<PAGE>
As filed with the Securities and Exchange Commission on May 30, 1996
Registration No. 333-
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-----------------------
DATAMETRICS CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 95-3545701
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
-----------------------
21135 ERWIN STREET
WOODLAND HILLS, CALIFORNIA 91367
(818) 598-6200
(Address of Principal Executive Offices, Zip Code)
1995 STOCK OPTION PLAN
EMPLOYEE QUALIFIED STOCK PURCHASE PLAN
(Full title of the plans)
-----------------------
SIDNEY E. WING Copies to:
PRESIDENT AND CHIEF EXECUTIVE OFFICER BARRY M. CLARKSON, ESQ.
21135 ERWIN STREET LATHAM & WATKINS
WOODLAND HILLS, CALIFORNIA 91367 701 "B" STREET
(818) 598-6200 SUITE 2100
(Name, address including zip code, SAN DIEGO, CALIFORNIA 92101
and telephone number, including (619) 236-1234
area code, of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed
Proposed Maximum
Amount Maximum Aggregate Amount of
Title of Each Class of being Offering Offering Registration
Securities to be Registered Registered(1) Price Per Share(2) Price(1) Fee
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $0.01 par value... 900,000 $7.31 $6,580,515 $2,270
===================================================================================================
</TABLE>
(1) The Company's 1995 Stock Option Plan (the "1995 Plan") authorizes the
issuance of 700,000 shares of the Company's Common Stock pursuant to
options granted or to be granted under the 1995 Plan, of which 437,000
shares are subject to presently outstanding options. The Company's
Employee Qualified Stock Purchase Plan ("EQSPP") authorizes the issuance of
200,000 shares of the Company's Common Stock.
(2) For purposes of computing the registration fee only. Pursuant to Rule
457(h), the Proposed Maximum Offering Price Per Share is based upon the
exercise price per share of $7.875 for outstanding options for 437,000
shares under the 1995 Plan and (2) for the remaining 463,000 shares under
the 1995 Plan and the EQSPP, upon the average ($6.78) of the high and low
prices for the Company's Common Stock on the American Stock Exchange on May
22, 1996.
Page 1 of 49
Exhibit Index on Page 7
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
ITEM 1. PLAN INFORMATION
Not required to be filed with this Registration Statement.
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION
Not required to be filed with this Registration Statement.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents are hereby incorporated by reference in this
Registration Statement:
(a) The Company's Annual Report on Form 10-K for the fiscal year
ended October 29, 1995, filed with the Commission on January 29, 1996;
(b)(1) The Company's Quarterly Report on Form 10-Q for the
quarter ended January 28, 1996, filed with the Commission on February 29,
1996.
(b)(2) The Company's Quarterly Report on Form 10-Q for the
quarter ended April 28, 1996, filed with the Commission on May 28, 1996.
(b)(3) All other reports filed pursuant to Section 13(a) or 15(d)
of the Exchange Act since the end of the Company's fiscal year ended
October 29, 1995; and
(c) The description of the Company's Common Stock contained in
the Company's Registration Statement on Form 8-A under the Securities
Exchange Act of 1934, filed with the Commission on or about July 12, 1988.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934 after the date this Registration
Statement is filed with the Securities and Exchange Commission and prior to the
filing of a post-effective amendment which indicates that all securities offered
have been sold or which deregisters all securities then remaining unsold shall
be deemed to be incorporated by reference in this Registration Statement and to
be a part of it from the respective dates of filing of such documents. Any
statement contained in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
this
1
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Registration Statement to the extent that a statement contained herein or
in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
As authorized by the Delaware General Corporation Law, the Company's Restated
Certificate of Incorporation and the Company's Restated By-Laws provide that no
director of the Company will be personally liable to the Company or its
stockholders for monetary damages for breach of fiduciary duty as a director
except for liability (i) for any breach of the director's duty of loyalty to the
Company or its stockholders, (ii) for acts or omissions not in good faith which
involve intentional misconduct or a knowing violation of law, (iii) in respect
of certain unlawful dividend payments or stock redemptions or repurchases and
(iv) for any transaction for which the director derives an improper personal
benefit. The effect of this provision is to eliminate the rights of the Company
and its stockholders (through stockholders' derivative suits on behalf of the
Company) to recover monetary damages against a director for breach of the
fiduciary duty of care as a director (including breaches resulting from
negligent or grossly negligent behavior) except in the situations described in
clauses (i) through (iv) above. This provision does not limit or eliminate the
rights of the Company or any stockholders to seek non-monetary relief such as an
injunction or rescission in the event of a breach of a director's duty of care.
In addition, the Company has purchased directors and officers' liability
insurance covering all directors and officers with respect to actions and
omissions occurring on or after the date of issuance of such policy.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
4.1 1995 Stock Option Plan of Datametrics Corporation
4.2 Employee Qualified Stock Purchase Plan of Datametrics Corporation
4.3 Form of Incentive Stock Option Agreement
2
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4.4 Form of Non-Qualified Stock Option Agreement
5.1 Opinion and consent of Latham & Watkins
23.1 Consent of Latham & Watkins (included in Exhibit 5.1)
23.2 Consent of Ernst & Young, LLP
24.1 Power of Attorney (included on signature page to this Registration
Statement)
ITEM 9. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of this registration statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
provided, however, that the undertakings set forth in paragraphs (a)(1)(i) and
(a)(1)(ii) above do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic reports
filed with or furnished to the Commission by the registrant pursuant to Section
13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated
by reference in this registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in this
3
<PAGE>
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the city of Woodland Hills, State of California, on May 21, 1996.
DATAMETRICS CORPORATION
By: /s/ Sidney E. Wing
----------------------------------------------
Sidney E. Wing
President and Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below authorizes Sidney E. Wing and John
J. Van Buren, and either of them, with full power of substitution and
resubstitution, his true and lawful attorneys-in-fact, for him in any and all
capacities, to sign any amendments (including post-effective amendments) to this
Registration Statement and to file the same, with exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange Commission.
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
Signature Title Date
--------- ----- ----
/s/ Garland S. White
- ----------------------------- Chairman of the Board May 21, 1996
Garland S. White
/s/ Sidney E. Wing
- ----------------------------- President and Chief May 21, 1996
Sidney E. Wing Executive Officer;
Director (Principal
Executive Officer)
/s/ John J. Van Buren
- ----------------------------- Senior Vice President, May 21, 1996
John J. Van Buren Chief Financial Officer
and Treasurer (Principal
Financial and Accounting
Officer)
/s/ Dann V. Angeloff Director May 21, 1996
- -----------------------------
Dann V. Angeloff
/s/ Richard A. Foster Director May 21, 1996
- -----------------------------
Richard A. Foster
/s/ David A. Hahn Director May 21, 1996
- -----------------------------
David A. Hahn
/s/ Richard W. Muchmore Director May 21, 1996
- -----------------------------
Richard W. Muchmore
Director May __, 1996
- -----------------------------
Kenneth K. Zeiger
5
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EXHIBIT INDEX
EXHIBIT PAGE
- ------- ----
4.1 1995 Stock Option Plan of Datametrics Corporation 8
4.2 Datametrics Corporation Employee Qualified Stock
Purchase Plan 18
4.3 Form of Incentive Stock Option Agreement 27
4.4 Form of Non-Qualified Stock Option Agreement 38
5.1 Opinion and consent of Latham & Watkins 48
23.1 Consent of Latham & Watkins (included in Exhibit
5.1) --
23.2 Consent of Ernst & Young, LLP 49
24.1 Power of Attorney (included on signature page to
this Registration Statement) --
<PAGE>
EXHIBIT 4.1
THE 1995 STOCK OPTION PLAN
OF
DATAMETRICS CORPORATION
Datametrics Corporation, a corporation organized under the laws of the State
of Delaware, hereby adopts The 1995 Stock Option Plan of Datametrics
Corporation. The purposes of this Plan are as follows:
(1) To further the growth, development and financial success of the
Company by providing additional incentives to certain key Employees of the
Company and its subsidiaries who have been or will be given responsibility
for the management or administration of the business affairs of the Company
and its subsidiaries, and to certain other persons with whom the Company
maintains a business relationship, by assisting them to become owners of
the Company's Common Stock and thus to benefit directly from its growth,
development and financial success.
(2) To enable the Company to obtain and retain the services of the type
of professional, technical and managerial employees considered essential to
the long-range success of the Company by providing and offering them an
opportunity to become owners of the Company's Common Stock under options,
including options that are intended to qualify as "incentive stock options"
under Section 422 of the Code.
ARTICLE I
DEFINITIONS
Whenever the following terms are used in this Plan, they shall have the
meaning specified below unless the context clearly indicates to the contrary.
The masculine pronoun shall include the feminine and neuter and the singular
shall include the plural, where the context so indicates.
SECTION 1.1--Board
"Board" shall mean the Board of Directors of the Company.
SECTION 1.2--Code
"Code" shall mean the Internal Revenue Code of 1986, as amended.
SECTION 1.3--Committee
"Committee" shall mean the Stock Option Committee of the Board, appointed as
provided in Section 6.1.
SECTION 1.4--Company
"Company" shall mean Datametrics Corporation. In addition, "Company" shall
mean any corporation assuming, or issuing new employee stock options in
substitution for, Incentive Stock Options, outstanding under the Plan, in a
transaction to which Section 424(a) of the Code applies.
SECTION 1.5--Director
"Director" shall mean a member of the Board.
SECTION 1.6--Employee
"Employee" shall mean any employee (as defined in accordance with the
regulations and revenue rulings then applicable under Section 3401(c) of the
Code) of the Company, or of any corporation which is then a Parent Corporation
or a Subsidiary, whether such employee is so employed at the time this Plan is
adopted or becomes so employed subsequent to the adoption of this Plan.
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SECTION 1.7--Exchange Act
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
SECTION 1.8--Incentive Stock Option
"Incentive Stock Option" shall mean an Option which qualifies under Section
422 of the Code and which is designated as an Incentive Stock Option by the
Committee.
SECTION 1.9--Non-Qualified Option
"Non-Qualified Option" shall mean an Option which is not an Incentive Stock
Option and which is designated as a Non-Qualified Option by the Committee.
SECTION 1.10--Officer
"Officer" shall mean an officer of the Company, as defined in Rule 16a-1(f)
under the Exchange Act, as such Rule may be amended in the future.
SECTION 1.11--Option
"Option" shall mean an option to purchase Common Stock of the Company
granted under the Plan. "Options" includes both Incentive Stock Options and
Non-Qualified Options.
SECTION 1.12--Optionee
"Optionee" shall mean an Employee or other person to whom an Option is
granted under the Plan.
SECTION 1.13--Parent Corporation
"Parent Corporation" shall mean any corporation in an unbroken chain of
corporations ending with the Company if each of the corporations other than
the Company then owns stock possessing 50% or more of the total combined
voting power of all classes of stock in one of the other corporations in such
chain.
SECTION 1.14--Plan
"Plan" shall mean The 1995 Stock Option Plan of Datametrics Corporation.
SECTION 1.15--Rule 16b-3
"Rule 16b-3" shall mean that certain Rule 16b-3 under the Exchange Act, as
such Rule may be amended in the future.
SECTION 1.16--Secretary
"Secretary" shall mean the Secretary of the Company.
SECTION 1.17--Securities Act
"Securities Act" shall mean the Securities Act of 1933, as amended.
SECTION 1.18--Subsidiary
"Subsidiary" shall mean any corporation in an unbroken chain of corporations
beginning with the Company if each of the corporations other than the last
corporation in the unbroken chain then owns stock possessing 50% or more of
the total combined voting power of all classes of stock in one of the other
corporations in such chain.
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SECTION 1.19--Termination of Relationship
"Termination of Relationship" shall mean the time when the employee-employer
relationship or other business relationship between the Optionee and the
Company, a Parent Corporation or a Subsidiary is terminated for any reason,
with or without cause, including, but not by way of limitation, a termination
by resignation, discharge, death or retirement, but excluding terminations
where there is a simultaneous reemployment by the Company, a Parent
Corporation or a Subsidiary. The Committee, in its absolute discretion, shall
determine the effect of all other matters and questions relating to
Termination of Relationship, including, but not by way of limitation, the
question of whether a Termination of Relationship resulted from a discharge
for good cause, and all questions of whether particular leaves of absence
constitute Terminations of Relationship; provided, however, that, with respect
to Incentive Stock Options, a leave of absence shall constitute a Termination
of Relationship if, and to the extent that, such leave of absence interrupts
employment for the purposes of Section 422(a)(2) of the Code and the then
applicable regulations and revenue rulings under said Section.
ARTICLE II
SHARES SUBJECT TO PLAN
SECTION 2.1--Shares Subject to Plan
The shares of stock subject to Options shall be shares of the Company's $.01
par value Common Stock. The aggregate number of such shares which may be
issued upon exercise of Options shall not exceed seven hundred thousand
(700,000).
SECTION 2.2--Unexercised Options
If any Option expires or is cancelled without having been fully exercised,
the number of shares subject to such Option but as to which such Option was
not exercised prior to its expiration or cancellation may again be optioned
hereunder, subject to the limitations of Section 2.1.
SECTION 2.3--Changes in Company's Shares
In the event that the outstanding shares of Common Stock of the Company are
hereafter changed into or exchanged for a different number or kind of shares
or other securities of the Company, or of another corporation, by reason of
reorganization, merger, consolidation, recapitalization, reclassification,
stock split-up, stock dividend or combination of shares, appropriate
adjustments shall be made by the Committee in the number and kind of shares
for the purchase of which Options may be granted, including adjustments of the
limitations in Section 2.1 on the maximum number and kind of shares which may
be issued on exercise of Options.
ARTICLE III
GRANTING OF OPTIONS
SECTION 3.1--Eligibility
Any key Employee of the Company or of any corporation which is then a Parent
Corporation or a Subsidiary or any other person (other than a director)
maintaining a business relationship with the Company, a Parent Corporation or
a Subsidiary shall be eligible to be granted Options, except as provided in
Section 3.2.
SECTION 3.2--Qualification of Incentive Stock Options
No Incentive Stock Option shall be granted except to Employees and unless
such Option, when granted, qualifies as an "incentive stock option" under
Section 422 of the Code.
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SECTION 3.3--Granting of Options
(a) The Committee shall from time to time, in its absolute discretion:
(i) Determine which Employees are key Employees and select from among the
key Employees and other eligible persons (including those to whom Options
have been previously granted under the Plan) such of them as in its opinion
should be granted Options; and
(ii) Determine the number of shares to be subject to such Options granted
to such selected key Employees and other eligible persons, and determine
whether such Options as are to be granted to Employees are to be Incentive
Stock Options or Non-Qualified Options; and
(iii) Determine the terms and conditions of such Options, consistent with
the Plan.
(b) Upon the selection of an Employee or other eligible person to be granted
an Option, the Committee shall instruct the Secretary to issue such Option and
may impose such conditions on the grant of such Option as it deems
appropriate. Without limiting the generality of the preceding sentence, the
Committee may, in its discretion and on such terms as it deems appropriate,
require as a condition on the grant of an Option to an Employee or other
eligible person that the Employee or other eligible person surrender for
cancellation some or all of the unexercised Options which have been previously
granted to him. An Option the grant of which is conditioned upon such
surrender may have an option price lower (or higher) than the option price of
the surrendered Option, may cover the same (or a lesser or greater) number of
shares as the surrendered Option, may contain such other terms as the
Committee deems appropriate and shall be exercisable in accordance with its
terms, without regard to the number of shares, price, option period or any
other term or condition of the surrendered Option.
ARTICLE IV
TERMS OF OPTIONS
SECTION 4.1--Option Agreement
Each Option shall be evidenced by a written Stock Option Agreement, which
shall be executed by the Optionee and an authorized Officer of the Company and
which shall contain such terms and conditions as the Committee shall
determine, consistent with the Plan. Stock Option Agreements evidencing
Incentive Stock Options shall contain such terms and conditions as may be
necessary to qualify such Options as "incentive stock options" under Section
422 of the Code.
SECTION 4.2--Option Price
(a) The price of the shares subject to each Option shall be set by the
Committee; provided, however, that the price per share shall be not less than
100% of the fair market value of such shares on the date such Option is
granted; provided, further, that, in the case of an Incentive Stock Option,
the price per share shall not be less than 110% of the fair market value of
such shares on the date such Option is granted in the case of an individual
then owning (within the meaning of Section 424(d) of the Code) more than 10%
of the total combined voting power of all classes of stock of the Company, any
Subsidiary or any Parent Corporation.
(b) For purposes of the Plan, the fair market value of a share of the
Company's Common Stock as of a given date shall be: (i) the closing price of a
share of the Company's Common Stock on the principal exchange on which shares
of the Company's Common Stock are then trading, if any, on the day previous to
such date, or, if shares were not traded on the day previous to such date,
then on the next preceding trading day during which a sale occurred; or (ii)
if such Common Stock is not traded on an exchange but is quoted on NASDAQ or a
successor quotation system, (1) the last sales price (if the Company's Common
Stock is then listed as a National Market Issue under the NASD National Market
System) or (2) the mean between the closing representative bid and asked
prices (in all other cases) for the Company's Common Stock on the day previous
to such date as reported by NASDAQ or such successor quotation system; or
(iii) if such Common Stock is not publicly traded on an exchange and not
quoted on NASDAQ or a successor quotation system, the mean between the closing
bid
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and asked prices for the Company's Common Stock, on the day previous to such
date, as determined in good faith by the Committee; or (iv) if the Company's
Common Stock is not publicly traded, the fair market value established by the
Committee acting in good faith.
SECTION 4.3--Commencement of Exercisability
(a) Except as the Committee may otherwise provide, no Option may be
exercised in whole or in part during the first year after such Option is
granted.
(b) Subject to the provisions of Sections 4.3(a), 4.3(c), 4.3(d) and 7.3,
Options shall become exercisable at such times and in such installments (which
may be cumulative) as the Committee shall provide in the terms of each
individual Option; provided, however, that by a resolution adopted after an
Option is granted the Committee may, on such terms and conditions as it may
determine to be appropriate and subject to Sections 4.3(a), 4.3(c), 4.3(d) and
7.3, accelerate the time at which such Option or any portion thereof may be
exercised.
(c) No portion of an Option which is unexercisable at Termination of
Relationship shall thereafter become exercisable.
(d) Notwithstanding any other provision of this Plan, in the case of an
Incentive Stock Option, the aggregate fair market value (determined at the
time the Incentive Stock Option is granted) of the shares of the Company's
stock with respect to which "incentive stock options" (within the meaning of
Section 422 of the Code) are exercisable for the first time by the Optionee
during any calendar year (under the Plan and all other incentive stock option
plans of the Company, any Subsidiary and any Parent Corporation) shall not
exceed $100,000.
SECTION 4.4--Expiration of Options
(a) No Option may be exercised to any extent by anyone after the first to
occur of the following events:
(i) The expiration of five years from the date the Option was granted; or
(ii) Except in the case of any Optionee who is disabled (within the
meaning of Section 22(e)(3) of the Code), the expiration of three months
from the date of the Optionee's Termination of Relationship for any reason
other than such Optionee's death unless the Optionee dies within said
three-month period; or
(iii) In the case of an Optionee who is disabled (within the meaning of
Section 22(e)(3) of the Code), the expiration of one year from the date of
the Optionee's Termination of Relationship for any reason other than such
Optionee's death unless the Optionee dies within said one-year period; or
(iv) The expiration of one year from the date of the Optionee's death.
(b) Subject to the provisions of Section 4.4(a), the Committee shall
provide, in the terms of each individual Option, when such Option expires and
becomes unexercisable; and (without limiting the generality of the foregoing)
the Committee may provide in the terms of individual Options that said Options
expire immediately upon a Termination of Relationship for any reason.
SECTION 4.5--Consideration
In consideration of the granting of an Option, the Optionee shall agree, in
the written Stock Option Agreement, to remain in the employ of or in a
business relationship with the Company, a Parent Corporation or a Subsidiary
for a period of at least one year after the Option is granted. Nothing in this
Plan or in any Stock Option Agreement hereunder shall confer upon any Optionee
any right to continue in the employ of or in a business relationship with the
Company, any Parent Corporation or any Subsidiary or shall interfere with or
restrict in any way the rights of the Company, its Parent Corporations and its
Subsidiaries, which are hereby expressly reserved, to remove or discharge any
Optionee at any time for any reason whatsoever, with or without cause.
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SECTION 4.6--Adjustments in Outstanding Options
In the event that the outstanding shares of the stock subject to Options are
changed into or exchanged for a different number or kind of shares of the
Company or other securities of the Company by reason of merger, consolidation,
recapitalization, reclassification, stock split-up, stock dividend or
combination of shares, the Committee shall make an appropriate and equitable
adjustment in the number and kind of shares as to which all outstanding
Options, or portions thereof then unexercised, shall be exercisable, to the
end that after such event the Optionee's proportionate interest shall be
maintained as before the occurrence of such event. Such adjustment in an
outstanding Option shall be made without change in the total price applicable
to the Option or the unexercised portion of the Option (except for any change
in the aggregate price resulting from rounding-off of share quantities or
prices) and with any necessary corresponding adjustment in Option price per
share; provided, however, that, in the case of Incentive Stock Options, each
such adjustment shall be made in such manner as not to constitute a
"modification" within the meaning of Section 424(h)(3) of the Code. Any such
adjustment made by the Committee shall be final and binding upon all
Optionees, the Company and all other interested persons.
SECTION 4.7--Merger, Consolidation, Acquisition, Liquidation or Dissolution
Notwithstanding the provisions of Section 4.6, in its absolute discretion,
and on such terms and conditions as it deems appropriate, the Committee may
provide by the terms of any Option that such Option cannot be exercised after
the merger or consolidation of the Company with or into another corporation,
the acquisition by another corporation or person of all or substantially all
of the Company's assets or 80% or more of the Company's then outstanding
voting stock or the liquidation or dissolution of the Company; and if the
Committee so provides, it may, in its absolute discretion and on such terms
and conditions as it deems appropriate, also provide, either by the terms of
such Option or by a resolution adopted prior to the occurrence of such merger,
consolidation, acquisition, liquidation or dissolution, that, for some period
of time prior to such event, such Option shall be exercisable as to all shares
covered thereby, notwithstanding anything to the contrary in Section 4.3(a),
Section 4.3(b) and/or any installment provisions of such Option.
ARTICLE V
EXERCISE OF OPTIONS
SECTION 5.1--Person Eligible to Exercise
During the lifetime of the Optionee, only he may exercise an Option (or any
portion thereof) granted to him. After the death of the Optionee, any
exercisable portion of an Option may, prior to the time when such portion
becomes unexercisable under the Plan or the applicable Stock Option Agreement,
be exercised by his personal representative or by any person empowered to do
so under the deceased Optionee's will or under the then applicable laws of
descent and distribution.
SECTION 5.2--Partial Exercise
At any time and from time to time prior to the time when any exercisable
Option or exercisable portion thereof becomes unexercisable under the Plan or
the applicable Stock Option Agreement, such Option or portion thereof may be
exercised in whole or in part; provided, however, that the Company shall not
be required to issue fractional shares and the Committee may, by the terms of
the Option, require any partial exercise to be with respect to a specified
minimum number of shares.
SECTION 5.3--Manner of Exercise
An exercisable Option, or any exercisable portion thereof, may be exercised
solely by delivery to the Secretary or his office of all of the following
prior to the time when such Option or such portion becomes unexercisable under
the Plan or the applicable Stock Option Agreement:
(a) Notice in writing signed by the Optionee or other person then
entitled to exercise such Option or portion, stating that such Option or
portion is exercised, such notice complying with all applicable rules
established by the Committee; and
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(b) (i) Full payment (in cash or by check) for the shares with respect to
which such Option or portion is thereby exercised; or
(ii) With the consent of the Committee, (A) shares of the Company's
Common Stock owned by the Optionee duly endorsed for transfer to the
Company or (B) subject to the timing requirements of Section 5.4,
shares of the Company's Common Stock issuable to the Optionee upon
exercise of the Option, with a fair market value (as determined under
Section 4.2(b)) on the date of Option exercise equal to the aggregate
Option price of the shares with respect to which such Option or portion
is thereby exercised; or
(iii) With the consent of the Committee, any combination of the
consideration provided in the foregoing subsections (i) and (ii); and
(c) The payment to the Company (or other employer corporation) of all
amounts which it is required to withhold under federal, state or local law
in connection with the exercise of the Option; with the consent of the
Committee, (i) shares of the Company's Common Stock owned by the Optionee
duly endorsed for transfer or (ii) subject to the timing requirements of
Section 5.4, shares of the Company's Common Stock issuable to the Optionee
upon exercise of the Option, valued in accordance with Section 4.2(b) at
the date of Option exercise, may be used to make all or part of such
payment;
(d) Such representations and documents as the Committee, in its absolute
discretion, deems necessary or advisable to effect compliance with all
applicable provisions of the Securities Act and any other federal or state
securities laws or regulations. The Committee may, in its absolute
discretion, also take whatever additional actions it deems appropriate to
effect such compliance including, without limitation, placing legends on
share certificates and issuing stop-transfer orders to transfer agents and
registrars; and
(e) In the event that the Option or portion thereof shall be exercised
pursuant to Section 5.1 by any person or persons other than the Optionee,
appropriate proof of the right of such person or persons to exercise the
Option or portion thereof.
SECTION 5.4--Certain Timing Requirements
Shares of the Company's Common Stock issuable to the Optionee upon exercise
of the Option may be used to satisfy the Option price or the tax withholding
consequences of such exercise only (i) during the period beginning on the
third business day following the date of release of the quarterly or annual
summary statement of sales and earnings of the Company and ending on the
twelfth business day following such date or (ii) pursuant to an irrevocable
written election by the Optionee to use shares of the Company's Common Stock
issuable to the Optionee upon exercise of the Option to pay all or part of the
Option price or the withholding taxes (subject to the approval of the
Committee) made at least six months prior to the payment of such Option price
or withholding taxes.
SECTION 5.5--Conditions to Issuance of Stock Certificates
The shares of stock issuable and deliverable upon the exercise of an Option,
or any portion thereof, may be either previously authorized but unissued
shares or issued shares which have then been reacquired by the Company. The
Company shall not be required to issue or deliver any certificate or
certificates for shares of stock purchased upon the exercise of any Option or
portion thereof prior to fulfillment of all of the following conditions:
(a) The admission of such shares to listing on all stock exchanges on
which such class of stock is then listed; and
(b) The completion of any registration or other qualification of such
shares under any state or federal law or under the rulings or regulations
of the Securities and Exchange Commission or any other governmental
regulatory body, which the Committee shall, in its absolute discretion,
deem necessary or advisable; and
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(c) The obtaining of any approval or other clearance from any state or
federal governmental agency which the Committee shall, in its absolute
discretion, determine to be necessary or advisable; and
(d) The payment to the Company (or other employer corporation) of all
amounts which it is required to withhold under federal, state or local law
in connection with the exercise of the Option; and
(e) The lapse of such reasonable period of time following the exercise of
the Option as the Committee may establish from time to time for reasons of
administrative convenience.
SECTION 5.6--Rights as Shareholders
The holders of Options shall not be, nor have any of the rights or
privileges of, shareholders of the Company in respect of any shares
purchasable upon the exercise of any part of an Option unless and until
certificates representing such shares have been issued by the Company to such
holders.
SECTION 5.7--Transfer Restrictions
Unless otherwise approved in writing by the Committee, no shares acquired
upon exercise of any Option by any Officer may be sold, assigned, pledged,
encumbered or otherwise transferred until at least six months have elapsed
from (but excluding) the date that such Option was granted. The Committee, in
its absolute discretion, may impose such other restrictions on the
transferability of the shares purchasable upon the exercise of an Option as it
deems appropriate. Any such other restriction shall be set forth in the
respective Stock Option Agreement and may be referred to on the certificates
evidencing such shares. The Committee may require the Employee to give the
Company prompt notice of any disposition of shares of stock, acquired by
exercise of an Incentive Stock Option, within two years from the date of
granting such Option or one year after the transfer of such shares to such
Employee. The Committee may direct that the certificates evidencing shares
acquired by exercise of an Incentive Stock Option refer to such requirement to
give prompt notice of disposition.
ARTICLE VI
ADMINISTRATION
SECTION 6.1--Stock Option Committee
The Stock Option Committee shall consist of two or more Directors, appointed
by and holding office at the pleasure of the Board, each of whom is a
"disinterested person" as defined by Rule 16b-3. Appointment of Committee
members shall be effective upon acceptance of appointment. Committee members
may resign at any time by delivering written notice to the Board. Vacancies in
the Committee shall be filled by the Board.
SECTION 6.2--Duties and Powers of Committee
It shall be the duty of the Committee to conduct the general administration
of the Plan in accordance with its provisions. The Committee shall have the
power to interpret the Plan and the Options and to adopt such rules for the
administration, interpretation and application of the Plan as are consistent
therewith and to interpret, amend or revoke any such rules. Any such
interpretations and rules in regard to Incentive Stock Options shall be
consistent with the basic purpose of the Plan to grant "incentive stock
options" within the meaning of Section 422 of the Code. The Board shall have
no right to exercise any of the rights or duties of the Committee under the
Plan.
SECTION 6.3--Majority Rule
The Committee shall act by a majority of its members in office. The
Committee may act either by vote at a meeting or by a memorandum or other
written instrument signed by a majority of the Committee.
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SECTION 6.4--Compensation; Professional Assistance; Good Faith Actions
Members of the Committee shall receive such compensation for their services
as members as may be determined by the Board. All expenses and liabilities
incurred by members of the Committee in connection with the administration of
the Plan shall be borne by the Company. The Committee may employ attorneys,
consultants, accountants, appraisers, brokers or other persons. The Committee,
the Company and its Officers and Directors shall be entitled to rely upon the
advice, opinions or valuations of any such persons. All actions taken and all
interpretations and determinations made by the Committee in good faith shall
be final and binding upon all Optionees, the Company and all other interested
persons. No member of the Committee shall be personally liable for any action,
determination or interpretation made in good faith with respect to the Plan or
the Options, and all members of the Committee shall be fully protected by the
Company in respect to any such action, determination or interpretation.
ARTICLE VII
OTHER PROVISIONS
SECTION 7.1--Options Not Transferable
No Option or interest or right therein or part thereof shall be liable for
the debts, contracts or engagements of the Optionee or his successors in
interest or shall be subject to disposition by transfer, alienation,
anticipation, pledge, encumbrance, assignment or any other means whether such
disposition be voluntary or involuntary or by operation of law by judgment,
levy, attachment, garnishment or any other legal or equitable proceedings
(including bankruptcy), and any attempted disposition thereof shall be null
and void and of no effect; provided, however, that nothing in this Section 7.1
shall prevent transfers by will or by the applicable laws of descent and
distribution or pursuant to a qualified domestic relations order (as defined
by the Code or Title I of the Employee Retirement Income Security Act, and the
rules and regulations thereunder).
SECTION 7.2--Amendment, Suspension or Termination of the Plan
The Plan may be wholly or partially amended or otherwise modified, suspended
or terminated at any time or from time to time by the Committee. However,
without approval of the Company's shareholders given within 12 months before
or after the action by the Committee, no action of the Committee may, except
as provided in Section 2.3, increase any limit imposed in Section 2.1 on the
maximum number of shares which may be issued on exercise of Options,
materially modify the eligibility requirements of Section 3.1, reduce the
minimum Option price requirements of Section 4.2(a) or extend the limit
imposed in this Section 7.2 on the period during which Options may be granted
or amend or modify the Plan in a manner requiring shareholder approval under
Rule 16b-3. Neither the amendment, suspension nor termination of the Plan
shall, without the consent of the holder of the Option, impair any rights or
obligations under any Option theretofore granted. No Option may be granted
during any period of suspension nor after termination of the Plan, and in no
event may any Option be granted under this Plan after the first to occur of
the following events:
(a) The expiration of ten years from the date the Plan is adopted by the
Board; or
(b) The expiration of ten years from the date the Plan is approved by the
Company's shareholders under Section 7.3.
SECTION 7.3--Approval of Plan by Shareholders
This Plan will be submitted for the approval of the Company's shareholders
within 12 months after the date of the Board's initial adoption of the Plan.
Options may be granted prior to such shareholder approval; provided, however,
that such Options shall not be exercisable prior to the time when the Plan is
approved by the shareholders; provided, further, that if such approval has not
been obtained at the end of said 12-month period, all Options previously
granted under the Plan shall thereupon be cancelled and become null and void.
The Company shall take such actions with respect to the Plan as may be
necessary to satisfy the requirements of Rule 16b-3(b).
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SECTION 7.4--Effect of Plan Upon Other Option and Compensation Plans
The adoption of this Plan shall not affect any other compensation or
incentive plans in effect for the Company, any Parent Corporation or any
Subsidiary. Nothing in this Plan shall be construed to limit the right of the
Company, any Parent Corporation or any Subsidiary (a) to establish any other
forms of incentives or compensation for employees of the Company, any Parent
Corporation or any Subsidiary or (b) to grant or assume options otherwise than
under this Plan in connection with any proper corporate purpose, including,
but not by way of limitation, the grant or assumption of options in connection
with the acquisition by purchase, lease, merger, consolidation or otherwise,
of the business, stock or assets of any corporation, firm or association.
SECTION 7.5--Titles
Titles are provided herein for convenience only and are not to serve as a
basis for interpretation or construction of the Plan.
SECTION 7.6--Conformity to Securities Laws
The Plan is intended to conform to the extent necessary with all provisions
of the Securities Act and the Exchange Act and any and all regulations and
rules promulgated by the Securities and Exchange Commission thereunder,
including without limitation Rule 16b-3. Notwithstanding anything herein to
the contrary, the Plan shall be administered, and Options shall be granted and
may be exercised, only in such a manner as to conform to such laws, rules and
regulations. To the extent permitted by applicable law, the Plan and Options
granted hereunder shall be deemed amended to the extent necessary to conform
to such laws, rules and regulations.
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EXHIBIT 4.2
DATAMETRICS CORPORATION
EMPLOYEE QUALIFIED STOCK PURCHASE PLAN
Datametrics Corporation, a Delaware corporation (the "Company"), hereby
adopts this Employee Qualified Stock Purchase Plan (the "Q.S.P. Plan").
1. PURPOSE. The purpose of the Q.S.P. Plan is to assist employees of the
Company and its Subsidiary Corporations in acquiring stock ownership interests
in the Company, pursuant to a plan which qualifies as an "employee stock
purchase plan" under Code Section 423. The Q.S.P. Plan is intended to help
employees provide for their future security, and to encourage them to remain
in the employ of the Company and its Subsidiary Corporations.
2. DEFINITIONS. Whenever one of the following terms is used in the Q.S.P.
Plan with the first letter or letters capitalized, it shall have the following
meaning, unless the context clearly indicates to the contrary (such
definitions to be equally applicable to the singular and plural forms of the
terms defined):
(a) "Administrator" shall mean the Company, acting through its Chief
Executive Officer or his or her delegate.
(b) "Authorization Card" shall mean the form prescribed by the
Administrator, which shall include a form of stock purchase agreement
pursuant to which an Eligible Employee shall purchase shares of Stock under
the Q.S.P. Plan and a form of payroll deduction authorization pursuant to
which such Eligible Employee shall authorize the Company or a Subsidiary
Corporation to deduct such Eligible Employee's contributions under the
Q.S.P. Plan.
(c) "Base Pay" shall mean gross pay received by an Employee on each
Payday as cash compensation for services to the Company or any Subsidiary
Corporation, excluding overtime payments, incentive compensation, bonuses,
fringe benefits, expense reimbursements, and other special-payments, except
to the extent that the inclusion of any such item is specifically
designated by the Administrator.
(d) "Board of Directors" shall mean the Board of Directors of the
Company.
(e) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(f) "Company" shall mean Datametrics Corporation, a Delaware corporation.
(g) "Effective Date" shall mean the first day of the Offer Period which
shall be January 29, 1996.
(h) "Eligible Employee" shall mean any Employee who satisfies the
requirements of Section 4.
(i) "Employee" shall mean any person who renders services to the Company
or any Subsidiary Corporation in the status of an employee within the
meaning of Code Section 3121(d). "Employee" shall not include any director
of the Company or any Subsidiary Corporation who does not render services
to the Company or any Subsidiary Corporation in the status of an employee
within the meaning of Code Section 3121(d).
(j) "Enrollment Period" shall mean, for each Semi-Annual Period of
Participation, the two week period determined in accordance with Section
6(b); provided, however, that pursuant to Section 6(b) the Enrollment
Period for the first Semi-Annual Period of Participation shall be the three
week period immediately preceding the Effective Date.
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(k) "Entry Date" shall mean the date an Eligible Employee is granted an
Option during the Offer Period. The earliest Entry Date under the Q.S.P.
Plan shall be the Effective Date. Subsequent Entry Dates under the Q.S.P.
Plan shall be the first business day of July 1996; the first business day
of January 1997; and the first business day of July 1997. Each Eligible
Employee shall have no more than one (1) Entry Date at any time under the
Q.S.P. Plan.
(l) "Offer Period" shall mean the period beginning on the Effective Date
and ending on December 31, 1997.
(m) "Option" shall mean a right granted to an Eligible Employee to
purchase shares of Stock under Sections 8(a) and 9 of the Q.S.P. Plan.
(n) "Option Price" shall mean the per share exercise price of shares of
Stock to be purchased pursuant to a semi-annual installment of an Option,
as provided in Section 10.
(o) "Parent Corporation" shall mean any corporation, other than the
Company, in an unbroken chain of corporations ending with the Company if,
at the time of the granting of the Option, each of the corporations other
than the Company own stock possessing 50% or more of the total combined
voting power of all classes of stock in one of the other corporations in
such chain.
(p) "Participant" shall mean an Eligible Employee who elects to
participate in the Q.S.P. Plan and complies with the provisions of Section
6.
(q) "Payday" of an Employee shall mean the regular and recurring
established day for payment of cash compensation to Employees in the same
classification or position.
(r) "Q.S.P. Plan" shall mean the Datametrics Corporation Employee
Qualified Stock Purchase Plan.
(s) "Semi-Annual Period of Participation" shall mean each semi-annual
period for which the Participant actually participates in the Offer Period.
There shall be four (4) semi-annual periods of participation within the
Offer Period. The first such semi-annual period shall begin on January 29,
1996 and end on the last business day in June 1996. The second such semi-
annual period shall begin on the first business day in July 1996 and end on
the last business day in December 1996. The third such semi-annual period
shall begin on the first business day in January 1997 and end on the last
business day in June 1997. The fourth such semi-annual period shall begin
on the first business day in July 1997 and end on the last business day in
December 1997.
(t) "Semi-Annual Purchase Date" shall mean the last business day of June
and December each year during the Offer Period on which shares of Stock are
automatically purchased for Participants under the Q.S.P. Plan.
(u) "Subsidiary Corporation" shall mean any corporation, other than the
Company, in an unbroken chain of corporations beginning with the Company
if, at the time of the granting of the Option, each of the corporations
other than the last corporation in the unbroken chain owns stock possessing
50% or more of the total combined voting power of all classes of stock in
one of the other corporations in such chain.
(v) "Stock" shall mean the shares of the Company's Common Stock, $.01 par
value.
3. STOCK SUBJECT TO THE Q.S.P. PLAN.
(a) Subject to Section 15, the shares of Stock that may be sold pursuant to
Options granted under the Q.S.P. Plan shall not exceed 200,000 shares.
(b) The maximum aggregate number of shares of Common Stock each Eligible
Employee may purchase over the duration of the Q.S.P. Plan shall not exceed
10,000 shares.
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(c) The Company shall reserve for issuance under the Q.S.P. Plan 200,000
shares of the Company's authorized but unissued Stock.
(d) If any Option expires or is cancelled without having been fully
exercised, the number of shares subject to such Option but as to which such
Option was not exercised before its expiration or cancellation may again be
optioned hereunder, subject to the limitations of subsection (a).
(e) Any adjustment to the number of shares of Stock reserved for issuance
under the Q.S.P. Plan shall be made only in accordance with Sections 15
(relating to recapitalization) and 18 (relating to amendments of the Q.S.P.
Plan).
4. ELIGIBILITY. Each Employee of the Company or any Subsidiary Corporation
who on the first day of any Enrollment Period:
(a) has been employed by the Company or any Subsidiary Corporation for
not less than thirty (30) days; and
(b) is customarily employed by the Company or any Subsidiary Corporation
for more than twenty (20) hours per week,
shall become an Eligible Employee on such day. An Employee who is an Eligible
Employee on the Effective Date may elect to begin participating in the Q.S.P.
Plan on any Entry Date on or after the Effective Date. The Effective Date
shall become such Employee's Entry Date for the Offer Period, and on that date
such Employee shall be granted an Option for the Offer Period; provided,
however, that any such Option is subject to cancellation and such Employee's
Entry Date may be changed in accordance with the terms of Section 9. An
Employee who is not an Eligible Employee on the Effective Date may
subsequently elect to participate in the Q.S.P. plan on any Entry Date for
which he or she becomes an Eligible Employee. The first Entry Date on which
such Employee is an Eligible Employee shall become such Employee's Entry Date
for the Offer Period, and on that date such Employee shall be granted an
Option for the Offer Period; provided, however, that any such Option is
subject to cancellation and that such Employee's Entry Date may alter in
accordance with the terms of Section 9.
5. PURCHASE RIGHTS.
(a) Options shall be granted under the Q.S.P. Plan until the earlier of the
maximum number of shares of Stock subject to sale pursuant to Options have
been sold, or the Q.S.P. Plan is terminated.
(b) The Q.S.P. Plan shall be implemented under the Offer Period. Subject to
subsection (c), the Offer Period will begin upon January 29, 1996 and will end
on December 31, 1997. The first day of the Offer Period shall be the first day
of the first Semi-Annual Period of Participation.
(c) Under no circumstances shall any shares of Stock be issued hereunder
until such time as (i) the Q.S.P. Plan shall have been approved by the
Company's stockholders and (ii) the Company shall have complied with all
applicable requirements of the Securities Act of 1933 (as amended), all
applicable listing requirements of any securities exchange on which shares of
the Stock are listed and all other applicable statutory and regulatory
requirements.
(d) Each Eligible Employee shall be granted a separate Option for the Offer
Period. The Option shall be granted on the Entry Date on which such individual
joins the Offer Period and shall be automatically exercised in successive
semi-annual installments on the last day of each Semi-Annual Period of
Participation in which the Eligible Employee participates. Accordingly, each
Option may be exercised up to two (2) times each calendar year it remains
outstanding. An Option granted under the Q.S.P. Plan may be cancelled pursuant
to Section 9. In such event, the date on which a subsequent Option is granted
to each Eligible Employee under the Q.S.P. Plan shall become the Entry Date
for such Eligible Employee and such date shall supersede and replace any
previous Entry Date.
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6. PARTICIPATION IN THE Q.S.P. PLAN.
(a) Each Eligible Employee may elect to participate in the Q.S.P. by
submitting to the Administrator a completed and executed Authorization Card in
accordance with subsection (b). An Eligible Employee who elects to participate
in the Q.S.P. Plan shall elect on such Authorization Card any whole percentage
of Base Pay (such percentage not to exceed ten percent (10%)) to be withheld
by payroll deduction, which upon an exercise of a semi-annual installment of
the Option granted to such Eligible Employee with respect to the Offer Period,
shall be contributed to the Company as payment for shares of Stock purchased
pursuant to such semi-annual installment of the Option. The deduction rate
authorized by any Eligible Employee shall continue in effect for the remainder
of the Offer Period, except to the extent such rate is changed in accordance
with the following:
(i) Each Eligible Employee may, at any one time during each Semi-Annual
Period of Participation at least two weeks prior to the Semi-Annual
Purchase Date, reduce his or her percentage of payroll deduction to any
whole percentage by filing a new completed and executed Authorization Card
with the Administrator (or his or her designate). At any one time during
the two week period commencing one month prior to the Semi-Annual Purchase
Date an Eligible Employee may increase his or her percentage of payroll
deduction (not to exceed ten percent (10%)) by filing a new completed and
executed Authorization Card with the Administrator (or his or her
designate), with such increase to become effective beginning on the first
day of the next Semi-Annual Period of Participation. An Eligible Employee
may not increase or reduce his or her percentage of payroll deduction
during the two week period immediately preceding each Semi-Annual Purchase
Date. Any reduction of an Eligible Employee's percentage of payroll
deduction shall become effective as soon as practicable after the filing of
a new completed and executed Authorization Card with the Administrator (or
his or her designate). If an Eligible Employee reduces his or her
percentage of payroll deduction to zero percent (0%), the Company or
Subsidiary Corporation will as soon as practicable thereafter pay to such
Eligible Employee in cash in one lump sum the balance of payroll deductions
credited to such Eligible Employee's account under the Q.S.P. Plan, without
the payment of any interest thereon. The Eligible Employee will at that
time be deemed to have ceased to participate in the Q.S.P. Plan and may
only recommence active participation in the Q.S.P. Plan by submitting to
the Administrator a new completed and executed Authorization Card in
accordance with subsection (b). Upon cessation of participation, such
Eligible Employee shall not be eligible to participate in the Q.S.P. Plan
during the Semi-Annual Period of Participation which immediately follows
the Semi-Annual Period of Participation during which such Employee ceased
to participate in the Q.S.P. Plan.
(b) An Employee who is an Eligible Employee on the Effective Date must
submit his or her Authorization Card to the Administrator during the three
week period immediately prior to the Effective Date in order to participate in
the first Semi-Annual Period of Participation. An Employee who is an Eligible
Employee on the Effective Date but who does not submit his or her
Authorization Card to the Administrator during such three week period or an
Employee who becomes an Eligible Employee subsequent to the Effective Date
must submit his or her Authorization Card to the Administrator during the two
week period commencing one month prior to such Eligible Employee's Entry Date.
(c) An Eligible Employee's Authorization Card shall include express written
authorization by the Eligible Employee to the Company to issue shares of Stock
purchased under the Q.S.P. Plan to an account in the name of such Eligible
Employee with a brokerage firm to be designated by the Administrator.
7. PAYROLL DEDUCTIONS.
(a) Cash compensation payable to an Eligible Employee who elects to
participate in the Q.S.P. Plan for a Semi-Annual Period of Participation shall
be reduced each Payday during such Semi-Annual Period of Participation through
payroll deductions by an amount equal to the whole percentage of Base Pay
payable on such Payday elected by the Eligible Employee under Section 6.
(b) The amount of each Eligible Employee's payroll deduction shall be held
by the Company or Subsidiary Corporation and credited to an account
established for such Eligible Employee. Neither the Company nor any Subsidiary
Corporation shall pay any interest on the funds credited to an Eligible
Employee's account under the Q.S.P. Plan.
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(c) During a leave of absence from the Company or any Subsidiary Corporation
which is approved by the Company or Subsidiary Corporation and which meets the
requirements of Treasury Regulation Section 1.421-7(h)(2), an Eligible
Employee may continue to participate in the Q.S.P. Plan by making cash
payments to the Company or Subsidiary Corporation on each Payday equal to the
dollar amount of the payroll deduction made for such Eligible Employee for the
Payday next preceding the first day of such Eligible Employee's leave of
absence.
8. GRANT OF OPTIONS; EXERCISE OF OPTIONS.
(a) Each Eligible Employee shall be granted an Option on his or her Entry
Date for the Offer Period. Each Eligible Employee's Option shall be
automatically exercised in semi-annual installments on the last day of each
Semi-Annual Period of Participation during which the Eligible Employee is
participating in the Q.S.P. Plan. The number of shares of Stock subject to
each installment of an Eligible Employee's Option shall be the quotient of the
total payroll deductions made for the Eligible Employee during the Semi-Annual
Period of Participation, divided by the Option Price with respect to such
Semi-Annual Period of Participation, excluding fractional shares of Stock;
provided, however, that the number of shares of Stock subject to each Option
shall not exceed 10,000 shares.
(b) Except as otherwise provided in subsection (d) and Section 6(a)(i), each
Eligible Employee participating in the Q.S.P. Plan shall be deemed to have
exercised a semi-annual installment of his or her Option on the last day of
any Semi-Annual Period of Participation in which the Eligible Employee is
participating in the Q.S.P. Plan, to the extent that the balance of payroll
deductions credited to such Eligible Employee's account under the Q.S.P. Plan
is sufficient to purchase, at the Option Price, whole shares of Stock. No
fractional shares of Stock shall be purchased upon the exercise of a semi-
annual installment of the Option and any funds credited to such Eligible
Employee's account remaining after the purchase of whole shares of Stock upon
exercise of a semi-annual installment of an Option shall remain credited to
such Eligible Employee's account and carried forward for purchase of shares of
Stock pursuant to the exercise of a semi-annual installment of the Option on
the last day of the next following Semi-Annual Period of Participation.
(c) Upon exercise of a semi-annual installment of an Eligible Employee's
Option, the Company shall as soon as practicable thereafter issue to the
Eligible Employee such shares of Stock purchased pursuant to subsection (b).
Such Stock is initially to be held in the brokerage account established by the
Eligible Employee at such brokerage firm as designated by the Administrator
and as authorized by the Eligible Employee upon enrollment in the Q.S.P. Plan.
(d) An Eligible Employee's semi-annual installment shall not be exercised on
the Semi-Annual Purchase Date if such Eligible Employee instructs the
Administrator in writing at least two weeks prior to such Semi-Annual Purchase
Date that such semi-annual installment is not to be exercised. As soon as
practicable after receipt of such instruction, the Company or Subsidiary
Corporation shall pay to such Eligible Employee in cash in one lump sum the
balance of payroll deductions credited to such Eligible Employee's account
under the Q.S.P. Plan, without the payment of any interest thereon. The
Eligible Employee shall at that time be deemed to have ceased to participate
in the Q.S.P. Plan and may only recommence active participation in the Q.S.P.
Plan by submitting a new Authorization Card in accordance with the terms of
Section 6 above. Upon cessation of participation, such Eligible Employee shall
not be eligible to participate in the Q.S.P. Plan during the Semi-Annual
Period of Participation which immediately follows the Semi-Annual Period of
Participation during which such Employee ceased to participate in the Q.S.P.
Plan.
(e) If the total number of shares of Stock for which Options are to be
exercised on any date exceeds the number of shares remaining unsold under the
Q.S.P. Plan (after deduction of all shares for which Options have theretofore
been exercised), the Administrator shall make a pro rata allocation of the
available remaining shares in as nearly a uniform manner as shall be
practicable and any balance of payroll deductions credited to the accounts of
Eligible Employees which have not been applied to the purchase of shares of
Stock shall be paid to such Eligible Employees by the Company or Subsidiary
Corporation in cash in one lump sum as soon as practicable, without payment of
any interest thereon.
II-5
<PAGE>
(f) Notwithstanding any provision in the Q.S.P. Plan to the contrary, an
Eligible Employee shall not be granted an Option:
(i) if, immediately after the Option is granted, such Employee would own
stock possessing 5% or more of the total combined voting power or value of
all classes of stock of the Company, any Parent Corporation or any
Subsidiary Corporations. For purposes of determining stock ownership under
this paragraph, the rules of Code Section 424(d) shall apply and Stock
which an Eligible Employee may purchase under outstanding options held by
such Eligible Employee shall be treated as stock owned by such Eligible
Employee; or
(ii) which permits such Eligible Employee's rights to purchase stock
under the Q.S.P. Plan and all other employee stock purchase plans of the
Company, any Parent Corporation, or any Subsidiary Corporations, which
qualify under Code Section 423, to accrue at a rate which exceeds $25,000
of the fair market value of such stock (determined at the time such option
is granted) for each calendar year in which such option is outstanding at
any time. For purpose of the limitations imposed by this paragraph, the
right to purchase stock under an option accrues when the option (or any
portion thereof) first becomes exercisable during the calendar year, the
right to purchase stock under an option accrues at the rate provided in the
option (but in no case may such rate exceed $25,000 of fair market value of
such stock determined at the time such option is granted for any one
calendar year), and a right to purchase stock which has accrued under the
option may not be carried over to any other option.
(g) Any Employee who is an officer subject to Section 16(b) under the
Securities Exchange Act of 1934, as amended, shall not sell, transfer, or
otherwise dispose of any shares of Stock received upon the exercise of the
Option granted hereunder for a period of six months after the purchase of such
shares.
9. CANCELLATION AND SUBSEQUENT GRANT OF OPTION. If the fair market value of
a share of Stock on the first day of any Semi-Annual Period of Participation
after the Effective Date is lower than the fair market value of a share of
Stock on the Eligible Employee's Entry Date into the Q.S.P. Plan, the Eligible
Employee's Option shall be cancelled as of the first day of such Semi-Annual
Period of Participation and the Eligible Employee's purchase rights with
respect to any remaining semi-annual installments under such Option shall be
immediately extinguished without any further action by the Company, any
Subsidiary Corporation, or the Eligible Employee. Upon such cancellation, a
new Option shall be granted to such Eligible Employee which may thereafter be
exercised in successive semi-annual installments on the last day of such Semi-
Annual Period of Participation and each subsequent Semi-Annual Period of
Participation; provided, however, that such Option may also subsequently be
cancelled in accordance with the terms of this Section. In the event that an
Option is cancelled and a new Option granted under this Section, the Eligible
Employee's Entry Date for purposes of the provisions of the Q.S.P. Plan shall
become the date upon which such new Option is granted.
10. OPTION PRICE.
(a) The per share exercise price of each Option (the "Option Price") shall
be an amount equal to the lesser of:
(i) 85% of the fair market value of a share of Stock on the Participant's
Entry Date into the Q.S.P. Plan; or
(ii) 85% of the fair market value of a share of Stock on the Semi-Annual
Purchase Date corresponding to the Semi-Annual Period of Participation for
which a Participant exercises a semi-annual installment of his or her
Option.
(b) For purposes of subsection (a) and Section 9, the fair market value of a
share of Stock as of a given date shall be the closing price of a share of
Stock on the principal exchange on which shares of Stock are then trading, if
any, on such date, or, if shares were not traded on such date, then on the
next preceding trading day during which a sale occurred.
II-6
<PAGE>
11. ISSUANCE OF CERTIFICATES.
(a) In the event the Administrator is required to obtain authority to issue
certificates for any shares of Stock purchased by an Eligible Employee under
the Q.S.P. Plan from any commissioner or agency, the Administrator shall seek
to obtain such authority. If the Administrator is unable, after reasonable
efforts, to obtain such authority, the Administrator, the Company, and any
Subsidiary Corporations shall be relieved from all liability and shall pay to
each such Eligible Employee the balance of payroll deductions credited to each
such Eligible Employee's account under the Q.S.P. Plan in cash in one lump sum
as soon as practicable, without the payment of any interest thereon.
12. CESSATION OF PARTICIPATION.
(a) Except as otherwise provided in Subsection 7(c), an Eligible Employee
shall cease to participate in the Q.S.P. Plan in the event that:
(i) the Eligible Employee reduces his or her percentage of payroll
deduction to zero percent (0%) pursuant to Section 6(a)(i);
(ii) the Administrator receives written instructions from the Eligible
Employee that a semi-annual installment is not to be exercised pursuant to
Section 8(d);
(iii) the Administrator receives written instructions from the Eligible
Employee to terminate such Eligible Employee's participation in the Q.S.P.
Plan;
(iv) the Eligible Employee resigns, is discharged from employment or has
a leave of absence from the Company or any Subsidiary Corporation; or
(v) the Employee dies.
(b) Upon cessation of participation by an Eligible Employee, such Eligible
Employee's payroll deductions shall cease. If such cessation of participation
occurs during the last two weeks of a Semi-Annual Period of Participation,
such Eligible Employee's Option installment shall be exercised on the Semi-
Annual Purchase Date in accordance with Section 8(b). Upon cessation of
participation at any other time, any balance of payroll deductions credited to
such Eligible Employee's account under the Q.S.P. Plan shall be paid to the
Employee in cash in one lump sum as soon as practicable after cessation of
participation, without payment of any interest thereon.
(c) An Eligible Employee shall not be eligible to participate in the Q.S.P.
Plan during the Semi-Annual Period of Participation which immediately follows
the Semi-Annual Period of Participation during which such Employee terminates
participation in the Q.S.P. Plan under paragraph (a).
13. TRANSFER OF OPTION. Options granted pursuant to the Q.S.P. Plan shall
not be transferable by an Eligible Employee, other than by will or the laws of
descent and distribution, and shall be exercisable during the Eligible
Employee's lifetime only by such Eligible Employee.
14. BENEFICIARY.
(a) Each Eligible Employee shall designate on his or her Authorization Card
a beneficiary or beneficiaries and may, without such beneficiaries' consent,
change such designation. Any designation shall be effective only after it is
received by the Administrator and shall be controlling over any disposition by
will or otherwise. Upon the death of an Eligible Employee, except as provided
in Section 12(b) the balance of payroll deductions credited to such Eligible
Employee's account shall be paid or distributed to the designated beneficiary
or beneficiaries, or in the absence of such designation, to the executor or
administrator of the Eligible Employee's estate, and in either event the
Administrator, the Company, and any Subsidiary Corporations shall not be under
any further liability to anyone.
II-7
<PAGE>
15. RECAPITALIZATION. If there shall be any change in the Stock subject to
the Q.S.P. Plan or the Stock subject to any Option, through merger,
consolidation, reorganization, recapitalization, reincorporation, stock split,
stock dividend (in excess of 2% of the fair market value of the Stock) or
other change in the corporate structure of the Company, appropriate
adjustments shall be made by the Administrator to the aggregate number of
shares subject to the Q.S.P. Plan and the number of shares and the price per
share subject to outstanding Options in order to preserve, but not to
increase, the benefits of the Eligible Employees hereunder; provided, however,
that subject to any required action by the stockholders, if the Company shall
not be the surviving corporation in any such merger, consolidation or
reorganization, every Option outstanding shall terminate, unless the surviving
corporation shall (subject to applicable provisions of the Code) issue a new
Option therefor or assume (with appropriate changes) the existing Option. If
the Option shall terminate by reason of such merger, consolidation, or
reorganization, then any provision herein to the contrary notwithstanding, any
Option held by an Eligible Employee may be exercised, in whole or in part, by
such Eligible Employee at any time prior to or concurrently with consummation
of such merger, consolidation, or reorganization.
16. RIGHTS AS A STOCKHOLDER. An Eligible Employee shall have no rights as a
stockholder with respect to any shares of Stock covered by Options until the
date of the issuance of a certificate for such shares of Stock. No adjustments
shall be made for dividends (ordinary or extraordinary, whether in cash,
securities or other property) or distributions or other rights for which the
record date is prior to the date such certificate is issued, except as
otherwise expressly provided herein.
17. COSTS; INDEMNIFICATIONS.
(a) The Company shall pay all costs and expenses incurred in administering
the Q.S.P. Plan.
(b) In addition to such other rights of indemnification as the Administrator
may have as a director or officer of the Company, the Company shall indemnify
and hold the Administrator harmless against any and all liability, loss,
costs, damages, attorneys' fees and other expenses the Administrator may
sustain or incur in connection with administration of the Q.S.P. Plan, except
for liability, loss, costs, damages, attorneys' fees and other expenses caused
by the negligence of the Administrator or his agent; provided, that within 60
days after the institution of any action, suit or proceeding the Administrator
shall in writing offer the Company the opportunity to handle, prosecute or
defend the same, at the Company's own expense. The Administrator shall have
the right, but not the obligation, to adjust, settle, or compromise any claim,
obligation, debt, demand, suit or judgment against the Administrator, and if
such settlement is approved by independent legal counsel selected by the
Company then the Company shall reimburse the Administrator for all sums of
money the Administrator may pay or become liable to pay against which the
Administrator is indemnified hereunder.
18. AMENDMENT OR TERMINATION OF THE Q.S.P. PLAN. The Board of Directors may
at any time, with respect to any shares of Stock not then subject to Options,
suspend or terminate the Q.S.P. Plan, and may amend the Q.S.P. Plan from time
to time as the Board of Directors may deem advisable; provided, however, that
except as provided in Section 15 hereof, the Board of Directors shall not
amend the Q.S.P. Plan in the following respects without the affirmative vote
of approval by a majority of the outstanding shares of Stock of the Company:
(a) To increase the maximum number of shares of Stock subject to the
Q.S.P. Plan;
(b) To change the designation or class of employees eligible to receive
Options under the Q.S.P. Plan;
(c) To materially increase the benefits accruing to Employees under the
Q.S.P. Plan; or
(d) In any manner which would cause the Q.S.P. Plan to no longer be an
employee stock purchase plan under Code Section 423.
19. APPLICATION OF FUNDS. The proceeds received by the Company from the sale
of Stock pursuant to the exercise of Options shall be deposited in the account
of the general corporate funds of the Company.
II-8
<PAGE>
20. APPROVAL OF STOCKHOLDERS. The Q.S.P. Plan shall become effective on the
Effective Date subject to the affirmative vote by a majority of the
outstanding shares of Stock of the Company approving the Q.S.P. Plan (which
approval must occur within twelve (12) months before or after the date the
Q.S.P. Plan is adopted by the Board of Directors).
21. NO RIGHTS AS AN EMPLOYEE. Nothing in the Q.S.P. Plan shall be construed
to give any person the right to remain in the employ of the Company or any
Subsidiary Corporation or to affect the Company or any Subsidiary
Corporation's right to terminate the employment of any person at any time with
or without cause.
22. TITLES. Titles are provided herein for convenience only and are not to
serve as a basis for interpretation or construction of the Q.S.P. Plan.
23. CONFORMITY TO SECURITIES LAWS. The Plan is intended to conform to the
extent necessary with all provisions of the Securities Act of 1933, as
amended, and the Securities Exchange Act of 1934, as amended, and any and all
regulations and rules promulgated by the Securities and Exchange Commission
thereunder, including without limitation Rule 16b-3. Notwithstanding anything
herein to the contrary, the Plan shall be administered, and Options shall be
granted and may be exercised, only in such a manner as to conform to such
laws, rules and regulations. To the extent permitted by applicable law, the
Q.S.P. Plan and Options granted hereunder shall be deemed amended to the
extent necessary to conform to such laws, rules and regulations.
II-9
<PAGE>
Exhibit 4.3
DATAMETRICS CORPORATION
INCENTIVE STOCK OPTION AGREEMENT
THIS AGREEMENT, dated ____________, 19__, is made by and between Datametrics
Corporation, a Delaware corporation hereinafter referred to as "Company," and
____________________, an employee of the Company or a Parent Corporation or
Subsidiary of the Company, hereinafter referred to as "Employee":
WHEREAS, the Company wishes to afford the Employee the opportunity to purchase
shares of its $.01 par value Common Stock; and
WHEREAS, the Company wishes to carry out the 1995 STOCK OPTION PLAN (the terms
of which are hereby incorporated by reference and made a part of this
Agreement); and
WHEREAS, the Committee, appointed to administer the Plan, has determined that
it would be to the advantage and best interest of the Company and its
shareholders to grant the Incentive Stock Option provided for herein to the
Employee as an inducement to enter into or remain in the service of the Company,
its Parent Corporations or its Subsidiaries and as an incentive for increased
efforts during such service, and has advised the Company thereof and instructed
the undersigned officers to issue said Option;
NOW, THEREFORE, in consideration of the mutual covenants herein contained and
other good and valuable consideration, receipt of which is hereby acknowledged,
the parties hereto do hereby agree as follows:
ARTICLE I
DEFINITIONS
-----------
Whenever the following terms are used in this Agreement, they shall have the
meaning specified below unless the context clearly indicates to the contrary.
The masculine pronoun shall include the feminine and neuter, and the singular
the plural, where the context so indicates.
SECTION 1.1 BOARD
- ----------- -----
"Board" shall mean the Board of Directors of the Company.
SECTION 1.2 CODE
- ----------- ----
"Code" shall mean the Internal Revenue Code of 1986, as amended.
SECTION 1.3 COMMITTEE
- ----------- ---------
"Committee" shall mean the Stock Option Committee of the Board,
appointed as provided in the Plan.
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SECTION 1.4 COMPANY
- ----------- -------
"Company" shall mean Datametrics Corporation, a Delaware
corporation. In addition, "Company" shall mean any corporation assuming, or
issuing a new incentive stock option in substitution for, the Option in a
transaction to which Section 424(a) of the Code applies.
SECTION 1.5 DIRECTOR
- ----------- --------
"Director" shall mean a member of the Board.
SECTION 1.6 EXCHANGE ACT
- ----------- ------------
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
SECTION 1.7 OFFICER
- ----------- -------
"Officer" shall mean an officer of the Company, as defined in Rule
16a-1(f) under the Exchange Act, as such Rule may be amended in the future.
SECTION 1.8 OPTION
- ----------- ------
"Option" shall mean an option to purchase Common Stock of the
Company granted under the Plan. "Options" includes both Incentive Stock Options
and Non-Qualified Options.
SECTION 1.9 PARENT CORPORATION
- ----------- ------------------
"Parent Corporation" shall mean any corporation in an unbroken chain
of corporations ending with the Company if each of the corporations other than
the Company then owns stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one (1) of the other
corporations in such chain.
SECTION 1.10 PLAN
- ------------ ----
"Plan" shall mean the 1995 Stock Option Plan of Datametrics
Corporation.
SECTION 1.11 RULE 16b-3
- ------------ ----------
"Rule 16b-3" shall mean that certain Rule 16b-3 under the Exchange
Act, as such Rule may be amended in the future.
SECTION 1.12 SECRETARY
- ------------ ---------
"Secretary" shall mean the Secretary of the Company.
SECTION 1.13 SECURITIES ACT
- ------------ --------------
"Securities Act" shall mean the Securities Act of 1933, as
amended.
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SECTION 1.14 SUBSIDIARY
- ------------ ----------
"Subsidiary" shall mean any corporation in an unbroken chain of
corporations beginning with the Company if each of the corporations other than
the last corporation in the unbroken chain then owns stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of stock
in one (1) of the other corporations in such chain.
SECTION 1.15 TERMINATION OF RELATIONSHIP
- ------------ ---------------------------
"Termination of Relationship" shall mean the time when the
employee-employer relationship or other business relationship between the
Optionee and the Company, a Parent Corporation or a Subsidiary is terminated for
any reason, with or without cause, including, but not by way of limitation, a
termination by resignation, discharge, death or retirement, but excluding any
termination where there is a simultaneous reemployment by the Company, a Parent
Corporation or a Subsidiary. The Committee, in its absolute discretion, shall
determine the effect of all other matters and questions relating to Termination
of Relationship, including, but not by way of limitation, the question of
whether a Termination of Relationship resulted from a discharge for good cause,
and all questions of whether particular leaves of absence constitute
Terminations of Relationship; provided, however, that, with respect to Incentive
Stock Options, a leave of absence shall constitute a Termination of Relationship
if, and to the extent that, such leave of absence interrupts employment for
purposes of Section 422(a)(2) of the Code and the then applicable regulations
and revenue rulings under said Section.
ARTICLE II
GRANT OF OPTION
---------------
SECTION 2.1 GRANT OF OPTION
- ----------- ---------------
In consideration of the Employee's agreement to remain in the employ
of the Company, its Parent Corporations or its Subsidiaries and for other good
and valuable consideration, on the date hereof the Company irrevocably grants to
the Employee the option to purchase any part or all of an aggregate of ________
shares of its $.01 par value Common Stock upon the terms and conditions set
forth in this Agreement.
SECTION 2.2 PURCHASE PRICE
- ----------- --------------
The purchase price of the shares of stock covered by the Option
shall be $_____ per share without commission or other charge.
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SECTION 2.3 CONSIDERATION TO COMPANY
- ----------- ------------------------
In consideration of the granting of this Option by the Company, the
Employee agrees to render faithful and efficient services to the Company, a
Parent Corporation or a Subsidiary, with such duties and responsibilities as the
Company shall from time to time prescribe, for a period of at least one (1) year
from the date this Option is granted. Nothing in this Agreement or in the Plan
shall confer upon the Employee any right to continue in the employ of the
Company, any Parent Corporation or any Subsidiary or shall interfere with or
restrict in any way the rights of the Company, its Parent Corporations and its
Subsidiaries, which are hereby expressly reserved, to discharge the Employee at
any time for any reason whatsoever, with or without cause.
SECTION 2.4 ADJUSTMENTS IN OPTION
- ----------- ---------------------
In the event that the outstanding shares of the stock subject to the
Option are changed into or exchanged for a different number or kind of shares of
the Company or other securities of the Company by reason of merger,
consolidation, recapitalization, reclassification, stock split up, stock
dividend or combination of shares, the Committee shall make an appropriate and
equitable adjustment in the number and kind of shares as to which the Option, or
portions thereof then unexercised, shall be exercisable, to the end that after
such event the Employee's proportionate interest shall be maintained as before
the occurrence of such event. Such adjustment in the Option shall be made
without change in the total price applicable to the unexercised portion of the
Option (except for any change in the aggregate price resulting from rounding-off
of share quantities or prices) and with any necessary corresponding adjustment
in the Option price per share; provided, however, that each such adjustment
shall be made in such manner as not to constitute a "modification" within the
meaning of Section 424(h)(3) of the Code. Any such adjustment made by the
Committee shall be final and binding upon the Employee, the Company and all
other interested persons.
ARTICLE III
PERIOD OF EXERCISABILITY
------------------------
SECTION 3.1 COMMENCEMENT OF EXERCISABILITY
- ----------- ------------------------------
(a) Except as the Committee may otherwise provide, no Option may be
exercised in whole or in part during the first year after such Option is
granted.
(b) Subject to the provisions of Sections 3.5 and 5.6, the Option
shall become exercisable in sixteen (16) cumulative quarterly installments of
one-sixteenth (1/16th) of the shares covered by the Option, the first such
installment to become exercisable one year after the date the Option is granted
and one additional installment to become exercisable every three months
thereafter.
(c) No portion of the Option which is unexercisable at Termination
of Relationship shall thereafter become exercisable.
(d) Notwithstanding any other provision of this Plan, in the case of
an Incentive Stock Option, the aggregate fair market value (determined at the
time the Incentive Stock Option is granted) of the shares of the Company's stock
with respect to which "incentive stock options" (within the meaning of Section
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<PAGE>
422 of the Code) are exercisable for the first time by the Optionee during any
calendar year (under the Plan and all other incentive stock option plans of the
Company, any Subsidiary and any Parent Corporation) shall not exceed $100,000.
SECTION 3.2 DURATION OF EXERCISABILITY
- ----------- --------------------------
The installments provided for in Section 3.1 are cumulative. Each
such installment which becomes exercisable pursuant to Section 3.1 shall remain
exercisable until it becomes unexercisable under Section 3.3.
SECTION 3.3 EXPIRATION OF OPTION
- ----------- --------------------
The Option may not be exercised to any extent by anyone after the
first to occur of the following events:
(a) The expiration of five (5) years from the date the Option was
granted; or
(b) The time of the Employee's Termination of Relationship unless
such Termination of Relationship results from his death, his retirement, his
disability (within the meaning of Section 22(e)(3) of the Code) or his being
discharged not for good cause; or
(c) The expiration of three (3) months from the date of the
Employee's Termination of Relationship by reason of his retirement or his being
discharged not for good cause, unless the Employee dies within said three-month
period; or
(d) The expiration of one (1) year from the date of the Employee's
Termination of Relationship by reason of his disability (within the meaning of
Section 22(e)(3) of the Code); or
(e) The expiration of one (1) year from the date of the Employee's
death; or
(f) The effective date of either the merger or consolidation of the
Company with or into another corporation, or the acquisition by another
corporation or person of all or substantially all of the Company's assets or
eighty percent (80%) or more of the Company's then outstanding voting stock, or
the liquidation or dissolution of the Company, unless the Committee waives this
provision in connection with such transaction. At least ten (10) days prior to
the effective date of such merger, consolidation, acquisition, liquidation or
dissolution, the Committee shall give the Employee notice of such event if the
Option has then neither been fully exercised nor become unexercisable under this
Section 3.3.
SECTION 3.4 ACCELERATION OF EXERCISABILITY
- ----------- ------------------------------
In the event of the merger or consolidation of the Company with or
into another corporation, or the acquisition by another corporation or person of
all or substantially all of the Company's assets or eighty percent (80%) or more
of the Company's then outstanding voting stock, or the liquidation or
dissolution of the Company, the Committee may, in its absolute discretion and
upon such terms and conditions as it deems appropriate, provide by resolution,
adopted prior to such event and incorporated in the notice referred to in
Section 3.3(f), that at some time prior to the effective date of such event this
Option shall be exercisable as
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to all the shares covered hereby, notwithstanding that this Option may not yet
have become fully exercisable under Section 3.1(a); provided, however, that this
acceleration of exercisability shall not take place if:
(a) This Option becomes unexercisable under Section 3.3 prior to
said effective date; or
(b) In connection with such an event, provision is made for an
assumption of this Option or a substitution therefor of a new option by an
employer corporation, or a parent or subsidiary of such corporation, so that
such assumption or substitution complies with the provisions of Section 424(a)
of the Code; and provided, further, that nothing in this Section 3.4 shall make
this Option exercisable if it is otherwise unexercisable by reason of Section
3.5 or Section 5.6.
The Committee may make such determinations and adopt such rules and
conditions as it, in its absolute discretion, deems appropriate in connection
with such acceleration of exercisability, including, but not by way of
limitation, provisions to ensure that any such acceleration and resulting
exercise shall be conditioned upon the consummation of the contemplated
corporate transaction, and determinations regarding whether provisions for
assumption or substitution have been made as defined in subsection (b) above.
SECTION 3.5 LIMITATION ON EXERCISABILITY
- ----------- ----------------------------
Notwithstanding any other provision of this Agreement, the aggregate
fair market value (determined at the time the Option is granted) of the shares
of the Company's stock with respect to which "incentive stock options" (within
the meaning of Section 422 of the Code) are exercisable for the first time by
the Employee during any calendar year (under the Plan and all other incentive
stock option plans of the Company, any Subsidiary and any Parent Corporation)
shall not exceed $100,000.
ARTICLE IV
EXERCISE OF OPTION
------------------
SECTION 4.1 PERSON ELIGIBLE TO EXERCISE
- ----------- ---------------------------
During the lifetime of the Employee, only he may exercise the Option
or any portion thereof, except for the exercisable portion of the Option which
may be transferred pursuant to a qualified domestic relations order under
Section 5.2 hereof. After the death of the Employee, any exercisable portion of
the Option may, prior to the time when the Option becomes unexercisable under
Section 3.3, be exercised by his personal representative or by any person
empowered to do so under the Employee's will or under the then applicable laws
of descent and distribution.
SECTION 4.2 PARTIAL EXERCISE
- ----------- ----------------
Any exercisable portion of the Option or the entire Option, if then
wholly exercisable, may be exercised in whole or in part at any time prior to
the time when the Option or portion thereof becomes unexercisable under Section
3.3; provided, however, that each partial exercise shall be for not less than
twenty-five (25) shares (or the minimum installment set forth in Section 3.1, if
a smaller number of shares) and shall be for whole shares only.
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SECTION 4.3 MANNER OF EXERCISE
- ----------- ------------------
The Option, or any exercisable portion thereof, may be exercised
solely by delivery to the Secretary or his office of all of the following prior
to the time when the Option or such portion becomes unexercisable under Section
3.3:
(a) Notice in writing signed by the Employee or the other person
then entitled to exercise the Option or portion, stating that the Option or
portion is thereby exercised, such notice complying with all applicable rules
established by the Committee; and
(b) (i) Full payment (in cash or by check) for the shares with
respect to which such Option or portion is exercised; or
(ii) With the consent of the Committee, (A) shares of the
Company's Common Stock owned by the Employee duly endorsed for transfer to the
Company or (B) subject to the timing requirements of Section 4.4, shares of the
Company's Common Stock issuable to the Employee upon exercise of the Option,
with a fair market value (as determined under Section 4.2(b) of the Plan) on the
date of Option exercise equal to the aggregate purchase price of the shares with
respect to which such Option or portion is exercised; or
(iii) With the consent of the Committee, any combination of the
consideration provided in the foregoing subparagraphs (i) and (ii); and
(c) A bona fide written representation and agreement, in a form
satisfactory to the Committee, signed by the Employee or other person then
entitled to exercise such Option or portion, stating that the shares of stock
are being acquired for his own account, for investment and without any present
intention of distributing or reselling said shares or any of them except as may
be permitted under the Securities Act and then applicable rules and regulations
thereunder, and that the Employee or other person then entitled to exercise such
Option or portion will indemnify the Company against and hold it free and
harmless from any loss, damage, expense or liability resulting to the Company if
any sale or distribution of the shares by such person is contrary to the
representation and agreement referred to above. The Committee may, in its
absolute discretion, take whatever additional actions it deems appropriate to
insure the observance and performance of such representation and agreement and
to effect compliance with the Securities Act and any other federal or state
securities laws or regulations. Without limiting the generality of the
foregoing, the Committee may require an opinion of counsel acceptable to it to
the effect that any subsequent transfer of shares acquired on an Option exercise
does not violate the Securities Act, and may issue stop-transfer orders covering
such shares. Share certificates evidencing stock issued on exercise of this
Option shall bear an appropriate legend referring to the provisions of this
subsection (c) and the agreements herein. The written representation and
agreement referred to in the first sentence of this subsection (c) shall,
however, not be required if the shares to be issued pursuant to such exercise
have been registered under the Securities Act, and such registration is then
effective in respect of such shares;
(d) Full payment to the Company (or other employer corporation) of
all amounts which, under federal, state or local tax law, it is required to
withhold upon exercise of the Option; with the consent of the Committee, (i)
shares of the Company's Common Stock owned by the Employee duly endorsed for
transfer or (ii) subject to the timing requirements of Section 4.4, shares of
the Company's Common Stock
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issuable to the Employee upon exercise of the Option, valued in accordance with
Section 4.2(b) of the Plan at the date of Option exercise, may be used to make
all or part of such payment; and
(e) In the event the Option or portion shall be exercised pursuant
to Section 4.1 by any person or persons other than the Employee, appropriate
proof of the right of such person or persons to exercise the Option.
SECTION 4.4 CERTAIN TIMING REQUIREMENTS
- ----------- ---------------------------
Shares of the Company's Common Stock issuable to the Employee upon
exercise of the Option may be used to satisfy the Option price or the tax
withholding consequences of such exercise only (i) during the period beginning
on the third (3rd) business day following the date of release of the quarterly
or annual summary statement of sales and earnings of the Company and ending on
the twelfth (12th) business day following such date or (ii) pursuant to an
irrevocable written election by the Employee to use shares of the Company's
Common Stock issuable to the Employee upon exercise of the Option to pay all or
part of the Option price or the withholding taxes (subject to the approval of
the Committee) made at least six (6) months prior to the payment of such Option
price or withholding taxes.
SECTION 4.5 CONDITIONS TO ISSUANCE OF STOCK CERTIFICATES
- ----------- --------------------------------------------
The shares of stock deliverable upon the exercise of the Option, or
any portion thereof, may be either previously authorized but unissued shares or
issued shares which have then been reacquired by the Company. Such shares shall
be fully paid and nonassessable. The Company shall not be required to issue or
deliver any certificate or certificates for shares of stock purchased upon the
exercise of the Option or portion thereof prior to fulfillment of all of the
following conditions:
(a) The admission of such shares to listing on all stock exchanges
on which such class of stock is then listed; and
(b) The completion of any registration or other qualification of
such shares under any state or federal law or under rulings or regulations of
the Securities and Exchange Commission or of any other governmental regulatory
body, which the Committee shall, in its absolute discretion, deem necessary or
advisable; and
(c) The obtaining of any approval or other clearance from any state
or federal governmental agency which the Committee shall, in its absolute
discretion, determine to be necessary or advisable; and
(d) The payment to the Company (or other employer corporation) of
all amounts which, under federal, state or local tax law, it is required to
withhold upon exercise of the Option; and
(e) The lapse of such reasonable period of time following the
exercise of the Option as the Committee may from time to time establish for
reasons of administrative convenience.
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SECTION 4.6 RIGHTS AS SHAREHOLDER
- ----------- ---------------------
The holder of the Option shall not be, nor have any of the rights or
privileges of, a shareholder of the Company in respect of any shares purchasable
upon the exercise of any part of the Option unless and until certificates
representing such shares shall have been issued by the Company to such holder.
ARTICLE V
OTHER PROVISIONS
----------------
SECTION 5.1 ADMINISTRATION
- ----------- --------------
The Committee shall have the power to interpret the Plan and this
Agreement and to adopt such rules for the administration, interpretation and
application of the Plan as are consistent therewith and to interpret or revoke
any such rules. All actions taken and all interpretations and determinations
made by the Committee in good faith shall be final and binding upon the
Employee, the Company and all other interested persons. No member of the
Committee shall be personally liable for any action, determination or
interpretation made in good faith with respect to the Plan or the Option. The
Board shall have no right to exercise any of the rights or duties of the
Committee under the Plan and this Agreement.
SECTION 5.2 OPTION NOT TRANSFERABLE
- ----------- -----------------------
Neither the Option nor any interest or right therein or part thereof
shall be liable for the debts, contracts or engagements of the Employee or his
successors in interest or shall be subject to disposition by transfer,
alienation, anticipation, pledge, encumbrance, assignment or any other means
whether such disposition be voluntary or involuntary or by operation of law by
judgment, levy, attachment, garnishment or any other legal or equitable
proceedings (including bankruptcy), and any attempted disposition thereof shall
be null and void and of no effect; provided, however, that this Section 5.2
shall not prevent transfers by will or by the applicable laws of descent and
distribution or pursuant to a qualified domestic relations order (as defined by
the Code or Title I of the Employee Retirement Income Security Act, and the
rules and regulations thereunder).
SECTION 5.3 SHARES TO BE RESERVED
- ----------- ---------------------
The Company shall at all times during the term of the Option reserve
and keep available such number of shares of stock as will be sufficient to
satisfy the requirements of this Agreement.
SECTION 5.4 NOTICES
- ----------- -------
Any notice to be given under the terms of this Agreement to the
Company shall be addressed to the Company in care of its Secretary, and any
notice to be given to the Employee shall be addressed to him at the address
given beneath his signature hereto. By a notice given pursuant to this Section
5.4, either party may hereafter designate a different address for notices to be
given to him. Any notice which is required to be given to the Employee shall, if
the Employee is then deceased, be given to the Employee's personal
representative if such representative has previously informed the Company of his
status and address by written notice under this Section 5.4. Any notice shall be
deemed duly given when enclosed in a properly
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sealed envelope or wrapper addressed as aforesaid, deposited (with postage
prepaid) in a post office or branch post office regularly maintained by the
United States Postal Service.
SECTION 5.5 TITLES
- ----------- ------
Titles are provided herein for convenience only and are not to serve
as a basis for interpretation or construction of this Agreement.
SECTION 5.6 SHAREHOLDER APPROVAL
- ----------- --------------------
The Plan will be submitted for approval by the Company's
shareholders within twelve (12) months after the date the Plan was initially
adopted by the Board. This Option may not be exercised to any extent by anyone
prior to the time when the Plan is approved by the shareholders, and if such
approval has not been obtained by the end of said twelve-month period, this
Option shall thereupon be cancelled and become null and void. The Company shall
take such actions as may be necessary to satisfy the requirements of Rule 16b-
3(b).
SECTION 5.7 NOTIFICATION OF DISPOSITION
- ----------- ---------------------------
The Employee shall give prompt notice to the Company of any
disposition or other transfer of any shares of stock acquired under this
Agreement if such disposition or transfer is made (a) within two (2) years from
the date of granting the Option with respect to such shares or (b) within one
(1) year after the transfer of such shares to him. Such notice shall specify the
date of such disposition or other transfer and the amount realized, in cash,
other property, assumption of indebtedness or other consideration, by the
Employee in such disposition or other transfer.
SECTION 5.8 CONSTRUCTION
- ----------- ------------
This Agreement shall be administered, interpreted and enforced under
the laws of the State of California.
SECTION 5.9 CONFORMITY TO SECURITIES LAWS
- ----------- -----------------------------
The Employee acknowledges that the Plan is intended to conform to
the extent necessary with all provisions of the Securities Act and the Exchange
Act and any and all regulations and rules promulgated by the Securities and
Exchange Commission thereunder, including without limitation Rule 16b-3.
Notwithstanding anything herein to the contrary, the Plan shall be administered,
and the Option is granted and may be exercised, only in such a manner as to
conform to such laws, rules and regulations. To the extent permitted by
applicable law, the Plan and this Agreement shall be deemed amended to the
extent necessary to conform to such laws, rules and regulations. Without
limiting the generality of the foregoing, the Employee acknowledges that Rule
16b-3(c)(1) precludes shares of stock acquired upon exercise of an Option
granted to an Officer or other person subject to Section 16b-3 from being sold
or otherwise disposed of for a minimum of six months from the date the Option
was granted.
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IN WITNESS WHEREOF, this Agreement has been executed and delivered by the
parties hereto.
* * * * *
THE ISSUANCE of the shares for this option is contingent on proper shareholder
approval and no options may be exercised before this approval has been given.
DATAMETRICS CORPORATION
By
---------------------------
President
By
---------------------------
Secretary
- ----------------------------
Employee
- ----------------------------
- ----------------------------
Address
Employee's Taxpayer Identification Number:
----------------------------
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Exhibit 4.4
NON-QUALIFIED STOCK OPTION AGREEMENT
OF
DATAMETRICS CORPORATION
THIS AGREEMENT, dated ____________, 19__, is made by and between Datametrics
Corporation, a Delaware corporation hereinafter referred to as "Company," and
_________________________, an employee of the Company, a Parent Corporation or
Subsidiary or a person maintaining a business relationship with the Company, a
Parent Corporation or a Subsidiary, hereinafter referred to as "Optionee":
WHEREAS, the Company wishes to afford the Optionee the opportunity to purchase
shares of its $.01 par value Common Stock; and
WHEREAS, the Company wishes to carry out the Plan (the terms of which are
hereby incorporated by reference and made a part of this Agreement); and
WHEREAS, the Committee, appointed to administer the Plan, has determined that
it would be to the advantage and best interest of the Company and its
shareholders to grant the Non-Qualified Option provided for herein to the
Optionee as an inducement to enter into or remain in the service of the Company,
its Parent Corporations or its Subsidiaries and as an incentive for increased
efforts during such service, and has advised the Company thereof and instructed
the undersigned officers to issue said Option;
NOW, THEREFORE, in consideration of the mutual covenants herein contained and
other good and valuable consideration, receipt of which is hereby acknowledged,
the parties hereto do hereby agree as follows:
ARTICLE I
DEFINITIONS
-----------
Whenever the following terms are used in this Agreement, they shall
have the meaning specified below unless the context clearly indicates to the
contrary. The masculine pronoun shall include the feminine and neuter, and the
singular the plural, where the context so indicates.
SECTION 1.1 BOARD
- ----------- -----
"Board" shall mean the Board of Directors of the Company.
SECTION 1.2 CODE
- ----------- ----
"Code" shall mean the Internal Revenue Code of 1986, as amended.
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SECTION 1.3 COMMITTEE
- ----------- ---------
"Committee" shall mean the Stock Option Committee of the Board,
appointed as provided in the Plan.
SECTION 1.4 COMPANY
- ----------- -------
"Company" shall mean Datametrics Corporation. In addition, "Company"
shall mean any corporation assuming, or issuing new employee stock options in
substitution for, the Option and Incentive Stock Options, outstanding under the
Plan, in a transaction to which Section 424(a) of the Code applies.
SECTION 1.5 DIRECTOR
- ----------- --------
"Director" shall mean a member of the Board.
SECTION 1.6 EXCHANGE ACT
- ----------- ------------
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
SECTION 1.7 OFFICER
- ----------- -------
"Officer" shall mean an officer of the Company, as defined in Rule
16a-1(f) under the Exchange Act, as such Rule may be amended in the future.
SECTION 1.8 OPTION
- ----------- ------
"Option" shall mean an option to purchase Common Stock of the
Company granted under the Plan. "Options" includes both Incentive Stock Options
and Non-Qualified Options.
SECTION 1.9 PARENT CORPORATION
- ----------- ------------------
"Parent Corporation" shall mean any corporation in an unbroken chain
of corporations ending with the Company if each of the corporations other than
the Company then owns stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one (1) of the other
corporations in such chain.
SECTION 1.10 PLAN
- ------------ ----
"Plan" shall mean the 1995 Stock Option Plan of Datametrics
Corporation.
SECTION 1.11 RULE 16b-3
- ------------ ----------
"Rule 16b-3" shall mean that certain Rule 16b-3 under the Exchange
Act, as such Rule may be amended in the future.
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SECTION 1.12 SECRETARY
- ------------ ---------
"Secretary" shall mean the Secretary of the Company.
SECTION 1.13 SECURITIES ACT
- ------------ --------------
"Securities Act" shall mean the Securities Act of 1933, as
amended.
SECTION 1.14 SUBSIDIARY
- ------------ ----------
"Subsidiary" shall mean any corporation in an unbroken chain of
corporations beginning with the Company if each of the corporations other than
the last corporation in the unbroken chain then owns stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of stock
in one (1) of the other corporations in such chain.
SECTION 1.15 TERMINATION OF RELATIONSHIP
- ------------ ---------------------------
"Termination of Relationship" shall mean the time when the
employee-employer relationship or other business relationship between the
Optionee and the Company, a Parent Corporation or a Subsidiary is terminated for
any reason, with or without cause, including, but not by way of limitation, a
termination by resignation, discharge, death or retirement, but excluding any
termination where there is a simultaneous reemployment by the Company, a Parent
Corporation or a Subsidiary. The Committee, in its absolute discretion, shall
determine the effect of all other matters and questions relating to Termination
of Relationship, including, but not by way of limitation, the question of
whether a Termination of Relationship resulted from a discharge for good cause,
and all questions of whether particular leaves of absence constitute
Terminations of Relationship.
ARTICLE II
GRANT OF OPTION
---------------
SECTION 2.1 GRANT OF OPTION
- ----------- ---------------
In consideration of the Optionee's agreement to remain in the employ
of or to continue a business relationship with the Company, its Parent
Corporations or its Subsidiaries and for other good and valuable consideration,
on the date hereof the Company irrevocably grants to the Optionee the option to
purchase any part or all of an aggregate of ________ shares of its $.01 par
value Common Stock upon the terms and conditions set forth in this Agreement.
SECTION 2.2 PURCHASE PRICE
- ----------- --------------
The purchase price of the shares of stock covered by the Option
shall be $_____ per share without commission or other charge.
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SECTION 2.3 CONSIDERATION TO COMPANY
- ----------- ------------------------
In consideration of the granting of this Option by the Company, the
Optionee agrees to render faithful and efficient services to the Company, a
Parent Corporation or a Subsidiary, with such duties and responsibilities as the
Company shall from time to time prescribe, for a period of at least one (1) year
from the date this Option is granted. Nothing in this Agreement or in the Plan
shall confer upon the Optionee any right to continue in the employ of or to
continue a business relationship with the Company, any Parent Corporation or any
Subsidiary or shall interfere with or restrict in any way the rights of the
Company, its Parent Corporations and its Subsidiaries, which are hereby
expressly reserved, to discharge the Optionee or to terminate such business
relationship at any time for any reason whatsoever, with or without cause.
SECTION 2.4 ADJUSTMENTS IN OPTION
- ----------- ---------------------
In the event that the outstanding shares of the stock subject to the
Option are changed into or exchanged for a different number or kind of shares of
the Company or other securities of the Company by reason of merger,
consolidation, recapitalization, reclassification, stock split up, stock
dividend or combination of shares, the Committee shall make an appropriate and
equitable adjustment in the number and kind of shares as to which the Option, or
portions thereof then unexercised, shall be exercisable, to the end that after
such event the Optionee's proportionate interest shall be maintained as before
the occurrence of such event. Such adjustment in the Option shall be made
without change in the total price applicable to the unexercised portion of the
Option (except for any change in the aggregate price resulting from rounding-off
of share quantities or prices) and with any necessary corresponding adjustment
in the Option price per share. Any such adjustment made by the Committee shall
be final and binding upon the Optionee, the Company and all other interested
persons.
ARTICLE III
PERIOD OF EXERCISABILITY
------------------------
SECTION 3.1 COMMENCEMENT OF EXERCISABILITY
- ----------- ------------------------------
(a) Except as the Committee may otherwise provide, no Option may be
exercised in whole or in part during the first year after such Option is
granted.
(b) Subject to the provisions of Sections 3.5 and 5.6, the Option
shall become exercisable in sixteen (16) cumulative quarterly installments of
one-sixteenth (1/16th) of the shares covered by the Option, the first such
installment to become exercisable one year after the date the Option is granted
and one additional installment to become exercisable every three months
thereafter.
(c) No portion of the Option which is unexercisable at Termination
of Relationship shall thereafter become exercisable.
(d) Notwithstanding any other provision of this Plan, in the case of
an Incentive Stock Option, the aggregate fair market value (determined at the
time the Incentive Stock Option is granted) of the shares of the Company's stock
with respect to which "incentive stock options" (within the meaning of Section
422 of the Code) are exercisable for the first time by the Optionee during any
calendar year (under the Plan
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and all other incentive stock option plans of the Company, any Subsidiary and
any Parent Corporation) shall not exceed $100,000.
SECTION 3.2 DURATION OF EXERCISABILITY
- ----------- --------------------------
The installments provided for in Section 3.1 are cumulative. Each
such installment which becomes exercisable pursuant to Section 3.1 shall remain
exercisable until it becomes unexercisable under Section 3.3.
SECTION 3.3 EXPIRATION OF OPTION
- ----------- --------------------
The Option may not be exercised to any extent by anyone after the
first to occur of the following events:
(a) The expiration of five (5) years from the date the Option was
granted; or
(b) The time of the Optionee's Termination of Relationship unless
such Termination of Relationship results from his death, his retirement, his
disability or his being discharged not for good cause; or
(c) The expiration of three (3) months from the date of the
Optionee's Termination of Relationship by reason of his retirement or his being
discharged not for good cause, unless the Optionee dies within said three-month
period; or
(d) The expiration of one (1) year from the date of the Optionee's
Termination of Relationship by reason of his disability; or
(e) The expiration of one (1) year from the date of the Optionee's
death; or
(f) The effective date of either the merger or consolidation of the
Company with or into another corporation, or the acquisition by another
corporation or person of all or substantially all of the Company's assets or
eighty percent (80%) or more of the Company's then outstanding voting stock, or
the liquidation or dissolution of the Company, unless the Committee waives this
provision in connection with such transaction. At least ten (10) days prior to
the effective date of such merger, consolidation, acquisition, liquidation or
dissolution, the Committee shall give the Optionee notice of such event if the
Option has then neither been fully exercised nor become unexercisable under this
Section 3.3.
SECTION 3.4 ACCELERATION OF EXERCISABILITY
- ----------- ------------------------------
In the event of the merger or consolidation of the Company with or
into another corporation, or the acquisition by another corporation or person of
all or substantially all of the Company's assets or eighty percent (80%) or more
of the Company's then outstanding voting stock, or the liquidation or
dissolution of the Company, the Committee may, in its absolute discretion and
upon such terms and conditions as it deems appropriate, provide by resolution,
adopted prior to such event and incorporated in the notice referred to in
Section 3.3(f), that at some time prior to the effective date of such event this
Option shall be exercisable as to all the shares covered hereby, notwithstanding
that this Option may not yet have become fully exercisable under Section 3.1(a);
provided, however, that this acceleration of exercisability shall not take place
if:
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(a) This Option becomes unexercisable under Section 3.3 prior to
said effective date; or
(b) In connection with such an event, provision is made for an
assumption of this Option or a substitution therefor of a new option by an
employer corporation or a parent or subsidiary of such corporation; and
provided, further, that nothing in this Section 3.4 shall make this Option
exercisable if it is otherwise unexercisable by reason of Section 5.6.
The Committee may make such determinations and adopt such rules and
conditions as it, in its absolute discretion, deems appropriate in connection
with such acceleration of exercisability, including, but not by way of
limitation, provisions to ensure that any such acceleration and resulting
exercise shall be conditioned upon the consummation of the contemplated
corporate transaction.
ARTICLE IV
EXERCISE OF OPTION
------------------
SECTION 4.1 PERSON ELIGIBLE TO EXERCISE
- ----------- ---------------------------
During the lifetime of the Employee, only he may exercise the Option
or any portion thereof, except for the exercisable portion of the Option which
may be transferred pursuant to a qualified domestic relations order under
Section 5.2 hereof. After the death of the Employee, any exercisable portion of
the Option may, prior to the time when the Option becomes unexercisable under
Section 3.3, be exercised by his personal representative or by any person
empowered to do so under the Employee's will or under the then applicable laws
of descent and distribution.
SECTION 4.2 PARTIAL EXERCISE
- ----------- ----------------
Any exercisable portion of the Option or the entire Option, if then
wholly exercisable, may be exercised in whole or in part at any time prior to
the time when the Option or portion thereof becomes unexercisable under Section
3.3; provided, however, that each partial exercise shall be for not less than
twenty-five (25) shares (or the minimum installment set forth in Section 3.1, if
a smaller number of shares) and shall be for whole shares only.
SECTION 4.3 MANNER OF EXERCISE
- ----------- ------------------
The Option, or any exercisable portion thereof, may be exercised
solely by delivery to the Secretary or his office of all of the following prior
to the time when the Option or such portion becomes unexercisable under Section
3.3:
(a) Notice in writing signed by the Optionee or the other person then
entitled to exercise the Option or portion, stating that the Option or portion
is thereby exercised, such notice complying with all applicable rules
established by the Committee; and
(b) (i) Full payment (in cash or by check) for the shares with
respect to which such Option or portion is exercised; or
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(ii) With the consent of the Committee, (A) shares of the
Company's Common Stock owned by the Optionee duly endorsed for transfer to the
Company or (B) subject to the timing requirements of Section 4.4, shares of the
Company's Common Stock issuable to the Optionee upon exercise of the Option,
with a fair market value (as determined under Section 4.2(b) of the Plan) on the
date of Option exercise equal to the aggregate purchase price of the shares with
respect to which such Option or portion is exercised; or
(iii) With the consent of the Committee, any combination of the
consideration provided in the foregoing subparagraphs (i) and (ii); and
(c) A bona fide written representation and agreement, in a form
satisfactory to the Committee, signed by the Optionee or other person then
entitled to exercise such Option or portion, stating that the shares of stock
are being acquired for his own account, for investment and without any present
intention of distributing or reselling said shares or any of them except as may
be permitted under the Securities Act and then applicable rules and regulations
thereunder, and that the Optionee or other person then entitled to exercise such
Option or portion will indemnify the Company against and hold it free and
harmless from any loss, damage, expense or liability resulting to the Company if
any sale or distribution of the shares by such person is contrary to the
representation and agreement referred to above. The Committee may, in its
absolute discretion, take whatever additional actions it deems appropriate to
insure the observance and performance of such representation and agreement and
to effect compliance with the Securities Act and any other federal or state
securities laws or regulations. Without limiting the generality of the
foregoing, the Committee may require an opinion of counsel acceptable to it to
the effect that any subsequent transfer of shares acquired on an Option exercise
does not violate the Securities Act, and may issue stop-transfer orders covering
such shares. Share certificates evidencing stock issued on exercise of this
Option shall bear an appropriate legend referring to the provisions of this
subsection (c) and the agreements herein. The written representation and
agreement referred to in the first sentence of this subsection (c) shall,
however, not be required if the shares to be issued pursuant to such exercise
have been registered under the Securities Act, and such registration is then
effective in respect of such shares; and
(d) Full payment to the Company (or other employer corporation) of
all amounts which, under federal, state or local tax law, it is required to
withhold upon exercise of the Option; with the consent of the Committee, (i)
shares of the Company's Common Stock owned by the Optionee duly endorsed for
transfer, or (ii) subject to the timing requirements of Section 4.4, shares of
the Company's Common Stock issuable to the Optionee upon exercise of the Option,
valued in accordance with Section 4.2(b) of the Plan at the date of Option
exercise, may be used to make all or part of such payment; and
(e) In the event the Option or portion shall be exercised pursuant
to Section 4.1 by any person or persons other than the Optionee, appropriate
proof of the right of such person or persons to exercise the Option.
SECTION 4.4 CERTAIN TIMING REQUIREMENTS
- ----------- ---------------------------
Shares of the Company's Common Stock issuable to the Optionee upon
exercise of the Option may be used to satisfy the Option price or the tax
withholding consequences of such exercise only (i) during the period beginning
on the third (3rd) business day following the date of release of the quarterly
or annual summary statement of sales and earnings of the Company and ending on
the twelfth (12th) business day following such date or (ii) pursuant to an
irrevocable written election by the Optionee to use shares of the
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Company's Common Stock issuable to the Optionee upon exercise of the Option to
pay all or part of the Option price or the withholding taxes (subject to the
approval of the Committee) made at least six (6) months prior to the payment of
such Option price or withholding taxes.
SECTION 4.5 CONDITIONS TO ISSUANCE OF STOCK CERTIFICATES
- ----------- --------------------------------------------
The shares of stock deliverable upon the exercise of the Option, or
any portion thereof, may be either previously authorized but unissued shares or
issued shares which have then been reacquired by the Company. Such shares shall
be fully paid and nonassessable. The Company shall not be required to issue or
deliver any certificate or certificates for shares of stock purchased upon the
exercise of the Option or portion thereof prior to fulfillment of all of the
following conditions:
(a) The admission of such shares to listing on all stock exchanges
on which such class of stock is then listed; and
(b) The completion of any registration or other qualification of
such shares under any state or federal law or under rulings or regulations of
the Securities and Exchange Commission or of any other governmental regulatory
body, which the Committee shall, in its absolute discretion, deem necessary or
advisable; and
(c) The obtaining of any approval or other clearance from any state
or federal governmental agency which the Committee shall, in its absolute
discretion, determine to be necessary or advisable; and
(d) The payment to the Company (or other employer corporation) of
all amounts which, under federal, state or local tax law, it is required to
withhold upon exercise of the Option; and
(e) The lapse of such reasonable period of time following the
exercise of the Option as the Committee may from time to time establish for
reasons of administrative convenience.
SECTION 4.6 RIGHTS AS SHAREHOLDER
- ----------- ---------------------
The holder of the Option shall not be, nor have any of the rights or
privileges of, a shareholder of the Company in respect of any shares purchasable
upon the exercise of any part of the Option unless and until certificates
representing such shares shall have been issued by the Company to such holder.
ARTICLE V
OTHER PROVISIONS
----------------
SECTION 5.1 ADMINISTRATION
- ----------- --------------
The Committee shall have the power to interpret the Plan and this
Agreement and to adopt such rules for the administration, interpretation and
application of the Plan as are consistent therewith and to interpret or revoke
any such rules. All actions taken and all interpretations and determinations
made by the Committee in good faith shall be final and binding upon the
Optionee, the Company and all other
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interested persons. No member of the Committee shall be personally liable for
any action, determination or interpretation made in good faith with respect to
the Plan or the Option. The Board shall have no right to exercise any of the
rights or duties of the Committee under the Plan and this Agreement.
SECTION 5.2 OPTION NOT TRANSFERABLE
- ----------- -----------------------
Neither the Option nor any interest or right therein or part thereof
shall be liable for the debts, contracts or engagements of the Optionee or his
successors in interest or shall be subject to disposition by transfer,
alienation, anticipation, pledge, encumbrance, assignment or any other means
whether such disposition be voluntary or involuntary or by operation of law by
judgment, levy, attachment, garnishment or any other legal or equitable
proceedings (including bankruptcy), and any attempted disposition thereof shall
be null and void and of no effect; provided, however, that this Section 5.2
shall not prevent transfers by will or by the applicable laws of descent and
distribution or pursuant to a qualified domestic relations order (as defined by
the Code or Title I of the Employee Retirement Income Security Act, and the
rules and regulations thereunder).
SECTION 5.3 SHARES TO BE RESERVED
- ----------- ---------------------
The Company shall at all times during the term of the Option reserve
and keep available such number of shares of stock as will be sufficient to
satisfy the requirements of this Agreement.
SECTION 5.4 NOTICES
- ----------- -------
Any notice to be given under the terms of this Agreement to the
Company shall be addressed to the Company in care of its Secretary, and any
notice to be given to the Optionee shall be addressed to him at the address
given beneath his signature hereto. By a notice given pursuant to this Section
5.4, either party may hereafter designate a different address for notices to be
given to him. Any notice which is required to be given to the Optionee shall, if
the Optionee is then deceased, be given to the Optionee's personal
representative if such representative has previously informed the Company of his
status and address by written notice under this Section 5.4. Any notice shall be
deemed duly given when enclosed in a properly sealed envelope or wrapper
addressed as aforesaid, deposited (with postage prepaid) in a post office or
branch post office regularly maintained by the United States Postal Service.
SECTION 5.5 TITLES
- ----------- ------
Titles are provided herein for convenience only and are not to serve
as a basis for interpretation or construction of this Agreement.
SECTION 5.6 SHAREHOLDER APPROVAL
- ----------- --------------------
The Plan will be submitted for approval by the Company's
shareholders within twelve (12) months after the date the Plan was initially
adopted by the Board. This Option may not be exercised to any extent by anyone
prior to the time when the Plan is approved by the shareholders, and if such
approval has not been obtained by the end of said twelve-month period, this
Option shall thereupon be cancelled and become null and void. The Company shall
take such actions as may be necessary to satisfy the requirements of Rule 16b-
3(b).
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<PAGE>
SECTION 5.7 CONSTRUCTION
- ----------- ------------
This Agreement shall be administered, interpreted and enforced under
the laws of the State of California.
SECTION 5.8 CONFORMITY TO SECURITIES LAWS
- ----------- -----------------------------
The Optionee acknowledges that the Plan is intended to conform to
the extent necessary with all provisions of the Securities Act and the Exchange
Act and any and all regulations and rules promulgated by the Securities and
Exchange Commission thereunder, including without limitation Rule 16b-3.
Notwithstanding anything herein to the contrary, the Plan shall be administered,
and the Option is granted and may be exercised, only in such a manner as to
conform to such laws, rules and regulations. To the extent permitted by
applicable law, the Plan and this Agreement shall be deemed amended to the
extent necessary to conform to such laws, rules and regulations. Without
limiting the generality of the foregoing, Optionee acknowledges that Rule 16b-
3(c)(1) precludes shares of stock acquired upon exercise of an Option granted to
an Officer or other person subject to Section 16b-3 from being sold or otherwise
disposed of for a minimum of six months from the date the Option was granted.
IN WITNESS WHEREOF, this Agreement has been executed and delivered
by the parties hereto.
DATAMETRICS CORPORATION
By
---------------------------
President
By
---------------------------
Secretary
- ----------------------------
Optionee
- ----------------------------
- ----------------------------
Address
Optionee's Taxpayer Identification Number:
----------------------------
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<PAGE>
[LATHAM & WATKINS LETTERHEAD] EXHIBIT 5.1
-----------
May 29, 1996
Datametrics Corporation
21135 Erwin Street
Woodland Hills, California 91367
Re: Form S-8 Registration Statement; 900,000 Shares of Common
Stock, Par Value $.01 Per Share, of Datametrics Corporation
-----------------------------------------------------------------
Ladies and Gentlemen:
In connection with the registration of 900,000 shares of common stock
of the Company, par value $.01 per share (the "Shares"), under the Securities
Act of 1933, as amended (the "Act"), by Datametrics Corporation, a Delaware
corporation (the "Company"), on a Registration Statement on Form S-8 to be filed
with the Securities and Exchange Commission (the "Commission") on or about May
29, 1996 (the "Registration Statement"), you have requested our opinion with
respect to the matters set forth below.
In our capacity as your counsel in connection with such registration,
we are familiar with the proceedings taken and proposed to be taken by the
Company in connection with the authorization, issuance and distribution of the
Shares, and for the purposes of this opinion, have assumed such proceedings will
be timely completed in the manner presently proposed. In addition, we have made
such legal and factual examinations and inquiries, including an examination of
originals or copies certified or otherwise identified to our satisfaction of
such documents, corporate records and instruments, as we have deemed necessary
or appropriate for purposes of this opinion.
In our examination, we have assumed the genuineness of all signatures,
the authenticity of all documents submitted to us as originals, and the
conformity to authentic original documents of all documents submitted to us as
copies.
We are opining herein as to the effect on the subject transaction only
of the General Corporation Law of the State of Delaware, and we express no
opinion with respect to the applicability thereto, or the effect thereon, of the
laws of any other jurisdiction or any other laws, or as to any matters of
municipal law or the laws of any other local agencies within the state.
Subject to the foregoing, it is our opinion that the Shares have been
duly authorized, and upon issuance, delivery and payment therefor in the manner
contemplated by the Registration Statement, will be validly issued, fully paid
and nonassessable.
<PAGE>
We consent to your filing this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ LATHAM & WATKINS
<PAGE>
EXHIBIT 23.2
------------
Consent of Ernst & Young LLP, Independent Auditors
We consent to the incorporation by reference in the Registration Statement (Form
S-8 No. 333-00000) of Datametrics Corporation and the related Prospectus
pertaining to the 1995 Stock Option Plan and the Employee Qualified Stock
Purchase Plan of Datametrics Corporation of our report dated December 8, 1995,
with respect to the financial statements and schedules of Datametrics
Corporation incorporated by reference in its Annual Report (Form 10-K) for the
year ended October 29, 1995 and the related financial statement schedules
included therein, filed with the Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
Woodland Hills, California
May 28, 1996
