultant.
References herein to “employed,” “employment” and similar terms (except
“employee”) shall include the providing of services in any such capacity or as a
director. The employees and other individuals and entities to whom options may
be granted pursuant to this paragraph 4 are referred to herein as “Eligible
Participants.”
5. Terms and Conditions of Employee Options.
     (a) Subject to the terms and conditions of this Plan, the Committee may,
from time to time prior to December 1, 2006, grant to such Eligible Participants
as the Committee may determine options to purchase such number of Common Shares
of the Company on such terms and conditions as the Committee may determine;
provided, however, that no Eligible Participant may be granted options with
respect to more than 250,000 Common Shares during any calendar year. In
determining the Eligible Participants to whom options shall be granted and the
number of Common Shares to be covered by each option, the Committee may take
into account the nature of the services rendered by the respective Eligible
Participants, their present and potential contributions to the success of the
Company, and such other factors as the Committee in its sole discretion shall
deem relevant. The date and time of approval by the Committee of the granting of
an option shall be considered the date and the time of the grant of such option.
The Committee in its sole discretion may designate whether an option granted to
an employee is to be considered an “incentive stock option” (as that term is
defined in Section 422 of the Internal Revenue Code of 1986, as amended, or any
amendment thereto (the “Code”)) or a nonstatutory stock option (an option
granted under this Plan that is not intended to be an “incentive stock option”).
The Committee may grant both incentive stock options and nonstatutory stock
options to the same employee. However, if an incentive stock option and a
nonstatutory stock option are awarded simultaneously, such options shall be
deemed to have been awarded in separate grants, shall be clearly identified, and
in no event shall the exercise of one such option affect the right to exercise
the other. To the extent that the aggregate Fair Market Value (as defined in
paragraph 5(c)) of Common Shares with respect to which incentive stock options
(determined without regard to this sentence) are exercisable for the first time
by any individual during any calendar year (under all plans of the Company and
its parent and subsidiary corporations) exceeds $100,000, such options shall be
treated as nonstatutory stock options.

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     (b) The purchase price of each Common Share subject to an option granted
pursuant to this paragraph 5 shall be fixed by the Committee. For nonstatutory
stock options, such purchase price may be set at not less than 50% of the Fair
Market Value (as defined below) of a Common Share on the date of grant. For
incentive stock options, such purchase price shall be no less than 100% of the
Fair Market Value of a Common Share on the date of grant, provided that if such
incentive stock option is granted to an employee who owns, or is deemed under
Section 424(d) of the Code to own, at the time such option is granted, stock of
the Company (or of any parent or subsidiary of the Company) possessing more than
10% of the total combined voting power of all classes of stock therein (a “10%
Stockholder”), such purchase price shall be no less than 110% of the Fair Market
Value of a Common Share on the date of grant.
     (c) “Fair Market Value” as of any date means, unless otherwise expressly
provided in the Plan:
     (i) the closing sale price of a Common Share on such date, or, if no sale
of Common Shares shall have occurred on that date, on the next preceding day on
which a sale of Common Shares occurred
     (A) on the composite tape for NASDAQ-listed shares, or
     (B) if the Common Shares are not quoted on the composite tape for
NASDAQ-listed shares, on the principal United States Securities Exchange
registered under the Securities Exchange Act of 1934, as amended, on which the
Common Shares are listed, or
     (ii) if clause (i) is inapplicable, the mean between the closing “bid” and
the closing “asked” quotation of a Common Share on that date, or, if no closing
bid or asked quotation is made on that date, on the next preceding day on which
a closing bid and asked quotation is made, on the National Association of
Securities Dealers, Inc. Automated Quotations System or any system then in use,
or
     (iii) if clauses (i) and (ii) are inapplicable, what the Committee
determines in good faith to be 100% of the fair market value of a Common Share
on that date, using such criteria as it shall determine, in its sole discretion,
to be appropriate for valuation.
     In the case of an incentive stock option, if this determination of Fair
Market Value is not consistent with the then current regulations of the
Secretary of the Treasury, Fair Market Value shall be determined in accordance
with those regulations. The determination of Fair Market Value shall be subject
to adjustment as provided in Plan Section 13.
     (d) Each option agreement provided for in paragraph 14 hereof shall specify
when each option granted under this Plan shall become exercisable.

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     (e) Each option granted pursuant to this paragraph 5 and all rights to
purchase shares thereunder shall cease on the earliest of:
     (i) ten years after the date such option is granted (or in the case of an
incentive stock option granted to a 10% Stockholder, five years after the date
such option is granted) or on such date prior thereto as may be fixed by the
Committee on or before the date such option is granted;
     (ii) the expiration of the period after the termination of the optionee’s
employment within which the option is exercisable as specified in paragraph 8(b)
or 8(c), whichever is applicable; or
     (iii) the date, if any, fixed for cancellation pursuant to paragraph 9 of
this Plan.
In no event shall any option be exercisable at any time after its original
expiration date. When an option is no longer exercisable, it shall be deemed to
have lapsed or terminated and will no longer be outstanding.
6. Terms and Conditions of Outside Director Options.
     (a) Subject to the terms and conditions of this Plan, the Committee shall
grant options to each Outside Director who is not on the date such option would
be granted the beneficial owner (as defined in Rule 13d-3 under the Act) of more
than 5% of the outstanding Common Shares, on the terms and conditions set forth
in this paragraph 6. During the term of this Plan and provided that sufficient
Common Shares are available pursuant to paragraph 3:
     (i) each person who is elected to be an Outside Director and who was not at
any time previously a director of the Company shall be granted a nonstatutory
stock option. The date such person is elected to be an Outside Director of the
Company shall be the date of grant for such options granted pursuant to this
subparagraph 6(a)(i). The number of Common Shares covered by each such option
shall be 7,500;
     (ii) each person who is an Outside Director at the conclusion of an Annual
Meeting of Stockholders shall be granted a nonstatutory stock option on the date
of such Annual Meeting of Stockholders. The date of such Annual Meeting of
Stockholders shall also be the date of grant for options granted pursuant to
this subparagraph 6(a)(ii). The number of Common Shares covered by each such
option shall be 9,500;
     (iii) each person who is elected to be an Outside Director between Annual
Meetings of Stockholders shall be granted a nonstatutory stock option. The date
such person is elected to be an Outside Director of the Company by the Board
shall be the date of grant for such options granted pursuant to this
subparagraph 6(a)(iii). The

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number of Common Shares covered by each such option shall be 9,500 multiplied by
a fraction, the numerator of which shall be 12 minus the number of whole 30-day
months that have elapsed from the date of the most recent Annual Meeting of
Stockholders to the date such person is elected to be an Outside Director, and
the denominator of which shall be 12;
     (iv) each person who is an Outside Director at the conclusion of an Annual
Meeting of Stockholders may elect in writing to be granted a nonstatutory stock
option on the date of such Annual Meeting of Stockholders in lieu of all cash
compensation to which such Outside Director would be entitled for the Board year
of the Company commencing with such Annual Meeting of Stockholders. The date of
such Annual Meeting of Stockholders shall also be the date of grant for options
granted pursuant to this subparagraph 6(a)(iv). The number of Common Shares
covered by each such option shall be 3,500. Any such election by an Outside
Director shall be subject to prior approval by the Committee; and
     (v) each person who is elected to be an Outside Director between Annual
Meetings of Stockholders may elect in writing to be granted a nonstatutory stock
option in lieu of all cash compensation to which such Outside Director would
otherwise be entitled for the period commencing with the date such person is
elected to be an Outside Director of the Company by the Board and ending on the
date of the next Annual Meeting of Stockholders. The date such person is elected
to be an Outside Director of the Company by the Board shall be the date of grant
for such options granted pursuant to this subparagraph 6(a)(v). The number of
Common Shares covered by each such option shall be 3,500 multiplied by a
fraction, the numerator of which shall be 12 minus the number of whole 30-day
months that have elapsed from the date of the most recent Annual Meeting of
Stockholders to the date such person is elected to be an Outside Director, and
the denominator of which shall be 12. Such election by an Outside Director shall
be subject to prior approval by the Committee.
     (b) The purchase price of each Common Share subject to an option granted to
an Outside Director pursuant to this paragraph 6 shall be the Fair Market Value
of a Common Share on the date of grant.
     (c) (i) Subject to the provisions of paragraphs 6(d) and 6(e) hereof,
(x) options granted to Outside Directors pursuant to subparagraph 6(a)(ii) and
(iv) and (y) options granted to Outside Directors pursuant to subparagraph
6(a)(i) if the date of grant of such options is the date of an Annual Meeting of
Stockholders shall vest and become exercisable in accordance with the following
schedule:

                          Annual Meeting                   Cumulative Percentage
of Stockholders                   Becoming Exercisable  
One Year After Grant
                    50 %
Two Years After Grant
                    100 %

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     (ii) Subject to the provisions of paragraph 6(d) and 6(e) hereof, (x) the
options granted to Outside Directors pursuant to subparagraphs 6(a)(iii) and
(v) and (y) options granted to Outside Directors pursuant to subparagraph
6(a)(i) if the date of grant of such options is a date other than the date of an
Annual Meeting of Stockholders shall vest and become exercisable in accordance
with the following schedule:

                          Anniversary of the                   Cumulative
Percentage Date of Grant                   Becoming Exercisable  
One Year After Grant
                    50 %
Two Years After Grant
                    100 %

     (d) Notwithstanding the vesting schedules set forth in paragraph 6(c)
hereof, an option held by an Outside Director shall vest and become immediately
exercisable upon the latest of (i) the date on which such Outside Director
attains 62 years of age, (ii) the date on which such Outside Director has
completed five years of Service (as hereinafter defined) and (iii) the first
anniversary of the date of grant of such option or, if applicable, the Annual
Meeting of Stockholders next succeeding the Annual Meeting at which such option
was granted. Any option granted to an Outside Director on or after the first
accelerated vesting date for such Outside Director shall automatically vest on
the Annual Meeting of Stockholders next succeeding the Annual Meeting at which
such option was granted. As used herein, “Service” shall mean service to the
Company or any subsidiary thereof in the capacity of any advisor, consultant,
employee, officer or director, and Service as a director from an Annual Meeting
of Stockholders to the next succeeding Annual Meeting shall constitute a year of
Service, notwithstanding that such period may actually be more or less than one
year.
     (e) Each option granted to an Outside Director pursuant to this paragraph 6
and all rights to purchase shares thereunder shall terminate on the earliest of:
     (i) ten years after the date such option is granted;
     (ii) the expiration of the period specified in paragraph 8(b) or 8(c),
whichever is applicable, after an Outside Director ceases to be a director of
the Company; or
     (iii) the date, if any, fixed for cancellation pursuant to paragraph 9 of
this Plan.
     In no event shall such option be exercisable at any time after its original
expiration date. When an option is no longer exercisable, it shall be deemed to
have lapsed or terminated and will no longer be outstanding.
     (f) The provisions of this Section 6 are not intended to be exclusive; the
Committee, in its discretion, may grant additional Options to an Outside
Director.

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7. Manner of Exercising Options. A person entitled to exercise an option granted
under this Plan may, subject to its terms and conditions and the terms and
conditions of this Plan, exercise it in whole at any time, or in part from time
to time, by delivery to the Company at its principal executive office, to the
attention of its President, of written notice of exercise, specifying the number
of shares with respect to which the option is being exercised, accompanied by
payment in full of the purchase price of the shares to be purchased at the time.
The purchase price of each share on the exercise of any option shall be paid in
full in cash (including check, bank draft or money order) at the time of
exercise or, at the discretion of the holder of the option, by delivery to the
Company of unencumbered Common Shares having an aggregate Fair Market Value on
the date of exercise equal to the purchase price, or by a combination of cash
and such unencumbered Common Shares. Provided, however, that a person exercising
a stock option shall not be permitted to pay any portion of the purchase price
with stock if, in the opinion of the Committee, payment in such manner could
have adverse financial accounting consequences for the Company. No shares shall
be issued until full payment therefor has been made, and the granting of an
option to an individual shall give such individual no rights as a stockholder
except as to shares issued to such individual.
8. Transferability and Termination of Options.
     (a) During the lifetime of an optionee, only such optionee or his or her
guardian or legal representative may exercise options granted under this Plan,
and no option granted under this Plan shall be assignable or transferable by the
optionee otherwise than by will or the laws of descent and distribution or
pursuant to a domestic relations order as defined in the Code or Title I of the
Employee Retirement Income Security Act (“ERISA”), or the rules thereunder;
provided, however, that any optionee may transfer a nonstatutory stock option
granted under this Plan to a member or members of his or her immediate family
(i.e., his or her children, grandchildren and spouse) or to one or more trusts
for the benefit of such family members or partnerships in which such family
members are the only partners, if (i) the option agreement with respect to such
options, which must be approved by the Committee, expressly so provides either
at the time of initial grant or by amendment to an outstanding option agreement
and (ii) the optionee does not receive any consideration for the transfer. Any
options held by any such transferee shall continue to be subject to the same
terms and conditions that were applicable to such options immediately prior to
their transfer and may be exercised by such transferee as and to the extent that
such option has become exercisable and has not terminated in accordance with the
provisions of the Plan and the applicable option agreement. For purposes of any
provision of this Plan relating to notice to an optionee or to vesting or
termination of an option upon the death, disability or termination of employment
of an optionee, the references to “optionee” shall mean the original grantee of
an option and not any transferee.
     (b) During the lifetime of an optionee, an option may be exercised only
while the optionee is employed by the Company or a parent or subsidiary thereof,
and only if such optionee has been continuously so employed since the date the
option was granted, except that:

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     (i) unless otherwise provided in a stock option agreement, an option
granted to an optionee who is not an Outside Director shall continue to be
exercisable for three months after termination of such optionee’s employment
but, unless otherwise provided in a stock option agreement, only to the extent
that the option was exercisable immediately prior to such optionee’s termination
of employment, and unless otherwise provided in a stock option agreement, an
option granted to an optionee who is an Outside Director shall continue to be
exercisable after such Outside Director ceases to be a director of the Company
but, unless otherwise provided in a stock option agreement, only to the extent
that the option was exercisable immediately prior to such Outside Director’s
ceasing to be a director;
     (ii) in the case of an optionee who is disabled (within the meaning of
Section 22(e)(3) of the Code) while employed, the option granted to such
optionee may be exercised within one year after termination of such optionee’s
employment; and
     (iii) as to any optionee whose termination occurs following a declaration
pursuant to paragraph 9 of this Plan, the option granted to such optionee may be
exercised at any time permitted by such declaration.
     (c) An option may be exercised after the death of the optionee, but only
within one year after the death of such optionee.
     (d) In the event of the disability (within the meaning of Section 22(e)(3)
of the Code) or death of an optionee, any option granted to such optionee that
was not previously exercisable shall become immediately exercisable in full if
the disabled or deceased optionee shall have been continuously employed by the
Company or a parent or subsidiary thereof between the date such option was
granted and the date of such disability, or, in the event of death, a date not
more than three months prior to such death.
9. Dissolution, Liquidation, Merger. In the event of (a) a proposed merger or
consolidation of the Company with or into any other corporation, regardless of
whether the Company is the surviving corporation, unless appropriate provision
shall have been made for the protection of the outstanding options granted under
this Plan by the substitution, in lieu of such options, of options to purchase
appropriate voting common stock (the “Survivor’s Stock”) of the corporation
surviving any such merger or consolidation or, if appropriate, the parent
corporation of the Company or such surviving corporation, or, alternatively, by
the delivery of a number of shares of the Survivor’s Stock which has a Fair
Market Value as of the effective date of such merger or consolidation equal to
the product of (i) the excess of (x) the Event Proceeds per Common Share (as
hereinafter defined) covered by the option as of such effective date, over
(y) the option price per Common Share, times (ii) the number of Common Shares
covered by such option, or (b) the proposed dissolution or liquidation of the
Company (such merger, consolidation, dissolution or liquidation being herein
called an “Event”), the Committee shall declare, at least ten days prior to the
actual effective date of an Event, and provide written notice to each optionee
of the declaration, that each outstanding

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option, whether or not then exercisable, shall be cancelled at the time of, or
immediately prior to the occurrence of, the Event (unless it shall have been
exercised prior to the occurrence of the Event) in exchange for payment to the
holder of each cancelled option, within ten days after the Event, of cash equal
to the amount (if any), for each Common Share covered by the cancelled option,
by which the Event Proceeds per Common Share (as hereinafter defined) exceeds
the exercise price per Common Share covered by such option. At the time of the
declaration provided for in the immediately preceding sentence, each option
shall immediately become exercisable in full and each holder of an option shall
have the right, during the period preceding the time of cancellation of the
option, to exercise his or her option as to all or any part of the Common Shares
covered thereby. Each outstanding option granted pursuant to this Plan that
shall not have been exercised prior to the Event shall be cancelled at the time
of, or immediately prior to, the Event, as provided in the declaration, and this
Plan shall terminate at the time of such cancellation, subject to the payment
obligations of the Company provided in this paragraph 9. For purposes of this
paragraph, “Event Proceeds per Common Share” shall mean the cash plus the fair
market value, as determined in good faith by the Committee, of the non-cash
consideration to be received per Common Share by the stockholders of the Company
upon the occurrence of the Event.
10. Substitution Options. Options may be granted under this Plan from time to
time in substitution for stock options held by employees of other corporations
who are about to become employees of the Company or a subsidiary of the Company,
or whose employer is about to become a subsidiary of the Company, as the result
of a merger or consolidation of the Company or a subsidiary of the Company with
another corporation, the acquisition by the Company or a subsidiary of the
Company of all or substantially all the assets of another corporation or the
acquisition by the Company or a subsidiary of the Company of at least 50% of the
issued and outstanding stock of another corporation. The terms and conditions of
the substitute options so granted may vary from the terms and conditions set
forth in this Plan to such extent as the Board at the time of the grant may deem
appropriate to conform, in whole or in part, to the provisions of the stock
options in substitution for which they are granted, but with respect to stock
options which are incentive stock options, no such variation shall be permitted
which affects the status of any such substitute option as an incentive stock
option under Section 422A of the Code.
11. Tax Withholding. Delivery of Common Shares upon exercise of any nonstatutory
stock option granted under this Plan shall be subject to any required
withholding taxes. A person exercising such an option may, as a condition
precedent to receiving the Common Shares, be required to pay the Company a cash
amount equal to the amount of any required withholdings. In lieu of all or any
part of such a cash payment, the Committee may, but shall not be required to,
permit the optionee to elect to cover all or any part of the required
withholdings, and to cover any additional withholdings up to the amount needed
to cover such optionee’s full FICA and federal, state and local income tax
liability with respect to income arising from the exercise of the option,
through a reduction of the number of Common Shares delivered to the person
exercising the option or through a subsequent return to the Company of shares
delivered to the person exercising the option.

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12. Termination of Employment. Neither the transfer of employment of an optionee
between any combination of the Company, a parent corporation or a subsidiary
thereof, nor a leave of absence granted to such optionee and approved by the
Committee, shall be deemed a termination of employment for purposes of this
Plan. The terms “parent” or “parent corporation” and “subsidiary” as used in
this Plan shall have the meaning ascribed to “parent corporation” and
“subsidiary corporation”, respectively, in Sections 424(e) and (f) of the Code.
13. Adjustment for Changes in Capitalization. In the event of any equity
restructuring (within the meaning of Financial Accounting Standards No. 123
(revised 2004)) that causes the per Share value of Common Shares to change, such
as a stock dividend, stock split, spin off, rights offering, or recapitalization
through a large, nonrecurring cash dividend, the Committee shall cause there to
be made an equitable adjustment to (i) the number and kind of Common Shares that
may be issued under the Plan, (ii) the limitations on the number of Common
Shares that may be issued to an individual Participant as an option in any
calendar year; and (iii) the number and kind of Shares and the exercise price
(if applicable) of any then outstanding awards of options, provided, in each
case, that with respect to incentive stock options, no such adjustment shall be
authorized to the extent that such adjustment would cause such options to
violate Section 422(b) of the Code or any successor provision, and provided
further, with respect to all awards of such options, that no such adjustment
shall be authorized to the extent that such adjustment would cause the awards to
be subject to adverse tax consequences under Section 409A of the Code. In the
event of any other change in corporate capitalization, such as a merger,
consolidation, any reorganization (whether or not such reorganization comes
within the definition of such term in Section 368 of the Code), or any partial
or complete liquidation of the Company, including an Event (subject to Plan
Section 9), such equitable adjustments described in the foregoing sentence may
be made as determined to be appropriate and equitable by the Committee to
prevent dilution or enlargement of rights. In either case, any such adjustment
shall be conclusive and binding for all purposes of the Plan. Unless otherwise
determined by the Committee, the number of Common Shares subject to an option
shall always be a whole number. In no event shall an outstanding option be
amended for the sole purpose of reducing the exercise price thereof.
14. Other Terms and Conditions. The Committee shall have the power, subject to
the other limitations contained herein, to fix any other terms and conditions
for the grant or exercise of any option under this Plan. Nothing contained in
this Plan, or in any option granted pursuant to this Plan, shall confer upon any
optionee any right to continued employment by the Company or any parent or
subsidiary of the Company or limit in any way the right of the Company or any
such parent or subsidiary to terminate an optionee’s employment at any time.
15. Option Agreements. All options granted under this Plan shall be evidenced by
a written agreement in such form or forms as the Committee may from time to time
determine, which agreement shall, among other things, designate whether the
options being granted thereunder are nonstatutory stock options or incentive
stock options under Section 422 of the Code.

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16. Amendment and Discontinuance of Plan. The Board may at any time amend,
suspend or discontinue this Plan; provided, however, that no amendment by the
Board shall, without further approval of the Stockholders of the Company, if
required in order for the Plan to continue to meet the requirements of the Code:
     (a) change the persons eligible to receive options;
     (b) except as provided in paragraph 3 hereof, increase the total number of
Common Shares of the Company which may be made subject to options granted under
this Plan;
     (c) except as provided in paragraph 3 hereof, change the minimum purchase
price for the exercise of an option; or
     (d) extend the term of this Plan beyond December 1, 2006.
No amendment to this Plan shall, without the consent of the holder of the
option, alter or impair any options previously granted under this Plan.
17. Effective Date. This Plan shall be effective July 26, 1989.

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