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EXHIBIT 4.4
COHU, INC.
1998 STOCK OPTION PLAN
(as amended)
The Cohu, Inc. 1998 Stock Option Plan, is hereby adopted for the benefit
of officers, directors, service providers and key employees of Cohu, Inc., a
Delaware corporation and its parent or subsidiaries, if any.
1. Purpose. The purpose of the Plan is to advance the growth and prosperity of
the Corporation and its stockholders by providing to officers, directors,
service providers and key employees of the Corporation an incentive to serve the
Corporation. By encouraging and enabling such persons to become owners of
capital stock of the Corporation, the Corporation seeks to attract and retain
persons of training, experience and ability and to furnish additional incentives
to those persons upon whose judgment, initiative and efforts the successful
conduct of the Corporation's business depends. It is the intention of the
Corporation that this objective will be accomplished through the granting of
incentive stock options and nonqualified stock options to certain officers,
directors, service providers and key employees of the Corporation.
2. Definitions. As used herein, the following terms shall have the corresponding
meanings.
2.1. "Committee" shall mean the Cohu, Inc. Compensation Committee,
appointed by the Board of Directors of the Corporation. If no such Committee is
appointed, the entire Board of Directors of the Corporation shall be deemed to
constitute the Committee. The Board of Directors of the Corporation may also
appoint an Employee Option Committee, consisting of one or more directors, which
is authorized to grant options to employees (other than executive officers of
the Corporation) subject to such limitations as may be established by the Board
of Directors from time to time. If an Employee Option Committee is established,
references to the term "Committee" shall also include the Employee Option
Committee, as the case may be.
2.2. "Corporation" shall mean Cohu, Inc. and any successor corporation
thereto and/or its parent or subsidiaries, if any, as the context requires. The
terms "parent" and "subsidiary" shall mean any existing or future corporation
which would be a parent or subsidiary corporation of the Corporation, as those
terms are defined in Section 424 of the Internal Revenue Code of 1986, as
amended, and the Treasury Regulations promulgated thereunder (the "Code").
2.3. "Date of Grant" shall mean the date of grant of a Stock Option
granted hereunder as set forth in the Stock Option Agreement. In the event of a
grant conditioned, among other things, upon stockholder ratification of this
Plan, the date of such conditional grant shall be the Date of Grant for purposes
of this Plan.
2.4. "Employee" shall mean any common-law employee of the Corporation.
The determination of whether or not a person is an Employee of the Corporation
with respect to the grant or exercise of an Incentive Stock Option shall be made
in accordance with the rule of Income Tax Regulation Section 1.421-7(h) (or
successor regulation).
2.5. "Fair Market Value" shall mean, with respect to the exercise of an
option under the Plan, (a) if the Common Stock is listed on a national
securities exchange or the NASDAQ National Market System, the closing price of
the Common Stock for the business day
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immediately preceding the day for which the determination is being made, or (b)
if the Common Stock is not then listed on an exchange, the average of the
closing bid and asked prices per share for the Common Stock in the
over-the-counter market as quoted on NASDAQ for the business day immediately
preceding the day for which the determination is being made, or (c) if the
Common Stock is not then listed on any exchange or quoted on NASDAQ, an amount
determined in good faith by the Board of Directors to be the fair market value
of the Common Stock, after consideration of all relevant factors.
2.6. "Holder" shall mean any person entitled to exercise a Stock Option
pursuant to the terms of the Plan.
2.7. "Incentive Stock Option" shall mean a Stock Option which is
intended to qualify for tax treatment as an incentive stock option under Section
422 of the Code. An Incentive Stock Option may only be granted to an Employee.
2.8. "Nonqualified Stock Option" shall mean a Stock Option which is not
intended to qualify for tax treatment as an Incentive Stock Option under Section
422 of the Code.
2.9. "Plan" shall mean the Cohu, Inc. 1998 Stock Option Plan, as herein
adopted and as may be amended from time to time.
2.10. "Purchase Price" shall mean the price paid for Shares upon the
exercise of a Stock Option granted hereunder.
2.11. "Shares" shall mean those shares of Common Stock of the
Corporation which are available for issuance pursuant to the terms of the Plan.
2.12. "Stock Option" shall mean a stock option giving a Holder the right
to purchase Shares. A Stock Option may be an Incentive Stock Option or a
Nonqualified Stock Option.
3. Term. All Stock Options shall be granted, if at all, within ten (10) years
from the earlier of the date the Plan is adopted by the Board of Directors of
the Corporation and the date the Plan is duly approved by the stockholders of
the Corporation.
4. Eligibility. Stock Options may be granted only to employees (including
officers and directors who are also employees) of the Corporation or its parent
or subsidiaries or to individuals who are rendering services as directors,
consultants, advisors, or other independent contractors to the Corporation or
its parent or subsidiaries. For purposes of the foregoing sentence, "employees"
shall include prospective employees to whom Stock Options are granted in
connection with written offers of employment with the Corporation or its parent
or subsidiaries and "consultants" or "advisors" shall include prospective
consultants or advisors to whom Stock Options are granted in connection with
written consulting or advising offers with the Corporation or its parent or
subsidiaries. The Committee shall, in the Committee's sole discretion, determine
which persons shall be granted Stock Options. An individual who is rendering
services as a director (and who is not an employee), consultant, advisor, or
other independent contractor or who is a prospective employee, consultant or
advisor shall be eligible to be granted only a Nonqualified Stock Option. A
Holder may, if otherwise eligible, be granted
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more than one Stock Option. In no event may a Stock Option be granted to an
individual where such grant, together with all other Stock Options granted
during that calendar year, would entitle the holder of the Stock Option to
purchase more than 200,000 Shares.
5. Shares of Stock Subject to the Plan. Subject to the adjustments set forth in
the Plan, the Shares which may be issued pursuant to the Plan shall not exceed
in the aggregate 1,850,000 shares of the Corporation's Common Stock, $1.00 par
value. Such Shares shall be authorized and unissued shares. Any Shares subject
to a Stock Option granted under this Plan which for any reason expires or is
terminated unexercised and/or Shares subject to repurchase which are repurchased
by the Corporation shall again be subject to and be available for issuance
pursuant to the terms of this Plan. Notwithstanding the foregoing, any such
shares shall be made subject to a new Stock Option only if the grant of such new
Stock Option and the issuance of such shares pursuant to such new Stock Option
would not cause the Plan or any Stock Option granted under the Plan to
contravene Rule 16b-3, as promulgated under the Securities Exchange Act of 1934,
as amended (the "Exchange Act") and as amended from time to time or any
successor rule or regulation ("Rule 16b-3").
6. Administration of the Plan. Within the limitations described herein, the
Committee shall administer the Plan, select the officers, directors, service
providers and Employees of the Corporation to whom Stock Options shall be
granted, determine the number of Shares to be subject to each grant, determine
the method of payment upon exercise of each Stock Option, determine all other
terms of Stock Options granted hereunder and interpret, construe and implement
the provisions of the Plan. By the adoption of this Plan, the Board of Directors
of the Corporation is delegating to the Committee plenary authority to
administer the Plan. All questions of interpretation of the Plan or any Stock
Option granted under the Plan shall be determined by the Committee, and such
decisions shall be binding upon all persons having an interest in the Plan
and/or any Stock Option.
With respect to the participation of eligible participants who are
subject to Section 16(b) of the Exchange Act, the Plan shall be administered in
compliance with the requirements of Rule 16b-3. In the case of officers or other
Employees or persons who are not directors of the Corporation, grants may be
approved by the Committee or by a majority of the members of the Board of
Directors. Notwithstanding the above, the Committee, in its sole discretion, may
delegate its powers hereunder to grant Stock Options to persons who are not
subject to Section 16(b) of the Exchange Act, to certain officers of the
Corporation. Any such delegation shall be in writing and shall clearly describe
any limitations to which such delegation of authority is subject.
In the event the Corporation is a "publicly held corporation" as defined
in paragraph (2) of section 162(m) of the Code, as amended by the Revenue
Reconciliation Act of 1993 (P.L. 103-66), and the regulations promulgated
thereunder ("Section 162(m)"), the Corporation shall establish a committee of
outside directors meeting the requirements of Section 162(m) to approve the
grant of Stock Options which might reasonably be anticipated to result in the
payment of employee remuneration that would otherwise exceed the limit on
employee remuneration deductible for income tax purposes pursuant to Section
162(m).
7. Indemnification. In addition to such other rights of indemnification as they
may have as directors or as members of the Committee, members of the Board of
Directors of the Corporation, members of the Committee and any officers to whom
authority to act for the
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Committee is delegated shall be indemnified by the Corporation against all
reasonable expenses, including attorneys' fees, actually and necessarily
incurred in connection with the defense of any action, suit or proceeding, or in
connection with any appeal therein, to which they or any of them may be a party
by reason of any action taken or failure to act under or in connection with the
Plan, or any right granted thereunder, and against all amounts paid by them in
settlement thereof (provided such settlement is approved by independent legal
counsel selected by the Corporation) or paid by them in satisfaction of a
judgment in any such action, suit or proceeding, except in relation to matters
as to which it shall be adjudged in such action, suit or proceeding that such
person is liable for gross negligence or misconduct in duties; provided,
however, that within sixty (60) days after the institution of such action, suit
or proceeding, such person shall offer to the Corporation, in writing, the
opportunity at its own expense to handle and defend the same.
8. Stock Options. The granting of a Stock Option shall be evidenced by a stock
option agreement ("Stock Option Agreement"), in such form and not inconsistent
with this Plan, as the Committee shall approve from time to time. The Committee
shall determine for each Stock Option (which need not be identical), the
exercise price of the Stock Option, the timing and terms of exercisability and
vesting of the Stock Option, the time of expiration of the Stock Option, the
effect of the Holder's termination of employment or service, whether the Stock
Option is to be treated as an Incentive Stock Option or as a Nonqualified Stock
Option, the method for satisfaction of any tax withholding obligation arising in
connection with the Stock Option, including by the withholding or delivery of
shares of Common Stock, and all other terms and conditions of the Stock Option
not inconsistent with the Plan. Each Stock Option Agreement shall contain in
substance the following terms and conditions:
8.1. Price. The Stock Option Agreement shall specify the Purchase Price
per Share. The Purchase Price per Share deliverable upon the exercise of an
Incentive Stock Option shall not be less than the Fair Market Value of a Share
on the Date of Grant of the Incentive Stock Option. In the case of a grant of an
Incentive Stock Option to an Employee who, at the time the Incentive Stock
Option is granted, owns stock possessing more than ten percent (10%) of the
total combined voting power of all classes of stock of the Corporation, or of
any parent or subsidiary corporation, the Purchase Price per Share deliverable
upon the exercise of the Incentive Stock Option shall not be less than one
hundred ten percent (110%) of the Fair Market Value of such Share on the Date of
Grant of the Incentive Stock Option. Notwithstanding the foregoing, an Incentive
Stock Option may be granted with a Purchase Price lower than the minimum price
set forth above if such Stock Option is granted pursuant to an assumption or
substitution for another Stock Option in a manner qualifying with the provisions
of Section 424(a) of the Code. The Purchase Price per Share deliverable upon
exercise of a Nonqualified Stock Option shall be not less than the Fair Market
Value of a Share on the Date of Grant of the Nonqualified Stock Option except
that the purchase price for no more than 5% of the shares under the plan can be
determined by the Committee in its sole discretion.
8.2. Number of Shares. The Stock Option Agreement shall specify the
number of Shares subject to the Stock Option.
8.3. Exercisability of Stock Options. A Stock Option may be exercisable,
in part or in full, at any time and from time to time during an exercise period,
and subject to such
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performance criteria, conditions and restrictions as determined by the Committee
on a case-by-case basis for each Stock Option, and as set forth in the Stock
Option Agreement; provided, however, that a Stock Option granted to a
prospective employee, prospective consultant or prospective advisor shall not be
exercisable prior to the date on which the person commences employment or
service. In no event shall the exercise period of any Incentive Stock Option
granted hereunder exceed ten (10) years from the Date of Grant of such Option;
provided, however, that in the case of a grant of an Incentive Stock Option to
an Employee, who, at the time the Incentive Stock Option is granted, owns stock
possessing more than ten percent (10%) of the total combined voting stock of the
Corporation or of any parent or subsidiary corporation, such Incentive Stock
Option shall not be exercisable after the expiration of five (5) years from its
Date of Grant.
In the event that the aggregate Fair Market Value (determined as of the
Date of Grant) of stock with respect to which Incentive Stock Options are
exercisable for the first time by an Employee during any calendar year (under
all stock option plans of the Corporation and its parent or subsidiary
corporations) exceeds $100,000, the excess shall be treated as a Nonqualified
Stock Option. This paragraph shall be applied by taking Incentive Stock Options
into account in the order in which they were granted.
8.4. Payment of Purchase Price.
(a) Forms of Payment Authorized. Payment of the Purchase Price
for the number of Shares being purchased pursuant to any Stock Option shall be
made (1) in cash, by check, or cash equivalent, (2) by tender to the Corporation
of shares of the Corporation's Common Stock owned by the Holder having a value,
as determined by the Committee (but without regard to any restrictions on
transferability applicable to such stock by reason of federal or state
securities laws or agreements with an underwriter for the Corporation), not less
than the option price, (3) if specifically permitted by the Committee and set
forth in the Holder's Stock Option Agreement, by the Holder's recourse
promissory note, (4) by the assignment of the proceeds of a sale of some or all
of the shares being acquired upon the exercise of a Stock Option or the proceeds
of a loan with respect to the shares acquired upon the exercise of a Stock
Option (including, without limitation, through an exercise complying with the
provisions of Regulation T as promulgated from time to time by the Board of
Governors of the Federal Reserve System), or (5) by any combination thereof. The
Committee may at any time or from time to time, grant Stock Options which do not
permit all of the foregoing forms of consideration to be used in payment of the
option price and/or which otherwise restrict one (1) or more forms of
consideration.
(b) Tender of Corporation Stock. Notwithstanding the foregoing, a
Stock Option may not be exercised by tender to the Corporation of shares of the
Corporation's Common Stock to the extent such tender of stock would constitute a
violation of the provisions of any law, regulation and/or agreement restricting
the redemption of the Corporation's stock or result in the recognition of
compensation expense to the Corporation under generally accepted accounting
principles. Unless otherwise provided by the Committee, a Stock Option may not
be exercised by tender to the Corporation of shares of the Corporation's Common
Stock unless such
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shares of the Corporation's common stock either have been owned by the Holder
for more than six (6) months or were not acquired, directly or indirectly, from
the Corporation.
(c) Promissory Notes. No promissory note shall be permitted if an
exercise using a promissory note would be a violation of any law. Any permitted
promissory note shall be due and payable not more than five (5) years after the
Stock Option is exercised, and interest shall be payable at least annually and
be at least equal to the minimum interest rate necessary to avoid imputed
interest pursuant to all applicable sections of the Code. The Committee shall
have the authority to permit or require the Holder to secure any promissory note
used to exercise a Stock Option with the Shares acquired on exercise of the
Stock Option and/or with other collateral acceptable to the Corporation. Unless
otherwise provided by the Committee, in the event the Corporation at any time
becomes subject to the regulations promulgated by the Board of Governors of the
Federal Reserve System or any other governmental entity affecting the extension
of credit in connection with the Corporation's securities, any promissory note
shall comply with such applicable regulations, and the Holder shall pay the
unpaid principal and accrued interest, if any, to the extent necessary to comply
with such applicable regulations.
(d) Assignment of Proceeds of Sale. The Corporation reserves, at
any and all times, the right, in the Corporation's sole and absolute discretion,
to establish, decline to approve and/or terminate any program and/or procedures
for the exercise of Stock Options by means of an assignment of the proceeds of a
sale of some or all of the Shares to be acquired upon such exercise, or the
assignment of the proceeds of a loan with respect to the Shares to be acquired
upon such exercise.
9. Recapitalization. Appropriate adjustments shall be made in the number and
class of Shares subject to the Plan, to the annual limit on Stock Options that
may be granted to any individual, and to any outstanding Stock Options and in
the Purchase Price per Share of any outstanding Stock Options in the event of a
stock dividend, stock split, reverse stock split, combination, reclassification,
or like change in the capital structure of the Corporation.
10. Reorganization. A "Reorganization" shall be deemed to have occurred in the
event any of the following occurs with respect to the Corporation: (a) the
direct or indirect sale or exchange by the stockholders of the Corporation of
all or substantially all of the stock of the Corporation where the stockholders
of the Corporation before such sale or exchange do not retain, directly or
indirectly, at least a majority of the beneficial interest in the voting stock
of the Corporation after such sale or exchange; (b) a merger or consolidation in
which the Corporation is not the surviving corporation; (c) a merger or
consolidation in which the Corporation is the surviving corporation where the
stockholders of the Corporation before such merger or consolidation do not
retain, directly or indirectly, at least a majority of the beneficial interest
in the voting stock of the Corporation after such merger or consolidation; (d)
the sale, exchange, or transfer of all or substantially all of the assets of the
Corporation (other than a sale, exchange, or transfer to one (1) or more
subsidiary corporations (as defined in paragraph 2.2 above) of the Corporation);
or (e) a liquidation or dissolution of the Corporation.
In the event of a Reorganization, the surviving, continuing, successor,
or purchasing corporation or parent corporation thereof, as the case may be (the
"Acquiring Corporation"), may assume the Corporation's rights and obligations
under outstanding Stock Options or substitute
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options for the Acquiring Corporation's stock for such outstanding Stock
Options. In the event the Acquiring Corporation elects not to assume or
substitute for such outstanding Stock Options in connection with the
Reorganization, any unexercisable and/or unvested portion of the outstanding
Stock Options shall be immediately exercisable and vested as of the date thirty
(30) days prior to the date of the Reorganization. The exercise and/or vesting
of any Stock Option that was permissible solely by reason of this paragraph 10
shall be conditioned upon the consummation of the Reorganization. Any Stock
Options which are neither assumed or substituted for by the Acquiring
Corporation in connection with the Reorganization nor exercised as of the date
of the Reorganization shall terminate and cease to be outstanding effective as
of the date of the Reorganization.
11. Investment Representations. The Committee may require a Holder to whom a
Stock Option is granted, as a condition of receipt and/or exercise of the Stock
Option, to give written assurances in substance and form satisfactory to the
Committee to the effect that the Holder is acquiring the Stock Option granted
hereunder or the Shares issuable upon exercise thereof for the Holder's own
account and not with any present intention of selling or otherwise distributing
the same, and to such other effects as the Committee deems necessary or
appropriate in order to comply with federal and applicable state securities
laws. Appropriate legends may be placed on any Shares issued under the Plan
evidencing such representations.
12. Compliance With Securities Laws. Each Stock Option granted hereunder shall
be subject to the requirement that, if at any time the Committee, in its
discretion, shall determine that the listing, registration or qualification of
the Shares subject to such Stock Option upon any securities exchange or under
any state or federal law, or the consent or approval of any government or
regulatory body, is necessary or desirable as a condition of, or in connection
with, the granting of such Stock Option granted hereunder or the issue of
Shares, such Stock Option may not be granted or exercised in whole or in part
unless such listing, registration, qualification, consent or approval shall have
been effected or obtained free of any conditions not acceptable to the
Committee. Nothing in the Plan or related Stock Option Agreements shall be
deemed to require the Corporation to apply for or obtain such listing,
registration or qualification.
13. Rights as a Stockholder. A Holder shall have no rights as a stockholder of
the Corporation with respect to any Shares covered by a Stock Option granted
hereunder until said Holder tenders an effective and unconditional notice of
exercise of the Stock Option to the Corporation, complies with all other terms
and conditions of exercise and, if applicable, pays the Purchase Price. Except
as otherwise expressly provided in the Plan, no adjustment shall be made for
dividends or other rights for which the record date is prior to the date on
which the Holder tenders notice of exercise, complies with all other terms and
conditions of exercise, and pays any applicable Purchase Price. The Committee
shall use its best efforts to secure prompt issuance of stock certificates
following full performance of exercise by any Holder.
14. Non-Assignability of Options. No Incentive Stock Option shall be assignable
or transferable by the Holder except by will or by the laws of descent and
distribution. During the life of the Holder, an Incentive Stock Option shall be
exercisable only by the Holder or by the duly appointed legal representative of
an incompetent Holder. A Nonqualified Stock Option may
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be assignable or transferable to the extent set forth in the Stock Option
Agreement governing such Stock Option.
15. Withholding Taxes. The Corporation shall have the right to deduct from
amounts otherwise due Holder under a Stock Option granted hereunder or from any
wages or other compensation to be paid to Holder any sums required by federal,
state and local tax law to be withheld with respect to the exercise of any Stock
Option or with respect to the disposition of Shares issued hereunder or, in the
alternative, to require the Holder to pay such sums to the Corporation. The
Corporation may also retain any certificate representing Shares issuable upon
exercise of Stock Options until all such tax withholding requirements are
satisfied. The Corporation may, in its discretion and upon request by Holder,
withhold from the Shares to be issued to Holder under this Plan a number of
Shares (based on the Fair Market Value of the Shares on the date of exercise of
the Stock Option) necessary to satisfy any tax withholding requirements.
16. Termination or Amendment of the Plan and Stock Options. The Committee may
terminate or amend the Plan or any Stock Option at any time; except that,
without stockholder approval, the Committee may not increase the number of
Shares which may be issued under the Plan (except by operation of paragraph 9)
or modify the requirements as to eligibility to receive Incentive Stock Options
under the Plan. In addition, the approval of the Corporation's stockholders
shall be sought for any amendment to the Plan or a Stock Option for which the
Committee deems stockholder approval necessary in order to comply with Rule
16b-3. In any event, no amendment may adversely affect any then outstanding
Stock Option or any unexercised portion thereof, without the consent of the
Holder, unless such amendment is required to enable a Stock Option designated as
an Incentive Stock Option to qualify as an Incentive Stock Option.
17. No Special Employment Rights. Nothing contained in this Plan or in any Stock
Option granted hereunder shall confer upon any Holder any right with respect to
continued employment or engagement with the Corporation or interfere in any way
with the right of the Corporation, subject to the terms of any separate
agreement with the Holder to the contrary, at any time to terminate such
employment or engagement or to increase or decrease the compensation or other
benefits paid to the Holder.
18. Governing Law. This Plan and any Stock Options issued hereunder shall be
governed by and construed in accordance with the laws of the State of
California.
IN WITNESS WHEREOF, the undersigned Secretary of the Corporation
certifies that the foregoing Cohu, Inc. 1998 Stock Option Plan was duly adopted
by the Board of Directors of the Corporation on January 29, 1998 and amended on
January 26, 2000.
/s/ John H. Allen
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John H. Allen
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