<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended:
December 31, 1994
OR
[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from to
Commission File Number 0-9992
KLA INSTRUMENTS CORPORATION
(Exact name of registrant as specified in its charter)
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DELAWARE 04-2564110
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
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160 RIO ROBLES
San Jose, California
(Address of principal executive offices)
95134
(Zip Code)
Registrant's telephone number, including area code: (408) 434-4200
------------------------------------------------------------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
Common shares outstanding at December 31, 1994: 23,224,000
This report, including all exhibits and attachments, contains 47 pages.
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KLA INSTRUMENTS CORPORATION
INDEX
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PART I FINANCIAL INFORMATION
Item 1 Financial Statements:
Condensed Consolidated Statements of Operations
Three Months Ended December 31, 1993 and 1994 3
Six Months Ended December 31, 1993 and 1994 4
Condensed Consolidated Balance Sheets 5
Condensed Consolidated Statements of Cash Flows 6
Notes to Condensed Consolidated Financial Information 7
Item 2 Management's Discussion and Analysis of Results of Operations and
Financial Condition 8-10
PART II OTHER INFORMATION
Items 1-6 11-13
Signatures 14
Index to Exhibits 15-16
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KLA INSTRUMENTS CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
THREE MONTHS ENDED DECEMBER 31,
(In thousands except per share amounts)
(Unaudited)
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1993 1994
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Net sales $ 57,087 $104,711
-------- --------
Costs and expenses:
Cost of sales 32,417 48,374
Engineering, research and development 4,847 8,808
Selling, general and administrative 11,310 21,739
Write-off of acquired in-process technology -- 25,240
-------- --------
48,574 104,161
-------- --------
Income from operations 8,513 550
Interest income and other, net 376 1,535
Interest expense (499) (608)
-------- --------
Income before income taxes 8,390 1,477
Provision for income taxes 2,098 531
-------- --------
Net income $ 6,292 $ 946
-------- --------
Net income per share $ 0.30 $ 0.04
======== ========
Weighted average number of common and
dilutive common equivalent shares outstanding 20,909 24,094
</TABLE>
See accompanying notes to condensed consolidated financial information.
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KLA INSTRUMENTS CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
SIX MONTHS ENDED DECEMBER 31,
(In thousands except per share amounts)
(Unaudited)
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1993 1994
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Net sales $108,991 $187,890
-------- --------
Costs and expenses:
Cost of sales 63,578 88,976
Engineering, research and development 9,776 16,990
Selling, general and administrative 21,243 38,189
Write-off of acquired in-process technology -- 25,240
-------- --------
94,597 169,395
-------- --------
Income from operations 14,394 18,495
Interest income and other, net 549 3,032
Interest expense (995) (1,082)
-------- --------
Income before income taxes 13,948 20,445
Provision for income taxes 3,490 6,601
-------- --------
Net income $ 10,458 $ 13,844
======== ========
Net income per share $ 0.50 $ 0.58
======== ========
Weighted average number of common and
dilutive common equivalent shares outstanding 20,854 23,987
</TABLE>
See accompanying notes to condensed consolidated financial information.
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KLA INSTRUMENTS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands except share amounts)
(Unaudited)
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JUNE 30, DECEMBER 31,
1994 1994
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ASSETS
Current assets:
Cash and cash equivalents $139,126 $119,847
Short-term investments -- 5,680
Accounts receivable, net 74,226 98,016
Inventories 53,265 67,055
Other current assets 11,838 11,811
-------- --------
Total current assets 278,455 302,409
Land, property and equipment, net 37,149 40,515
Marketable securities -- 16,982
Other assets 5,966 5,541
-------- --------
Total assets $321,570 $365,447
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable $ 4,673 $ 2,631
Current portion of long-term debt -- 20,000
Accounts payable 11,890 14,701
Income taxes payable 12,466 18,705
Other current liabilities 36,553 55,379
-------- --------
Total current liabilities 65,582 111,416
-------- --------
Deferred income taxes 8,606 8,606
Long-term debt 20,000 --
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.001 par value, 1,000 shares authorized, none
outstanding -- --
Common stock, $0.001 par value, 75,000 shares authorized, 22,864
and 23,224 shares issued and outstanding 23 23
Capital in excess of par value 147,358 151,441
Retained earnings 80,275 94,119
Treasury stock (581) (581)
Cumulative translation adjustment 307 423
-------- --------
Total stockholders' equity 227,382 245,425
-------- --------
Total liabilities and stockholders' equity $321,570 $365,447
======== ========
</TABLE>
See accompanying notes to condensed consolidated financial information.
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KLA INSTRUMENTS CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Six Months Ended December 31
(In thousands)
(Unaudited)
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1993 1994
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Cash flows from operating activities:
Net income $ 10,458 $ 13,844
Adjustments required to reconcile net income to cash provided by
(used for) operations:
Depreciation and amortization 4,904 5,669
Write-off of acquired in-process technology -- 16,154
Changes in assets and liabilities:
Accounts receivable, net (13,122) (23,204)
Inventories, net (2,261) (10,408)
Other current assets (1,465) 56
Accounts payable 421 1,834
Income taxes payable and deferred income taxes 1,042 6,239
Other current liabilities (1,815) 14,732
Other assets (191) (2,080)
-------- --------
Cash provided for (used for) operating activities (2,029) 22,836
-------- --------
Cash flows from investing activities:
Capital expenditures (1,411) (6,155)
Short term investments -- (5,680)
Long term marketable securities -- (16,982)
Acquisition of Metrologix -- (14,182)
Capitalization of software development costs (248) --
-------- --------
Cash (used for) investing activities (1,659) (42,999)
-------- --------
Cash flows from financing activities:
Short-term borrowings and current portion of long-term debt, net (4,822) (3,315)
Sales of common stock 3,191 4,083
-------- --------
Cash provided by (used for) financing activities (1,631) 768
-------- --------
Effect of exchange rate changes on cash 63 116
-------- --------
Decrease in cash and cash equivalents (5,256) (19,279)
Cash and cash equivalents at beginning of period 52,362 139,126
-------- --------
Cash and cash equivalents at end of period $ 47,106 $119,847
======== ========
Supplemental disclosure to cash flow information
Cash paid during the period for:
Interest $ 790 $ 1,166
Income taxes 2,012 8,766
</TABLE>
See accompanying notes to condensed consolidated financial information.
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KLA INSTRUMENTS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION
(IN '000'S)
UNAUDITED
1) This information is unaudited but, in the opinion of Registrant's
management, all adjustments (consisting only of adjustments that are of a
normal recurring nature) necessary for a fair statement of results have
been included. The results for the quarter ended December 31, 1994, are not
necessarily indicative of results to be expected for the entire year. This
financial information should be read in conjunction with the Registrant's
Annual Report on Form 10-K (including items incorporated by reference
therein) for the year ended June 30, 1994.
2) Effective July 1, 1994, the Company adopted Statement of Financial
Accounting Standards No. 115, "Accounting for Investments in Certain Debt
and Equity Securities" (FAS 115), which requires investment securities to
be classified as either held to maturity, trading or available for sale.
The Company reviewed its portfolio and determined that its investment
portfolio would be classified as available for sale. Under FAS 115, for
those investments classified as available for sale, any difference between
an investment's cost and its fair value should be recorded as a separate
component of stockholder's equity. At December 31, 1994, the fair value of
the Company's investments approximated cost.
3) Details of certain balance sheet components:
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JUNE 30, DECEMBER 31,
1994 1994
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INVENTORIES:
Systems raw materials $12,597 $13,991
Customer service spares 12,220 12,055
Work-In-Process 13,348 23,740
Demonstration Equipment 15,100 17,269
------- -------
$53,265 $67,055
======= =======
OTHER CURRENT LIABILITIES:
Accrued compensation and benefits $16,328 $20,801
Accrued warranty and installation 14,367 15,924
Unearned service contract revenue 3,054 8,780
Other 2,804 9,874
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$36,553 $55,379
======= =======
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4) In December 1994, the Company acquired Metrologix Inc., (Metrologix), a
manufacturer of advanced electron beam measurement equipment for $14.2
million in cash. This acquisition was accounted for as a purchase and the
total purchase price of $16.1 million has been allocated to assets acquired
and liabilities assumed. A significant portion of the purchase price was
allocated to acquired in-process technology. The results of operations for
Metrologix from the date of the acquisition to December 31, 1994 were
immaterial. During the quarter ended December 31, 1994, the Company
wrote-off the acquired in-process technology resulting in an after-tax
charge of $16.2 million (25.2 million pre-tax).
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KLA INSTRUMENTS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION
(IN '000'S)
UNAUDITED
RESULTS OF OPERATIONS
SECOND QUARTER AND SIX MONTHS OF FISCAL 1995 COMPARED WITH SECOND QUARTER AND
SIX MONTHS OF FISCAL 1994
METROLOGIX
In December 1994, the Company acquired Metrologix Inc., (Metrologix), a
manufacturer of advanced electron beam measurement equipment. Except for the
non-recurring write-off of Metrologix technology, the acquisition did not have a
material impact on the financial performance of the Company. Although Metrologix
operated profitably during the quarter ended December 31, 1994, the Company does
not expect the Metrologix business to contribute to earnings during the
remainder of the fiscal year.
NET SALES
Net sales increased 83.4% and 72.4%, respectively, for the three and six
month periods ended December 31, 1994 as compared to the prior fiscal year. The
WISARD business unit was predominantly responsible for the dollar increase in
net sales. The Company attributes the continuing increase of WISARD's sales
primarily to the continuing adoption by customers of KLA's methodology of
in-line monitoring. The number of fabs with multiple KLA 2100 series systems per
fab increased to 70 fabs at December 31, 1994, from 25 fabs one year ago. In
addition, the increase in WISARD's net sales is due to the increase in customers
that are upgrading their older fabs. The Metrology division and the RAPID
business unit also recorded significant increases in net sales. The RAPID
business unit's sales increase is due to the increasing market acceptance of the
Company's 331 model.
GROSS MARGIN
Gross margins were 53.8% and 52.6%, respectively, for the three and six
month periods ended December 31, 1994 compared to 43.2% and 41.7% for the same
periods of the prior fiscal year. The improvement in the gross margin percentage
was due about equally to 1) a favorable mix effect as the WISARD business unit's
share of total revenues rose and 2) improvement in the WISARD business unit's
gross margin as a result of volume efficiencies and the use of lower cost
components. The RAPID business unit also recorded significant improvements in
gross margin for the quarter ended December 31, 1994 as compared to the same
period of the prior fiscal year. The Company attributes this increase primarily
to volume efficiencies.
ENGINEERING, RESEARCH AND DEVELOPMENT
Engineering, research and development expenses were 8.4% of net sales for
the three month and 9.0% for the six month periods ended December 31, 1994,
compared to 8.5% and 9.0% in the comparable periods in the prior fiscal year.
Net engineering expenditures rose $4.0 million and $7.2 million, respectively,
during the three and six month periods of fiscal 1995 compared to the prior
fiscal year. The primary business units experiencing dollars increases were the
WISARD business unit, the newly formed PRISM division and the Rapid business
unit . Although the Company has significantly increased engineering headcount
and spending, these expenditure increases have been slightly slower than the
Company's revenue growth.
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KLA INSTRUMENTS CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION
SELLING, GENERAL AND ADMINISTRATIVE
Selling, general and administrative expenses increased 1.0% and 0.8% of
sales, respectively, for the three and six month periods ended December 31,
1994, compared to the same periods of the prior fiscal year, prior to the effect
of the non-recurring pre-tax charge of $25.2 million, for the write-off of the
Metrologix acquired in-process technology. Sales and administration expenses
grew slower than revenues, while representative commissions and profit sharing
grew at a rate higher than revenues. The increase in profit sharing reflects the
improvement in the Company's financial performance prior to the non-recurring
Metrologix charge. Representative commissions increased as a percentage of sales
primarily due to the rise in the share of sales to Asia-Pacific customers.
INTEREST INCOME AND OTHER, NET
Interest income and other, net increased $1.2 million and $2.5 million,
respectively, for the three and six month periods ended December 31, 1994 as
compared to the same periods of the prior fiscal year. This increase is
primarily attributable to higher average cash and cash equivalent balances.
PROVISION FOR INCOME TAXES
The 32.3% estimated effective tax rate for the six month period ended
December 31, 1994 is lower than the U.S. statutory rate primarily as a result of
income in foreign jurisdictions having a lower than U.S. tax rate, and from the
realization of net deferred tax assets previously reserved, including tax credit
carryforwards, and from the realization of Foreign Sales Corporation benefits
and research and development tax credits.
FUTURE OPERATING RESULTS
The Company's future results will depend on its ability to continuously
introduce new products and enhancements to its customers as demands for higher
performance yield management and process control systems change or increase. Due
to the risks inherent in transitioning to new products, the Company must
accurately forecast demand in both volume and configuration and also manage the
transition from older products. The Company's results could be affected by the
ability of competitors to introduce new products which have technological and/or
pricing advantages. The Company's results also will be affected by strategic
decisions made by management regarding whether to continue particular product
lines, and by volume, mix and timing of orders received during a period,
fluctuations in foreign exchange rates, and changing conditions in both the
semiconductor industry and key semiconductor markets around the world. As a
result, the Company's operating results may fluctuate, especially when measured
on a quarterly basis.
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LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents decreased $19.3 million at December 31, 1994
compared to June 30, 1994. The decrease in cash and cash equivalents is
entirely due to the adoption of new investment strategies and the
implementation of FAS 115, which caused the reclassification of $22.7 million
from cash and cash equivalents to short term investments and marketable
securities. Cash generated by operations was $22.8 million. The Company used
$14.2 million to acquire Metrologix in December 1994. The Company also invested
$6.2 million in new cleanrooms and other capital equipment. Proceeds from the
exercise of stock options and the employee stock purchase plan were $4.1
million. The Company is continuing to expand and anticipates it may begin the
construction of an additional facility at its San Jose campus site during 1995.
The Company believes that its current level of liquid assets, credit facilities
and cash generated from operations are sufficient to fund growth through the
foreseeable future.
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KLA INSTRUMENTS CORPORATION
FORM 10-Q
PART II: OTHER INFORMATION
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Item 1 -- Legal Proceedings Not Applicable
Item 2 -- Changes in Securities Not Applicable
Item 3 -- Defaults Upon Senior Securities Not Applicable
Item 4 -- Submission of Matters to a Vote of Security Holders Page 12
Item 5 -- Other Events Not Applicable
Item 6 -- Exhibits and Reports on Form 8-K Page 13
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ITEM 4
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
An annual meeting of the stockholders was held on November 16, 1994 at the
Company's San Jose headquarters.
At the meeting Mr. Leo Chamberlain and Mr. Dag Tellefsen were elected
directors of the Company. Mr. Kenneth Levy, Mr. Robert Lorenzini, Mr. Samuel
Rubinovitz, Dr. Yoshio Nishi, and Mr. Kenneth Schroeder continued in the office
as directors after the meeting.
At the meeting four items were put to a vote of stockholders:
1. Election of two directors
2. Approval of an amendment to the 1981 Employee Stock Purchase Plan to
increase the number of shares reserved for issuance under the Purchase Plan
by 300,000 shares.
3. Approval of an amendment to the 1982 Stock Option Plan to increase the
number of shares reserved for issuance by 1,600,000 shares and to implement
a per optionee share limitation.
4. Ratification of the appointment of Price Waterhouse as the independent
accountants of the Company for the fiscal year ending June 30, 1995.
The voting results were:
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ITEM DIRECTORS FOR AGAINST WITHHELD ABSTAIN NO VOTE
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1. Mr. Chamberlain 19,863,163 0 24,503
Mr. Tellefsen 19,863,163 0 1,792,801
2. 19,863,163 532,920 32,141 2,257,235
3. 19,863,163 4,529,327 36,762 2,303,251
4. 19,863,163 6,501 26,029
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ITEM 6
EXHIBITS AND REPORTS ON FORM 8-K
See exhibit index on page 15. The Company had no Form 8-K filings during
the period ended December 31, 1994.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
KLA INSTRUMENTS CORPORATION
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February 13, 1994 Kenneth Levy
- ------------------------- -----------------------------------------------------
[Date] Kenneth Levy
Chairman of the Board
February 13, 1994 Kenneth L. Schroeder
- ------------------------- -----------------------------------------------------
[Date] Kenneth L. Schroeder
President
February 13, 1994 Robert J. Boehlke
- ------------------------- -----------------------------------------------------
[Date] Robert J. Boehlke
V.P. Finance and Administration
Chief Financial Officer
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INDEX TO EXHIBITS
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(I) EXHIBITS INCORPORATED BY REFERENCE:
3.1 Certificate of Incorporation as amended (11)
3.2 Bylaws, as amended (11)
4.1 Rights Agreement dated as of March 15, 1989, between the Company and First National
Bank of Boston, as Rights Agent. The Rights Agreement includes as Exhibit A, the
form of Right Certificate, and as Exhibit B, the form of Summary of Rights to
Purchase Common Stock (2)
10.15 Statement of Partnership to Triangle Partners dated April 12, 1983 (3)
10.16 Lease Agreement and Addendum thereto dated January 10, 1983, between BBK
Partnership and the Company (3)
10.18 Purchase and Sale Agreement dated January 10, 1983, between BBK Partnership,
Triangle Partners and the Company (3)
10.23 Research and Development Agreement, Cross License and Technology Transfer Agreement
and Agreement for Option to License and Purchase Resulting Technology, all dated
February 21, 1985, by and between KLA Development No. 3, Ltd., and the Company (4)
10.24 Research and Development Agreement dated February 21, 1985, by and between KLA
Development No. 3, Ltd., and the Company (4)
10.25 Agreement for Option to License and Purchase Resulting Technology dated February
21, 1985, by and between KLA Development No. 3, Ltd., and the Company (4)
10.33 (Research and Development) Agreement dated as of February 1, 1987, by and between
IBM Corporation and the Company (5)
10.35 Research and Development Agreement, Cross License and Technology Transfer Agreement
and Agreement for Option to License and Purchase Resulting Technology, all dated
October 1, 1986, by and between KLA Development No. 4, Ltd., and the Company (5)
10.43 Amendment to the Exclusive Marketing Agreement dated February 23, 1989, by and
between Micrion Limited Partnership and the Company (6)
10.44 Bank Loan Guarantee dated June 29, 1989, by the Company in favor of The First
National Bank of Boston for the Micrion Limited Partnership (6)
10.45 Distribution Agreement, Manufacturing License Agreement, and Technical Marketing
Assistance Agreement, all dated July 1990, by and between Tokyo Electron Limited, a
Japanese Corporation, and the Company (7)
10.46 Principle facility Purchase Agreement dated July 1990, including all exhibits and
amendments; Lease Agreement, Termination of Lease, Lot line adjustment, rights of
first refusal, Deeds of Trust (7)
10.47 Joint Venture Agreement between the Company and Nippon Mining Company, Limited,
dated September 18, 1990 (8)
10.48 Exercise of Option to Purchase Technology made effective as of September 30, 1989,
by and between KLA Development No. 3, and the Company (8)
10.49 Exercise of Option to Purchase Technology made effective as of January 1, 1990, by
and between KLA Development No. 4, and the Company (8)
10.51 Guarantee Agreement between First National Bank of Boston and the Company, dated
June 29, 1989 (8)
10.52 Amendment to the Guarantee Agreement between First National Bank of Boston and the
Company, dated April 19, 1991 (8)
10.53 Secured Installment Note between Micrion and First National Bank of Boston, dated
April 19, 1991 (8)
10.54 Micrion Corporation Series E Preferred Stock Purchase Agreement, dated September
13, 1991 (8)
10.55 Micrion Corporation Guaranty and Warrant Agreement, dated December 8, 1989 (8)
10.57 Stock repurchase and option grant agreement between Bob Boehlke and the Company,
dated April 22, 1991 (8)
10.58 Purchase Agreement between the Company and Ono Sokki Co., Ltd., dated October 18,
1991 with certain portions for which confidential treatment has been requested,
excised (9)
10.59 Credit Agreement between Bank of America NT & SA and the Company, dated November
15, 1991, as amended July 29, 1992 (9)
10.60 Employment agreement between the Company and Kenneth L. Schroeder dated October 4,
1991 (9)
10.61 Amendment of Credit Agreement between Bank of America NT & SA and the Company,
dated October 28, 1992 (10)
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10.62 Amendment of Credit Agreement between Bank of America NT & SA and the Company,
dated December 31, 1992 (10)
10.63 Amendment of Credit Agreement between Bank of America NT & SA and the Company,
dated February 28, 1993 (10)
10.64 Amendment of Credit Agreement between Bank of America NT & SA and the Company,
dated March 31, 1993 (10)
10.65 Amendment of Credit Agreement between Bank of America NT & SA and the Company,
dated June 1, 1993 (10)
10.66 Amendment of Credit Agreement between Bank of America NT & SA and the Company,
dated December 31, 1993 (16)
10.67 Amendment of Credit Agreement between Bank of America NT & SA and the Company,
dated March 31, 1994 (16)
10.68 Credit Agreement between Bank of America NT & SA and the Company, dated April 30,
1994 (16)
10.71 1990 Outside Directors Stock Option Plan (14)
(II) EXHIBITS INCLUDED HEREWITH:
10.73 Amendment of Credit Agreement between Bank of America NT & SA and the Company dated
December 31, 1994
10.74 1981 Employee Stock Purchase Plan, as amended by the Board of Directors on October
7, 1994
10.75 1982 Stock Option Plan, as amended by the Board of Directors on October 7, 1994
27 Financial Data Schedule
</TABLE>
- ---------------
2 Filed as exhibit number 1 to Form 8-A, filed effective March 23, 1989
3 Filed as the same exhibit number as set forth herein to Registrant's Form 10-K
for the year ended June 30, 1983
4 Filed as the same exhibit number as set forth herein to Registrant's Form 10-K
for the year ended June 30, 1985
5 Filed as the same exhibit number as set forth herein to Registrant's Form 10-K
for the year ended June 30, 1987
6 Filed as the same exhibit number as set forth herein to Registrant's Form 10-K
for the year ended June 30, 1989
7 Filed as the same exhibit number as set forth herein to Registrant's Form 10-K
for the year ended June 30, 1990
8 Filed as the same exhibit number as set forth herein to Registrant's Form 10-K
for the year ended June 30, 1991
9 Filed as the same exhibit number as set forth herein to Registrant's Form 10-K
for the year ended June 30, 1992
10 Filed as the same exhibit number as set forth herein to Registrant's Form
10-K for the year ended June 30, 1993
11 Filed as the same exhibit number to Registrant's registration statement no.
33-51819 on Form S-3, dated February 2, 1994
14 Filed as exhibit number 4.6 as set forth herein to Registrant's Form 10-K for
the year ended June 30, 1991
16 Filed as the same exhibit number as set forth herein to Registrant's Form
10-K for the year ended June 30, 1994
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EXHIBIT 10.73
FIRST AMENDMENT TO CREDIT AGREEMENT
This FIRST AMENDMENT TO CREDIT AGREEMENT ("Amendment"), dated as of
December 31, 1994, is entered into by and between KLA Instruments Corporation
("Borrower") and Bank of America National Trust and Savings Association
("Bank").
RECITALS
A. The Bank and the Borrower are parties to a Credit Agreement dated as of
April 30, 1994 (the "Credit Agreement"), pursuant to which the Bank has extended
certain credit facilities to the Borrower and certain of its subsidiaries.
B. The Borrower has requested that the Bank agree to certain amendments to
the Credit Agreement.
C. The Bank is willing to amend the Credit Agreement, subject to the terms
and conditions of this Amendment.
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Bank and Borrower mutually agree to amend said
Credit Agreement as follows:
1. DEFINED TERMS. Unless otherwise defined herein, capitalized
terms used herein shall have the meanings, if any, assigned to them in the
Credit Agreement.
2. AMENDMENTS TO CREDIT AGREEMENT.
(a) The definition of the term "Availability Period" occurring in
Section 1.01 of the Credit Agreement is hereby amended in its entirety
to read as follows:
"AVAILABILITY PERIOD": the period commencing on the date of this
Agreement and ending on the date that is the earlier to occur of (a)
February 15, 1995, or (b) the date on which the Bank's commitment to
extend credit hereunder terminates.
(b) Section 2.10 of the Credit Agreement is amended by deleting
the words "December 31, 1994" from the end of the second sentence of the
section and replacing the deleted words with "the last day of the
Availability Period." .
3. REPRESENTATIONS AND WARRANTIES. The Borrower hereby represents
and warrants to the Bank as follows:
(a) No Event of Default or event which with the giving of notice,
the lapse of time, or both, would be an Event of Default, has occurred
and is continuing.
(b) The execution, delivery, and performance by the Borrower of
this Amendment have been duly authorized by all necessary corporate and
other action and do not and will not require any registration with,
consent or approval of, notice to or action by, any person (including
any governmental authority) in order to be effective and enforceable.
The Credit Agreement as amended by this Amendment constitutes the legal,
valid, and binding obligations of the Borrower, enforceable against the
Borrower in accordance with its terms, without defense, counterclaim or
offset.
(c) All representations and warranties of the Borrower contained in
the Credit Agreement are true and correct.
(d) The Borrower is entering into this Amendment on the basis of
its own investigation and for its own reasons, without reliance upon the
Bank or any other person.
4. EFFECTIVE DATE. This Amendment will become effective as of
December 31, 1994 (the "EFFECTIVE DATE") provided that on or before such
date the Bank has received from the Borrower a duly executed original of
this Amendment.
5. RESERVATION OF RIGHTS. The Borrower acknowledges and agrees that
the execution and delivery by the Bank of this Amendment shall not be
deemed to create a course of dealing or otherwise obligate the Bank to
execute similar amendments under the same or similar circumstances in the
future.
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<PAGE> 2
6. MISCELLANEOUS.
(a) Except as herein expressly amended, all terms, covenants, and
provisions of the Credit Agreement are and shall remain in full force
and effect and all references therein to such Credit Agreement shall
henceforth refer to the Credit Agreement as amended by this Amendment.
This Amendment shall be deemed incorporated into, and a part of, the
Credit Agreement.
(b) This Amendment shall be binding upon and inure to the benefit
of the parties hereto and thereto and their respective successors and
assigns. No third party beneficiaries are intended in connection with
this Amendment.
(c) This Amendment shall be governed by and construed in accordance
with the law of the State of California (without regard to principles of
conflicts of laws).
(d) This Amendment may be executed in any number of counterparts,
each of which shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument.
(e) This Amendment may not be amended except in writing executed by
the Borrower and the Bank.
(f) If any term or provision of this Amendment shall be deemed
prohibited by or invalid under any applicable law, such provision shall
be invalidated without affecting the remaining provisions of this
Amendment or the Credit Agreement, respectively.
(g) Borrower covenants to pay to or reimburse the Bank, upon
demand, for all cost and expenses (including allocated cost of in-house
counsel) incurred in connection with the development, preparation,
negotiation, execution and delivery of this Amendment.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Amendment as of the date first above written.
<TABLE>
<S> <C>
BANK OF AMERICA NATIONAL TRUST KLA INSTRUMENTS CORPORATION
AND SAVINGS ASSOCIATION
By: By:
Stephen L. Parry
Vice President Title:
</TABLE>
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<PAGE> 1
Exhibit 10.74
KLA INSTRUMENTS CORPORATION
SECOND AMENDED AND RESTATED
1981 EMPLOYEE STOCK PURCHASE PLAN
1. Purpose. On October 6, 1981, the KLA Instruments Corporation
1981 Employee Stock Purchase Plan (the "Initial Plan") was adopted. On July 1,
1984, the Initial Plan was amended and restated in its entirety and retitled
the KLA Instruments Corporation 1981 Employee Stock Purchase Plan as Amended
and Restated (the "Second Plan"). On July 19, 1989, the Second Plan was
amended and restated in its entirety and retitled the KLA Instruments
Corporation Amended and Restated 1981 Employee Stock Purchase Plan (the "Third
Plan"). On August 3, 1993, the Third Plan was amended and restated in its
entirety as set forth herein and retitled the KLA Instruments Corporation
Second Amended and Restated 1981 Employee Stock Purchase Plan (the "Plan").
Notwithstanding any other provision of the Plan to the
contrary, the terms and conditions of the Initial Plan, the Second Plan, and
the Third Plan shall remain in full force and effect as to options granted and
as to shares of common stock of KLA Instruments Corporation ("KLA") purchased
pursuant to the Initial Plan, the Second Plan, and the Third Plan,
respectively.
Notwithstanding any other provision of the Plan to the
contrary, if an employee participating in the Plan is subject to section 16 of
the Securities Exchange Act of 1934, as amended, (the "Exchange Act") any
provisions of the Plan resulting from the amendment and restatement of the
Second Plan and the Third Plan the application of which to such employee which
would result in a "material increase" in the benefits accruing to such employee
under the Plan such as to require stockholder approval of such provision for
purposes of complying with Rule 16b-3 shall not apply to such employee and,
instead, the applicable provision of the Initial Plan, the Second Plan, or the
Third Plan, as the case may be, if any, shall apply to such employee. The Plan
is established to provide eligible employees of KLA and any current or future
parent and/or subsidiary corporations of KLA (collectively referred to as the
"Company") with an opportunity through payroll deductions to acquire a
proprietary interest in the Company by the purchase of common stock of KLA.
(KLA and any such parent and/or subsidiary corporation of KLA shall be
individually referred to herein as a "Participating Company." For purposes of
the Plan, a parent
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corporation and a subsidiary corporation shall be as defined in sections 425(e)
and 425(f) of the Internal Revenue Code of 1986, as amended (the "Code").)
It is intended that the Plan shall qualify as an "employee
stock purchase plan" under section 423 of the Code (including any future
amendments or replacements of such section), and the Plan shall be so
construed. Any term not expressly defined in the Plan but defined for purposes
of section 423 of the Code shall have the same definition herein.
An employee participating in the Plan (a "Participant") may
withdraw such Participant's accumulated payroll deductions (if any) therein at
any time during an Offering Period (as defined below). Accordingly, each
Participant is, in effect, granted an option pursuant to the Plan (a "Purchase
Right") which may or may not be exercised at the end of an Offering Period and
which is intended to qualify as an option described in section 423 of the Code.
2. Administration. The Plan shall be administered by the Board
of Directors of KLA (the "Board") and/or by a duly appointed committee of the
Board having such powers as shall be specified by the Board. Any subsequent
references to the Board shall also mean the committee if a committee has been
appointed. All questions of interpretation of the Plan or of any Purchase
Right shall be determined by the Board and shall be final and binding upon all
persons having an interest in the Plan and/or any Purchase Right. Subject to
the provisions of the Plan, the Board shall determine all of the relevant terms
and conditions of Purchase Rights granted pursuant to the Plan; provided,
however, that all Participants granted Purchase Rights pursuant to the Plan
shall have the same rights and privileges within the meaning of section
423(b)(5) of the Code. All expenses incurred in connection with the
administration of the Plan shall be paid by the Company.
3. Share Reserve. The maximum number of shares which may be
issued under the Plan shall be two million (2,000,000) shares of KLA's
authorized but unissued common stock or treasury stock (the "Shares"). In the
event that any Purchase Right for any reason expires or is cancelled or
terminated, the Shares allocable to the unexercised portion of such Purchase
Right may again be subjected to a Purchase Right.
4. Eligibility. Any employee of a Participating Company
(including officers and directors who are also employees) is eligible to
participate in the Plan except employees who own or hold options to purchase
or who, as a result of participation in this Plan, would own or hold options to
purchase, stock of the Company possessing five percent (5%) or more of the
total combined voting power or value of all classes of stock of the Company
within the meaning of section 423(b)(3) of the Code.
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An employee who is also a director may participate in the Plan
but may not purchase shares under the Plan until the Company's stockholders
approve the Plan. In the event that stockholder approval of the Plan is not
obtained prior to the last Purchase Date of an Offering Period in which a
director who is also an employee is participating, then any cash balance in
such Participant's account shall be refunded to the Participant as soon as
practical after the last day of the Offering Period.
5. Offering Dates.
(a) Offering Periods. Except as otherwise set forth
below, the Plan shall be implemented by offerings (individually an "Offering")
of two (2) years duration (an "Offering Period"). An Offering Period shall
commence on the first day of January and July of each year. The first Offering
Period shall commence on July 1, 1989. Notwithstanding the foregoing, the
Board may establish a different term for one (1) or more Offerings and/or
different commencing and/or ending dates for such Offerings and/or additional
Offerings, including, without limitation, an Offering commencing October 1,
1989. An employee who becomes eligible to participate in the Plan after an
Offering Period has commenced shall not be eligible to participate in such
Offering but may participate in any subsequent Offering provided such employee
is still eligible to participate in the Plan as of the commencement of any such
subsequent Offering. The Company shall have the authority to designate the
maximum number of Offerings in which an eligible employee may participate at
any one time. The first day of an Offering Period shall be the "Offering Date"
for such Offering Period. In the event the first and/or last day of an
Offering Period is not a business day, the Company shall specify the business
day that will be deemed the first or last day, as the case may be, of the
Offering Period.
(b) Purchase Periods. Each Offering Period shall consist
of four (4) consecutive purchase periods of six (6) months duration (a
"Purchase Period"). The last day of each Purchase Period shall be the
"Purchase Date" for such Purchase Period. Notwithstanding the foregoing, the
Board may establish a different term for one (1) or more Purchase Periods
and/or different commencing dates and/or Purchase Dates for such Purchase
Periods. In the event the first and/or last day of a Purchase Period is not a
business day, the Company shall specify the business day that will be deemed
the first or last day, as the case may be, of the Purchase Period.
(c) Governmental Approval; Stockholder Approval.
Notwithstanding any other provision of the Plan to the contrary, any Purchase
Right granted pursuant to the Plan shall be subject to (i) obtaining all
necessary governmental approvals and/or qualifications of the sale and/or
issuance of the
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Purchase Rights and/or the Shares, and (ii) in the case of Purchase Rights with
an Offering Date after an amendment of the Plan, obtaining any necessary
approval of the stockholders of the Company required by paragraph 22.
6. Participation in the Plan.
(a) Initial Participation. An eligible employee shall
become a Participant on the first Offering Date after satisfying the
eligibility requirements set forth in paragraph 4 and delivering to the Company
not later than the close of business on the date seven (7) days prior to such
Offering Date or on a date as may be established by the Company from time to
time (the "Subscription Date") a subscription agreement indicating the
employee's election to participate in the Plan and authorizing payroll
deductions. An eligible employee who does not deliver a subscription agreement
to the Company on or before the Subscription Date shall not participate in the
Plan for that Offering Period or for any subsequent Offering Period unless such
eligible employee subsequently enrolls in the Plan by complying with the
provisions of paragraph 4 and by filing a subscription agreement with the
Company on or before the Subscription Date for such subsequent Offering Period.
The Company may, from time to time, change the Subscription Date as deemed
advisable by the Company in its sole discretion for proper administration of
the Plan.
(b) Continued Participation. Participation in the Plan
shall continue until (i) the Participant ceases to be eligible as provided in
paragraph 4, (ii) the Participant withdraws from the Plan pursuant to paragraph
11, or (iii) the Participant terminates employment as provided in paragraph 12.
If a Participant is automatically withdrawn from an Offering at the end of a
Purchase Period of such Offering pursuant to paragraph 11(c), then the
Participant shall automatically participate in the Offering Period commencing
on the next business day. At the end of an Offering Period, each Participant
in such terminating Offering Period shall automatically participate in the
first subsequent Offering Period according to the same elections contained in
the Participant's subscription agreement effective for the Offering Period
which has just ended, provided such Participant is still eligible to
participate in the Plan as provided in paragraph 4. However, a Participant may
file a subscription agreement with respect to such subsequent Offering Period
if the Participant desires to change any of the Participant's elections
contained in the Participant's then effective subscription agreement.
7. Right to Purchase Shares. During an Offering Period each
Participant in such Offering Period shall have a Purchase Right consisting of
the right to purchase that number of whole Shares arrived at by dividing Twenty
Thousand Dollars ($20,000) by eighty-five percent (85%) of the fair market
value of the Shares on the Offering Date of such Offering Period; provided,
however,
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<PAGE> 5
that in no event shall a Participant have a Purchase Right for more than two
thousand (2,000) Shares.
8. Purchase Price. The purchase price at which Shares may be
acquired at the end of an Offering pursuant to the exercise of all or any
portion of a Purchase Right granted under the Plan (the "Offering Exercise
Price") shall be set by the Board; provided, however, that the purchase price
shall not be less than eighty-five percent (85%) of the lesser of (a) the fair
market value of the Shares on the Offering Date of such Offering Period, or (b)
the fair market value of the Shares at the time of exercise of all or any
portion of the Purchase Right. Unless otherwise provided by the Board prior to
the commencement of an Offering Period, the Offering Exercise Price shall be
eighty-five percent (85%) of the lesser of (a) the fair market value of the
Shares on the Offering Date of such Offering Period or (b) the fair market
value of the Shares at the time of exercise of all or any portion of the
Purchase Right. For purposes of the Plan, the fair market value of the Shares
at any point in time shall be determined by the Board based on such factors as
the Board deems relevant; including, without limitation, the mean of the bid
and asked price of the Shares on the date in question (or the immediately
preceding business day in the event the date in question falls on a weekend or
legal holiday) as reported on the National Association of Securities Dealers
Automated Quotations system, if available.
9. Payment of Purchase Price. Shares which are acquired pursuant
to the exercise of all or any portion of a Purchase Right for a given Offering
Period may be paid for only by means of payroll deductions from the
Participant's Compensation accumulated during the Offering Period. For
purposes of the Plan, a Participant's "Compensation" with respect to an
Offering shall include all amounts paid in cash and includable as "wages"
subject to tax under section 3101(a) of the Code without applying the dollar
limitation of section 3121(a) of the Code. Accordingly, Compensation shall
include, without limitation, salaries, commissions, bonuses, overtime and
amounts contributed to the Participant's Salary Reduction Account, as that term
is defined in the Company's Employee Savings and Investment Plan (the "Savings
and Investment Plan"). Compensation shall not include reimbursements of
expenses, allowances, or any amount deemed received without the actual transfer
of cash or any amounts directly or indirectly paid pursuant to the Plan or any
other stock purchase or stock option plan or credits or benefits under the
Savings and Investment Plan (other than as set forth above) or any other
Company contributions or payments to any trust, fund, or plan to provide
retirement, pension, profit sharing, health, welfare, death, insurance or
similar benefits to or on behalf of such Participant or any other payments not
specifically referenced above, except to the extent that the inclusion of any
such item with respect to all Participants on a nondiscriminatory basis is
specifically approved by the Board. Except as set forth below. the amount of
Compensation to be
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<PAGE> 6
withheld from a Participant's Compensation during each month shall be
determined by the Participant's subscription agreement.
(a) Election to Decrease Withholding. During an Offering
Period, a Participant may elect to decrease the amount withheld from his or her
Compensation by filing an amended subscription agreement with the Company on or
before the Change Notice Date. The "Change Notice Date" shall initially be the
date fifteen (15) days prior to the end of the first pay period for which such
election is to be effective; provided, however, the Company may change such
Change Notice Date from time to time. A Participant may not elect to increase
the amount withheld from the Participant's Compensation during an Offering
Period.
(b) Limitations on Payroll Withholding. The amount of
payroll withholding with respect to the Plan for any Participant shall be at
least Ten Dollars ($10.00) per month but shall not exceed ten percent (10%) of
the Participant's Compensation for any relevant pay period. Amounts shall be
withheld in whole percentages only and shall be reduced by any amounts
contributed by the Participant and applied to the purchase of Company stock
pursuant to any other employee stock purchase plan qualifying under section 423
of the Code.
(c) Payroll Withholding. Payroll deductions shall
commence on the first payday following the Offering Date and shall continue to
the end of the Offering Period unless sooner altered or terminated as provided
in the Plan.
(d) Participant Accounts. Individual accounts shall be
maintained for each Participant. All payroll deductions from a Participant's
Compensation shall be credited to such account and shall be deposited with the
general funds of the Company. All payroll deductions received or held by the
Company may be used by the Company for any corporate purpose.
(e) No Interest Paid. Interest shall not be paid on sums
withheld from a Participant's Compensation
(f) Exercise of Purchase Right. On each Purchase Date of
an Offering Period, each Participant who has not withdrawn from the Offering or
whose participation in the Offering has not terminated on or before such last
day shall automatically acquire pursuant to the exercise of the Participant's
Purchase Right the number of whole Shares arrived at by dividing the total
amount of the Participant's accumulated payroll deductions for the Purchase
Period by the Offering Exercise Price; provided, however, that in no event
shall the number of Shares purchased by the Participant exceed the number of
Shares subject to the Participant's Purchase Right. No Shares shall be
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<PAGE> 7
purchased on behalf of a Participant whose participation in the Offering or the
Plan has terminated on or before the date of such exercise.
(g) Return of Cash Balance. Any cash balance remaining
in the Participant's account shall be refunded to the Participant as soon as
practical after the last day of the Offering Period. In the event the cash to
be returned to a Participant pursuant to the preceding sentence is an amount
less than the amount necessary to purchase a whole Share, the Company may
establish procedures whereby such cash is maintained in the Participant's
account and applied toward the purchase of Shares in the subsequent Purchase
Period or Offering Period.
(h) Withholding. At the time the Purchase Right is
exercised, in whole or in part, or at the time some or all of the Shares are
disposed of, the Participant shall make adequate provision for foreign, federal
and state tax withholding obligations of the Company, if any, which arise upon
exercise of the Purchase Right and/or upon disposition of Shares. The Company
may, but shall not be obligated to, withhold from the Participant's
Compensation the amount necessary to meet such withholding obligations.
(i) Company Established Procedures. The Company may,
from time to time, establish or change (i) a minimum required withholding
amount for participation in any Offering, (ii) limitations on the frequency
and/or number of changes in the amount withheld during an Offering, (iii) an
exchange ratio applicable to amounts withheld in a currency other than United
States dollars, (iv) payroll withholding in excess of or less than the amount
designated by a Participant in order to adjust for delays or mistakes in the
Company's processing of subscription agreements, (v) the date(s) and manner by
which the fair market value of the Shares is determined for purposes of the
administration of the Plan, and/or (vi) such other limitations or procedures as
deemed advisable by the Company in the Company's sole discretion which are
consistent with the Plan.
(j) Expiration of Purchase Right. Any portion of a
Participant's Purchase Right remaining unexercised after the end of the
Offering Period to which such Purchase Right relates shall expire immediately
upon the end of such Offering Period.
10. Limitations on Purchase of Shares; Rights as a Stockholder.
(a) Fair Market Value Limitation. Notwithstanding any
other provision of the Plan, no Participant shall be entitled to purchase
Shares under the Plan at a rate which exceeds Twenty-Five Thousand Dollars
($25,000) in fair market value, determined as of the Offering Date for each
Offering Period (or
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such other limit as may be imposed by the Code), for each calendar year in
which the Participant participates in the Plan.
(b) Allocation of Shares. In the event the number of
Shares which might be purchased by all Participants in the Plan exceeds the
number of Shares available in the Plan pursuant to all Offerings which have
commenced, the Company shall make a pro rata allocation of the remaining Shares
(and within each Offering, to each Participant in such Offering) in as uniform
a manner as shall be practicable and as the Company shall determine to be
equitable.
(c) Rights as a Stockholder and Employee. A Participant
shall have no rights as a stockholder by virtue of the Participant's
participation in the Plan until the date of the issuance of a stock
certificate(s) for the Shares being purchased pursuant to the exercise of the
Participant's Purchase Right. No adjustment shall be made for cash dividends
or distributions or other rights for which the record date is prior to the date
such stock certificate(s) are issued. Nothing herein shall confer upon a
Participant any right to continue in the employ of the Company or interfere in
any way with any right of the Company to terminate the Participant's employment
at any time.
11. Withdrawal.
(a) Withdrawal From an Offering. A Participant may
withdraw from an Offering by signing a written notice of withdrawal on a form
provided by the Company for such purpose and delivering such notice to the
Company at any time prior to the end of an Offering Period; provided, however,
that if a Participant withdraws after the Purchase Date for a Purchase Period
of an Offering, the withdrawal shall not affect Shares acquired by the
Participant in such Purchase Period. Unless otherwise indicated by the
Participant, withdrawal from an Offering shall not result in a withdrawal from
the Plan or any succeeding Offering therein. By withdrawing from an Offering
on a Purchase Date, a Participant may have Shares purchased on such Purchase
Date and immediately commence participating in the Offering commencing
immediately after such Purchase Date. A Participant is prohibited from again
participating in an Offering upon withdrawal from such Offering. The Company
may impose, from time to time, a requirement that the notice of withdrawal be
on file with the Company for a reasonable period prior to the effectiveness of
the Participant's withdrawal from an Offering.
(b) Withdrawal from the Plan. A Participant may withdraw
from the Plan by signing a written notice of withdrawal on a form provided by
the Company for such purpose and delivering such notice to the Company.
Withdrawals made after a Purchase Date of an Offering Period shall not affect
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shares acquired by the Participant on such Purchase Date. In the event a
Participant voluntarily elects to withdraw from the Plan, the Participant may
not resume participation in the Plan during the same Offering Period, but may
participate in any subsequent Offering under the Plan by again satisfying the
requirements of paragraph 6. The Company may impose, from time to time, a
requirement that the notice of withdrawal be on file with the Company for a
reasonable period prior to the effectiveness of the Participant's withdrawal
from the Plan.
(c) Automatic Withdrawal From an Offering. If the fair
market value of the Shares on a Purchase Date of an Offering is less than the
fair market value of the Shares on the Offering Date for such Offering, then
every Participant shall automatically (i) be withdrawn from the Offering at the
close of the Purchase Date and after the acquisition of Shares for such
Purchase Period, and (ii) be enrolled in the Offering commencing on the first
business day subsequent to such Purchase Period. A Participant may elect not
to be automatically withdrawn from an Offering pursuant to this paragraph 11(c)
by delivering to the Company not later than the close of business on the last
business day before the date seven (7) days prior to the Purchase Date a
written notice indicating such election; provided, however, that the Company
may change the date such notice is required to be delivered to the Company from
time to time.
12. Termination of Employment. Termination of a Participant's
employment with the Company for any reason, including retirement or death or
the failure of a Participant to remain an employee eligible to participate in
the Plan, shall terminate the Participant's participation in the Plan
immediately. A Participant whose participation has been so terminated may
again become eligible to participate in the Plan by again satisfying the
requirements of paragraphs 4 and 6.
13. Repayment of Payroll Deductions. In the event a Participant's
interest in the Plan or any Offering therein is terminated for any reason, the
balance held in the Participant's account shall be returned as soon as
practical after such termination to the Participant (or, in the case of the
Participant's death, to the Participant's legal representative) and all of the
Participant's rights under the Plan shall terminate. Such account balance may
not be applied to any other Offering under the Plan. No interest shall be paid
on sums returned to a Participant pursuant to this paragraph 13.
14. Transfer of Control. A "Transfer of Control" shall be deemed
to have occurred in the event any of the following occurs with respect to the
Control Company. For purposes of applying this paragraph 14, the "Control
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Company" shall mean the Participating Company whose stock is subject to the
Purchase Right.
(a) the direct or indirect sale or exchange by the
stockholders of the Control Company of all or substantially all of the stock of
the Control Company where the stockholders of the Control Company before such
sale or exchange do not retain, directly or indirectly, at least a majority of
the beneficial interest in the voting stock of the Control Company;
(b) a merger in which the stockholders of the Control
Company before such merger do not retain, directly or indirectly, at least a
majority of the beneficial interest in the voting stock of the Control Company;
or
(c) the sale, exchange, or transfer of all or
substantially all of the Control Company's assets (other than a sale, exchange,
or transfer to one (1) or more corporations where the stockholders of the
Control Company before such sale, exchange, or transfer retain, directly or
indirectly, at least a majority of the beneficial interest in the voting stock
of the corporation(s) to which the assets were transferred).
In the event of a Transfer of Control, the Board, in its sole
discretion, shall either (i) provide that Purchase Rights granted under the
Plan shall be fully exercisable to the extent of each Participant's account
balance for the Offering Period as of a date prior to the Transfer of Control,
as the Board so determines or (ii) arrange with the surviving, continuing,
successor, or purchasing corporation, as the case may be, that such corporation
assume the Company's rights and obligations under the Plan. All Purchase
Rights shall terminate effective as of the date of the Transfer of Control to
the extent that the Purchase Right is neither exercised as of the date of the
Transfer of Control nor assumed by the surviving, continuing, successor, or
purchasing corporation, as the case may be.
15. Capital Changes. In the event of changes in the common stock
of the Company due to a stock split, reverse stock split, stock dividend,
combination, reclassification, or like change in the Company's capitalization,
or in the event of any merger, sale or other reorganization, appropriate
adjustments shall be made by the Company in the Plan's share reserve, the
number and class of shares of stock subject to a Purchase Right and in the
purchase price per share of any outstanding Purchase Right, including, without
limitation, the number of Shares subject to a Purchase Right as set forth in
paragraph 7.
16. Non-Transferability. A Purchase Right may not be transferred
in any manner otherwise than by will or the laws of descent and distribution
and
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shall be exercisable during the lifetime of the Participant only by the
Participant.
17. Reports. Each Participant who exercised all or part of the
Participant's Purchase Right for a Purchase Period shall receive as soon as
practical after the last day of such Purchase Period a report of such
Participant's account setting forth the total payroll deductions accumulated,
the number of Shares purchased and the remaining cash balance to be refunded or
retained in the Participant's account pursuant to paragraph 9(g), if any.
18. Plan Term. This Plan shall continue until terminated by the
Board or until all of the Shares reserved for issuance under the Plan have been
issued or until December 31, 2000, whichever shall first occur.
19. Restriction on Issuance of Shares. The issuance of shares
pursuant to the Purchase Right shall be subject to compliance with all
applicable requirements of federal or state law with respect to such
securities. The Purchase Right may not be exercised if the issuance of shares
upon such exercise would constitute a violation of any applicable federal or
state securities laws or other law or regulations. In addition, no Purchase
Right may be exercised unless (i) a registration statement under the Securities
Act of 1933, as amended, shall at the time of exercise of the Purchase Right be
in effect with respect to the shares issuable upon exercise of the Purchase
Right, or (ii) in the opinion of legal counsel to the Company, the shares
issuable upon exercise of the Purchase Right may be issued in accordance with
the terms of an applicable exemption from the registration requirements of said
Act. As a condition to the exercise of the Purchase Right, the Company may
require the Participant to satisfy any qualifications that may be necessary or
appropriate, to evidence compliance with any applicable law or regulation and
to make any representation or warranty with respect thereto as may be requested
by the Company.
20. Legends. The Company may at any time place legends or other
identifying symbols referencing any applicable federal and/or state securities
restrictions and any provision convenient in the administration of the Plan on
some or all of the certificates representing shares of stock issued under the
Plan. The Participant shall, at the request of the Company, promptly present
to the Company any and all certificates representing shares acquired pursuant
to a Purchase Right in the possession of the Participant in order to effectuate
the provisions of this paragraph.
21. Transfer Restrictions. The Company, in its absolute
discretion, may impose such restrictions on the transferability of the shares
purchasable upon the exercise of a Purchase Right as it deems appropriate and
any such
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restriction shall be set forth in the respective subscription agreement and may
be referred to on the certificates evidencing such shares. The Company may
require the employee to give the Company prompt notice of any disposition of
shares of stock acquired by exercise of a Purchase Right within two years from
the date of granting such Purchase Right or one year from the date of exercise
of such Purchase Right. The Company may direct that the certificates
evidencing shares acquired by exercise of a Purchase Right refer to such
requirement to give prompt notice of disposition.
22. Amendment or Termination of the Plan. The Board may at any
time amend or terminate the Plan, except that (i) such termination shall not
affect Purchase Rights previously granted under the Plan except as permitted by
the Plan, and (ii) no amendment may adversely affect a Purchase Right
previously granted under the Plan (except to the extent permitted by the Plan
or as may be necessary to qualify the Plan as an "employee stock purchase plan"
pursuant to section 423 of the Code). In addition, an amendment to the Plan
must be approved by the stockholders of the Company, within the meaning of
section 423 of the Code, within twelve (12) months of the adoption of such
amendment if such amendment would authorize the sale of more shares than are
authorized for issuance under the Plan or would change the designation of
corporations whose employees may be offered Purchase Rights under the Plan.
Notwithstanding any other provision of the Plan to the contrary, in the event
of an amendment to the Plan which affects the rights or privileges of Purchase
Rights to be offered under the Plan, each Participant with an outstanding
Purchase Right shall have the right to exercise such outstanding Purchase Right
on the effective date of the amendment.
IN WITNESS WHEREOF, the undersigned Secretary of KLA Instruments
Corporation certifies that the foregoing Second Amended and Restated 1981
Employee Stock Purchase Plan, as amended, was duly adopted by the Board of
Directors of KLA Instruments Corporation on October 7, 1994.
12
<PAGE> 13
Plan History
<TABLE>
<S> <C>
October 6, 1981 Initial Plan adopted by Board of Directors.
December 7, 1981 Initial Plan approved by stockholders.
December 17, 1982 2-for-1 stock split.
December 8, 1983 2-for-1 stock split.
June 1, 1984 Second Plan adopted by Board of Directors.
October 25, 1984 Second Plan approved by stockholders.
January 1, 1985 Paragraph 9(a) of the Second Plan amended
by the Board of Directors to change the
definition of "base pay." (No stockholder
approval required.)
July 19, 1989 Third Plan adopted by Board of Directors.
(No stockholder approval required.)
July 20, 1990 Share reserve increase of 300,000 shares
(from 900,000 shares to 1,200,000 shares)
and extension of the Plan term until December
31, 2000 approved by the Board of Directors.
October 26, 1990 Share reserve increase and extension of Plan
term approved by stockholders.
October 26, 1990 Paragraph 7 of the Plan amended to limit the
number of shares that a participant may purchase
during an offering period. (No stockholder
approval required.)
September 14, 1992 Share reserve increase of 500,000 shares (from
1,200,000 shares to 1,700,000 shares) and amendment
to allow use of treasury stock approved by Board of
Directors. (Stockholder approval required.)
November 18, 1992 Stockholders approve the 500,000 share increase and
the amendment to allow use of treasury stock.
</TABLE>
13
<PAGE> 14
<TABLE>
<S> <C>
August 3, 1993 Paragraph 4 amended to include employees who are also
directors and to allow part-time employees to
participate. Plan restated and renamed the Second
Amended and Restated 1981 Employee Stock Purchase Plan.
(Stockholder approval required.)
November 17, 1993 Stockholders approve the amendments to include employees
who are also director, to allow part-time employees
to participate, and to restate and rename the Plan the
"Second Amended and Restated 1981 Employee Stock
Purchase Plan."
October 7, 1994 The Plan was amended to increase the number of Shares
reserved for issuance under the Plan from 1,700,000 to
2,000,000 shares. (Stockholder approval required.)
November 16, 1994 Stockholders approve the share increase to 2,000,000 shares.
</TABLE>
14
<PAGE> 15
KLA INSTRUMENTS CORPORATION
SECOND AMENDED AND RESTATED
1981 EMPLOYEE STOCK PURCHASE PLAN
SUBSCRIPTION AGREEMENT
[ ] Original Application
[ ] Change in Percentage of Payroll Deductions
I hereby elect to participate in the Second Amended and Restated 1981
Employee Stock Purchase Plan (the "Stock Purchase Plan") of KLA Instruments
Corporation (the "Company") and subscribe to purchase shares of the Company's
common stock (the "Shares") as determined in accordance with the terms of the
Stock Purchase Plan.
I hereby authorize payroll deductions in the amount of $______________
or______________ percent of my compensation from each paycheck throughout the
"Offering Period" (as defined in the Stock Purchase Plan) in accordance with
the terms of the Stock Purchase Plan. (The amount deducted each [pay period]
[month] must be at least [$ ] and may be no greater than 10% of compensation
for any pay period (if stated in percentages, must be in whole percentages).)
I understand that these payroll deductions will be accumulated for the purchase
of Shares at the applicable purchase price determined in accordance with the
Stock Purchase Plan. I further understand that, except as otherwise set forth
in the Stock Purchase Plan, Shares will be purchased for me automatically on
the last day of the Purchase Period unless I withdraw from the Stock Purchase
Plan or from the Offering Period by giving written notice to the Company or
unless I terminate employment.
I understand that I will automatically participate in each subsequent
Offering Period under the Stock Purchase Plan until such time as I file with
the Company a notice of withdrawal from the Stock Purchase Plan or any such
subsequent Offering Period on such form as may be established from time to time
by the Company or I terminate employment.
I understand that I will be automatically withdrawn from an Offering
Period and be automatically enrolled in the subsequent Offering Period if the
fair market value of the Shares on the purchase date of an Offering Period is
less than the fair market value of the Shares on the first day of such Offering
Period; provided, however, that I may elect not to be automatically withdrawn
if I notify the Company in writing of such election no later than the close of
business on the last business day before the date 7 days prior to the purchase
date of such Offering Period.
15
<PAGE> 16
Shares purchased for me under the Stock Purchase Plan should be issued
in the name set forth below. I understand that Shares may be issued either in
my name alone or together with my spouse as community property or in joint
tenancy.)
NAME: ____________________________________________________
ADDRESS: _________________________________________________
MY SOCIAL SECURITY NUMBER: _______________________________
I am familiar with the terms and provisions of the Stock Purchase Plan
and hereby agree to participate in the Stock Purchase Plan subject to all of
the terms and provisions thereof. I understand that the Board reserves the
right to amend the Stock Purchase Plan and my right to purchase stock under the
Stock Purchase Plan as may be necessary to qualify the Plan as an employee
stock purchase plan as defined in section 423 of the Internal Revenue Code of
1986, as amended. I understand that the effectiveness of this subscription
agreement is dependent upon my eligibility to participate in the Stock Purchase
Plan.
Date: ____________________________ Signature: ___________________________
16
<PAGE> 17
KLA INSTRUMENTS CORPORATION
SECOND AMENDED AND RESTATED
1981 EMPLOYEE STOCK PURCHASE PLAN
NOTICE OF WITHDRAWAL
I hereby elect to withdraw from the current offering (the "Offering")
of the common stock of KLA Instruments Corporation (the "Company") under the
Second Amended and Restated 1981 Employee Stock Purchase Plan (the "Stock
Purchase Plan"), and hereby request that all payroll deductions credited to my
account under the Stock Purchase Plan with respect to the Offering (if any),
and not previously used to purchase shares of common stock of the Company under
the Stock Purchase Plan, be paid to me as soon as is practical. I understand
that this Notice of Withdrawal automatically terminates my interest in the
Offering.
As to participation in future offerings of stock under the Stock
Purchase Plan, I elect as follows:
[ ] I elect to participate in future offerings under the Stock Purchase
Plan.
I understand that by making the election set forth above I
will automatically participate in each subsequent Offering
under the Stock Purchase Plan until such time as I file with
the Company a notice of withdrawal from the Stock Purchase
Plan or any such subsequent offering on such form as may be
established from time to time by the Company or I terminate
employment.
[ ] I elect not to participate in future offerings under the Stock
Purchase Plan.
I understand that by making the election set forth above I
terminate my interest in the Stock Purchase Plan and that no
further payroll deductions will be made unless I elect in
accordance with the Stock Purchase Plan to become a
participant in another offering under the Stock Purchase Plan.
I understand that if no election is made as to participation in future
offerings under the Stock Purchase Plan, I will be deemed to have elected to
participate in such future offerings.
17
<PAGE> 18
Date: ______________________________ Signature: ___________________________
18
<PAGE> 1
Exhibit 10.75
KLA INSTRUMENTS CORPORATION
1982 STOCK OPTION PLAN
AS AMENDED
1. Purpose: On October 6, 1981, the KLA Instruments
Corporation 1981 Incentive Stock Option Plan (the "1981 Plan") was adopted.
The 1981 Plan was amended and restated in its entirety and renamed the KLA
Instruments Corporation 1982 Stock Option Plan (the "1982 Plan"). The 1982
Plan was amended and restated in its entirety in 1985 (the "Prior Plan"). The
Prior Plan was amended and restated in its entirety effective January 1, 1987
(the "Plan"). The Plan is established to create additional incentive for key
employees, consultants and directors of KLA Instruments Corporation and any
present or future parent and/or subsidiary corporations of such corporation
(collectively referred to as the "Company"). For purposes of the Plan, a
parent corporation and a subsidiary corporation shall be as defined in sections
425(e) and 425(f) of the Internal Revenue Code of 1986, as amended (the
"Code").
2. Administration.
(a) Administration by Board and/or Committee. The Plan
shall be administered by the Board of Directors of the Company (the "Board")
and/or by a duly appointed committee of the Board having such powers as shall
be specified by the Board. Any subsequent references herein to the Board shall
also mean the committee if such committee has been appointed and, unless the
powers of the committee have been specifically limited, the committee shall
have all of the powers of the Board granted herein, including, without
limitation, the power to terminate or amend the Plan at any time, subject to
the terms of the Plan and any applicable limitations imposed by law. All
questions of interpretation of the Plan or of any options granted under the
Plan (an "Option") shall be determined by the Board, and such determinations
shall be final and binding upon all persons having an interest in the Plan
and/or any Option.
(b) Options Authorized. Options may be either incentive
stock options as defined in section 422 of the Code or nonqualified stock
options.
(c) Compliance with Section 162(m) of the Code. In the
event that the Company is a "publicly held corporation" as defined in
paragraph (2) of section 162(m) of the Code, as amended by the Revenue
Reconciliation Act of
1
<PAGE> 2
1993 (P.L. 103-66), and the regulations promulgated thereunder ("Section
162(m)"), the Company may establish a committee of outside directors meeting
the requirements of Section 162(m) to approve the grant of Options which might
reasonably be anticipated to result in the payment of employee remuneration
that would otherwise exceed the limit on employee remuneration deductible for
income tax purposes pursuant to Section 162(m).
3. Eligibility:
(a) Eligible Persons. The Options may be granted only to
employees (including officers), consultants and directors of the Company;
provided, however, that no non-employee director may be granted an Option after
October 25, 1991. The Board shall, in its sole discretion, determine which
persons shall be granted Options (an "Optionee"). A consultant of the Company
shall be eligible to be granted only a nonqualified stock option. In the event
an Optionee is not an employee at the time an Option is granted to such
Optionee, termination of such Optionee's status as a consultant shall be deemed
to be termination of the Optionee's employment for purposes of applying the
provisions of the Plan. An Optionee may, if he is otherwise eligible, be
granted additional Options.
(b) Fair Market Value Limitation. To the extent that the
aggregate fair market value (determined at the time the Option is granted) of
stock with respect to which Incentive Stock Options are exercisable by an
Optionee for the first time during any calendar year (under all stock option
plans of the Company, including the Plan) exceeds One Hundred Thousand Dollars
($100,000), such options shall be treated as nonqualified stock options. This
paragraph shall be applied by taking Incentive Stock Options into account in
the order in which they were granted. [In the event of an amendment to section
422 of the Code, this paragraph 3(b) shall be automatically amended to make
this provision no more restrictive to the Optionee than necessary to insure
qualification of the incentive stock option as meeting the requirements of
section 422 of the Code. In the event an Optionee receives an Option intended
to be an incentive stock option which is subsequently determined to have
exceeded the fair market value limitation, the Option shall be amended, if
necessary, in accordance with applicable Treasury Regulations and rulings to
preserve, as the first priority, to the maximum possible extent, the status of
the Option as an incentive stock option and to preserve, as a second priority,
to the maximum possible extent, the total number of shares subject to the
Option. Options designated as nonqualified stock options shall not be subject
to the fair market value limitation.]
(c) Ten Percent Owner Optionees. No person shall be
eligible to receive an Option which is intended to be an incentive stock option
if such
2
<PAGE> 3
person owns stock possessing more than 10% of the total combined voting power
of all classes of stock of the Company within the meaning of section 422(b)(6)
of the Code.
4. Shares Subject to Option. The maximum number of shares of
stock which may be issued under the Plan shall be Six Million Seven Hundred
Fifty Thousand (6,350,000) shares of the Company's authorized but unissued
common stock subject to adjustment as provided in paragraph 6(f). Subject to
adjustment as provided in paragraph 6(f) below, at any such time as the Company
is a "publicly held corporation" as defined in Section 162(m), no person shall
be granted within any fiscal year of the Company Options which in the aggregate
cover more than One Hundred Thousand (100,000) shares; provided, however, that
the foregoing limit shall be Three Hundred Thousand (300,000) shares with
respect to Options granted to any person during the first fiscal year of such
person's employment with the Company (the "Per Optionee Limit"). In the event
that any outstanding Option for any reason expires or is terminated, the shares
allocable to the unexercised portion of such Option may again be subjected to
an Option.
5. Time for Granting Options. All options shall be granted, if
at all, within ten (10) years from July 20, 1990.
6. Terms, Conditions and Form of Options. Subject to the
provisions of the Plan, the Board shall determine for each Option (which need
not be identical) the number of shares for which the Option shall be granted,
the option price of the Option, the exercisability of the Option, whether the
Option is a nonqualified stock option or an incentive stock option, and all
other terms and conditions of the Option. Options granted pursuant to the Plan
shall be evidenced by written agreements specifying the number of shares
covered thereby, in such form as the Board shall from time to time establish,
which agreements may incorporate all or any of the terms of the Plan by
reference and shall comply with and be subject to the following terms and
conditions:
(a) Option Price. The option price shall be not less
than the fair market value as determined by the Board of the shares of common
stock of the Company on the date the Option is granted.
(b) Exercise Period of Options. The Board shall have the
power to set the time or times within which each Option shall be exercisable or
the event or events upon the occurrence of which all or a portion of each
Option shall be exercisable and the term of each Option; provided, however,
that no incentive stock option shall be exercisable after the expiration of ten
(10) years from the date such option is granted and no nonqualified stock
option shall be exercisable after the expiration of ten (10) years and one (1)
day from the date
3
<PAGE> 4
such option is granted. Unless otherwise provided for by the Board in the
grant of the Option, any Option granted hereunder shall be exercisable during
the period commencing seven (7) months after the date the Option is granted
(the "Grant Date") and ending at the time set forth in the previous sentence.
During such period the Option shall be exercised only in proportion to the
vested ratio at the time of the exercise. The "vested ratio" at the time of an
exercise is a fraction the numerator of which is the number of full months of
continuous employment with the Company which have occurred more than six (6)
months after the Grant Date and the denominator of which is 54.
(c) Exercise of Options.
(i) Options may be exercised only by written
notice to the Company, stating the number of shares being purchased and
accompanied by payment of the option price for the number of shares being
purchased (1) in cash, by check, or in cash equivalent, (2) by tender to the
Company of shares of common stock of the Company which (a) either have been
owned by the optionee for more than six (6) months or were not acquired
directly or indirectly from the Company, and (b) have a fair market value not
less than the option price, or (3) by such other consideration as the Board may
approve at the time the Option is granted. Notwithstanding the foregoing, the
Board shall have the authority (A) with respect to Optionees who would not be
subject to suit under section 16(b) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), upon the sale of shares of the Company, to
establish or approve a program and/or procedures which permit the payment of
the option price upon the exercise of an Option by the assignment of the
proceeds of a sale of some or all of the shares being so acquired and (B) with
respect to Optionees who would be subject to suit under section 16(b) of the
Exchange Act upon the sale of shares of the Company, to establish or approve a
program and/or procedures which permit the payment of the option price upon the
exercise of an Option by cash for a portion of the option price and the
Optionee's promissory note for the balance of the option price. At the time an
Option is exercised, in whole or in part, or at any time thereafter as
requested by the Company, the Optionee shall make adequate provision for the
federal and state income tax withholding obligations of the Company, if any,
which arise upon exercise, in whole or in part, of the Option or which arise,
directly or indirectly, upon any transfer, in whole or in part, of any shares
acquired on exercise of the Option.
(ii) The Company reserves, at any and all times,
the right, in the Company's sole and absolute discretion, to establish, decline
to approve and/or terminate any programs and/or procedures for the exercise of
Options by means of an assignment of the proceeds of a sale of some or all of
the shares to be acquired upon such exercise.
4
<PAGE> 5
(iii) No promissory note shall be permitted pursuant
to paragraph 6(c)(i)(B) if an exercise using a promissory note would be a
violation of any law. In the event an Optionee provides for partial payment
with a promissory note, such promissory note shall comply with provisions
established by the Board; provided, however, that the principal balance shall
not exceed the lesser of (A) the option price or (B) the maximum amount
permitted under the Delaware General Corporation Law or other applicable law.
Any permitted promissory note shall be due and payable not more than two (2)
years after the Option is granted and interest shall be payable at least
annually and be at least equal to the minimum interest rate necessary to avoid
imputed interest pursuant to all applicable sections of the Code. The Board
shall have the authority to permit or require the Optionee to secure any
promissory note used to exercise an Option with the shares acquired on exercise
of the Option and/or with other collateral acceptable to the Company. In the
event the Company at any time is subject to the regulations promulgated by the
Board of Governors of the Federal Reserve System or any other governmental
entity affecting the extension of credit in connection with the Company's
securities, any promissory note shall comply with such applicable regulations,
and the Optionee shall pay the unpaid principal and accrued interest, if any,
to the extent necessary to comply with such applicable regulations.
(iv) If an amendment to the Plan requiring the
approval of the stockholders of the Company is necessary for the grant of an
Option and/or the approval of such stockholders is deemed necessary or
advisable by the Board prior to the exercise of an Option, such Option shall
not be exercisable until such time as the Plan is duly approved by the
stockholders of the Company.
(v) In the event of (1) a merger or consolidation
or other reorganization in which the stockholders of the Company before such
merger do not retain, directly or indirectly, at least a majority of the
beneficial interest in the voting stock of the surviving entity, and/or (2) the
sale of all or substantially all of the Company's assets (other than a sale or
transfer to a subsidiary of the Company as defined in section 425(f) of the
Code), all outstanding Options, notwithstanding the terms of such Options,
shall become fully exercisable prior to consummation of such merger or sale of
assets at such time(s) as the Board shall determine or the surviving or
acquiring corporation, as a condition precedent to consummation of said
transaction, shall assume the outstanding Options or issue substitute options
in place thereof. Such assumption or substitution shall meet the requirements
of section 425(a) of the Code if the Options assumed or surrendered are
incentive stock options (as defined in the Code) and shall satisfy comparable
requirements if the Options assumed or surrendered are nonqualified stock
options.
5
<PAGE> 6
(d) Options Non-Transferable. During the lifetime of the
Optionee, the Option shall be exercisable only by said Optionee. No option
shall be assignable or transferable by the Optionee, except by will or by the
laws of descent and distribution.
(e) Termination of Options. If an Optionee ceases to be
an employee of the Company for any reason except death or disability within the
meaning of Section 422(c) of the Code, any Option, to the extent unexercised
and exercisable by the Optionee on the date on which the Optionee ceased to be
an employee, may be exercised by the Optionee within one (1) month after the
date on which the Optionee ceased to be an employee, but in any event no later
than the date of expiration of the Option's term. If the Optionee's employment
with the Company is terminated because of the death of the Optionee or
disability of the Optionee within the meaning of section 422(c) of the Code,
any Option, to the extent unexercised and exercisable by the Optionee on the
date the Optionee ceased to be employed by the Company, may be exercised by the
Optionee (or the Optionee's legal representative) at any time prior to the
expiration of twelve (12) months from the date the Optionee ceased to be
employed, but in any event no later than the date of expiration of the Option's
term. An Optionee's employment shall be deemed to have terminated on account
of death if the Optionee dies within three (3) months of the Optionee's
termination of employment. Except as provided in this paragraph 6(e), an
Option shall terminate and may not be exercised after the Optionee ceases to be
an employee of the Company.
(f) Effect of Change in Stock Subject to Plan.
Appropriate adjustments shall be made in the number and class of shares of
stock subject to the Plan, to the Per Optionee Limit set forth in paragraph 4
above, and to any outstanding Options and in the exercise price of any
outstanding Options in the event of a stock dividend, stock split, reverse
stock split, or like change in the capital structure of the Company.
(g) Restriction on Issuance of Shares. The grant of
Options and the issuance of shares shall be subject to compliance with all of
the applicable requirements of all federal, state, and other laws and
regulations with respect to such securities.
(h) Rights as a Stockholder or Employee. No person shall
have any rights as a stockholder with respect to any shares covered by an
Option until the date of the issuance of a stock certificate(s) for the shares
for which the Option has been exercised. No adjustment shall be made for
dividends or distributions or other rights for which the record date is prior
to the date such stock certificate(s) are issued, except as provided in
paragraph 6(f). Nothing in
6
<PAGE> 7
the Plan or in any Option agreement shall confer upon any Optionee any right to
continue in the employ of the Company or interfere in any way with any right of
the Company to terminate the Optionee's employment at any time.
(i) Fractional Shares. In no event shall the Company be
required to issue fractional shares upon the exercise of an Option.
7. Termination or Amendment of Plan. The Board may at any time
terminate or amend the Plan, provided that without approval of stockholders
there shall be: (i) no increase in the total number of shares covered by the
Plan (except by operation of the provisions of paragraph 6(f) above), and (ii)
no change in the class of person eligible to receive Options. In any case, no
amendment may adversely affect any then outstanding Options or any unexercised
portions thereof without the consent of the Optionee unless such amendment is
required to enable the Option to qualify as an incentive stock option.
8. Continuation of Prior Plan as to Outstanding Options.
Notwithstanding the provisions of the Plan set forth herein, the terms of the
1981 Plan, the 1982 Plan, and the Prior Plan shall remain in effect and apply
to Options granted pursuant to the 1981 Plan, the 1982 Plan, and the Prior
Plan, respectively.
IN WITNESS WHEREOF, the undersigned Secretary of the Company certifies
that the foregoing KLA Instruments Corporation 1982 Stock Option Plan, as
amended, was duly adopted by the Board of Directors of the Company on October
7, 1994.
_____________________________
7
<PAGE> 8
Plan History
<TABLE>
<S> <C>
April 23, 1987 Date Plan as amended adopted by Board of Directors.
June 22, 1987 Date share reserve increase of 1,000,000 shares (from
2,250,000 shares to 3,250,000 shares) approved by Board
of Directors.
July 23, 1987 Date first amendments to Plan regarding a same-day-sale
program and loans to Company officers were approved
by Board of Directors.
October 29, 1987 Date Plan as amended, share reserve increase and first
amendment were approved by the Stockholders.
September 12, 1988 Date share reserve increase of 1,000,000 shares (from
3,250,000 shares to 4,250,000 shares) approved by Board
of Directors.
October 27, 1988 Date share reserve increase approved by Stockholders.
July 20, 1990 Date share reserve increase of 500,000 shares (from 4,250,000
shares to 4,750,000 shares) and extension of Plan term
until July 20, 2000 approved by Board of Directors.
October 26, 1990 Date share reserve increase and extension of Plan term
approved by Stockholders.
October 26, 1991 Date Plan amended by Board of Directors to make non-employee
directors ineligible to receive stock option grants. (No
Stockholder approval required.)
October 7, 1994 Date Plan amended by Board of Directors to increase the number
of shares reserved for issuance under the Plan from 4,750,000
to 6,350,000 shares and to modify certain other provisions as
required by Section 162(m) of the Internal Revenue Code.
(Stockholder approval required.)
November 16, 1994 Date share reserve increase and amendment of Plan approved
by Stockholders.
</TABLE>
8
<PAGE> 9
EXHIBIT A
1. Paragraph 2 of the 1982 Stock Option Plan shall be amended to read as
follows:
"2. Administration.
(a) Administration by Board and/or Committee. The Plan
shall be administered by the Board of Directors of the Company
(the "Board") and/or by a duly appointed committee of the
Board having such powers as shall be specified by the Board.
Any subsequent references herein to the Board shall also mean
the committee if such committee has been appointed and, unless
the powers of the committee have been specifically limited,
the committee shall have all of the powers of the Board
granted herein, including, without limitation, the power to
terminate or amend the Plan at any time, subject to the terms
of the Plan and any applicable limitations imposed by law.
All questions of interpretation of the Plan or of any options
granted under the Plan (an "Option") shall be determined by
the Board, and such determinations shall be final and binding
upon all persons having an interest in the Plan and/or any
Option.
(b) Options Authorized. Options may be either incentive
stock options as defined in section 422 of the Code or
nonqualified stock options.
(c) Compliance with Section 162(m) of the Code. In the
event that the Company is a "publicly held corporation" as
defined in paragraph (2) of section 162(m) of the Code, as
amended by the Revenue Reconciliation Act of 1993 (P.L.
103-66), and the regulations promulgated thereunder ("Section
162(m)"), the Company may establish a committee of outside
directors meeting the requirements of Section 162(m) to
approve the grant of Options which might reasonably be
anticipated to result in the payment of employee remuneration
that would otherwise exceed the limit on employee remuneration
deductible for income tax purposes pursuant to Section
162(m)."
2. Paragraph 4 of the 1982 Stock Option Plan shall be amended to read as
follows:
"4. Shares Subject to Option. The maximum number of shares of
stock which may be issued under the Plan shall be Six Million
Seven Hundred Fifty Thousand (6,350,000) shares of the
Company's authorized but unissued common stock subject to
adjustment as provided in paragraph 6(f).
1
<PAGE> 10
Subject to adjustment as provided in paragraph 6(f) below, at
any such time as the Company is a "publicly held corporation"
as defined in Section 162(m), no person shall be granted
within any fiscal year of the Company Options which in the
aggregate cover more than One Hundred Thousand (100,000)
shares; provided, however, that the foregoing limit shall be
Three Hundred Thousand (300,000) shares with respect to
Options granted to any person during the first fiscal year of
such person's employment with the Company (the "Per Optionee
Limit"). In the event that any outstanding Option for any
reason expires or is terminated, the shares allocable to the
unexercised portion of such Option may again be subjected to
an Option."
3. Paragraph 6(f) of the 1982 Stock Option Plan shall be amended to read
as follows:
"6. Terms, Conditions and Form of Options.
(f) Effect of Change in Stock Subject to Plan.
Appropriate adjustments shall be made in the number and class
of shares of stock subject to the Plan, to the Per Optionee
Limit set forth in paragraph 4 above, and to any outstanding
Options and in the exercise price of any outstanding Options
in the event of a stock dividend, stock split, reverse stock
split, or like change in the capital structure of the
Company."
2
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED STATEMENT OF OPERATIONS, THE CONSOLIDATED BALANCE SHEET AND THE
ACCOMPANYING NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1995
<PERIOD-START> JUL-01-1994
<PERIOD-END> DEC-31-1994
<CASH> 119,847
<SECURITIES> 5,680
<RECEIVABLES> 99,533
<ALLOWANCES> 1,517
<INVENTORY> 67,055
<CURRENT-ASSETS> 302,409
<PP&E> 78,851
<DEPRECIATION> 38,336
<TOTAL-ASSETS> 365,447
<CURRENT-LIABILITIES> 111,416
<BONDS> 0
<COMMON> 23
0
0
<OTHER-SE> 245,402
<TOTAL-LIABILITY-AND-EQUITY> 365,447
<SALES> 187,890
<TOTAL-REVENUES> 187,890
<CGS> 88,976
<TOTAL-COSTS> 169,395
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,082
<INCOME-PRETAX> 20,445
<INCOME-TAX> 6,601
<INCOME-CONTINUING> 13,844
<DISCONTINUED> 0
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<CHANGES> 0
<NET-INCOME> 13,844
<EPS-PRIMARY> .58
<EPS-DILUTED> .58
</TABLE>
