Document:

exv10wxfy

 

Exhibit 10(f)

Digi International Inc.

2000 Omnibus Stock Plan

as Amended and Restated as of

September 27, 2006

(effective as of November 27, 2006, subject to stockholder approval)

     1. Purpose. The purpose of the Digi International Inc. 2000 Omnibus Stock Plan (the
“Plan”) is to promote the interests of the Company and its stockholders by providing key personnel
of the Company and its Affiliates and Outside Directors with an opportunity to acquire a
proprietary interest in the Company and reward them for achieving a high level of corporate
performance and thereby develop a stronger incentive to put forth maximum effort for the continued
success and growth of the Company and its Affiliates. In addition, the opportunity to acquire a
proprietary interest in the Company will aid in attracting and retaining key personnel and Outside
Directors of outstanding ability.

     2. Definitions.

     2.1 The capitalized terms used elsewhere in the Plan have the meanings set forth
below.

     (a) “Affiliate” means any corporation that is a “parent corporation” or
“subsidiary corporation” of the Company, as those terms are defined in Code Sections
424(e) and (f), or any successor provisions, and, for purposes other than the grant
of Incentive Stock Options, any joint venture in which the Company or any such
“parent corporation” or “subsidiary corporation” owns an equity interest.

     (b) “Agreement” means a written contract (i) consistent with the terms of the
Plan entered into between the Company or an Affiliate and a Participant and (ii)
containing the terms and conditions of an Award in such form and not inconsistent
with the Plan as the Committee shall approve from time to time, together with all
amendments thereto, which amendments may be unilaterally made by the Company (with
the approval of the Committee) unless such amendments are deemed by the Committee to
be materially adverse to the Participant and not required as a matter of law.

     (c) “Award” or “Awards” means a grant made under the Plan in the form of
Restricted Stock, Options, Stock Appreciation Rights, Performance Units, Stock or
any other stock-based award.

     (d) “Board” means the Board of Directors of the Company.

     (e) “Code” means the Internal Revenue Code of 1986, as amended and in effect
from time to time or any successor statute.

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     (f) “Committee” means two or more Non-Employee Directors designated by the
Board to administer the Plan under Plan Section 3.1 and constituted so as to permit
grants thereby to comply with Exchange Act Rule 16b-3 and Code Section 162(m).

     (g) “Company” means Digi International Inc., a Delaware corporation, or any
successor to all or substantially all of its businesses by merger, consolidation,
purchase of assets or otherwise.

     (h) “Effective Date” means the date specified in Plan Section 12.1.

     (i) “Employee” means an employee (including an officer or director who is also
an employee) of the Company or an Affiliate.

     (j) “Exchange Act” means the Securities Exchange Act of 1934, as amended and in
effect from time to time or any successor statute.

     (k) “Exchange Act Rule 16b-3” means Rule 16b-3 promulgated by the Securities
and Exchange Commission under the Exchange Act, as now in force and in effect from
time to time or any successor regulation.

     (l) “Fair Market Value” as of any date means, unless otherwise expressly
provided in the Plan:

     (i) the closing sale price of a Share on such date, or, if no sale
of Shares shall have occurred on that date, on the next preceding day on
which a sale of Shares occurred

     (A) on the composite tape for NASDAQ-listed shares, or

     (B) if the Shares are not quoted on the composite tape for
NASDAQ-listed shares, on the principal United States Securities
Exchange registered under the Exchange Act on which the Shares are
listed, or

     (ii) if clause (i) is inapplicable, the mean between the closing “bid”
and the closing “asked” quotation of a 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 Share on
that date, using such criteria as it shall determine, in its sole
discretion, to be appropriate for valuation.

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     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 16.

     (m) “Fundamental Change” means a dissolution or liquidation of the
Company, a sale of substantially all of the assets of the Company, a merger or
consolidation of the Company with or into any other corporation, regardless of
whether the Company is the surviving corporation, or a statutory share exchange
involving capital stock of the Company.

     (n) “Incentive Stock Option” means any Option designated as such and granted in
accordance with the requirements of Code Section 422 or any successor provision.

     (o) “Insider” as of a particular date means any person who, as of that date is
an officer of the Company as defined under Exchange Act Rule 16a-1(f) or its
successor provision.

     (p) “Non-Employee Director” means a member of the Board who is considered a
non-employee director within the meaning of Exchange Act Rule 16b-3(b)(3) or its
successor provision and an outside director for purposes of Code Section 162(m).

     (q) “Non-Statutory Stock Option” means an Option other than an Incentive Stock
Option.

     (r) “Option” means a right to purchase Stock, including both Non-Statutory
Stock Options and Incentive Stock Options.

     (s) “Outside Director” means a director who is not an Employee.

     (t) “Participant” means a person or entity to whom an Award is or has been made
in accordance with the Plan.

     (u) “Performance Cycle” means the period of time as specified in an Agreement
over which Performance Units are to be earned.

     (v) “Performance Units” means an Award made pursuant to Plan Section 11.

     (w) “Plan” means this Digi International Inc. 2000 Omnibus Stock Plan, as may
be amended and in effect from time to time.

     (x) “Restricted Stock” means Stock granted under Plan Section 7 so long as such
Stock remains subject to one or more restrictions.

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     (y) “Section 16” or “Section 16(b)” means Section 16 or Section 16(b),
respectively, of the Exchange Act or any successor statute and the rules and
regulations promulgated thereunder as in effect and as amended from time to time.

     (z) “Share” means a share of Stock.

     (aa) “Stock” means the common stock, par value $.01 per share, of the Company.

     (bb) “Stock Appreciation Right” means a right, the value of which is determined
in relation to the appreciation in value of Shares pursuant to an Award granted
under Plan Section 10.

     (cc) “Subsidiary” means a “subsidiary corporation,” as that term is defined in
Code Section 424(f) or any successor provision.

     (dd) “Successor” with respect to a Participant means the legal representative
of an incompetent Participant, and if the Participant is deceased the estate of the
Participant or the person or persons who may, by bequest or inheritance, or pursuant
to the terms of an Award, acquire the right to exercise an Option or Stock
Appreciation Right or to receive cash and/or Shares issuable in satisfaction of an
Award in the event of the Participant’s death.

     (ee) “Term” means the period during which an Option or Stock Appreciation Right
may be exercised or the period during which the restrictions or terms and conditions
placed on Restricted Stock or any other Award are in effect.

     (ff) “Transferee” means any member of the Participant’s immediate family (i.e.,
his or her children, step-children, grandchildren and spouse) or one or more trusts
for the benefit of such family members or partnerships in which such family members
are the only partners.

     2.2 Gender and Number. Except when otherwise indicated by the context,
reference to the masculine gender shall include, when used, the feminine gender and any term
used in the singular shall also include the plural.

     3. Administration and Indemnification.

     3.1 Administration.

     (a) The Committee shall administer the Plan. The Committee shall have
exclusive power to (i) make Awards, (ii) determine when and to whom Awards will be
granted, the form of each Award, the amount of each Award, and any other terms or
conditions of each Award consistent with the Plan, and (iii) determine whether, to
what extent and under what circumstances, Awards may be settled, paid or exercised
in
cash, Shares or other Awards, or other property or

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canceled, forfeited or
suspended. Each Award shall be subject to an Agreement authorized by the Committee.
A majority of the members of the Committee shall constitute a quorum for any
meeting of the Committee, and 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. Notwithstanding
the foregoing, the Board shall have the sole and exclusive power to administer the
Plan with respect to Awards granted to Outside Directors.

     (b) Solely for purposes of determining and administering Awards to Participants
who are not Insiders, the Committee may delegate all or any portion of its authority
under the Plan to one or more persons who are not Non-Employee Directors.

     (c) To the extent within its discretion and subject to Plan Sections 15 and 16,
other than price, the Committee may amend the terms and conditions of any
outstanding Award.

     (d) It is the intent that the Plan and all Awards granted pursuant to it shall
be administered by the Committee so as to permit the Plan and Awards to comply with
Exchange Act Rule 16b-3, except in such instances as the Committee, in its
discretion, may so provide. If any provision of the Plan or of any Award would
otherwise frustrate or conflict with the intent expressed in this Section 3.1(d),
that provision to the extent possible shall be interpreted and deemed amended in the
manner determined by the Committee so as to avoid the conflict. To the extent of
any remaining irreconcilable conflict with this intent, the provision shall be
deemed void as applicable to Insiders to the extent permitted by law and in the
manner deemed advisable by the Committee.

     (e) The Committee’s interpretation of the Plan and of any Award or Agreement
made under the Plan and all related decisions or resolutions of the Board or
Committee shall be final and binding on all parties with an interest therein.
Consistent with its terms, the Committee shall have the power
to establish, amend or waive regulations to administer the Plan. In carrying
out any of its responsibilities, the Committee shall have discretionary authority to
construe the terms of the Plan and any Award or Agreement made under the Plan.

     3.2 Indemnification. Each person who is or shall have been a member of
the Committee, or of the Board, and any other person to whom the Committee delegates
authority under the Plan, shall be indemnified and held harmless by the Company, to the
extent permitted by law, against and from any loss, cost, liability or expense that may be
imposed upon or reasonably incurred by such person in connection with or resulting from any
claim, action, suit or proceeding to which such person may be a party or in which such
person may be involved by reason of any action taken or failure to act, made in good faith,
under the Plan and against and from any and all amounts paid by such person in settlement
thereof, with the Company’s approval, or paid by such person in satisfaction of any judgment
in any such action, suit or proceeding against such person, provided such

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person shall give
the Company an opportunity, at the Company’s expense, to handle and defend the same before
such person undertakes to handle and defend it on such person’s own behalf. The foregoing
right of indemnification shall not be exclusive of any other rights of indemnification to
which such person or persons may be entitled under the Company’s Certificate of
Incorporation or Bylaws, as a matter of law, or otherwise, or any power that the Company may
have to indemnify them or hold them harmless.

     4. Shares Available Under the Plan.

     (a) The number of Shares available for distribution under the Plan shall
not exceed 3,250,000* (subject to adjustment pursuant to Plan Section
16).

     (b) Any Shares subject to the terms and conditions of an Award under the Plan
that are not used because the terms and conditions of the Award are not met may
again be used for an Award under the Plan; provided however, that Shares with
respect to which a Stock Appreciation Right has been exercised whether paid in cash
and/or in Shares may not again be awarded under the Plan.

     (c) Any unexercised or undistributed portion of any terminated, expired,
exchanged, or forfeited Award, or any Award settled in cash in lieu of Shares
(except as provided in Plan Section 4(b)) shall be available for further Awards.

     (d) For the purposes of computing the total number of Shares granted under the
Plan, the following rules shall apply to Awards payable in Shares where appropriate:

     (i) each Option shall be deemed to be the equivalent of the
maximum number of Shares that may be issued upon exercise of the particular
Option;

     (ii) an Award (other than an Option) payable in some other security
shall be deemed to be equal to the number of Shares to which it relates;

     (iii) where the number of Shares available under the Award is variable
on the date it is granted, the number of Shares shall be deemed to be the
maximum number of Shares that could be received under that particular Award;
and

     (iv) where two or more types of Awards (all of which are payable in
Shares) are granted to a Participant in tandem with each other, such that
the exercise of one type of Award with respect to a number of Shares cancels
at least an equal number of Shares of the other, each such joint Award shall
be deemed to be the equivalent of the maximum number of Shares available
under the largest single Award.

 

			
	*	 	Includes 2,500,000 shares added to the Plan
subject to stockholder approval.

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     Additional rules for determining the number of Shares granted under the Plan
may be made by the Committee as it deems necessary or desirable.

     (e) No fractional Shares may be issued under the Plan; however, cash shall
be paid in lieu of any fractional Share in settlement of an Award.

     (f) The maximum number of Shares that may be awarded to a Participant in any
calendar year in the form of Options is 250,000, the maximum number of Shares that
may be awarded to a Participant in any calendar year in the form of Restricted Stock
is 100,000, and the maximum number of Shares that may be awarded to a Participant in
any calendar year in the form of Stock Appreciation Rights is 100,000.

     5. Eligibility. Participation in the Plan shall be limited to Employees and to
individuals or entities who are not Employees but who provide services to the Company or an
Affiliate, including services provided in the capacity of a consultant, advisor or director. The
granting of Awards is solely at the discretion of the Committee, except that Incentive Stock
Options may only be granted to Employees. References herein to “employed,” “employment” or similar
terms (except “Employee”) shall include the providing of services in any capacity or as a director.
Neither the transfer of employment of a Participant between any of the Company or its
Affiliates, nor a leave of absence granted to such Participant and approved by the Committee,
shall be deemed a termination of employment for purposes of the Plan.

     6. General Terms of Awards.

     6.1 Amount of Award. Each Agreement shall set forth the number of Shares of
Restricted Stock, Stock or Performance Units subject to the Agreement, or the number of
Shares to which the Option subject to the Agreement applies or with respect to which payment
upon the exercise of the Stock Appreciation Right subject to the Agreement is to be
determined, as the case may be, together with such other terms and conditions applicable to
the Award as determined by the Committee acting in its sole discretion.

     6.2 Term. Each Agreement, other than those relating solely to Awards of Shares
without restrictions, shall set forth the Term of the Option, Stock Appreciation Right,
Restricted Stock or other Award or the Performance Cycle for the Performance Units, as the
case may be. Acceleration of the expiration of the applicable Term is permitted, upon such
terms and conditions as shall be set forth in the Agreement, which may, but need not,
include, without limitation, acceleration in the event of the Participant’s death or
retirement. Acceleration of the Performance Cycle of Performance Units shall be subject to
Plan Section 11.2.

     6.3 Transferability. Except as provided in this Section, during the lifetime
of a Participant to whom an Award is granted, only that Participant (or that Participant’s
legal representative) may exercise an Option or Stock Appreciation Right, or receive payment
with respect to Performance Units or any other Award. No Award of Restricted Stock (before
the expiration of the restrictions), Options, Stock Appreciation Rights or Performance Units
or other Award may be sold, assigned, transferred, exchanged or

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otherwise encumbered other
than to a Successor in the event of a Participant’s death or pursuant to a qualified
domestic relations order as defined in the Code or Title 1 of the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”), or the rules thereunder; any attempted transfer
in violation of this Section 6.3 shall be of no effect. Notwithstanding the immediately
preceding sentence, the Committee, in an Agreement or otherwise at its discretion, may
provide that the Award (other than Incentive Stock Options) may be transferable to a
Transferee if the Participant does not receive any consideration for the transfer. Any
Award held by a Transferee shall continue to be subject to the same terms and conditions
that were applicable to that Award immediately before the transfer thereof to the
Transferee. For purposes of any provision of the Plan relating to notice to a Participant
or to acceleration or termination of an Award upon the death, disability or termination of
employment of a Participant the references to “Participant” shall mean the original grantee
of an Award and not any Transferee.

     6.4 Termination of Employment. Except as otherwise determined by the Committee
or provided by the Committee in an Agreement, in case of a Participant’s termination of
employment, the following provisions shall apply:

     (a) Options and Stock Appreciation Rights.

	 	(i)	 	If a Participant’s employment or other
relationship with the Company and its Affiliates terminates because of
the Participant’s death, then any Option or Stock Appreciation Right
that has not expired or been terminated shall become exercisable in
full if the Participant’s employment or other relationship with the
Company and its Affiliates has been continuous between the date the
Option or Stock Appreciation Right was granted and a date not more than
three months prior to such death, and may be exercised by the
Participant’s Successor at any time, or from time to time, within one
year after the date of the Participant’s death.
	 
	 	(ii)	 	If a Participant’s employment or other
relationship with the Company and its Affiliates terminates because the
Participant is disabled (within the meaning of Section 22(e)(3) of the
Code), then any Option or Stock Appreciation Right that has not expired
or been terminated shall become exercisable in full if the
Participant’s employment or other relationship with the Company and its
Affiliates has been continuous between the date the Option or Stock
Appreciation Right was granted and the date of such disability, and the
Participant or the Participant’s Successor may exercise such Option or
Stock Appreciation Right at any time, or from time to time, within one
year after the date of the Participant’s disability.
	 
	 	(iii)	 	If a Participant’s employment terminates for
any reason other than death or disability, then any Option or Stock
Appreciation Right that has not expired or been terminated shall remain
exercisable for three months after termination of the Participant’s
employment, but, unless

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	 	 	 	otherwise provided in the Agreement, only to
the extent that such Option or Stock Appreciation Right was exercisable
immediately prior to such Participant’s termination of employment;
provided, however, that if the Participant is an Outside Director, the
Option or Stock Appreciation Right shall remain exercisable until the
expiration of the Term after such Outside Director ceases to be a
director of the Company but, unless otherwise provided in the
Agreement, only to the extent that such Option or Stock Appreciation
Right was exercisable immediately prior to such Outside Director
ceasing to be a director.
	 
	 	(iv)	 	Notwithstanding the foregoing Plan Sections
6.4(a)(i), (ii) and (iii), in no event shall an Option or a Stock
Appreciation Right be exercisable after the expiration of the Term of
such Award. Any
Option or Stock Appreciation Right that is not exercised within the
periods set forth in Plan Sections 6.4 (i), (ii) and (iii), except as
otherwise provided by the Committee in the Agreement, shall terminate
as of the end of the periods described in such Sections.

     (b) Performance Units. If a Participant’s employment or other
relationship with the Company and its Affiliates terminates during a Performance
Cycle because of death or disability, or under other circumstances provided by the
Committee in its discretion in the Agreement or otherwise, the Participant, unless
the Committee shall otherwise provide in the Agreement, shall be entitled to a
payment with respect to Performance Units at the end of the Performance Cycle based
upon the extent to which achievement of performance targets was satisfied at the end
of such period (as determined at the end of the Performance Cycle) and prorated for
the portion of the Performance Cycle during which the Participant was employed by
the Company or its Affiliates. Except as provided in this Section 6.4(b) or in the
Agreement, if a Participant’s employment or other relationship with the Company and
its Affiliates terminates during a Performance Cycle, then such Participant shall
not be entitled to any payment with respect to that Performance Cycle.

     (c) Restricted Stock Awards. Unless otherwise provided in the
Agreement, in case of a Participant’s death or disability, the Participant shall be
entitled to receive a number of Shares of Restricted Stock under outstanding Awards
that has been prorated for the portion of the Term of the Awards during which the
Participant was employed by the Company and its Affiliates, and, with respect to
such Shares, all restrictions shall lapse. Any Shares of Restricted Stock as to
which restrictions do not lapse under the preceding sentence shall terminate at the
date of the Participant’s termination of employment and such Shares of Restricted
Stock shall be forfeited to the Company.

     6.5 Rights as Stockholder. Each Agreement shall provide that a Participant
shall have no rights as a stockholder with respect to any securities covered by an Award
unless and until the date the Participant becomes the holder of record of the Stock, if any,
to which the Award relates.

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     7. Restricted Stock Awards.

     (a) An Award of Restricted Stock under the Plan shall consist of Shares
subject to restrictions on transfer and conditions of forfeiture, which restrictions
and conditions shall be included in the applicable Agreement. The Committee may
provide for the lapse or waiver of any such restriction or condition based on such
factors or criteria as the Committee, in its sole discretion, may determine.

     (b) Except as otherwise provided in the applicable Agreement, each Stock
certificate issued with respect to an
Award of Restricted Stock shall either be deposited with the Company or its
designee, together with an assignment separate from the certificate, in blank,
signed by the Participant, or bear such legends with respect to the restricted
nature of the Restricted Stock evidenced thereby as shall be provided for in the
applicable Agreement.

     (c) The Agreement shall describe the terms and conditions by which the
restrictions and conditions of forfeiture upon awarded Restricted Stock shall lapse.
Upon the lapse of the restrictions and conditions, Shares free of restrictive
legends, if any, relating to such restrictions shall be issued to the Participant or
a Successor or Transferee.

     (d) A Participant or a Transferee with a Restricted Stock Award shall have all
the other rights of a stockholder including, but not limited to, the right to
receive dividends and the right to vote the Shares of Restricted Stock.

     (e) No more than 1,000,000** of the total number of Shares available
for Awards under the Plan shall be issued during the term of the Plan as Restricted
Stock. This limitation shall be calculated pursuant to the applicable provisions of
Plan Sections 4 and 16.

     8. Other Awards. The Committee may from time to time grant Stock and other
Awards under the Plan including, without limitation, those Awards pursuant to which Shares are or
may in the future be acquired, Awards denominated in Stock units, securities convertible into Stock
and phantom securities. The Committee, in its sole discretion, shall determine the terms and
conditions of such Awards provided that such Awards shall not be inconsistent with the terms and
purposes of the Plan. The Committee may, at its sole discretion, direct the Company to issue
Shares subject to restrictive legends and/or stop transfer instructions that are consistent with
the terms and conditions of the Award to which the Shares relate. No more than 50,000 of the total
number of Shares available for Awards under the Plan shall be issued during the term of the Plan in
the form of Stock without restrictions.

 

			
	**	 	Changed from 100,000, subject to stockholder
approval.

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     9. Stock Options.

     9.1 Terms of All Options.

     (a) An Option shall be granted pursuant to an Agreement as either an
Incentive Stock Option or a
Non-Statutory Stock Option. The purchase price of each Share subject to an
Option shall be determined by the Committee and set forth in the Agreement, but
shall not be less than the Fair Market Value of a Share as of the date the Option is
granted (except as provided in Plan Sections 9.2 and 19).

     (b) The purchase price of the Shares with respect to which an Option is
exercised shall be payable in full at the time of exercise, provided that to the
extent permitted by law, the Agreement may permit some or all Participants to
simultaneously exercise Options and sell the Shares thereby acquired pursuant to a
brokerage or similar relationship and use the proceeds from the sale as payment of
the purchase price of the Shares. The purchase price may be payable in cash, by
delivery or tender of Shares having a Fair Market Value as of the date the Option is
exercised equal to the purchase price of the Shares being purchased pursuant to the
Option, or a combination thereof, as determined by the Committee, but no fractional
Shares will be issued or accepted. Provided, however, that a Participant exercising
a stock option shall not be permitted to pay any portion of the purchase price with
Shares if, in the opinion of the Committee, payment in such manner could have
adverse financial accounting consequences for the Company.

     (c) Each Option shall be exercisable in whole or in part on the terms provided
in the Agreement. In no event shall any Option be exercisable at any time after the
expiration of its Term. When an Option is no longer exercisable, it shall be deemed
to have lapsed or terminated.

     9.2 Incentive Stock Options. In addition to the other terms and
conditions applicable to all Options:

     (i) the purchase price of each Share subject to an Incentive Stock Option shall
not be less than 100% of the Fair Market Value of a Share as of the date the
Incentive Stock Option is granted if this limitation is necessary to qualify the
Option as an Incentive Stock Option (except as provided in Plan Section 20);

     (ii) the aggregate Fair Market Value (determined as of the date the Option is
granted) of the Shares with respect to which Incentive Stock Options held by an
individual first become exercisable in any calendar year (under the Plan and all
other incentive stock option plans of the Company and its Affiliates)
shall not exceed $100,000 (or such other limit as may be required by the Code)
if this limitation is necessary to qualify the Option as an Incentive Stock Option
and to the extent an Option or Options granted to a Participant exceed this limit
the Option or Options shall be treated as a Non-Statutory Stock Option;

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     (iii) an Incentive Stock Option shall not be exercisable more than 10 years
after the date of grant (or such other limit as may be required by the Code) if this
limitation is necessary to qualify the Option as an Incentive Stock Option;

     (iv) the Agreement covering an Incentive Stock Option shall contain such other
terms and provisions that the Committee determines necessary to qualify this Option
as an Incentive Stock Option; and

     (v) notwithstanding any other provision of the Plan to the contrary, no
Participant may receive an Incentive Stock Option under the Plan if, at the time the
Award is granted, the Participant owns (after application of the rules contained in
Code Section 424(d), or its successor provision), Shares possessing more than 10% of
the total combined voting power of all classes of stock of the Company or its
Subsidiaries, unless (i) the exercise price for that Incentive Stock Option is at
least 110% of the Fair Market Value of the Shares subject to that Incentive Stock
Option on the date of grant and (ii) that Option is not exercisable after the date
five years from the date that Incentive Stock Option is granted.

     10. Stock Appreciation Rights. An Award of a Stock Appreciation Right shall entitle
the Participant (or a Successor or Transferee), subject to terms and conditions determined by the
Committee, to receive upon exercise of the Stock Appreciation Right all or a portion of the excess
of (i) the Fair Market Value of a specified number of Shares as of the date of exercise of the
Stock Appreciation Right over (ii) a specified price that shall not be less than 100% of the Fair
Market Value of such Shares as of the date of grant of the Stock Appreciation Right. A Stock
Appreciation Right may be granted in connection with part or all of, in addition to, or completely
independent of an Option or any other Award under the Plan. If issued in connection with a
previously or contemporaneously granted Option, the Committee may impose a condition that exercise
of a Stock Appreciation Right cancels a pro rata portion of the Option with which it is connected
and vice versa. Each Stock Appreciation Right may be exercisable in whole or in part on the terms
provided in the Agreement. No Stock Appreciation Right shall be exercisable at any time after the
expiration of its Term. When a Stock Appreciation Right is no longer exercisable, it shall be
deemed to have lapsed or terminated. Upon exercise of a Stock Appreciation Right, payment to the
Participant or a Successor or Transferee shall be made at such time or times as shall be provided
in the Agreement in the form of cash, Shares or a combination of cash and Shares as determined by
the Committee. The Agreement may provide for a limitation upon the amount or percentage of the
total appreciation on which payment (whether in cash and/or Shares) may be made in the event of the
exercise of a Stock Appreciation Right.

     11. Performance Units.

     11.1 Initial Award.

     (a) An Award of Performance Units under the Plan shall entitle the
Participant or a Successor or Transferee to future payments of cash, Shares or a
combination of cash and Shares, as determined by the Committee, based upon the
achievement of pre-established performance targets. These performance targets

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may,
but need not, include, without limitation, targets relating to one or more of the
Company’s or a group’s, unit’s, Affiliate’s or an individual’s performance. The
Agreement may establish that a portion of a Participant’s Award will be paid for
performance that exceeds the minimum target but falls below the maximum target
applicable to the Award. The Agreement shall also provide for the timing of the
payment.

     (b) Following the conclusion or acceleration of each Performance Cycle, the
Committee shall determine the extent to which (i) performance targets have been
attained, (ii) any other terms and conditions with respect to an Award relating to
the Performance Cycle have been satisfied and (iii) payment is due with respect to
an Award of Performance Units.

     11.2 Acceleration and Adjustment. The Agreement may permit an
acceleration of the Performance Cycle and an adjustment of performance targets and payments
with respect to some or all of the Performance Units awarded to a Participant, upon the
occurrence of certain events, which may, but need not include, without limitation, a
Fundamental Change, a recapitalization, a change in the accounting practices of the Company,
a change in the Participant’s title or employment responsibilities, the Participant’s death
or retirement or, with respect to payments in Shares with respect to Performance Units, a
reclassification, stock dividend, stock split or stock combination as provided in Plan
Section 16. The Agreement also may provide for a limitation on the value of an Award of
Performance Units that a Participant may receive.

     12. Effective Date and Duration of the Plan.

     12.1 Effective Date. The Plan shall become effective as of November 6, 2000,
provided that the Plan is approved by the requisite vote of stockholders at the January 2001
Annual Meeting of Stockholders or any adjournment thereof.

     12.2 Duration of the Plan. The Plan shall remain in effect until all Stock
subject to it shall be distributed, all Awards have expired or lapsed, the Plan is
terminated
pursuant to Plan Section 15, or November 27, 2016*** (the “Termination Date”);
provided, however, that Awards made before the Termination Date may be exercised, vested or
otherwise effectuated beyond the Termination Date unless limited in the Agreement or
otherwise. No Award of an Incentive Stock Option shall be made more than 10 years after the
Effective Date (or such other limit as may be required by the Code) if this limitation is
necessary to qualify the Option as an Incentive Stock Option. The date and time of approval
by the Committee of the granting of an Award shall be considered the date and time at which
the Award is made or granted.

     13. Plan Does Not Affect Employment Status.

     (a) Status as an eligible Employee shall not be construed as a commitment
that any Award will be made under the Plan to that eligible Employee or to eligible
Employees generally.

 

			
	***	 	Changed from November 6, 2010, subject to
stockholder approval.

13

 

     (b) Nothing in the Plan or in any Agreement or related documents shall confer
upon any Employee or Participant any right to continue in the employment of the
Company or any Affiliate or constitute any contract of employment or affect any
right that the Company or any Affiliate may have to change such person’s
compensation, other benefits, job responsibilities, or title, or to terminate the
employment of such person with or without cause.

     14. Tax Withholding. The Company shall have the right to withhold from any cash
payment under the Plan to a Participant or other person (including a Successor or a Transferee) an
amount sufficient to cover any required withholding taxes. The Company shall have the right to
require a Participant or other person receiving Shares under the Plan to pay the Company a cash
amount sufficient to cover any required withholding taxes before actual receipt of those Shares.
In lieu of all or any part of a cash payment from a person receiving Shares under the Plan, the
Committee may permit the individual to cover all or any part of the required withholdings through a
reduction of the number of Shares delivered or delivery or tender return to the Company of Shares
held by the Participant or other person, in each case valued in the same manner as used in
computing the withholding taxes under the applicable laws.

     15. Amendment, Modification and Termination of the Plan.

     (a) The Board may at any time and from time to time terminate, suspend or modify
the Plan. Except as limited in (b) below, the Committee may at any time alter or amend any
or all Agreements under the Plan to the extent permitted by law.

     (b) No termination, suspension, or modification of the Plan will materially and
adversely affect any right acquired by any Participant or Successor or Transferee under an
Award granted before the date of termination, suspension, or modification, unless otherwise
agreed to by the Participant in the Agreement or otherwise, or required as a matter of law;
but it will be conclusively presumed that any adjustment for changes in capitalization
provided for in Plan Sections 11.2 or 16 does not adversely affect these rights.

     16. 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 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 Shares that may
be issued under the Plan, (ii) the limitations on the number of Shares that may be issued to an
individual Participant as an Option or a Stock Appreciation Right in any calendar year or that may
be issued in the form of Restricted Stock or Shares without restrictions and (iii) the number and
kind of Shares or, subject to Plan Section 11.2, Performance Units, subject to and the exercise
price (if applicable) of any then outstanding Awards of Options, Stock Appreciation Rights,
Restricted Stock, Performance Units or any other Awards related to shares of Stock (to the extent
such other Awards would not otherwise automatically adjust in the equity restructuring); 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

14

 

provision; provided further, with respect to all Awards, 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), including a
Fundamental Change (subject to Plan Section 17), or any partial or complete liquidation of the
Company, 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 Shares subject to an Award shall always be a whole number. In no event
shall an outstanding Option or Stock Appreciation Right be amended for the sole purpose of
reducing the exercise price or grant price thereof.

     17. Fundamental Change. In the event of a proposed Fundamental Change, the
Committee may, but shall not be obligated to:

     (a) if the Fundamental Change is a merger or consolidation or statutory share
exchange, make appropriate provision for the protection of the outstanding Options and Stock
Appreciation Rights by the substitution of options, stock appreciation rights and
appropriate voting common stock of the corporation surviving any merger or consolidation or,
if appropriate, the parent corporation of the Company or such surviving corporation; or

     (b) at least ten days before the occurrence of the Fundamental Change, declare, and
provide written notice to each holder of an Option or Stock Appreciation Right of the
declaration, that each outstanding Option and Stock Appreciation Right, whether or not then
exercisable, shall be canceled at the time of, or immediately before the occurrence of the
Fundamental Change in exchange for payment to each holder of an Option or Stock Appreciation
Right, within ten days after the Fundamental Change, of cash equal to (i) for each Share
covered by the canceled Option, the amount, if any, by which the Fair Market Value (as
defined in this Section) per Share exceeds the exercise price per Share covered by such
Option or (ii) for each Stock Appreciation Right, the price determined pursuant to Section
10, except that Fair Market Value of the Shares as of the date of exercise of the Stock
Appreciation Right, as used in clause (i) of Plan Section 10, shall be deemed to mean Fair
Market Value for each Share with respect to which the Stock Appreciation Right is calculated
determined in the manner hereinafter referred to in this Section. At the time of the
declaration provided for in the immediately preceding sentence, each Stock Appreciation
Right and each Option shall immediately become exercisable in full and each person holding
an Option or a Stock Appreciation Right shall have the right, during the period preceding
the time of cancellation of the Option or Stock Appreciation Right, to exercise the Option
as to all or any part of the Shares covered thereby or the
Stock Appreciation Right in whole or in part, as the case may be. In the event of a
declaration pursuant to Plan Section 17(b), each outstanding Option and Stock Appreciation
Right granted pursuant to the Plan that shall not have been exercised before the Fundamental
Change shall be canceled at the time of, or immediately before, the Fundamental Change, as
provided in the declaration.

15

 

Notwithstanding the foregoing, no person holding an Option or
a Stock Appreciation Right shall be entitled to the payment provided for in this Section
17(b) if such Option or Stock Appreciation Right shall have terminated, expired or been
cancelled. For purposes of this Section only, “Fair Market Value” per Share means the cash
plus the fair market value, as determined in good faith by the Committee, of the non-cash
consideration to be received per Share by the stockholders of the Company upon the
occurrence of the Fundamental Change.

     18. Prohibition on Repricing. Without the approval of the Company’s
stockholders, the Committee will not reprice, adjust or amend the exercise price of any Option or
the grant price of any Stock Appreciation Right previously awarded, whether through amendment,
cancellation and replacement grant or any other means, except pursuant to Section 16 of the Plan in
connection with an equity restructuring, or pursuant to Section 17 of the Plan in connection with a
Fundamental Change, in order to prevent dilution or enlargement of the benefits, or potential
benefits intended to be provided under the Plan.

     19. Forfeitures. An Agreement may provide that if a Participant has received or been
entitled to payment of cash, delivery of Shares, or a combination thereof pursuant to an Award
within six months before the Participant’s termination of employment with the Company and its
Affiliates, the Committee, in its sole discretion, may require the Participant to return or forfeit
the cash and/or Shares received with respect to the Award (or its economic value as of (i) the date
of the exercise of Options or Stock Appreciation Rights, (ii) the date of, and immediately
following, the lapse of restrictions on Restricted Stock or the receipt of Shares without
restrictions, or (iii) the date on which the right of the Participant to payment with respect to
Performance Units vests, as the case may be) in the event of certain occurrences specified in the
Agreement. The Committee’s right to require forfeiture must be exercised within 90 days after
discovery of such an occurrence but in no event later than 15 months after the Participant’s
termination of employment with the Company and its Affiliates. The occurrences may, but need not,
include competition with the Company or any Affiliate, unauthorized disclosure of material
proprietary information of the Company or any Affiliate, a violation of applicable business ethics
policies of the Company or Affiliate or any other occurrence specified in the Agreement within the
period or periods of time specified in the Agreement.

     20. Corporate Mergers, Acquisitions, Etc. The Committee may also grant Options, Stock
Appreciation Rights, Restricted Stock or other Awards under the Plan in substitution for, or in
connection with the assumption of, existing options, stock appreciation rights, restricted stock or
other award granted, awarded or issued by another corporation and assumed or
otherwise agreed to be provided for by the Company pursuant to or by reason of a transaction
involving a corporate merger, consolidation, acquisition of property or stock, separation,
reorganization or liquidation to which the Company or a Subsidiary is a party. The terms and
conditions of the substitute Awards may vary from the terms and conditions set forth in the Plan to
the 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 awards in substitution for which they are granted.

     21. Unfunded Plan. The Plan shall be unfunded and the Company shall not be required
to segregate any assets that may at any time be represented by Awards under the Plan. Neither the
Company, its Affiliates, the Committee, nor the Board of Directors shall be deemed

16

 

to be a trustee
of any amounts to be paid under the Plan nor shall anything contained in the Plan or any action
taken pursuant to its provisions create or be construed to create a fiduciary relationship between
the Company and/or its Affiliates, and a Participant or Successor or Transferee. To the extent
any person acquires a right to receive an Award under the Plan, this right shall be no greater than
the right of an unsecured general creditor of the Company.

     22. Limits of Liability.

     (a) Any liability of the Company to any Participant with respect to an Award shall be
based solely upon contractual obligations created by the Plan and the Award Agreement.

     (b) Except as may be required by law, neither the Company nor any member of the Board
of Directors or of the Committee, nor any other person participating in any determination of
any question under the Plan, or in the interpretation, administration or application of the
Plan, shall have any liability to any party for any action taken, or not taken, in good
faith under the Plan.

     23. Compliance with Applicable Legal Requirements. No certificate for Shares
distributable pursuant to the Plan shall be issued and delivered unless the issuance of the
certificate complies with all applicable legal requirements including, without limitation,
compliance with the provisions of applicable state securities laws, the Securities Act of 1933, as
amended and in effect from time to time or any successor statute, the Exchange Act and the
requirements of the exchanges on which the Company’s Shares may, at the time, be listed.

     24. Deferrals and Settlements. The Committee may require or permit Participants to
elect to defer the issuance of Shares or the settlement of Awards in cash under such rules and
procedures as it may establish under the Plan. It may also provide that deferred settlements
include the payment or crediting of interest on the deferral amounts.

     25. Other Benefit and Compensation Programs. Payments and other benefits received by
a Participant under an Award made pursuant to the Plan shall not be deemed a part of a
Participant’s regular, recurring compensation for purposes of the termination, indemnity or
severance pay laws of any country and shall not be included in, nor have any effect on, the
determination of benefits under any other employee benefit plan, contract or similar arrangement
provided by the Company or an Affiliate unless expressly so provided by such other plan, contract
or arrangement, or unless the Committee expressly determines that an Award or portion
of an Award should be included to accurately reflect competitive compensation practices or to
recognize that an Award has been made in lieu of a portion of competitive cash compensation.

     26. Beneficiary Upon Participant’s Death. To the extent that the transfer of a
Participant’s Award at his or her death is permitted under an Agreement, a Participant’s Award
shall be transferable at death to the estate or to the person who acquires the right to succeed to
the Award by bequest or inheritance.

17

 

     27. Requirements of Law.

     (a) To the extent that federal laws do not otherwise control, the Plan and all
determinations made and actions taken pursuant to the Plan shall be governed by the laws of
the State of Minnesota without regard to its conflicts-of-law principles and shall be
construed accordingly.

     (b) If any provision of the Plan shall be held illegal or invalid for any reason, the
illegality or invalidity shall not effect the remaining parts of the Plan, and the Plan
shall be construed and enforced as if the illegal or invalid provision had not been
included.

18exv10wxgy

 

Exhibit 10(g)

DIGI INTERNATIONAL INC.

NON-OFFICER STOCK OPTION PLAN

AS AMENDED AND RESTATED AS OF NOVEMBER 27, 2006

1. Purpose of Plan. The purpose of this Digi International Inc. Non-Officer 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
(other than officers and directors of the Company) 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”). 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, the CEO Stock Option Committee (if any) or the Authorized Officer
(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, the CEO Stock Option Committee and the Authorized Officer 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 (x) 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 or (y) its authority to designate Eligible Participants to receive options
under the Plan and to determine the number of options to be granted to such Eligible Participant to
an officer of the Company (an “Authorized Officer”); provided that the Authorized Officer cannot
designate himself or herself as an Eligible Participant to receive options under the Plan. The
stock option grants by the Authorized Officer pursuant to this paragraph 2 shall not exceed the
number of shares of Common Stock available for issuance under this Plan taking into account any
outstanding and unexercised options, subject to such further limitations on the authority of the
Authorized Officer as the Committee shall approve.

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 exceed 2,750,000 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, who is not an officer or director of the Company, 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 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. 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.

     (b) The purchase price of each Common Share subject to an option granted pursuant to this
paragraph 5 shall be fixed by the Committee. Such purchase price may be set at not less that 50% of
the Fair Market Value (as defined below) 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

2

 

     (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.

     (d) Each option agreement provided for in paragraph 13 hereof shall specify when each option
granted under this Plan shall become exercisable.

     (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 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 7(b) or 7(c), whichever is
applicable; or

     (iii) the date, if any, fixed for cancellation pursuant to paragraph 7 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. 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.

7. 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 Internal Revenue Code
of 1986, as amended, or any amendment thereto (the “Code”) or Title I of the Employee Retirement
Income Security Act (“ERISA”), or the rules thereunder; provided,

3

 

however, that any optionee may
transfer a 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:

     (i) unless otherwise provided in a stock option agreement, an option granted to an
optionee shall continue to be exercisable for three months after termination of such
optionee’s employment but only to the extent that the option was exercisable immediately
prior to such optionee’s termination of employment;

     (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 7 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.

8. 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

4

 

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 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 8. 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.

9. 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.

10. 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

5

 

exercising the option or through
a subsequent return to the Company of shares delivered to the person exercising the option.

11. 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.

12. 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 and (ii) the number and kind of Common Shares and the exercise price (if applicable)
of any then outstanding awards of options, provided that, with respect to all awards of options, 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 8),
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.

13. 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.

14. 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.

15. Amendment and Discontinuance of Plan. The Board may at any time amend, suspend or discontinue
this Plan. No amendment to this Plan shall, without the consent of the holder of an option
previously granted under this Plan, shall alter or impair any option.

16. Effective Date. This Plan shall be effective April 2, 1998.

6

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