Document:

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                                SPORTSNUTS, INC.

                              AMENDED AND RESTATED
                             2000 STOCK OPTION PLAN

                                   ARTICLE 1.
                               GENERAL PROVISIONS

               1.1         PURPOSE OF THE PLAN

               This 2000 Stock  Option Plan (the  "Plan") is intended to promote
the interests of SPORTSNUTS,  INC., a Delaware corporation,  (the "Corporation")
by providing  eligible persons with the opportunity to acquire or increase their
proprietary  interest in the  Corporation  as an incentive for them to remain in
the Service of the Corporation.

               Capitalized  terms shall have the meanings assigned to such terms
in the attached Appendix.

               1.2         ADMINISTRATION OF THE PLAN

                  a.       Prior to the Section 12(g) Registration Date, the
Plan shall be administered by the Board or a committee of the Board.

                  b.  Beginning  with the Section 12(g)  Registration  Date, the
Primary Committee shall have sole and exclusive authority to administer the Plan
with respect to Section 16 Insiders.  Administration of the Plan with respect to
all other persons  eligible  under the Plan may, at the Board's  discretion,  be
vested in the  Primary  Committee  or a  Secondary  Committee,  or the Board may
retain the power to administer the Plan with respect to all such persons.

                  c. Members of the Primary Committee or any Secondary Committee
shall  serve  for such  period of time as the  Board  may  determine  and may be
removed by the Board at any time.  The Board may also terminate the functions of
any  Secondary  Committee  at any time and  reassume  all powers  and  authority
previously delegated to such committee.

                  d.  Each Plan  Administrator  shall,  within  the scope of its
administrative  functions  under the  Plan,  have full  power and  authority  to
establish  such  rules and  regulations  as it may deem  appropriate  for proper
administration of the Plan and to make such determinations under, and issue such
interpretations  of,  the  provisions  of the Plan and any  outstanding  options
thereunder  as it may  deem  necessary  or  advisable.  Decisions  of  the  Plan
Administrator  within the scope of its  administrative  functions under the Plan
shall be final and binding on all parties who have an interest in the Plan under
its jurisdiction or any option thereunder.

                  e. Service on the Primary Committee or the Secondary Committee
shall constitute  service as a Board member,  and members of each such committee
shall accordingly be entitled to full indemnification and reimbursement as Board
members for their service on such

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committee.  No member of the Primary Committee or the Secondary  Committee shall
be liable for any act or omission made in good faith with respect to the Plan or
any option grants under the Plan.

                  f.  Each Plan  Administrator  shall,  within  the scope of its
administrative  jurisdiction under the Plan, have full authority (subject to the
provisions  of the Plan) to  determine  which  eligible  persons  are to receive
option  grants,  the time or times when such option  grants are to be made,  the
number of shares to be covered  by each such  grant,  the status of the  granted
option as either an  Incentive  Option or a  Non-Statutory  Option,  the time or
times at which each option is to become  exercisable,  the vesting  schedule (if
any) applicable to the option shares, the acceleration of such vesting schedule,
the  maximum  term for which the option is to remain  outstanding,  whether  the
option  shares shall be subject to rights of  repurchase  and/or rights of first
refusal, and all other terms and conditions of the option grants.

               1.3         ELIGIBILITY

                  The following  persons shall be eligible to participate in the
Plan:

                  a.       Employees,

                  b.       non-employee members of the Board or the board of
directors of any Parent or Subsidiary, and

                  c.       consultants and other independent advisors who
provide Services to the Corporation or any Parent or Subsidiary.

               1.4         STOCK SUBJECT TO THE PLAN

                  a. The  stock  issuable  under  the Plan  shall be  shares  of
authorized  but unissued  Common  Stock,  including  shares  repurchased  by the
Corporation  on the open  market.  The maximum  number of shares of Common Stock
which may be issued over the term of the Plan shall not exceed  fifteen  million
(15,000,000)  shares, which number of shares may be changed from time to time in
accordance with Section 3.4 below.

                  b. Shares of Common Stock subject to outstanding options shall
be  available  for  subsequent  issuance  under the Plan to the  extent  (i) the
options expire or terminate for any reason prior to exercise in full or (ii) the
options are cancelled in accordance with the cancellation-regrant  provisions of
Article 2.  However,  should the  Exercise  Price be paid with  shares of Common
Stock or should  shares of Common  Stock  otherwise  issuable  under the Plan be
withheld by the Corporation in satisfaction of the withholding taxes incurred in
connection  with the  exercise of an option  under the Plan,  then the number of
shares of Common Stock available for issuance under the Plan shall be reduced by
the gross number of shares for which the option is exercised, and not by the net
number of shares of Common Stock issued to the holder of such option.

                  c. Should any change be made to the Common  Stock by reason of
any stock  split,  stock  dividend,  recapitalization,  combination  of  shares,
exchange of shares or other change  affecting the outstanding  Common Stock as a
class without the Corporation's receipt of

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consideration,  appropriate  adjustments shall be made to (i) the maximum number
and/or class of securities issuable under the Plan, (ii) the number and/or class
of securities for which any one person may be granted options per calendar year,
and (iii) the number and/or class of securities and the Exercise Price in effect
under each outstanding option in order to prevent the dilution or enlargement of
benefits thereunder.  The adjustments determined by the Plan Administrator shall
be final, binding, and conclusive.

                                   ARTICLE 2.
                              OPTION GRANT PROGRAM

               2.1         OPTION TERMS

                  Each option shall be evidenced by one or more documents in the
form  approved  by the Plan  Administrator;  provided,  however,  that each such
document shall comply with the terms specified below.  Each document  evidencing
an Incentive Option shall, in addition,  be subject to the provisions of Section
2.2 of the Plan, below.

                  a.       Exercise Price

                           (1)      The Exercise Price shall be fixed by the
Plan  Administrator but shall not be less than one hundred percent (100%) of the
Fair Market Value per share of Common Stock on the Grant Date.

                           (2)      The Exercise Price shall become immediately
due upon exercise of the option and shall,  subject to the provisions of Article
3.1, and the documents  evidencing the option,  be payable in one or more of the
forms specified below:
                                    (a)     cash or check made payable to the
               Corporation,

                                    (b)     shares of Common Stock held for
               the requisite period necessary to avoid a charge to the Corpor-
               ation's earnings for financial reporting purposes and valued
               at Fair Market Value on the Exercise Date, or

                                    (c)     to the extent the option is exer-
               cised for vested shares, through a special  sale and
               remittance  procedure  pursuant  to which  the Optionee
               shall   concurrently   provide   irrevocable   written
               instructions  to (a) a  Corporation-designated  brokerage firm to
               effect the immediate  sale of the  Purchased  Shares and remit to
               the  Corporation,  out  of the  sale  proceeds  available  on the
               settlement date, sufficient funds to cover the aggregate Exercise
               Price  payable  for the  Purchased  Shares  plus  all  applicable
               federal,  state and local income and employment taxes required to
               be withheld by the Corporation by reason of such exercise and (b)
               the  Corporation  to deliver the  certificates  for the Purchased
               Shares  directly to such  brokerage firm in order to complete the
               sale.

                  Except to the  extent  the sale and  remittance  procedure  is
utilized, payment of the Exercise Price for the Purchased Shares must be made on
the Exercise Date.

                  b.       Exercise and Term of Options.  Each option shall be
exercisable at such time or times, during such period and for such number
of shares as shall be determined by the Plan

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Administrator and set forth in the documents evidencing the option.  However, no
option  shall  have a term in excess of ten (10) years  measured  from the Grant
Date.

                  c.       Effect of Termination of Service

                           (1)      The following provisions shall govern the
exercise of any options held by the Optionee at the time of cessation of
Service:

                                    (a)     Any option outstanding at the time
               of the Optionee's cessation of
               Service for any reason  except  death,  Permanent  Disability  or
               Misconduct shall remain  exercisable for a three (3) month period
               thereafter,  provided no option  shall be  exercisable  after the
               Expiration Date.

                                    (b)     Any option outstanding at the time
               of the Optionee's cessation of
               Service  due  to  death  or  Permanent  Disability  shall  remain
               exercisable for a twelve (12) month period  thereafter,  provided
               no option shall be exercisable after the Expiration Date. Subject
               to the foregoing,  any option  exercisable in whole or in part by
               the Optionee at the time of death may be  exercised  subsequently
               by the personal representative of the Optionee's estate or by the
               person or persons to whom the option is  transferred  pursuant to
               the Optionee's will or in accordance with the laws of descent and
               distribution.

                                    (c)     Should the Optionee's Service be
               terminated for Misconduct, then all outstanding options held by
               the Optionee shall terminate immediately and cease to be
               outstanding.

                                    (d)     During the applicable post-Service
               exercise period, the option may not be  exercised  in the
               aggregate  for more than the number of shares  for which
               the  option is  exercisable  on the date of the
               Optionee's  cessation of Service;  the option shall,  immediately
               upon the Optionee's cessation of Service,  terminate and cease to
               be  outstanding to the extent the option is not otherwise at that
               time exercisable.  Upon the expiration of the applicable exercise
               period or (if earlier) upon the Expiration Date, the option shall
               terminate  and cease to be  outstanding  for any shares for which
               the option has not been exercised.

                           (2)      The Plan Administrator shall have the
discretion, exercisable either at the time an option is granted or at any time
while the option remains outstanding, to:

                                    (a)     extend the period of time for which
               the option is to remain exercisable  following the  Optionee's
               cessation of Service from the period  otherwise  in effect for
               that option to such  greater period of time as the Plan Adminis-
               trator  shall deem appropriate, but in no event beyond the
               Expiration Date, and/or

                                    (b)     permit the option to be exercised,
               during the applicable post-Service exercise  period,  not only
               with respect to the number of shares of Common  Stock for which
               such option is  exercisable  at the time of the  Optionee's
               cessation  of Service  but also with respect to one or more
               additional  shares that would have vested under the option had
               the Optionee continued in Service.

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                  d.       Stockholder Rights.  The holder of an option shall
have no stockholder rights with respect to the shares subject to the option
until such person shall have exercised the option, paid the Exercise Price, and
become a holder of record of the Purchased Shares.

                  e. Limited  Transferability of Options. During the lifetime of
the Optionee, Incentive Options may be exercised only by the Optionee, and shall
not be  assignable  or  transferable  except by will or the laws of descent  and
distribution  following  the  Optionee's  death.  Non-Statutory  Options  may be
assigned  or  transferred  in whole or in part only (i)  during  the  Optionee's
lifetime if in connection with the Optionee's estate plan to one or more members
of  the  Optionee's  immediate  family  (spouse  and  children)  or  to a  trust
established  exclusively  for the benefit of one or more such  immediate  family
members,  or (ii) by will or the laws of descent and distribution  following the
Optionee's  death.  The assigned  portion may only be exercised by the person or
persons  who  acquire a  proprietary  interest  in the  option  pursuant  to the
assignment.  The terms  applicable to the assigned  portion shall be the same as
those in effect for the option immediately prior to such assignment and shall be
set forth in such documents issued to the assignee as the Plan Administrator may
deem appropriate.

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               2.2         INCENTIVE OPTIONS

                  The  terms  specified  below  shall  apply  to  all  Incentive
Options.  Except as modified by the  provisions  of this  Section  2.2,  all the
provisions of this Plan shall apply to Incentive Options.  Options  specifically
designated  as  Non-Statutory  Options  when issued  under the Plan shall not be
subject to the terms of this Section 2.2.

                  a.       Eligibility.  Incentive Options may only be granted
to Employees.

                  b.       Exercise Price.  The Exercise Price shall not be less
than one hundred percent (100%) of the Fair Market Value per share of Common
Stock on the Grant Date.

                  c. Dollar  Limitation.  The aggregate Fair Market Value of the
shares of Common Stock  (determined as of the respective date or dates of grant)
for which one or more  options  granted to any  Employee  under the Plan (or any
other option plan of the  Corporation or any Parent or  Subsidiary)  may for the
first time become  exercisable as Incentive  Options during any one (1) calendar
year shall not exceed the sum of One Hundred Thousand Dollars ($100,000). To the
extent the Employee holds two (2) or more such options which become  exercisable
for the first time in the same calendar  year,  the foregoing  limitation on the
exercisability  of such  options as  Incentive  Options  shall be applied in the
order in which such options are granted.

                  d. 10% Stockholder. If an Employee to whom an Incentive Option
is granted is a 10% Stockholder,  then the Exercise Price shall not be less than
one  hundred ten  percent  (110%) of the Fair  Market  Value per share of Common
Stock on the Grant  Date,  and the option  term shall not exceed  five (5) years
measured from the Grant Date.

                  e.  Holding  Period.  Shares  purchased  pursuant to an option
shall cease to qualify for favorable tax treatment as Incentive Option Shares if
and to the extent  Optionee  disposes of such shares within two (2) years of the
Grant Date or within one (1) year of Optinee's purchase of said shares.

               2.3         CORPORATE TRANSACTION/CHANGE IN CONTROL

                  a. In the  event of any  Corporate  Transaction,  the Board of
Directors shall have the sole discretion to elect that each  outstanding  option
shall automatically accelerate so that each such option shall, immediately prior
to the effective date of the Corporate Transaction, become fully exercisable for
all of the shares of Common  Stock at the time subject to such option and may be
exercised for any or all of those shares as fully-vested shares of Common Stock.
The Board may  exercise  its  discretion  to  accelerate  the vesting of options
whether or not (i) such option is, in connection with the Corporate Transaction,
either to be assumed by the  successor  corporation  or Parent  thereof or to be
replaced with a comparable option to purchase shares of the capital stock of the
successor corporation or Parent thereof, (ii) such option is to be replaced with
a cash incentive program of the successor corporation which preserves the spread
existing on the unvested option shares at the time of the Corporate  Transaction
and provides for subsequent  payout in accordance with the same vesting schedule
applicable to such option,  except to the extent that the  acceleration  of such
option is subject to other limitations  imposed by the Plan Administrator at the
time of the option grant. The

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determination  of option  comparability  under clause (i) above shall be made by
the  Plan  Administrator,  whose  determination  shall  be  final,  binding  and
conclusive.

                  b. In the  event of any  Corporate  Transaction,  the Board of
Directors shall have sole  discretion to elect that all  outstanding  repurchase
rights may also be  terminated  automatically  whether  or not those  repurchase
rights are to be assigned to the successor  corporation  (or Parent  thereof) in
connection with such Corporate Transaction.

                  c. The Plan  Administrator's  discretion under Sections 2.3.a.
and b. above shall be exercisable either at the time the option is granted or at
any time while the option remains outstanding,  whether or not those options are
to be assumed or replaced (or those repurchase rights are to be assigned) in the
Corporate Transaction.  The Plan Administrator shall also have the discretion to
grant  options which do not  accelerate  whether or not such options are assumed
(and to provide for repurchase  rights that do not terminate whether or not such
rights are assigned) in connection with a Corporate Transaction.

                  d. If the Board of Directors elects the automatic acceleration
of some or all of the  outstanding  options upon the  occurrence  of a Corporate
Transaction,  all such  outstanding  options  shall  terminate  and  cease to be
outstanding,  except to the extent  assumed  by the  successor  corporation  (or
parent  thereof)  immediately   following  the  consummation  of  the  Corporate
Transaction.

                  e. Each option which is assumed in connection with a Corporate
Transaction  shall be appropriately  adjusted,  immediately after such Corporate
Transaction, to apply to the number and class of securities that would have been
issuable to the Optionee in consummation  of such Corporate  Transaction had the
option  been  exercised   immediately  prior  to  such  Corporate   Transaction.
Appropriate  adjustments  shall  also be made to (i) the  number  and  class  of
securities  available for issuance under the Plan following the  consummation of
such Corporate Transaction, (ii) the exercise price payable per share under each
outstanding  option,  provided the  aggregate  exercise  price  payable for such
securities  shall  remain the same and (iii) the  maximum  number of  securities
and/or  class of  securities  for  which any one  person  may be  granted  stock
options.

                  f.  The  Plan   Administrator   shall  have  the   discretion,
exercisable  at the time the  option is  granted or at any time while the option
remains  outstanding,  to provide for the automatic  acceleration of any options
assumed or replaced in a Corporate  Transaction that do not otherwise accelerate
at that  time  (and  the  termination  of any of the  Corporation's  outstanding
repurchase  rights that do not otherwise  terminate at the time of the Corporate
Transaction) in the event the Optionee's Service should  subsequently  terminate
by reason of an Involuntary  Termination  within eighteen (18) months  following
the effective  date of such  Corporate  Transaction.  Any options so accelerated
shall remain  exercisable  for shares until the earlier of (i) the expiration of
the option term or (ii) the expiration of the one (1)-year  period measured from
the effective date of the Involuntary Termination.

                  g.  The  Plan   Administrator   shall  have  the   discretion,
exercisable  either at the time the  option is  granted or at any time while the
option remains outstanding, to (i) provide for the automatic acceleration of one
or more  outstanding  options  (and  the  automatic  termination  of one or more
outstanding  repurchase  rights) upon the  occurrence  of a Change in Control or
(ii) condition any such option  acceleration (and the termination of any

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outstanding  repurchase rights) upon the subsequent  Involuntary  Termination of
the Optionee's  Service within a specified  period (not to exceed  eighteen (18)
months)  following  the  effective  date of such Change in Control.  Any options
accelerated  in  connection   with  a  Change  in  Control  shall  remain  fully
exercisable until the expiration or sooner termination of the option term.

                  h.  The  portion  of  any  Incentive  Option   accelerated  in
connection  with a  Corporate  Transaction  or Change in  Control  shall  remain
exercisable as an Incentive Option only to the extent the applicable One Hundred
Thousand Dollar ($100,000) limitation is not exceeded. To the extent such dollar
limitation  is  exceeded,  the  accelerated  portion  of such  option  shall  be
exercisable as a Non-Statutory Option under the federal tax laws.

                  i. The grant of options  under the Plan shall in no way affect
the right of the  Corporation  to adjust,  reclassify,  reorganize  or otherwise
change its capital or business  structure  or to merge,  consolidate,  dissolve,
liquidate or sell or transfer all or any part of its business or assets.

               2.4         CANCELLATION AND REGRANT OF OPTIONS

                  The Plan Administrator  shall have the authority to effect, at
any time and from time to time, with the consent of the affected option holders,
the  cancellation of any or all outstanding  options under the Plan and to grant
in substitution  new options  covering the same or different number of shares of
Common Stock but with an Exercise Price based on the Fair Market Value per share
of Common Stock on the new Grant Date.

                                   ARTICLE 3.
                                  MISCELLANEOUS

               3.1         FINANCING

                  a. The Plan  Administrator  may permit any Optionee to pay the
option  Exercise  Price by  delivering a promissory  note payable in one or more
installments. The terms of any such promissory note (including the interest rate
and the terms of repayment)  shall be established by the Plan  Administrator  in
its sole discretion. Promissory notes may be authorized with or without security
or collateral.  In all events,  the maximum credit available to the Optionee may
not exceed the sum of (i) the aggregate  option  Exercise  Price payable for the
Purchased Shares plus (ii) the amount of any federal, state and local income and
employment tax liability  incurred by the Optionee in connection with the option
exercise.

                  b. The Plan  Administrator  may, in its discretion,  determine
that one or more such  promissory  notes shall be subject to  forgiveness by the
Corporation  in whole or in part upon such terms as the Plan  Administrator  may
deem appropriate.

               3.2         TAX WITHHOLDING

                  a. The  Corporation's  obligation to deliver  shares of Common
Stock  upon the  exercise  of  options  under the Plan  shall be  subject to the
satisfaction  of all applicable  federal,  state and local income and employment
tax withholding requirements.

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                  b. The Plan Administrator may, in its discretion,  provide any
or all holders of Non-  Statutory  Options  under the Plan with the right to use
shares of Common Stock in  satisfaction  of all or part of the Taxes incurred by
such holders in connection with the exercise of their options. Such right may be
provided to any such holder in either or both of the following formats:

                           (1)  Stock  Withholding:  The  election  to have  the
         Corporation  withhold,  from  the  shares  of  Common  Stock  otherwise
         issuable upon the exercise of such  Non-Statutory  Option, a portion of
         those  shares  with  an  aggregate  Fair  Market  Value  equal  to  the
         percentage  of the Taxes (not to exceed  one  hundred  percent  (100%))
         designated by the holder.

                           (2) Stock  Delivery:  The  election to deliver to the
         Corporation,  at the time the Non-Statutory Option is exercised, one or
         more shares of Common Stock  previously  acquired by such holder (other
         than in connection with the option exercise  triggering the Taxes) with
         an  aggregate  Fair Market Value equal to the  percentage  of the Taxes
         (not to exceed one hundred percent (100%)) designated by the holder.

               3.3         EFFECTIVE DATE AND TERM OF THE PLAN

                  a. The Plan shall become effective on the Plan Effective Date.
However,  no shares shall be issued under the Plan pursuant to Incentive Options
until  the  Plan  is  approved  by  the  Corporation's  stockholders.   If  such
stockholder  approval is not obtained  within  twelve (12) months after the Plan
Effective Date, then all Incentive  Options  previously  granted under this Plan
shall automatically convert into Non-Statutory Options.

                  b. The Plan shall  terminate upon the earliest of (i) June 30,
2008,  (ii) the date on which all shares  available for issuance  under the Plan
shall have been issued,  or (iii) the termination of all outstanding  options in
connection  with a  Corporate  Transaction.  Upon  such  Plan  termination,  all
outstanding  options shall continue to have force and effect in accordance  with
the provisions of the documents evidencing such options.

               3.4         AMENDMENT OF THE PLAN

                  a. The Board  shall  have  complete  and  exclusive  power and
authority to amend or modify the Plan in any or all respects.  However,  no such
amendment or modification shall adversely affect any rights and obligations with
respect to options at the time  outstanding  under the Plan unless each affected
Optionee consents to such amendment or modification.  In addition, amendments to
the Plan shall be subject to approval of the  Corporation's  stockholders to the
extent required by applicable laws or regulations.

                  b.  Options to purchase  shares of Common Stock may be granted
under the Plan that are in each  instance in excess of the number of shares then
available  for  issuance  under the Plan,  provided any excess  shares  actually
issued  are  held  in  escrow  until  there  is  obtained  Board  approval  (and
shareholder  approval if  required  by  applicable  laws or  regulations)  of an
amendment sufficiently increasing the number of shares of Common Stock available
for issuance under the Plan.

               3.5         USE OF PROCEEDS

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                  Any cash proceeds received by the Corporation from the sale of
shares  of  Common  Stock  under the Plan  shall be used for  general  corporate
purposes.

               3.6         REGULATORY APPROVALS

                  a. The  implementation of the Plan, the granting of any option
         under the Plan, and the issuance of any shares of Common Stock upon the
         exercise of any option shall be subject to the Corporation's  obtaining
         all approvals and permits  required by  regulatory  authorities  having
         jurisdiction  over the Plan and the options  granted  under it, and the
         shares of Common Stock issued pursuant to the Plan.

                  b. No  shares  of Common  Stock  shall be issued or  delivered
under the Plan  unless  and until  there  shall  have been  compliance  with all
applicable  requirements of federal and state securities laws and all applicable
listing requirements of any stock exchange (or the Nasdaq market, if applicable)
on which Common Stock is then listed for trading.

               3.7         NO EMPLOYMENT/SERVICE RIGHTS

                  Nothing in the Plan shall  confer upon the  Optionee any right
to continue in Service for any period of specific  duration or interfere with or
otherwise  restrict in any way the rights of the  Corporation  (or any Parent or
Subsidiary employing or retaining such person) or of the Optionee,  which rights
are hereby expressly reserved by each, to terminate such person's Service at any
time for any reason, with or without cause.

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                                    APPENDIX

               The following  definitions  shall be in effect under the Plan and
the Plan Documents:

         1.    Board shall mean the Corporation's Board of Directors.

         2. Change in Control shall mean a change in ownership or control of the
Corporation effected through either of the following transactions:

                  (i) the acquisition,  directly or indirectly, by any person or
         related group of persons  (other than the  Corporation or a person that
         directly or indirectly  controls,  is controlled by, or is under common
         control with, the  Corporation),  of beneficial  ownership  (within the
         meaning of Rule 13d-3 of the 1934 Act) of  securities  possessing  more
         than fifty  percent  (50%) of the total  combined  voting  power of the
         Corporation's  outstanding  securities pursuant to a tender or exchange
         offer made directly to the Corporation's stockholders,  which the Board
         does not recommend such stockholders to accept, or

                  (ii) a change in the composition of the Board over a period of
         thirty-six (36) consecutive  months or less such that a majority of the
         Board members ceases, by reason of one or more contested  elections for
         Board  membership,  to be comprised of individuals  who either (A) have
         been Board members  continuously  since the beginning of such period or
         (B) have been elected or nominated for election as Board members during
         such period by at least a majority of the Board  members  described  in
         clause (A) who were still in office at the time the Board approved such
         election or nomination.

         3.    Code shall mean the Internal Revenue Code of 1986, as amended.

         4.    Common Stock shall mean the Corporation's common stock.

         5.    Corporate Transaction shall mean either of the following
stockholder-approved transactions to which the Corporation is a party:

                  (i) a merger or consolidation  in which securities  possessing
         more than fifty percent (50%) of the total combined voting power of the
         Corporation's  outstanding  securities  are  transferred to a person or
         persons different from the persons holding those securities immediately
         prior to such transaction; or

                  (ii)     the sale, transfer or other disposition of all or
         substantially all of the Corporation's assets in complete liquidation
         or dissolution of the Corporation.

         6.    Eligible Director shall mean a non-employee Board member eligible
to participate in the Plan.

         7.  Employee  shall  mean an  individual  who is in the  employ  of the
Corporation (or any Parent or Subsidiary),  subject to the control and direction
of the employer  entity as to both the work to be  performed  and the manner and
method of performance.

                                     11

<PAGE>

         8.  Exercise  Date shall mean the date on which the  Corporation  shall
have received written notice of the option exercise.

         9.    Exercise Price shall mean the exercise price per share as
specified in the Stock Option Grant.

         10.   Expiration Date shall mean the date on which the option expires
as specified in the Stock Option Grant.

         11. Fair Market Value per share of Common  Stock on any  relevant  date
shall be determined in accordance with the following provisions:

                  (i) If the  Common  Stock is traded at the time on the  Nasdaq
         National  Market,  then  the Fair  Market  Value  shall be the  closing
         selling  price per share of Common  Stock on the date in  question,  as
         such  price is  reported  by the  National  Association  of  Securities
         Dealers on the Nasdaq National Market or any successor system. If there
         is no  closing  selling  price  for the  Common  Stock  on the  date in
         question, then the Fair Market Value shall be the closing selling price
         on the last preceding date for which such quotation exists.

                  (ii) If the  Common  Stock is at the time  listed on any Stock
         Exchange, then the Fair Market Value shall be the closing selling price
         per share of Common Stock on the date in question on the Stock Exchange
         determined by the Plan  Administrator  to be the primary market for the
         Common Stock, as such price is officially  quoted in the composite tape
         of transactions on such exchange.  If there is no closing selling price
         for the  Common  Stock on the date in  question,  then the Fair  Market
         Value shall be the closing selling price on the last preceding date for
         which such quotation exists.

                  (iii) If the Common Stock is not listed on any Stock  Exchange
         nor traded on the Nasdaq  National  Market,  then the Fair Market Value
         shall be determined by the Plan Administrator after taking into account
         such factors as the Plan Administrator shall deem appropriate.

                  (iv)  For   purposes   of  any  option   grants  made  on  the
         Underwriting Date, the Fair Market Value shall be deemed to be equal to
         the price per share at which the  Common  Stock is sold in the  initial
         public offering pursuant to the Underwriting Agreement.

         12. First Refusal Right shall mean the right granted to the Corporation
in Section E of the Stock Option Exercise Notice and Purchase Agreement.

         13.  Grant  Date  shall mean the date on which the option is granted to
Optionee as specified in the Stock Option Grant.

         14.   Incentive Option shall mean an option which satisfies the re-
quirements of Code Section 422.

         15.   Involuntary Termination shall mean the termination of the Service
of any individual which occurs by reason of:

                                       12

<PAGE>

                  (i)  such individual's involuntary dismissal or discharge by
         the Corporation for reasons other than Misconduct, or

                  (ii) such individual's  voluntary  resignation following (A) a
         change in his or her position  with the  Corporation  which  materially
         reduces his or her level of  responsibility,  (B) a reduction in his or
         her level of compensation  (including base salary,  fringe benefits and
         participation  in   corporate-performance   based  bonus  or  incentive
         programs) by more than  fifteen  percent  (15%) or (C) a relocation  of
         such  individual's  place of  employment by more than fifty (50) miles,
         provided and only if such change,  reduction or  relocation is effected
         by the Corporation without the individual's consent.

         16.  Market  Stand Off shall mean the market stand off  restriction  on
disposition  of the  Purchased  Shares as  specified  in  Section F of the Stock
Option Exercise Notice and Purchase Agreement.

         17.  Misconduct  shall  mean  the  commission  of  any  act  of  fraud,
embezzlement or dishonesty by the Optionee,  any  unauthorized use or disclosure
by such person of  confidential  information or trade secrets of the Corporation
(or any  Parent or  Subsidiary),  or any other  intentional  misconduct  by such
person  adversely  affecting the business or affairs of the  Corporation (or any
Parent or Subsidiary) in a material manner.  The foregoing  definition shall not
be deemed to be inclusive of all the acts or omissions which the Corporation (or
any Parent or Subsidiary) may consider as grounds for the dismissal or discharge
of any Optionee or other person in the Service of the Corporation (or any Parent
or Subsidiary).

         18.   1933 Act shall mean the Securities Act of 1933, as amended.

         19.   1934 Act shall mean the Securities Exchange Act of 1934, as
amended.

         20.   Non-Statutory Option shall mean an option not intended to satisfy
the requirements of Code Section 422.

         21.   Optionee shall mean any person to whom an option is granted under
Plan.

         22.  Option  Shares  shall  mean the  number of shares of Common  Stock
subject to the option as specified in the Stock Option Grant.

         23. Owner shall mean Option and all subsequent holders of the Purchased
Shares who derive their chain of  ownership  through a Permitted  Transfer  from
Optionee.

         24. Parent shall mean any corporation  (other than the  Corporation) in
an unbroken chain of  corporations  ending with the  Corporation,  provided each
corporation in the unbroken chain (other than the Corporation) owns, at the time
of the determination,  stock possessing fifty percent (50%) or more of the total
combined  voting power of all classes of stock in one or the other  corporations
in such chain.

         25.   Permanent Disability or Permanently Disabled shall mean the
inability of the Optionee to engage in any substantial gainful activity by
reason of any medically determinable physical or

                                       13

<PAGE>

mental impairment expected to result in death or to be of continuous duration of
twelve (12) months or more.

         26.  Permitted  Transfer  shall mean (i) a  gratuitous  transfer of the
Purchased Shares,  provided and only if Optionee obtains the Corporation's prior
written  consent to such  transfer,  (ii) a transfer  of title to the  Purchased
Shares effected pursuant to Optionee's will or the laws of intestate  succession
following  Optionee's death, or (iii) a transfer to the Corporation in pledge as
security for any purchase-money  indebtedness incurred by Optionee in connection
with the acquisition of the Purchased Shares.

         27. Plan Administrator  shall mean the particular  entity,  whether the
Board or a committee of the Board,  which is authorized  to administer  the Plan
with  respect to one or more  classes of  eligible  persons,  to the extent such
entity is carrying out its administrative  functions under the Plan with respect
to the persons under its jurisdiction.

         28.   Plan Documents shall mean the Plan, the Stock Option Grant, and
Stock Option Exercise Notice and Purchase Agreement, collectively.

         29. Plan  Effective  Date shall mean July 1, 1998, the date as of which
the Plan was Adopted by the Board.

         30.  Primary  Committee  shall  mean the  committee  of two (2) or more
non-employee  Board members (as defined in the  regulations to Section 16 of the
1934 Act)  appointed by the Board to administer the Plan with respect to Section
16 Insiders.

         31.   Purchased Shares shall mean the shares purchased upon exercise
of the Option.

         32.  Recapitalization  shall  mean any  stock  split,  stock  dividend,
recapitalization,  combination  of shares,  exchange  of shares or other  charge
affecting  the  Corporation's  outstanding  Common Stock as a class  without the
Corporation's receipt of consideration.

         33.   Reorganization shall mean any of the following transactions:

                  (i)      a merger or consolidation in which the Corporation is
         not the surviving entity;

                  (ii)     a sale, transfer, or other disposition of all or sub-
         stantially all of the Corporation's assets;

                  (iii)  a  reverse  merger  in  which  the  Corporation  is the
         surviving  entity  but in which the  Corporation's  outstanding  voting
         securities  are  transferred in whole or in part to a person or persons
         different from the persons holding those securities  immediately  prior
         to the merger; or

                  (iv) any transaction effected primarily to change the state in
         which the  Corporation is  incorporated  or to create a holding company
         structure.

                                       14

<PAGE>

         34. Repurchase Right shall mean the  Corporation's  right to repurchase
Purchased  Shares as set forth in Section D of the Stock Option  Exercise Notice
and Repurchase Agreement.

         35.      SEC shall mean the Securities Exchange Commission.

         36. Secondary Committee shall mean a committee of two (2) or more Board
members  appointed by the Board to administer  the Plan with respect to eligible
persons other than Section 16 Insiders.

         37.  Section 12(g)  Registration  Date shall mean the date on which the
Common Stock is first registered under Section 12(g) of the 1934 Act.

         38.  Section 16  Insider  shall  mean an  officer  or  director  of the
Corporation  subject to the short-swing  profit liabilities of Section 16 of the
1934 Act.

         39. Service shall mean the  performance of services to the  Corporation
(or any Parent or  Subsidiary)  by a person in the  capacity of an  Employee,  a
non-employee  member of the board of directors or a  consultant  or  independent
advisor,  except to the extent otherwise  specifically provided in the documents
evidencing the option grant.

         40. Stock Exchange shall mean either the American Stock  Exchange,  the
New York Stock Exchange, or another regional stock exchange.

         41. Stock Option Exercise Notice and Purchase  Agreement shall mean the
agreement  of said  title in  substantially  the form of  Exhibit A to the Stock
Option Grant,  pursuant to which Optionee gives notice of his intent to exercise
the option and purchase Shares.

         42. Stock  Option  Grant shall mean the Stock  Option  Grant  document,
pursuant to which  Optionee  has been  informed of the basic terms of the option
granted under the Plan.

         43. Subsidiary shall mean any corporation  (other than the Corporation)
in an unbroken chain of corporations  beginning with the  Corporation,  provided
each corporation  (other than the last  corporation) in the unbroken chain owns,
at the time of the  determination,  stock possessing fifty percent (50%) or more
of the total  combined  voting power of all classes of stock in one of the other
corporations in such chain.

                                       15

<PAGE>

         44. Taxes shall mean the Federal, state and local income and employment
tax liabilities  incurred by the holder of Non- Statutory  Options in connection
with the exercise of those options.

         45. 10% Stockholder  shall mean the owner of stock (as determined under
Code  Section  424(d))  possessing  more  than ten  percent  (10%) of the  total
combined  voting power of all classes of stock of the Corporation (or any Parent
or Subsidiary).

                                       16Ex - 10.1

                               RADISYS CORPORATION

                           DEFERRED COMPENSATION PLAN

                            Effective January 1, 2001

<PAGE>
                                TABLE OF CONTENTS

                                                                         PAGE
                                                                        ------

ARTICLE I--PURPOSE AND Effective Date......................................1

ARTICLE II--DEFINITIONS....................................................1

  2.1      Account.........................................................1
  2.2      Administrative Committee........................................1
  2.3      Beneficiary.....................................................1
  2.4      Board...........................................................1
  2.5      Bonus...........................................................1
  2.6      Company.........................................................2
  2.7      Compensation....................................................2
  2.8      Deferral Commitment.............................................2
  2.9      Deferral Period.................................................2
  2.10     Determination Date..............................................2
  2.11     Director Fees...................................................2
  2.12     Disability......................................................2
  2.13     Earnings Index..................................................2
  2.14     Elective Deferred Compensation..................................2
  2.15     Eligible Stock Option...........................................3
  2.16     Employer........................................................3
  2.17     Option Gain.....................................................3
  2.18     Participant.....................................................3
  2.19     Participation Agreement.........................................3
  2.20     Plan............................................................3
  2.21     Rate of Return..................................................3
  2.22     Retirement......................................................3
  2.23     Salary..........................................................3
  2.24     Stock...........................................................4
  2.25     Stock Option Deferral...........................................4
  2.26     Stock Option Deferral Amount....................................4
  2.27     Unforeseen Emergency............................................4

ARTICLE III--PARTICIPATION AND DEFERRAL COMMITMENTS........................4

  3.1      Eligibility and Participation...................................4
  3.2      Form of Deferral................................................5
  3.3      Limitations on Deferral Commitments.............................5
  3.4      Commitment Limited by Termination...............................5
  3.5      Modification of Deferral Commitment.............................6

                                                                           (i)
<PAGE>

ARTICLE IV--DEFERRED COMPENSATION ACCOUNTS.................................6

  4.1      Accounts........................................................6
  4.2      Elective Deferred Compensation..................................6
  4.3      Matching Contribution...........................................6
  4.4      Pension Makeup..................................................6
  4.5      Allocation of Elective Deferred Compensation....................7
  4.6      Determination of Accounts.......................................7
  4.7      Vesting of Accounts.............................................7
  4.8      Statement of Accounts...........................................7

ARTICLE V--PLAN BENEFITS...................................................7

  5.1      Distributions Prior to Termination of Employment................7
  5.2      Distributions Following Termination of Service..................8
  5.3      Benefit Commencement............................................9
  5.4      Accelerated Distribution........................................9
  5.5      Deferred Payment of Benefit.....................................9
  5.6      Withholding for Taxes...........................................9
  5.7      Valuation and Settlement........................................9
  5.8      Payment to Guardian............................................10

ARTICLE VI--BENEFICIARY DESIGNATION.......................................10

  6.1      Beneficiary Designation........................................10
  6.2      Changing Beneficiary...........................................10
  6.3      No Beneficiary Designation.....................................10
  6.4      Effect of Payment..............................................10

ARTICLE VII--ADMINISTRATION...............................................10

  7.1      Committee; Duties..............................................10
  7.2      Agents.........................................................11
  7.3      Binding Effect of Decisions....................................11
  7.4      Indemnity of Committee.........................................11

ARTICLE VIII--CLAIMS PROCEDURE............................................11

  8.1      Claim..........................................................11
  8.2      Denial of Claim................................................11
  8.3      Review of Claim................................................12
  8.4      Final Decision.................................................12

                                                                           (ii)
<PAGE>
ARTICLE IX--AMENDMENT AND TERMINATION OF PLAN.............................12

  9.1      Amendment......................................................12
  9.2      Employer's Right to Terminate..................................13

ARTICLE X--MISCELLANEOUS..................................................13

  10.1     Unfunded Plan..................................................13
  10.2     Unsecured General Creditor.....................................13
  10.3     Trust Fund.....................................................14
  10.4     Nonassignability...............................................14
  10.5     Not a Contract of Employment...................................14
  10.6     Protective Provisions..........................................14
  10.7     Governing Law..................................................14
  10.8     Validity.......................................................14
  10.9     Notice.........................................................15
  10.10    Successors.....................................................15

                                                                           (iii)
<PAGE>
                               RADISYS CORPORATION

                           DEFERRED COMPENSATION PLAN

                      ARTICLE I--PURPOSE AND EFFECTIVE DATE

         The purpose of this Deferred Compensation Plan is to provide current
tax planning opportunities as well as supplemental funds upon the retirement or
death of certain employees and Board members of Employer. It is intended that
the Plan will aid in attracting and retaining employees of exceptional ability
by providing them with these benefits. The Plan shall be effective as of January
1, 2001.

                             ARTICLE II--DEFINITIONS

         For the purposes of this Plan, the following terms shall have the
meanings indicated, unless the context clearly indicates otherwise:

2.1      Account

         "Account" means the device used by Employer to measure and determine
the amounts to be paid to a Participant under the Plan. Separate subaccounts may
be maintained to properly reflect the Participant's balance and earnings
thereon. A Participant's Account shall not constitute or be treated as a trust
fund of any kind.

2.2      Administrative Committee

         "Administrative Committee" means the committee appointed to administer
the Plan pursuant to Article VII.

2.3      Beneficiary

         "Beneficiary" means the person, persons or entity entitled under
Article VI to receive any Plan benefits payable after a Participant's death.

2.4      Board

         "Board" means the Board of Directors of the Company.

2.5      Bonus

         "Bonus" means any incentive compensation (including Executive Incentive
Compensation, Design Win, Revenue, and MBO bonus payments) that is payable to a
Participant in addition to the Participant's Salary.

2.6      Company

         "Company" means RadiSys Corporation, an Oregon corporation, or any
successor to the business thereof.

PAGE 1 - DEFERRED COMPENSATION PLAN
<PAGE>
2.7      Compensation

         "Compensation" means the Salary, Bonus, and Option Gain that the
Participant earns for services rendered to the Company.

2.8      Deferral Commitment

         "Deferral Commitment" means an election to defer Compensation made by a
Participant pursuant to Article III and for which a separate Participation
Agreement has been submitted by the Participant to the Administrative Committee.

2.9      Deferral Period

         "Deferral Period" means a calendar year.

2.10     Determination Date

         "Determination Date" means the last day of each calendar month.

2.11     Director Fees

         "Director Fees" means all Board and committee meeting fees payable to a
Participant (before reduction for amounts deferred under the Plan). Director
Fees do not include expenses, reimbursements, or any form of noncash
compensation or benefits.

2.12     Disability

         "Disability" means a physical or mental condition which, in the opinion
of the Administrative Committee, prevents the Participant from satisfactorily
performing the Participant's usual duties for the Company. The Administrative
Committee's decision as to Disability will be based upon medical reports and/or
other evidence satisfactory to the Administrative Committee.

2.13     Earnings Index

         "Earnings Index" means a portfolio or fund selected by the
Administrative Committee from time to time to be used as an index in calculating
Rate of Return.

2.14     Elective Deferred Compensation

         "Elective Deferred Compensation" means the amount of Compensation that
a Participant elects to defer pursuant to a Deferral Commitment.

2.15     Eligible Stock Option

         "Eligible Stock Option" means one (1) or more nonqualified stock
option(s) under a Company stock option plan that is determined by the Committee
to be eligible for gain deferral pursuant to this Plan.

PAGE 2 - DEFERRED COMPENSATION PLAN
<PAGE>
2.16     Employer

         "Employer" means the Company or any successor to the business thereof,
and any affiliated or subsidiary corporations designated by the Administrative
Committee.

2.17     Option Gain

         "Option Gain" means the amount by which the fair market value of
exercised options exceeds the exercise price.

2.18     Participant

         "Participant" means any eligible individual who has elected to defer
Compensation under this Plan.

2.19     Participation Agreement

         "Participation Agreement" means the agreement submitted by a
Participant (including the Benefit Payment Election Form) to the Administrative
Committee prior to the beginning of the Deferral Period, with respect to a
Deferral Commitment made for such Deferral Period.

2.20     Plan

         "Plan" means this RadiSys Corporation Deferred Compensation Plan, as
amended from time to time.

2.21     Rate of Return

         "Rate of Return" means the rate used to determine the amount credited
monthly to a Participant's Account under Article IV. Such rate shall be
determined by the Administrative Committee based upon the net performance of the
Earnings Indices selected by the Participant.

2.22     Retirement

         "Retirement" means a Participant's voluntary termination of employment
with Employer or termination of Board service on or after the Participant's
attainment of age fifty (50) or after five (5) years of service.

2.23     Salary

         "Salary" means the Employee's base salary for the Plan Year. Salary
excludes any other form of compensation such as restricted stock, proceeds from
stock options or stock appreciation rights, severance payments, moving expenses,
car or other special allowance, or any other amounts included in an Eligible
Employee's taxable income that is not compensation for services. Deferral
elections shall be computed before taking into account any reduction in taxable
income by Salary reduction under Code Sections 125 or 401(k), or under this
Plan.

2.24     Stock

         "Stock" means RadiSys Corporation Common Stock.

PAGE 3 - DEFERRED COMPENSATION PLAN
<PAGE>
2.25     Stock Option Deferral

         "Stock Option Deferral" means a stock-for-stock exercise of an Eligible
Stock Option having an aggregate fair market value in excess of the total stock
purchase price necessary to exercise such options.

2.26     Stock Option Deferral Amount

         "Stock Option Deferral Amount" means the amount of a Participant's
Option Gains deferred in connection with an Eligible Stock Option exercise and
Stock Option Deferral in accordance with Section 4.2(c) of this Plan.

2.27     Unforeseen Emergency

         "Unforeseen Emergency" means a severe financial hardship to the
Participant resulting from a sudden and unexpected illness or accident of the
Participant or of a dependent (as defined in Section 152(a) of the Internal
Revenue Code) of the Participant, loss of the Participant's property due to
casualty, or other similar extraordinary and unforeseeable circumstances arising
as a result of events beyond the control of the Participant. The circumstances
that will constitute an unforeseeable emergency will depend upon the facts of
each case, but in any case, payment may not be made to the extent that such
hardship is or may be relieved:

               (a) Through reimbursement or compensation by insurance or
         otherwise,

               (b) By liquidation of the Participant's assets, to the extent the
         liquidation of such assets would not itself cause severe financial
         hardship, or

               (c) By cessation of deferrals under the Plan.

               ARTICLE III--PARTICIPATION AND DEFERRAL COMMITMENTS

3.1      Eligibility and Participation

               (a) Eligibility. Eligibility to participate in the Plan is
         limited to Board members and executives who are Vice Presidents,
         Directors, Director Equivalents, or as selected by the Administrative
         Committee. Executives must elect to defer the maximum permissible
         annual pretax deferral under the 401(k) Savings Plan before
         participating in this Plan.

               (b) Participation. Eligible employees and Board members may elect
         to participate in the Plan with respect to any Deferral Period by
         submitting a Participation Agreement to the Administrative Committee by
         December 31 of the calendar year immediately preceding the Deferral
         Period.

PAGE 4 - DEFERRED COMPENSATION PLAN
<PAGE>
               (c) Part-Year Participation. When an employee first becomes
         eligible to defer Compensation during a Deferral Period, a
         Participation Agreement must be submitted to the Administrative
         Committee no later than thirty (30) days following notification to the
         employee of eligibility to defer, and such Participation Agreement
         shall be effective only with regard to Compensation earned or payable
         following the submission of the Participation Agreement to the
         Administrative Committee.

3.2      Form of Deferral

         A Participant may elect Deferral Commitments in the Participation
Agreement as follows:

               (a) Salary Deferral Commitment. A Salary Deferral Commitment
         shall be related to the Salary payable by Employer to a Participant
         during the Deferral Period. The amount to be deferred shall be stated
         as a flat percentage or dollar amount.

               (b) Bonus Deferral Commitment. A Bonus Deferral Commitment shall
         be related to any Bonus payable to the Participant during the Deferral
         Period. The amount to be deferred shall be stated as a flat percentage
         or dollar amount.

               (c) Stock Option Deferral Commitment. To the extent permitted by
         the Committee, a Participant may elect to defer into his or her Stock
         subaccount all or a portion of his or her Option Gain, subject to such
         terms and conditions as the Committee may establish.

               (d) Director Fees Deferral Commitment. A Director Fees Commitment
         shall relate to the Director Fees payable by the Company to a
         Participant during the Deferral Period. The amount to be deferred shall
         be stated as a flat percentage or dollar amount.

3.3      Limitations on Deferral Commitments

         The following limitations shall apply to Deferral Commitments:

               (a) Minimum. The minimum Salary deferral amount shall be five
         thousand dollars ($5,000) per year and, for Director Fee deferrals, the
         amount shall be two thousand four hundred dollars ($2,400).

               (b) Maximum. The maximum deferral amount shall be ninety percent
         (90%) of Salary and one hundred percent (100%) of Bonus or Director
         Fees.

               (c) Changes in Minimum or Maximum. The Administrative Committee
         may change the minimum or maximum deferral amounts from time to time by
         giving written notice to all Participants. No such change may affect a
         Deferral Commitment made prior to the Administrative Committee's
         action.

3.4      Commitment Limited by Termination

         If a Participant terminates employment with Employer prior to the end
of the Deferral Period, the Deferral Period and the Deferral Commitment shall
end at the date of termination.

PAGE 5 - DEFERRED COMPENSATION PLAN
<PAGE>
3.5      Modification of Deferral Commitment

         Participants may change, suspend or resume their Deferral Commitments
in accordance with rules established by the Administrative Committee, provided
that the modification applies only to a Salary, Bonus, Director Fee or Stock
Option Deferral payment that is not yet payable.

                   ARTICLE IV--DEFERRED COMPENSATION ACCOUNTS

4.1      Accounts

         For record keeping purposes only, an Account shall be maintained for
each Participant. Separate subaccounts shall be maintained to the extent
necessary to properly reflect the Participant's election of Earnings Indices and
total vested or nonvested Account balances. The Account shall be a bookkeeping
device utilized for the sole purpose of determining the benefits payable under
the Plan and shall not constitute a separate fund of assets.

4.2      Elective Deferred Compensation

               (a) A Participant's Elective Deferred Compensation shall be
         credited to the Participant's Account at the same time the
         corresponding nondeferred portion of the Compensation becomes or would
         have become payable. Any withholding of taxes or other amounts with
         respect to deferred Compensation which is required by state, federal or
         local law shall be withheld from the Participant's nondeferred
         Compensation to the maximum extent possible with any excess reducing
         the amount to be credited to the Participant's Account.

               (b) As soon as practicable after Stock would have otherwise been
         issued to the Participant in connection with the exercise of an
         Eligible Stock Option, the Committee shall credit a Stock subaccount of
         the Participant's Account with shares of Phantom Stock with a value
         equivalent to the Option Gain which has been deferred by the
         Participant in accordance with the Participant's election; that is, the
         portion of the Participant's Option Gain that the Participant has
         elected to defer shall be credited to the Stock subaccount of the
         Participant's Account.

4.3      Matching Contribution

         If a Participant defers the maximum elective percentage into the
qualified 401(k) Savings Plan, the Employer shall credit a matching contribution
to the Participant's Account equal to any matching contribution which would have
been credited to the Participant's 401(k) Savings Plan but for the Participant's
participation in this Plan.

4.4      Pension Makeup

         The Employer shall restore an amount equal to any reduction in a
Participant's Qualified Pension Plan benefits resulting from deferrals under
this Plan to the extent that the Qualified Pension Plan benefits are not
restored by any other plan or agreement provided by the Employer.

PAGE 6 - DEFERRED COMPENSATION PLAN
<PAGE>
4.5      Allocation of Elective Deferred Compensation

               (a) At the time a Participant completes a Deferral Commitment for
         a Deferral Period, the Participant shall also select the Investment
         Index or Indices in which the Participant wishes to have the deferrals
         deemed invested. The Participant may select any combination of
         Investment Indices as long as at least five percent (5%), in whole
         percentages, is credited to each of the Investment Indices selected.

               (b) A Participant may change the amounts allocated to the
         Investment Indices on the first day of each calendar quarter, provided
         that the Participant submitted notice of the change at least ten (10)
         days before the first day of the calendar quarter. The change may apply
         to prospective deferrals only or may include current account balances.
         However, any amount allocated to the Participant's Stock subaccount
         from Salary, Bonus and Director Fee Deferrals or a Stock Option
         Deferral may not be reallocated.

               (c) Changes in Notice and Frequency. The Administrative Committee
         may change the notice requirement and frequency by which Participants
         can reallocate their accounts from time to time by giving written
         notice to all Participants.

4.6      Determination of Accounts

         Each Participant's Account as of each Determination Date shall consist
of the balance of the Participant's Account as of the immediately preceding
Determination Date, plus the Participant's Elective Deferred Compensation
credited during the period, plus earnings, minus the amount of any distributions
made since the immediately preceding Determination Date.

4.7      Vesting of Accounts

         Each Participant shall be one hundred percent (100%) vested at all
times in the Participant's Elective Deferred Compensation and any earnings
thereon. Any matching or makeup contributions under Sections 4.3 and 4.4 shall
vest pursuant to the vesting schedule of the underlying qualified plan.

4.8      Statement of Accounts

         The Administrative Committee shall give to each Participant a statement
setting forth the balances in the Participant's Account on a quarterly basis and
at such other times as may be determined by the Administrative Committee.

                            ARTICLE V--PLAN BENEFITS

5.1      Distributions Prior to Termination of Employment

         A Participant's Account may be distributed to the Participant prior to
termination of employment as follows:

               (a) Scheduled Early Withdrawals. A Participant may elect in a
         Participation Agreement to withdraw all or any portion of the amount
         deferred (and earnings thereon) pursuant to that Participation
         Agreement in from two (2) to five (5) substantially equal annual
         installments or a single lump sum commencing the first January 1 and on
         each subsequent January 1 follow

PAGE 7 - DEFERRED COMPENSATION PLAN
<PAGE>
         -ing the date specified in the election. Such date shall not be sooner
         than three (3) years after the date the Deferral Period commences.

               (b) Hardship Withdrawals. Upon a finding that a Participant has
         suffered an Unforeseen Emergency, the Administrative Committee may, in
         its sole discretion, make distributions from the Participant's Account.
         The amount of such a withdrawal shall be limited to the amount the
         Administrative Committee determines to be reasonably necessary to meet
         the Participant's needs resulting from the Unforeseen Emergency. If any
         payment is made due to Unforeseen Emergency, any existing Deferral
         Commitment shall be null and void and the Participant shall not be
         permitted to make any Deferral Commitment for twelve (12) months. Any
         hardship withdrawal distribution shall be payable in a single lump sum
         within thirty (30) days after the Administrative Committee approves
         such payment.

5.2      Distributions Following Termination of Service

               (a)    Retirement or Disability Benefit.

                      (i) Benefit Amount. If a Participant terminates service
               with Employer due to Retirement or Disability, Employer shall pay
               to the Participant a benefit equal to the balance in the
               Participant's Account.

                      (ii) Form of Benefit. Subject to Section 5.2(a)(iii),
               benefits under this Section 5.2(a) shall be paid in the form
               selected by the Participant in the Participation Agreement.
               Optional forms of payment include a lump-sum payment or
               substantially equal annual installments of the Account amortized
               over a period of up to fifteen (15) years. The initial payment
               shall be within sixty (60) days of termination and all subsequent
               payments, if any, shall be in January. As of each January 1, the
               amount to be distributed in installment payments for that year
               shall be determined by dividing the Participant's Account balance
               as of the preceding December 31 by the remainder of the
               installment periods.

                      (iii) Small Accounts. Notwithstanding Section 5.2(a)(ii),
               if a Participant's Account is less than fifty thousand dollars
               ($50,000) on the Retirement date, the Administrative Committee,
               in its sole discretion, may pay the benefit under Section 5.2(a)
               in a lump sum.

                      (iv) Change in Form of Payment. Notwithstanding the above,
               a Participant may elect to file a change of payment designation
               which shall supersede the prior form of payment designation in
               the Participation Agreement for any one (1) or more Deferral
               Periods. If the Participant's most recent change of payment
               designation has not been filed thirteen (13) calendar months
               prior to the year of termination, the prior election shall be
               used to determine the form of payment.

               (b)    Death Benefit.

                      (i) Preretirement. If a Participant terminates employment
               with Employer due to death, Employer shall pay to the
               Participant's Beneficiary a lump-sum benefit equal to the vested
               balance in the Participant's Account.

PAGE 8 - DEFERRED COMPENSATION PLAN
<PAGE>
                      (ii) Postretirement. If a Participant dies following the
               Participant's Retirement, Employer shall continue to pay any
               remaining benefit payments to the Participant's Beneficiary in
               the form previously elected by the Participant for Retirement
               benefits.

               (c) Termination Benefit. If a Participant terminates employment
         with Employer for any reason other than Retirement, Disability, or
         death, Employer shall pay to the Participant a lump-sum benefit equal
         to the balance in the Participant's Account.

               (d) All balances in a Participant's Stock subaccount shall be
         paid in Stock. All other Participant subaccounts shall be paid in cash.

5.3      Benefit Commencement

         Benefits shall commence as soon as practical after termination but in
no case more than sixty (60) days after termination.

5.4      Accelerated Distribution

         Notwithstanding any other provision of the Plan, at any time a
Participant shall be entitled to receive, upon written request to the
Administrative Committee, a lump-sum distribution equal to ninety percent (90%)
of the Account balance as of the Determination Date immediately preceding the
date on which the Administrative Committee receives the written request. The
remaining balance shall be forfeited by the Participant. The amount payable
under this section shall be paid in a lump sum within thirty (30) days following
the receipt of the notice by the Administrative Committee from the Participant.
Such Participant shall not be eligible to participate in the Plan for a period
of one (1) year from the date of distribution.

5.5      Deferred Payment of Benefit

         If part of a Participant's compensation is not deductible under IRC
Section 162(m), then RadiSys may require the Participant to defer payment of
benefits under this Article to avoid the limitation set forth in Section 162(m).
Any deferred benefits under this Section shall be distributed to the Participant
in the first calendar year such amounts would not exceed the limitation as set
out in IRC Section 162(m).

5.6      Withholding for Taxes

         To the extent required by the law in effect at the time payments are
made, Employer shall withhold from payments made hereunder any taxes required to
be withheld by the federal or any state or local government, including any
amounts which the Employer determines are reasonably necessary to pay any
generation-skipping transfer tax which is or may become due. A beneficiary,
however, may elect not to have withholding of federal income tax pursuant to
Section 3405 of the Internal Revenue Code, or any successor provision thereto.

5.7      Valuation and Settlement

         The amount of a lump-sum payment and the initial installment payment
shall be based on the value of the Participant's Account on the Determination
Date immediately preceding the lump-sum payment or commencement of installment
payments.

PAGE 9 - DEFERRED COMPENSATION PLAN
<PAGE>
5.8      Payment to Guardian

         The Administrative Committee may direct payment to the duly appointed
guardian, conservator, or other similar legal representative of a Participant or
Beneficiary to whom payment is due. In the absence of such a legal
representative, the Administrative Committee may, in it sole and absolute
discretion, make payment to a person having the care and custody of a minor,
incompetent or person incapable of handling the disposition of property upon
proof satisfactory to the Administrative Committee of incompetency, minority, or
incapacity. Such distribution shall completely discharge the Administrative
Committee from all liability with respect to such benefit.

                       ARTICLE VI--BENEFICIARY DESIGNATION

6.1      Beneficiary Designation

         Each Participant shall have the right, at any time, to designate a
Beneficiary (both primary as well as contingent) to whom benefits under this
Plan shall be paid if a Participant dies prior to complete distribution to the
Participant of the benefits due under the Plan. Each Beneficiary designation
shall be in a written form prescribed by the Administrative Committee, and will
be effective only when filed with the Administrative Committee during the
Participant's lifetime.

6.2      Changing Beneficiary

         Any Beneficiary designation may be changed by a Participant without the
consent of the previously named Beneficiary by the filing of a new Beneficiary
designation with the Administrative Committee. The filing of a new Beneficiary
designation shall cancel all Beneficiary designations previously filed. If a
Participant's Compensation is community property, any Beneficiary Designation
shall be valid or effective only as permitted under applicable law.

6.3      No Beneficiary Designation

         In the absence of an effective Beneficiary Designation, or if all
designated Beneficiaries predecease the Participant or die prior to complete
distribution of the Participant's benefits, the Participant's designated
Beneficiary shall be deemed to be the Participant's estate.

6.4      Effect of Payment

         Payment to the Beneficiary shall completely discharge Employer's
obligations under this Plan.

                           ARTICLE VII--ADMINISTRATION

7.1      Committee; Duties

         The Plan shall be administered by an Administrative Committee
consisting of three (3) members as may be appointed from time to time by the
Board. The Administrative Committee shall have the authority to interpret and
enforce all appropriate rules and regulations for the administration of the Plan
and decide or resolve any and all questions, including determination of
eligibility and interpretations of the Plan, as may arise in such
administration. A majority vote of the Administrative Committee members in
office at the time of the vote shall control any decision. The required majority
action

PAGE 10 - DEFERRED COMPENSATION PLAN
<PAGE>
may be taken either by a vote at a meeting or without a meeting by a
signed memorandum. Meetings may be conducted by telephone conference call. The
Administrative Committee may, by majority action, delegate to one or more of its
members the authority to execute and deliver in the name of the Administrative
Committee all communications and documents which the Administrative Committee is
required or authorized to provide under this Plan. Any party shall accept and
rely upon any document executed in the name of the Administrative Committee.
Members of the Administrative Committee may be Participants under this Plan.

7.2      Agents

         The Administrative Committee may, from time to time, employ agents and
delegate to them such administrative duties as it sees fit, and may from time to
time consult with counsel who may be counsel to the Company.

7.3      Binding Effect of Decisions

         The decision or action of the Administrative Committee with respect to
any question arising out of or in connection with the administration,
interpretation and application of the Plan and the rules and regulations
promulgated hereunder shall be final, conclusive and binding upon all persons
having any interest in the Plan.

7.4      Indemnity of Committee

         The Company shall indemnify and hold harmless the members of the
Administrative Committee against any and all claims, loss, damage, expense or
liability arising from any action or failure to act with respect to this Plan on
account of such person's service on the Administrative Committee, except in the
case of gross negligence or willful misconduct.

                         ARTICLE VIII--CLAIMS PROCEDURE

8.1      Claim

         Any person claiming a benefit, requesting an interpretation or ruling
under the Plan, or requesting information under the Plan shall present the
request in writing to the Administrative Committee which shall respond in
writing within thirty (30) days.

8.2      Denial of Claim

         If the claim or request is denied, the written notice of denial shall
state:

               (a) The reason for denial, with specific reference to the Plan
         provisions on which the denial is based.

               (b) A description of any additional material or information
         required and an explanation of why it is necessary.

               (c) An explanation of the Plan's claim review procedure.

PAGE 11 - DEFERRED COMPENSATION PLAN
<PAGE>
8.3      Review of Claim

               (a) Any person whose claim or request is denied or who has not
         received a response within thirty (30) days may request review by
         notice given in writing to the Administrative Committee. The claim or
         request shall be reviewed by the Administrative Committee who may, but
         shall not be required to, grant the claimant a hearing. On review, the
         claimant may have representation, examine pertinent documents, and
         submit issues and comments in writing.

               (b) Such notice shall be made within the lesser of ninety (90)
         days of notice of denial or one hundred twenty (120) days of the
         original written claim.

8.4      Final Decision

         The decision on review shall normally be made within sixty (60) days.
If an extension of time is required for a hearing or other special
circumstances, the claimant shall be notified and the time limit shall be one
hundred twenty (120) days. The decision shall be in writing and shall state the
reason and the relevant plan provisions. All decisions on review shall be final
and bind all parties concerned.

                  ARTICLE IX--AMENDMENT AND TERMINATION OF PLAN

9.1      Amendment

               (a) The Company may amend the Plan at any time and from time to
         time by written instrument. Except as provided in (b) below, the power
         to amend may be executed only by the Board.

               (b) The Administrative Committee may adopt any technical,
         clerical, conforming or clarifying amendment or other change, provided:

                      (i) The Administrative Committee deems it necessary or
               advisable to:

                             (A) Correct any defect, supply any omission or
                      reconcile any inconsistency in order to carry out the
                      intent and purposes of the Plan;

                             (B) Maintain the Plan's status as a "top-hat" plan
                      for purposes of ERISA; or

                             (C) Facilitate the administration of the Plan;

                      (ii) The amendment or change does not, without the consent
               of the Board, materially increase the cost to the Employer of
               maintaining the Plan; and

                      (iii) Any amendment adopted by the Administrative
               Committee shall be in writing, signed by a member of the
               Committee and promptly reported to the Board.

               (c) To the extent permitted under subsection (e) below,
         amendments may have an immediate, prospective or retroactive effective
         date.

               (d) Amendments do not require the consent of any Participant or
         Beneficiary.

PAGE 12 - DEFERRED COMPENSATION PLAN
<PAGE>

               (e)    Amendments are subject to the following limitations:

                      (i) Preservation of Account Balance. No amendment shall
               reduce the amount credited or to be credited to any Account as of
               the date notice of the amendment is given to Participants.

                      (ii) Changes in Earnings Rate. If the Plan is amended so
               that the Earnings Index is not used to calculate the Rate of
               Return, the rate of earnings to be credited to the Participant's
               Account shall not be less than the monthly equivalent of the
               average nominal annual yield on three (3) month Treasury bills
               for the applicable Determination Period.

9.2      Employer's Right to Terminate

         The Board may at any time partially or completely terminate the Plan
if, in its judgment, the tax, accounting or other effects of the continuance of
the Plan, or potential payments thereunder would not be in the best interests of
Employer.

               (a) Partial Termination. The Board may partially terminate the
         Plan by instructing the Administrative Committee not to accept any
         additional Deferral Commitments. If such a partial termination occurs,
         the Plan shall continue to operate and be effective with regard to
         Deferral Commitments entered into prior to the effective date of such
         partial termination.

               (b) Complete Termination. The Board may completely terminate the
         Plan by instructing the Administrative Committee not to accept any
         additional Deferral Commitments, and by terminating all ongoing
         Deferral Commitments. If such a complete termination occurs, the Plan
         shall cease to operate and Employer shall pay out each Account. Payment
         shall be made in the form designated by the Participant at the time of
         deferral.

         Payments shall commence within sixty (60) days after the Board
terminates the Plan and earnings shall continue to be credited on the unpaid
Account balance.

                            ARTICLE X--MISCELLANEOUS

10.1     Unfunded Plan

         This plan is an unfunded plan maintained primarily to provide deferred
compensation benefits for a select group of "management or highly-compensated
employees" within the meaning of Sections 201, 301 and 401 of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), and therefore is
exempt from the provisions of Parts 2, 3 and 4 of Title I of ERISA.

10.2     Unsecured General Creditor

         Participants and Beneficiaries shall be unsecured general creditors,
with no secured or preferential right to any assets of Employer or any other
party for payment of benefits under this Plan. Any life insurance policies,
annuity contracts or other property purchased by Employer in connection with
this Plan shall remain its general, unpledged and unrestricted assets.
Employer's obligation under the Plan shall be an unfunded and unsecured promise
to pay money in the future.

PAGE 13 - DEFERRED COMPENSATION PLAN
<PAGE>
10.3     Trust Fund

         At its discretion, the Employer may establish one (1) or more trusts,
with such trustees as the Employer may approve, for the purpose of providing for
the payment of benefits owed under the Plan. Although such a trust shall be
irrevocable, its assets shall be held for payment of all the Company's general
creditors in the event of insolvency or bankruptcy. To the extent any benefits
provided under the Plan are paid from any such trust, Employer shall have no
further obligation to pay them. If not paid from the trust, such benefits shall
remain the obligation of Employer.

10.4     Nonassignability

         Neither a Participant nor any other person shall have any right to
commute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise
encumber, transfer, hypothecate or convey in advance of actual receipt the
amounts, if any, payable hereunder, or any part thereof, which are, and all
rights to which are, expressly declared to be unassignable and nontransferable.
No part of the amounts payable shall, prior to actual payment, be subject to
seizure or sequestration for the payment of any debts, judgments, alimony or
separate maintenance owed by a Participant or any other person, nor be
transferable by operation of law in the event of a Participant's or any other
person's bankruptcy or insolvency.

10.5     Not a Contract of Employment

         This Plan shall not constitute a contract of employment between
Employer and the Participant. Nothing in this Plan shall give a Participant the
right to be retained in the service of Employer or to interfere with the right
of Employer to discipline or discharge a Participant at any time.

10.6     Protective Provisions

         A Participant will cooperate with Employer by furnishing any and all
information requested by Employer in order to facilitate the payment of benefits
hereunder, and by taking such physical examinations as Employer may deem
necessary and taking such other action as may be requested by Employer.

10.7     Governing Law

         The provisions of this Plan shall be construed and interpreted
according to the laws of the State of Oregon, except as preempted by federal
law.

10.8     Validity

         In case any provision of this Plan shall be held illegal or invalid for
any reason, said illegality or invalidity shall not affect the remaining parts
hereof, but this Plan shall be construed and enforced as if such illegal and
invalid provision had never been inserted herein.

PAGE 14 - DEFERRED COMPENSATION PLAN
<PAGE>
10.9     Notice

         Any notice required or permitted under the Plan shall be sufficient if
in writing and hand delivered or sent by registered or certified mail. Such
notice shall be deemed as given as of the date of delivery or, if delivery is
made by mail, as of the date shown on the postmark on the receipt for
registration or certification. Mailed notice to the Administrative Committee
shall be directed to the Company's address. Mailed notice to a Participant or
Beneficiary shall be directed to the individual's last known address in
Employer's records.

10.10    Successors

         The provisions of this Plan shall bind and inure to the benefit of
Employer and its successors and assigns. The term successors as used herein
shall include any corporate or other business entity which shall, whether by
merger, consolidation, purchase or otherwise acquire all or substantially all of
the business and assets of Employer, and successors of any such corporation or
other business entity.

                                            RADISYS CORPORATION

                                       By:
                                            -----------------------------------
                                            Its:

                                     Dated:
                                            -----------------------------------

PAGE 15 - DEFERRED COMPENSATION PLAN

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