<PAGE> 1
As filed with the Securities and Exchange Commission on January 30, 1998
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
KLA-TENCOR CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 04-2564110
(State of incorporation) (I.R.S. Employer Identification No.)
160 Rio Robles
San Jose, California 95134
(Address, including zip code, of principal executive offices)
SECOND AMENDED AND RESTATED 1981 EMPLOYEE STOCK PURCHASE PLAN
1997 EMPLOYEE STOCK PURCHASE PLAN
(Full Titles of the Plans)
LISA C. BERRY
VICE PRESIDENT, GENERAL COUNSEL
KLA-TENCOR CORPORATION
160 Rio Robles
San Jose, California 95134
(Name and address of agent for service)
(408) 468-4200
(Telephone number, including area code, of agent for service)
Copy to:
JUDITH M. O'BRIEN, ESQ.
WILSON SONSINI GOODRICH & ROSATI
Professional Corporation
650 Page Mill Road
Palo Alto, California 94304
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CALCULATION OF REGISTRATION FEE
================================================================================
<TABLE>
<CAPTION>
Amount to be Proposed Maximum Offering Proposed Maximum Aggregate Amount of
Title of Securities to be Registered Registered Price Per Share(1) Offering Price(1) Registration Fee
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,
$.001 par value
Newly reserved under Second 800,000 36.4375 29,150,000 $8,833
Amended and Restated 1981
Employee Stock
Purchase Plan
Newly reserved under 1997 200,000 36.4375 7,287,500 $2,208
Employee Stock
Purchase Plan
Total 1,000,000 36.4375 36,437,500 $11,041
========= ======= ========== =======
</TABLE>
(1) The Proposed Maximum Offering Price Per Share was estimated in
accordance with Rule 457(c) and Rule 457(h) under the Securities Act of 1933, as
amended (the "SECURITIES ACT") solely for the purpose of calculating the
registration fee, based on the average between the high and low price of the
Registrant's stock as reported in the Nasdaq National Market System on January
27, 1998.
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
KLA-Tencor Corporation (the "REGISTRANT" or the "COMPANY") hereby
incorporates by reference in this registration statement the following
documents:
(a) Registrant's Annual Report on Form 10-K for the fiscal year
ended June 30, 1997 (File No. 000-09992) pursuant to Section
13(a) of the Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT");
(b) Registrant's definitive proxy statement dated October 10,
1997, filed in connection with the November 18, 1997 Annual
Meeting of Stockholders of the Company;
(c) Registrant's Quarterly Report on Form 10-Q for the fiscal
quarter ended September 30, 1997, filed pursuant to Section
13(a) of the Exchange Act;
(d) Registration Statement on Form S-8 filed with the Securities
and Exchange Commission on March 7, 1997 registering shares
under the Second Amended and Restated 1981 Employee Stock
Purchase Plan (File No. 333-22939).
(e) Registration Statement on Form S-8 filed with the Securities
and Exchange Commission on June 28, 1995 registering shares
under the 1981 Employee Stock Purchase Plan (File No.
033-88662).
(f) The description of the Registrant's Common Stock as set forth
in the Registration Statement filed by the Registrant on Form
8-A on March 29, 1989 (File No. 000-09992) pursuant to Section
12(g) of the Exchange Act and any amendments or reports
thereto filed with the Securities and Exchange Commission for
the purpose of updating such description including Amendment
No. 1 to Form 8-A filed September 25, 1995 and Amendment No. 2
to Form 8-A filed September 24, 1996.
ITEM 4. DESCRIPTION OF SECURITIES.
The class of securities to be offered is registered under Section 12 of
the Exchange Act.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Inapplicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145(a) of the Delaware General Corporation Law (the "DGCL")
provides in relevant part that "[a] corporation may indemnify any person who was
or is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of
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another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful." With respect to
derivative actions, Section 145(b) of the DGCL provides in relevant part that
"[a] corporation may indemnify any person who was or is a party or is threatened
to be made a party to any threatened, pending or completed action or suit by or
in the right of the corporation to procure a judgment in its favor... [by reason
of his service in one of the capacities specified in the preceding sentence]
against expenses (including attorneys' fees) actually and reasonably incurred by
him in connection with the defense or settlement of such action or suit if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation and except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the corporation
unless and only to the extent that the Court of Chancery or the court in which
such action or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
which the Court of Chancery or such other court shall deem proper."
The Company's Amended and Restated Certificate of Incorporation
provides that to the fullest extent permitted by the DGCL, no director of the
Company shall be personally liable to the Company or its stockholders for
monetary damages for breach of fiduciary duty as a director. The Amended and
Restated Certificate of Incorporation also provides that no amendment or repeal
of such provision shall apply to or have any effect on the right to
indemnification permitted thereunder with respect to claims arising from acts or
omissions occurring in whole or in part before the effective date of such
amendment or repeal whether asserted before or after such amendment or repeal.
The Company's Bylaws provide that the Company shall indemnify to the
full extent permitted by the DGCL each of its directors, officers, employees and
other agents against expenses actually and reasonably incurred in connection
with any proceeding arising by reason of the fact that such person is or was an
agent of the Company.
The Company has entered into indemnification agreements with its
directors and executive officers and intends to enter into indemnification
agreements with any new directors and executive officers in the future.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Inapplicable.
ITEM 8. EXHIBITS
See Exhibit Index.
ITEM 9. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement to include
any material information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to such
information in the registration statement.
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<PAGE> 4
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
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<PAGE> 5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of San Jose, State of California, on January 30, 1998.
KLA-TENCOR CORPORATION
By: /s/ Lisa C. Berry
--------------------------------------------------
Lisa C. Berry, Vice President and General Counsel
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POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Kenneth Levy and Lisa C. Berry, and each
of them, their true and lawful attorneys and agents, with full power of
substitution, each with power to act alone, to sign and execute on behalf of the
undersigned any amendment or amendments to this Registration Statement on Form
S-8 and to perform any acts necessary in order to file such amendments, and each
of the undersigned does hereby ratify and confirm all that said attorneys and
agents, or their or his or her substitutes, shall do or cause to be done by
virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/ Kenneth Levy Chairman of the Board and January 30, 1998
- -------------------------------
Kenneth Levy Director
/s/ Jon D. Tompkins Chief Executive Officer and January 30, 1998
- -------------------------------
Jon D. Tompkins Director
(Principal Executive Officer)
/s/ Kenneth L. Schroeder President, Chief Operating January 30,1998
- -------------------------------
Kenneth L. Schroeder Officer and Director
/s/ Robert J. Boehlke Vice President, Administration January 30, 1998
- -------------------------------
Robert J. Boehlke and Finance, and Chief Financial
Officer (Principal Financial and
Accounting Officer)
/s/ James W. Bagley Director January 30, 1998
- -------------------------------
James W. Bagley
/s/ Edward W. Barnholt Director January 30, 1998
- -------------------------------
Edward W. Barnholt
/s/ Leo J. Chamberlain Director January 30, 1998
- -------------------------------
Leo J. Chamberlain
/s/ Richard J. Elkus, Jr. Director January 30, 1998
- -------------------------------
Richard J. Elkus, Jr.
/s/ Dean O. Morton Director January 30, 1998
- -------------------------------
Dean O. Morton
/s/ Yoshio Nishi Director January 30, 1998
- -------------------------------
Yoshio Nishi
/s/ Samuel Rubinovitz Director January 30, 1998
- -------------------------------
Samuel Rubinovitz
/s/ Dag Tellefsen Director January 30, 1998
- -------------------------------
Dag Tellefsen
/s/ Lida Urbanek Director January 30, 1998
- -------------------------------
Lida Urbanek
</TABLE>
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KLA-TENCOR CORPORATION
REGISTRATION STATEMENT ON FORM S-8
INDEX TO EXHIBITS
Exhibit
Number Description
5.1 Opinion re: legality
10.1 Second Amended and Restated 1981 Employee Stock Purchase Plan,
as amended on November 18, 1996
10.2 1997 Employee Stock Purchase Plan
23.1 Consent of Counsel (included in Exhibit 5.1)
23.2 Consent of Independent Accountants
24.1 Power of Attorney (see Page II-5)
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EXHIBIT 5.1
[Letterhead]
January 30, 1998
KLA-Tencor Corporation
160 Rio Robles
San Jose, CA 95134
RE: REGISTRATION STATEMENT ON FORM S-8
Ladies and Gentlemen:
We have examined the Registration Statement on Form S-8 to be filed by
you with the Securities and Exchange Commission on or about January 30, 1998
(the "Registration Statement"), in connection with the registration under the
Securities Act of 1933, as amended, of an additional 800,000 shares of Common
Stock reserved for issuance under the Second Amended and Restated 1981 Employee
Stock Purchase Plan, and 200,000 shares of Common Stock reserved for issuance
under the 1997 Employee Stock Purchase Plan (collectively, the "Shares")
(collectively, the "Plans"). As your legal counsel, we have examined the
proceedings taken and proposed to be taken in connection with the issuance, sale
and payment of consideration for the Shares to be issued under the Plans.
It is our opinion that, when issued and sold in compliance with
applicable prospectus delivery requirements and in the manner referred to in the
Plans and pursuant to the agreements which accompany the Plans, the Shares will
be legally and validly issued, fully paid and non-assessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement and further consent to the use of our name wherever appearing in the
Registration Statement and any amendments thereto.
Sincerely,
WILSON SONSINI GOODRICH & ROSATI
Professional Corporation
/s/ Wilson Sonsini Goodrich & Rosati
<PAGE> 1
EXHIBIT 10.1
KLA INSTRUMENTS CORPORATION
SECOND AMENDED AND RESTATED
1981 EMPLOYEE STOCK PURCHASE PLAN
(As Amended November 18, 1997)
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 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").)
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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 five million six hundred thousand (5,600,000) 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.
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
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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 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.
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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, that in
no event shall a Participant have a Purchase Right for more than four thousand
(4,000) 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;
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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 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)
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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 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
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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
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.
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(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 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
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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
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
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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 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
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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
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
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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.
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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.
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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: _____________________________
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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.
Date: _______________________ Signature: _____________________________
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EXHIBIT 10.2
KLA-TENCOR CORPORATION
1997 EMPLOYEE STOCK PURCHASE PLAN
The following constitute the provisions of the 1997 Employee Stock
Purchase Plan (the "Plan") of KLA-Tencor Corporation (the "Company"). Certain
definitions of terms used in the Plan are provided in Section 2 below.
1. PURPOSE
The purpose of the Plan is to provide employees of the Company and its
Designated Subsidiaries with an opportunity to purchase Common Stock of the
Company through accumulated payroll deductions. It is the intention of the
Company to have the Plan qualify as an "Employee Stock Purchase Plan" under
Section 423 of the Code. The provisions of the Plan shall, accordingly, be
construed so as to extend and limit participation in a manner consistent with
the requirements of that section of the Code. The Plan will also be extended to
employees of foreign subsidiaries subject to adjustments, in the sole discretion
of the Board of Directors, to take into account the requirements of the local
laws associated with the particular subsidiary. These local requirements may not
provide the same favorable tax consequences as are available to participants in
the United States.
2. DEFINITIONS
(a) "BOARD" shall mean the Board of Directors of the Company.
(b) "CODE" shall mean the Internal Revenue Code of 1986, as amended.
(c) "COMMON STOCK" shall mean the Common Stock, $.001 par value, of the
Company.
(d) "COMPANY" shall mean KLA-Tencor Corporation, a Delaware
corporation.
(e) "COMPENSATION" Compensation shall mean all amounts 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 and overtime.
Compensation shall not include reimbursements of expenses, allowances, or any
amount deemed received without the actual transfer of cash or any 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.
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(f) "CONTINUOUS STATUS AS AN EMPLOYEE" shall mean the absence of any
interruption or termination of service as an Employee. Continuous Status as an
Employee shall not be considered interrupted in the case of a leave of absence
agreed to in writing by the Company, provided that such leave is for a period of
not more than 90 days or re-employment upon the expiration of such leave is
guaranteed by contract or statute.
(g) "DESIGNATED SUBSIDIARIES" shall mean the Subsidiaries which have
been designated by the Board from time to time in its sole discretion as
eligible to participate in the Plan.
(h) "EMPLOYEE" shall mean any person, including an officer, who is
customarily employed for at least 20 hours per week and more than five months in
a calendar year by the Company or one of its Designated Subsidiaries.
(i) "ENROLLMENT DATE" shall mean the first day of each Offering Period.
(j) "EXERCISE DATE" shall mean each December 31 and June 30 of each
Offering Period of the Plan.
(k) "EXERCISE PERIOD" shall mean a period commencing on January 1 and
terminating on the following June 30 or commencing on July 1 and terminating on
the following December 31.
(l) "OFFERING PERIOD" shall mean a period of twenty-four (24) months
commencing on January 1 and July 1 of each year during which an option granted
pursuant to the Plan may be exercised.
(m) "PLAN" shall mean this 1997 Employee Stock Purchase Plan.
(n) "SUBSIDIARY" shall mean a corporation, domestic or foreign, of
which not less than 50% of the voting shares are held by the Company or a
Subsidiary, whether or not such corporation now exists or is hereafter organized
or acquired by the Company or a Subsidiary.
3. ELIGIBILITY
(a) Any Employee who shall be employed by the Company on a given
Enrollment Date shall be eligible to participate in the Plan, subject to
limitations imposed by Section 423(b) of the Code or other applicable local law.
(b) Any provisions of the Plan to the contrary notwithstanding, no
Employee shall be granted an option under the Plan (i) if, immediately after the
grant, such Employee (or any other person whose stock would be attributed to
such Employee pursuant to Section 425(d) of the Code) would own stock and/or
hold outstanding options to purchase stock
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possessing five percent or more of the total combined voting power or value of
all classes of stock of the Company or of any Subsidiary, or (ii) which permits
such Employee's rights to purchase stock under all employee stock purchase plans
of the Company and its Subsidiaries to accrue at a rate which exceeds US$25,000
of fair market value of such stock (determined at the time such option is
granted) for each calendar year in which such option is outstanding at any time.
4. OFFERING PERIODS
The Plan shall be implemented by consecutive Offering Periods with a
new Offering Period commencing on January 1 and July 1 of each year, commencing
January 1, 1998, or as otherwise determined by the Board, and continuing
thereafter until terminated in accordance with Section 19 hereof. The Board
shall have the power to change the duration of Offering Periods with respect to
future offerings without stockholder approval if such change is announced at
least 15 days prior to the scheduled beginning of the first Offering Period to
be affected.
5. PARTICIPATION
(a) An eligible Employee may become a participant in the Plan by
completing a subscription agreement authorizing payroll deductions on the form
provided by the Company and filing it with the Company's payroll office prior to
the applicable Enrollment Date, unless a later time for filing the subscription
agreement is set by the Board for all eligible Employees with respect to a given
Offering Period. An eligible Employee may participate in an Offering Period only
if, as of the Enrollment Date of such Offering Period, such Employee is not
participating in any prior Offering Period which is continuing at the time of
such proposed enrollment.
(b) Payroll deductions for a participant shall commence on the first
payroll date following the Enrollment Date and shall end on the last payroll
date in the Offering Period to which such authorization is applicable, unless
sooner terminated by the participant as provided in Section 10.
6. PAYROLL DEDUCTIONS
(a) At the time a participant files his subscription agreement, he
shall elect to have payroll deductions made on each pay date during the Offering
Period in an amount not exceeding 10% of the Compensation which he receives on
each pay date during the Offering Period, and the aggregate of such payroll
deductions during the Offering Period shall not exceed 10% of his aggregate
Compensation during said Offering Period.
(b) All payroll deductions made by a participant shall be credited to
his account under the Plan. A participant may not make any additional payments
into such account.
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(c) A participant may discontinue his participation in the Plan as
provided in Section 10, may lower the rate of his payroll deductions effective
immediately or may increase (but not above 10%) the rate of his payroll
deductions effective as of the first date of the next Exercise Period within
such Offering Period by completing or filing with the Company a new
authorization for payroll deductions.
(d) Notwithstanding the foregoing, to the extent necessary to comply
with section 423(b)(8) of the Code and Section 3(b) herein, a participant's
payroll deductions may be decreased to zero percent at such time during any
Exercise Period which is scheduled to end during the current calendar year.
Payroll deductions shall recommence at the rate provided in such participant's
subscription agreement at the beginning of the first Exercise Period which is
scheduled to end in the following calendar year, unless terminated by the
participant as provided in Section 10.
7. GRANT OF OPTION
(a) On the Enrollment Date of each Offering Period, each eligible
Employee participating in such Offering Period shall be granted an option to
purchase on each Exercise Date during such Offering Period (at the per share
option price) up to a number of shares of the Company's Common Stock determined
by dividing such Employee's payroll deductions accumulated during such Exercise
Period by 85% of the fair market value of a share of the Company's Common Stock
on the Enrollment Date or on the Exercise Date, whichever is lower, provided
that the number of shares subject to the option shall not exceed 200% of the
number of shares determined by dividing 10% of the Employee's Compensation over
the Offering Period (determined as of the Enrollment Date) by 85% of the fair
market value of a share of the Company's Common Stock on the Enrollment Date,
subject to the limitations set forth in Sections 3(b) and 12 hereof. Fair market
value of a share of the Company's Common Stock shall be determined as provided
in Section 7(b) herein.
(b) The option price per share of the shares offered in a given
Offering Period shall be the lower of: (i) 85% of the fair market value of a
share of the Common Stock of the Company on the Enrollment Date; or (ii) 85% of
the fair market value of a share of the Common Stock of the Company on the
applicable Exercise Date. The fair market value of the Company's Common Stock on
a given date shall be determined by the Board in its discretion; provided,
however, that where there is a public market for the Common Stock, the fair
market value per share shall be the closing price of the Common Stock for such
date, as reported by Nasdaq National Market. If a closing price is not available
for an Enrollment Date or an Exercise Date, the fair market value of a share of
the Common Stock of the Company on such date shall be the fair market value of a
share of the Common Stock of the Company on the last business day prior to such
date.
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8. EXERCISE OF OPTION
Unless a participant withdraws from the Plan as provided in Section 10,
his option for the purchase of shares will be exercised automatically on each
Exercise Date of the Offering Period, and the maximum number of full shares
subject to his option will be purchased for him at the applicable option price
with the accumulated payroll deductions in his account. During his lifetime, a
participant's option to purchase shares hereunder is exercisable only by him.
Any amount remaining in the participant's account after an Exercise Date shall
be held in the account until the next Exercise Date in such Offering Period,
unless the Offering Period has been over-subscribed or has terminated with such
Exercise Date, in which event such amount shall be refunded to the participant.
9. DELIVERY
As promptly as practicable after each Exercise Date, the Company shall
arrange the delivery to each participant, as appropriate, of a certificate
representing the shares purchased upon exercise of his option.
10. WITHDRAWAL; TERMINATION OF EMPLOYMENT
(a) A participant may withdraw all but not less than all of the payroll
deductions credited to his account under the Plan at any time by giving written
notice to the Company. All of the participant's payroll deductions credited to
his account will be paid to him promptly after receipt of his notice of
withdrawal and his participation in the Plan will be automatically terminated,
and no further payroll deductions for the purchase of shares will be made.
Payroll deductions will not resume on behalf of a participant who has withdrawn
from the Plan unless written notice is delivered to the Company within the open
enrollment period preceding the commencement of an Exercise Period directing the
Company to resume payroll deductions.
(b) Upon termination of the participant's Continuous Status as an
Employee prior to the Exercise Date of an Offering Period for any reason,
including retirement or death, the payroll deductions credited to the
participant's account will be returned to the participant or, in the case of
death, to the person or persons entitled thereto under Section 14, and such
participant's option will be automatically terminated.
(c) If an Employee fails to maintain Continuous Status as an Employee
for at least 20 hours per week during an Offering Period in which the Employee
is a participant, he will be deemed to have elected to withdraw from the Plan
and the payroll deductions credited to his account will be returned to him and
his option terminated.
(d) A participant's withdrawal from an Offering Period will not have
any effect upon his eligibility to participate in a succeeding Offering Period
or in any similar plan which may hereafter be adopted by the Company.
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11. INTEREST
No interest shall accrue on the payroll deductions of a participant in
the Plan.
12. STOCK
(a) The maximum number of shares of the Company's Common Stock which
shall be made available for sale under the Plan shall be 200,000. If on a given
Exercise Date the number of shares with respect to which options are to be
exercised exceeds the number of shares then available, the Company shall make a
pro rata allocation of the shares remaining available for option grant in as
uniform a manner as shall be practicable and as it shall determine to be
equitable. In such event, the Company shall give written notice of such
reduction of the number of shares subject to the option to each Employee
affected thereby and shall similarly reduce the rate of payroll deductions, if
necessary.
(b) The participant will have no interest or voting right in shares
covered by his option until such option has been exercised.
(c) Shares to be delivered to a participant under the Plan will be
registered in the name of the participant or in the name of the participant and
his or her spouse.
13. ADMINISTRATION
The Plan shall be administered by the Board of Directors of the Company
or a committee appointed by the Board. The Board may delegate routine matters to
management. The administration, interpretation or application of the Plan by the
Board or its committee shall be final, conclusive and binding upon all
participants. Members of the Board who are eligible Employees are permitted to
participate in the Plan, provided that:
(a) Members of the Board who are eligible to participate in the Plan
may not vote on any matter affecting the administration of the Plan or the grant
of any option pursuant to the Plan.
(b) If a committee is established to administer the Plan, no member of
the Board who is eligible to participate in the Plan may be a member of the
committee.
14. DESIGNATION OF BENEFICIARY
(a) A participant may file a written designation of a beneficiary who
is to receive any shares and cash, if any, from the participant's account under
the Plan in the event of such participant's death subsequent to the end of the
Offering Period but prior to delivery to him of such shares and cash. In
addition, a participant may file a written designation of a beneficiary who is
to receive any cash from the participant's account under the Plan in the event
of such participant's death prior to the exercise of the option.
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(b) Such designation of beneficiary may be changed by the participant
at any time by written notice. In the event of the death of a participant and in
the absence of a beneficiary validly designated under the Plan who is living at
the time of such participant's death, the Company shall deliver such shares
and/or cash to the executor or administrator of the estate of the participant,
or if no such executor or administrator has been appointed (to the knowledge of
the Company), the Company, in its discretion, may deliver such shares and/or
cash to the spouse or to any one or more dependents or relatives of the
participant, or if no spouse, dependent or relative is known to the Company,
then to such other person as the Company may designate.
15. TRANSFERABILITY
Neither payroll deductions credited to a participant's account nor any
rights with regard to the exercise of an option or to receive shares under the
Plan may be assigned, transferred, pledged or otherwise disposed of in any way
(other than by will, the laws of descent and distribution or as provided in
Section 14 hereof) by the participant. Any such attempt at assignment, transfer,
pledge or other disposition shall be without effect, except that the Company may
treat such act as an election to withdraw funds in accordance with Section 10.
16. USE OF FUNDS
All payroll deductions received or held by the Company under the Plan
may be used by the Company for any corporate purpose, and the Company shall not
be obligated to segregate such payroll deductions.
17. REPORTS
Individual accounts will be maintained for each participant in the
Plan. Statements of account will be given to participating Employees
semi-annually promptly following each Exercise Date, which statements will set
forth the amounts of payroll deductions, the per share purchase price, the
number of shares purchased and the remaining cash balance, if any.
18. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION
Subject to any required action by the stockholders of the Company, the
number of shares of Common Stock covered by each option under the Plan which has
not yet been exercised and the number of shares of Common Stock which have been
authorized for issuance under the Plan but have not yet been placed under option
(collectively, the "Reserves"), as well as the price per share of Common Stock
covered by each option under the Plan which has not yet been exercised, shall be
proportionately adjusted for any increase or decrease in the number of issued
shares of Common Stock resulting from a stock split or the payment of a stock
dividend (but only on the Common Stock) or any other
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increase or decrease in the number of shares of Common Stock effected without
receipt of consideration by the Company; provided, however, that conversion of
any convertible securities of the Company shall not be deemed to have been
"effected without receipt of consideration". Such adjustment shall be made by
the Board, whose determination in that respect shall be final, binding and
conclusive. Except as expressly provided herein, no issue by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares of Common Stock subject to an option.
In the event of the proposed dissolution or liquidation of the Company,
the Offering Period will terminate immediately prior to the consummation of such
proposed action, unless otherwise provided by the Board. In the event of a
proposed sale of all or substantially all of the assets of the Company, or the
merger of the Company with or into another entity, the Board, in its sole
discretion, may provide that (i) each option under the Plan shall be assumed,
(ii) an equivalent option shall be substituted by such successor entity or a
parent or subsidiary of such successor entity, or in lieu of such assumption or
substitution, that the participant shall have the right to exercise the option,
including shares as to which the option would not otherwise be exercisable, or
(iii) the Plan shall terminate and a shortened Exercise Period may take place or
a participant's contributions returned. If the Board makes an option fully
exercisable in lieu of assumption or substitution in the event of a merger or
sale of assets, the Board shall notify the participant that the option shall be
fully exercisable for a period of 30 days from the date of such notice, and the
option will terminate upon the expiration of such period.
The Board may, if it so determines in the exercise of its sole
discretion, also make provision for adjusting the Reserves, as well as the price
per share of Common Stock covered by each outstanding option, if the Company
effects one or more reorganizations, recapitalizations, rights offerings or
other increases or decreases of the shares of its outstanding Common Stock, and
if the Company is being consolidated with or merged into any other corporation.
19. AMENDMENT OR TERMINATION
The Board of Directors of the Company may at any time terminate or
amend the Plan. No such termination can affect options previously granted, nor
may an amendment make any change in any option theretofore granted which
adversely affects the rights of any participant, nor may an amendment be made
without prior approval of the stockholders of the Company if such amendment is
required by law or otherwise to be approved by the stockholders.
Amendments to the Code which impact the Plan shall be automatically
implemented without further action by the Board unless such amendments require
independent action by either the Board or the stockholders.
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20. NOTICES
All notices or other communications by a participant to the Company
under or in connection with the Plan shall be deemed to have been duly given
when received in the form specified by the Company at the location, or by the
person, designated by the Company for the receipt thereof.
21. STOCKHOLDER APPROVAL
Continuance of the Plan shall be subject to approval by the
stockholders of the Company within 12 months before or after the date the Plan
is adopted. If such stockholder approval is obtained at a duly held stockholders
meeting, it may be obtained by the affirmative vote of the holders of a majority
of the outstanding shares of the Company present or represented and entitled to
vote thereon, which approval shall be:
(a) (i) solicited substantially in accordance with Section 14(a) of the
Securities Exchange Act of 1934, as amended (the "Act") and the rules and
regulations promulgated thereunder, or
(ii) solicited after the Company has furnished in writing to
the holders entitled to vote substantially the same information concerning the
Plan as that which would be required by the rules and regulations in effect
under Section 14(a) of the Act at the time such information is furnished; and
(b) obtained at or prior to the first annual meeting of stockholders
held subsequent to the first registration of Common Stock under Section 12 of
the Act.
In the case of approval by written consent, it must be obtained by the unanimous
written consent of all stockholders of the Company.
22. CONDITIONS UPON ISSUANCE OF SHARES
Shares shall not be issued with respect to an option unless the
exercise of such option and the issuance and delivery of such shares pursuant
thereto shall comply with all applicable provisions of law, domestic or foreign,
including, without limitation, the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, as amended, the rules and regulations
promulgated thereunder, and the requirements of any stock exchange upon which
the shares may then be listed, and shall be further subject to the approval of
counsel for the Company with respect to such compliance.
As a condition to the exercise of an option, the Company may require
the person exercising such option to represent and warrant at the time of any
such exercise that the shares are being purchased only for investment and
without any present intention to sell or distribute such shares if, in the
opinion of counsel for the Company, such a representation is required by any of
the aforementioned applicable provisions of law.
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EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated July 28, 1997, which appears on page
30 of the 1997 Annual Report to Stockholders of KLA-Tencor, which is
incorporated by reference in KLA-Tencor's Annual Report on Form 10-K for the
year ended June 30, 1997.
PRICE WATERHOUSE LLP
San Jose, California
January 30, 1998
