<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 3, 1998
REGISTRATION NO. 333-______
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
DATA I/O CORPORATION
--------------------
(Exact name of registrant as specified in its charter)
Washington 91-0864123
---------- ----------
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
10525 Willows Road N.E., Redmond, Washington 98052
- -------------------------------------------- ----------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
DATA I/O CORPORATION 1986 STOCK OPTION PLAN,
AMENDED AND RESTATED AS OF MAY 12, 1998
---------------------------------------
(FULL TITLE OF THE PLAN)
JOEL S. HATLEN
VICE PRESIDENT OF FINANCE AND CHIEF FINANCIAL OFFICER
DATA I/O CORPORATION
10525 WILLOWS ROAD N.E.
REDMOND, WASHINGTON 98052
------------------------------
(NAME AND ADDRESS OF AGENT FOR SERVICE)
(425) 881-6444
--------------
(TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED
TITLE OF OFFERING PRICE MAXIMUM AMOUNT OF
SECURITIES AMOUNT TO BE PER AGGREGATE REGISTRATION
TO BE REGISTERED REGISTERED SHARE (2) OFFERING PRICE FEE (1)
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
common stock, 300,000
without par value shares $4.59 $1,377,000 $406.22
============================================================================================================================
</TABLE>
(1) THE PROSPECTUS WHICH CONSTITUTES PART OF THIS REGISTRATION STATEMENT ALSO
RELATES TO SHARES OF DATA I/O CORPORATION COMMON STOCK COVERED BY EARLIER
REGISTRATION STATEMENTS (REGISTRATION STATEMENT NOS. 333-20657, 33-66824,
333-48595, 33-02254, 33-03958, 33-54422 AND 33-95608).
(2) THE PROPOSED MAXIMUM OFFERING PRICE PER SHARE AND THE REGISTRATION FEE WERE
CALCULATED IN ACCORDANCE WITH RULE 457(H) UNDER THE ACT BASED ON THE AVERAGE
OF THE HIGH AND LOW PRICES FOR DATA I/O CORPORATION COMMON STOCK ON JUNE 2,
1998, AS QUOTED BY THE NASDAQ NATIONAL MARKET SYSTEM, WHICH WAS $4.59 PER
SHARE.
Page 1 of 20 pages
Exhibit Index is located on page II-5.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION
STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed or to be filed with the Commission by the
registrant are incorporated by reference in this registration statement.
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
December 25, 1997 and Quarterly Report on Form 10-Q for the quarter
ended March 26, 1998, filed with the Commission pursuant to Section
13(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act").
(b) All other reports filed pursuant to Section 13(a) or 15(d) of the
Exchange Act since end of the fiscal period covered by the Company's
Quarterly Report on Form 10-Q referred to in (a) above.
(c) The description of the Company's Common Stock contained in a
registration statement on Form 8-A filed pursuant to Section 12 of the
Exchange Act (Registration No. 0-10394).
(d) All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act after the date hereof and prior to the
filing of a post-effective amendment which indicates that all
securities offered have been sold or which deregisters all securities
then remaining unsold shall be deemed to be incorporated by reference
herein and to be a part hereof from the date of filing of such
documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not Applicable
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
None
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Washington Business Corporation Act includes a provision (Section 23B.08.320
of the Revised Code of Washington) that permits a corporation to limit a
director's liability to the corporation or its shareholders for monetary damages
for his acts or omissions as a director, except for those acts or omissions
involving intentional misconduct or a knowing violation of law, certain unlawful
distributions or a transaction whereby the director received a personal benefit
to which he was not legally entitled. The Company's Restated Articles of
Incorporation includes a provision implementing the allowed limitations on a
director's liability to the Company or its shareholders.
The Washington Business Corporation Act (Sections 23B.08.500 through 23B.08.600
of the Revised Code of Washington) authorizes a court to award, or a
corporation's Board of Directors to grant, indemnity to directors and officers
in terms sufficiently broad to permit such indemnification under certain
circumstances for liabilities arising under the Securities Act of 1933, as
amended. Pursuant to its Amended & Restated Bylaws, the Company will indemnify
its officers, directors and other persons described in Section 23B.08.510 of the
Washington Business Corporation Act to the full extent permitted by law. The
Company maintains insurance for this purpose. Such insurance generally insures
the directors and officers against claims due to any breach of duty, neglect,
error, misstatement, misleading statement, omission or other act solely by
reason of their being directors and officers, and for acts, errors and omissions
by them in the provision of professional services to the Company.
II-1
<PAGE>
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable
ITEM 8. EXHIBITS.
<TABLE>
<CAPTION>
Exhibit Number Exhibit
- -------------- -------
<C> <S>
4.1 Data I/O Corporation 1986 Stock Option Plan, Amended and Restated
as of May 12, 1998
5.1 Opinion of Heller Ehrman White & McAuliffe
23.1 Consent of Heller Ehrman White & McAuliffe (See Exhibit 5.1)
23.2 Consent of Ernst & Young LLP, Independent Auditors
24 Power of Attorney (See page II-4 of this Registration Statement)
</TABLE>
ITEM 9. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate, represent
a fundamental change in the information set forth in the registration statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the registration statement is on Form S-3, Form S-8 or Form F-3, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
section 13 or section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in this registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (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
II-2
<PAGE>
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.
(e) The undersigned registrant hereby undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is sent or
given, the latest annual report to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 of Regulations S-X is not set forth in the prospectus, to deliver, or
cause to be delivered to each person to whom the prospectus is sent or given,
the latest quarterly report that is specifically incorporated by reference in
the prospectus to provide such interim financial information.
(h) 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 of 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.
II-3
<PAGE>
SIGNATURES
The Registrant. 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 Redmond, State of Washington, on the 3rd day of
June, 1998.
DATA I/O CORPORATION
By: /s/ Joel S. Hatlen
-----------------------------------------
Joel S. Hatlen, Vice President of Finance
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints David C.
Bullis and Joel S. Hatlen, or either of them, his or her attorney-in-fact, with
the power of substitution for him or her, in any and all capacities, to sign any
amendments to this Registration Statement, and to file the same, with exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, hereby ratifying and confirming all that said attorneys-in-
fact and their substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ David C. Bullis President and Chief Executive Officer June 3, 1998
- -------------------------------- (Principal Executive Officer)
David C. Bullis
/s/ Frances M. Conley Chairman of the Board June 3, 1998
- --------------------------------
Frances M. Conley
/s/ Edward D. Lazowska Director June 3, 1998
- --------------------------------
Edward D. Lazowska
/s/ Keith L. Barnes Director June 3, 1998
- --------------------------------
Keith L. Barnes
/s/ Paul A. Gary Director June 3, 1998
- --------------------------------
Paul A. Gary
/s/ Joel S. Hatlen Vice President of Finance, Chief Financial Officer, June 3, 1998
- -------------------------------- Secretary and Treasurer (Principal Financial and
Joel S. Hatlen Principal Accounting Officer)
</TABLE>
II-4
<PAGE>
EXHIBIT INDEX
-------------
<TABLE>
<CAPTION>
Exhibit Number Exhibit Page
- -------------- ------- ----
<C> <S>
4.1 Data I/O Corporation 1986 Stock Option Plan, Amended and
Restated May 12, 1998
5.1 Opinion of Heller Ehrman White & McAuliffe
23.1 Consent of Heller Ehrman White & McAuliffe (see Exhibit 5.1)
23.2 Consent of Ernst & Young LLP, Independent Auditors
24 Power of Attorney (See page II-4 of this Registration Statement)
</TABLE>
II-5
<PAGE>
EXHIBIT 4.1
DATA I/O CORPORATION 1986 STOCK OPTION PLAN
AMENDED AND RESTATED AS OF MAY 12, 1998
<PAGE>
DATA I/O CORPORATION
1986 STOCK OPTION PLAN
AMENDED AND RESTATED
AS OF MAY 12, 1998
This Stock Option Plan (the "Plan") provides for the grant of options (the
"Options") to acquire shares of common stock (the "Common Stock") of Data I/O
Corporation (the "Corporation"). Stock options granted under this plan that
qualify under Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code") are referred to in this Plan as "Incentive Stock Options." Incentive
Stock Options and stock options that do not qualify under Section 422 of the
Code ("Non-Qualified Options") granted under this Plan are referred to as
"Options."
1. PURPOSES.
The purposes of this Plan are to retain the services of valued key
employees of the Corporation, to encourage such employees to acquire a greater
proprietary interest in the Corporation, thereby strengthening their incentive
to achieve the objectives of the shareholders and to serve as an aid and
inducement in the hiring of new key employees.
2. ADMINISTRATION.
The Plan shall be administered by the Board of Directors of the Corporation
(the "Board") or by a committee designated by the Board composed of two or more
members of the Board, each of whom is a "Non-Employee Director" (as defined
below), which committee (the "Committee") may be an executive, compensation or
other committee, including a separate committee especially created for this
purpose. The term "Non-Employee Director" shall be defined by reference to the
rules and regulations promulgated under Section 16(b) of the Securities Exchange
Act of 1934, as amended (the "Act"). The Board shall consider whether a
director is an "outside director" as defined in the regulations promulgated
under Section 162(m) of the Code when appointing any such Committee and shall
appoint solely two or more "outside directors" if the Board intends for
compensation attributable to Options to be "qualified performance-based
compensation" as defined in the regulations promulgated under Section 162(m) of
the Code. Any such Committee shall have the powers and authority vested in the
Board hereunder (including the power and authority to interpret any provision of
the Plan or of any Option). The members of any such Committee shall serve at
the pleasure of the Board. A majority of the members of the Committee shall
constitute a quorum, and all actions of the Committee shall be taken by a
majority of the members present. Any action may be taken by a written
instrument signed by all of the members of the Committee and any action so taken
shall be fully as effective as if it had been taken at a meeting. The Board, or
any committee thereof appointed to administer the Plan, is referred to herein as
the "Plan Administrator."
Subject to the provisions of the Plan, and with a view to effecting its
purpose, the Plan Administrator shall have sole authority, in its absolute
discretion, to (a) construe and interpret the Plan; (b) define the terms used
herein; (c) prescribe, amend, and rescind rules and regulations relating to the
Plan; (d) determine the individuals to whom Options to purchase shares of Common
Stock shall be granted under the Plan and whether the Options are Incentive
Stock Options or Non-Qualified Options; (e) determine the time or times at which
Options shall be granted under the Plan; (f) determine the number of shares of
Common Stock subject to each Option, the Option price, the duration of each
Option granted under the Plan and the times at which each Option shall become
exercisable; (g) determine all of the other terms and conditions of Options
granted under the Plan; and (h) make all other determinations necessary or
advisable for the administration of the Plan and do everything necessary or
appropriate to administer the Plan. All decisions, determinations, and
interpretations made by the Committee shall be binding and conclusive on all
participants in the Plan and on their legal representatives, heirs, and
beneficiaries.
The Board or the Committee may delegate to one or more executive officers
of the Corporation the authority to grant Options under this Plan to employees
of the Corporation who, at the time of grant, are neither subject to Section
16(b) of the Exchange Act with respect to the Common Stock nor a " covered
employee" within the meaning of Section 162(m)(3) of the Code ("Non-Insiders"),
and in connection therewith the authority to
1
<PAGE>
determine: (a) whether the Option in an Incentive Stock Option or a Non-
Qualified Stock Option; (b) the number of shares of Common Stock subject to such
Option; (c) the duration of the Option; (d) the vesting schedule for determining
the times at which such Option shall become exercisable; and (e) all other terms
and conditions of such Options. The exercise price for any Option granted by
action of an executive officer pursuant to such delegation of authority shall
not be less than the fair market value per share of the Common Stock on the Date
of Grant as determined in accordance with procedures established by the Plan
Administrator. Unless expressly approved in advance by the Board or the
Committee, such delegation of authority shall not include the authority to
accelerate the vesting, extend the period for exercise or otherwise alter the
terms of outstanding Options. The term "Plan Administrator" when used in any
provision of this Plan other than Sections 2, 5(f), 5(m), 5(n) and 11 shall be
deemed to refer to the Board or the Committee, as the case may be, and such
senior executive officer, insofar as such provision may be applied to Non-
Insiders and Options granted to Non-Insiders.
3. ELIGIBILITY.
Options may be granted to any individual who, at the time the Option is
granted, is an employee of the Corporation or any "related corporation" (as
defined below) and may be granted in substitution for outstanding options of
another corporation in connection with the merger, consolidation, acquisition of
property or stock, or other reorganization between such other corporation and
the Corporation or any subsidiary thereof. Options may also be granted in
exchange for outstanding Options. No person shall be granted Options to
purchase more than 250,000 shares of Common Stock (subject to adjustment as set
forth in Section 5(m) hereof) in any calendar year. Any person to whom an
Option is granted under this Plan is referred to herein as an "Optionee."
As used in this Plan, the term "related corporation," when referring to a
subsidiary corporation, shall mean any corporation (other than the Corporation)
in an unbroken chain of corporations beginning with the Corporation if, at the
time of the granting of the Option, each of the corporations other than the last
corporation in the unbroken chain owns stock possessing fifty percent (50%) or
more of the total combined voting power of all classes of stock of one of the
other corporations in such chain. When referring to a parent corporation, the
term "related corporation" shall mean any corporation (other than the
Corporation) in an unbroken chain of corporations ending with the Corporation
if, at the time of granting of the Option, each of the corporations other than
the Corporation owns stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock of one of the other corporations
in such chain.
4. STOCK.
The Plan Administrator is authorized to grant Options to acquire one
million four hundred thirty thousand (1,430,000) shares of the authorized but
unissued, or reacquired, Common Stock. The number of shares with respect to
which Options may be granted hereunder is subject to adjustment as set forth in
Section 5(m) hereof. In the event that any Option granted pursuant to this Plan
expires or is terminated for any reason, those shares of Common Stock allocable
to the unexercised portion of such terminated Option may again be subject to an
Option granted to the same or to a different Optionee under this Plan.
5. TERMS AND CONDITIONS OF OPTIONS.
Each Option granted pursuant to this Plan shall be evidenced by a written
agreement approved by the Plan Administrator (the "Agreement"). Agreements may
contain such additional provisions, not inconsistent herewith, as the Plan
Administrator in its discretion, may deem advisable. All Options shall also
comply with the following requirements:
(a) Number of Shares.
Each Agreement shall state the number of shares of Common Stock to which it
pertains and whether the Option is intended to be an Incentive Stock Option or a
Non-Qualified Stock Option. In the absence of action to the contrary by the
Plan Administrator in connection with the grant of an Option, all Options shall
be Non-Qualified Options. The aggregate fair market value (determined at the
Date of Grant, as defined below) of the
2
<PAGE>
stock with respect to which Incentive Stock Options are exercisable for the
first time by the Optionee during any calendar year (granted under this Plan and
all other incentive stock option plans of the Corporation, a related corporation
or a predecessor corporation) shall not exceed $100,000, or such other limit as
may be prescribed by the Code as it may be amended from time to time. Any Option
which exceeds the annual limit shall not be void, but rather shall be a Non-
Qualified Option.
(b) Date of Grant.
Each Agreement shall state the date which the Plan Administrator has deemed
to be the effective date of the Option for purposes of this Plan (the "Date of
Grant").
(c) Option Price.
Each Agreement shall state the price per share of Common Stock at which it
is exercisable. Common Stock issued under this Plan may be issued for any lawful
consideration as determined by the Plan Administrator; provided, that the per
share exercise price for any Incentive Stock Option shall not be less than the
fair market value per share of the Common Stock on the Date of Grant as
determined by the Plan Administrator in good faith and provided, further, that
with respect to Incentive Stock Options granted to greater-than-10% shareholders
of the Corporation (as determined with reference to Section 424(d) of the Code),
the exercise price per share shall not be less than 110% of the fair market
value per share of the Common Stock at the Date of Grant.
(d) Duration of Options.
At the time of the grant of the Option, the Plan Administrator shall
designate, subject to paragraph 5(g) below, the expiration date of the Option,
which shall not be later than ten years from the Date of Grant in the case of
Incentive Stock Options; provided, that the expiration date of any Incentive
Stock Option granted to a greater-than-10% shareholder of the Corporation (as
determined with reference to Section 424(d) of the Code) shall not be later than
five years from the Date of Grant. In the absence of action to the contrary by
the Plan Administrator in connection with the grant of a particular Option, and
except as otherwise required by the preceding sentence, all Options granted
hereunder shall expire six years from the Date of Grant.
(e) Vesting Schedule.
In order to ensure that the Corporation will receive the benefits
contemplated in exchange for the Options granted pursuant hereto, no Option
shall be exercisable until it has vested. Subject to paragraph 5(f) below, the
vesting schedule or other events for vesting for each Option, such as
performance goals, shall be specified by the Plan Administrator at the time of
the grant of the Option and shall be set forth or referenced in the Agreement.
If no vesting schedule is specified by the Plan Administrator at the time of the
grant of an Option hereunder, the following schedule shall apply:
Years of Service
Following Date of Percent
Grant Vested
----------------- -------
1 25
2 50
3 75
4 100
3
<PAGE>
(f) Acceleration of Vesting.
The vesting of one or more outstanding Options may be accelerated by the
Plan Administrator at such times and in such amounts as it shall determine in
its sole discretion. The vesting of Options shall also be accelerated under the
circumstances described in Section 5(n) below.
(g) Term of Option.
Each Option shall terminate, to the extent not previously exercised, upon
the occurrence of the first of the following events: (i) the expiration of the
duration of the Option, as designated by the Plan Administrator in accordance
with Section 5(d) above; (ii) the expiration of 90 days from the date of the
Optionee's termination of employment with the Corporation for any reason
whatsoever other than death or disability unless, in the case of a Non-Qualified
Option, the exercise period is extended by the Plan Administrator until a date
not later than the expiration date of the Option; or (iii) the expiration of one
year from (A) the date of death of the Optionee or (B) cessation of employment
by reason of "disability" unless, in the case of a Non-Qualified Option, the
exercise period is extended by the Plan Administrator until a date not later
than the expiration date of the Option. For purposes of the Plan, "disability"
shall mean any physical, mental or other health condition which substantially
impairs the employee's ability to perform her or his assigned duties for 60 days
or more in any 120 day period or that can be expected to result in death. The
Plan Administrator shall determine whether an Optionee has incurred a disability
on the basis of medical evidence acceptable to the Plan Administrator. Upon
making a determination of disability, the Plan Administrator shall, for purposes
of the Plan, determine the date of an Optionee's termination of employment.
Unvested Options shall terminate immediately upon the termination of employment
of the Optionee by the Corporation for any reason whatsoever, including death or
disability.
(h) Exercise of Options.
Options shall be exercisable, either all or in part, at any time after
vesting. If less than all of the shares included in the vested portion of any
Option are purchased, the remainder may be purchased at any subsequent time
prior to the expiration of the Option term. No portion of any Option of less
than one hundred (100) shares (as adjusted pursuant to Section 5(m) hereof) may
be exercised, provided that if the vested portion of any Option is less than one
hundred (100) shares, it may be exercised with respect to all Shares for which
it is vested. Only whole shares may be issued pursuant to an Option, and to the
extent that an Option covers a fraction of a share, it is unexercisable.
Options or portions thereof may be exercised by giving written notice to the
Corporation, which notice shall specify the number of shares to be purchased,
and be accompanied by payment in the amount of the aggregate Option exercise
price for the Common Stock so purchased, which payment shall be in the form
specified in Section 5(i) hereof. The Corporation shall not be obligated to
issue, transfer, or deliver a certificate of Common Stock to any Optionee, or to
his personal representative, until the aggregate Option price has been paid for
all shares for which the Option shall have been exercised and adequate provision
has been made by the Optionee for satisfaction of any tax withholding
obligations associated with such exercise. During the lifetime of an Optionee,
Options are exercisable only by the Optionee.
(i) Payment upon Exercise of Option.
Upon exercise of any Option the aggregate Option exercise price shall be
paid to the Corporation in cash or by certified or cashier's check. In addition,
an Optionee may pay for all or any portion of the aggregate Option exercise
price for any shares of Common Stock purchased upon the exercise of any Option
by delivering to the Corporation shares of Common Stock previously held by such
Optionee or by complying with any other payment mechanism which the Plan
Administrator may approve from time to time. The shares of Common Stock received
or withheld by the Corporation as payment for shares of Common Stock purchased
upon the exercise of Options shall have a fair market value at the date of
exercise (as determined by the Plan Administrator) equal to the aggregate Option
exercise price (or portion thereof) to be paid by exchange or withholding of
shares of Common Stock.
4
<PAGE>
(j) Rights as a Shareholder.
An Optionee shall have no rights as a shareholder with respect to any
shares covered by the Option until the Optionee becomes a record holder of such
shares, irrespective of whether he has given notice of exercise. Subject to the
provisions of Section 5(m) hereof, no rights shall accrue to an Optionee and no
adjustments shall be made on account of dividends (ordinary or extraordinary,
whether in cash, securities or other property) or distributions or other rights
declared on, or created in, the Common Stock for which the record date is prior
to the date the Optionee becomes a record holder of the shares of Common Stock
covered by the Option, irrespective of whether the Optionee has given notice of
exercise.
(k) Transfer of Option.
Options granted under this Plan and the rights and privileges conferred
hereby may not be transferred, assigned, pledged, or hypothecated in any manner
(whether by operation of law or otherwise) other than by will or by the
applicable laws of descent and distribution or, in the case of Non-Qualified
Options (but not Incentive Stock Options), pursuant to a qualified domestic
relations order, and shall not be subject to execution, attachment or similar
process. Upon any attempt to transfer, assign, pledge, hypothecate or otherwise
dispose of any Option under this Plan or of any right or privilege conferred
hereby, contrary to the provisions hereof, or upon the sale, levy or any
attachment or similar process upon the rights and privileges conferred hereby,
such Option shall thereupon terminate and become null and void.
(1) Securities Regulation and Tax Withholding.
(1) 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 relevant provisions of law, including,
without limitation, any applicable state securities laws, 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 such shares may then be listed and shall be further subject to the
approval of counsel for the Corporation with respect to such compliance,
including the availability of an exemption from registration for the issuance
and sale of any shares upon exercise of any Option. Inability of the Corporation
to obtain from any regulatory body having jurisdiction the authority deemed by
the Corporation to be necessary for the lawful issuance and sale of any shares
hereunder, or the unavailability of an exemption from registration for the
issuance and sale of any shares hereunder, shall relieve the Corporation of any
liability in respect of the non-issuance or sale of such shares as to which such
requisite authority shall not have been obtained.
As a condition to the exercise of an Option, the Corporation may
require the Optionee to represent and warrant in writing at the time of such
exercise that the shares are being purchased only for investment and without any
present intention to sell or distribute such shares. At the Option of the
Corporation, a stop-transfer order against any shares of stock may be placed on
the official stock books and records of the Corporation, and a legend indicating
that the stock may not be pledged, sold or otherwise transferred unless an
opinion of counsel is provided stating that such transfer is not in violation of
any applicable law or regulation, may be stamped on stock certificates in order
to assure exemption from registration. The Plan Administrator may also require
such other actions or agreements by the Optionees as may from time-to-time be
necessary to comply with federal and state securities laws. THE CORPORATION
SHALL BE UNDER NO OBLIGATION TO UNDERTAKE REGISTRATION OF THE OPTIONS OR SHARES
OF STOCK ISSUABLE UPON EXERCISE THEREOF.
(2) As a condition to the exercise of any Option granted
hereunder, the Optionee shall make such arrangements as the Plan Administrator
may require for the satisfaction of any federal, state or local withholding tax
obligations that may arise in connection with such exercise.
(3) Issue, transfer or delivery of certificates of Common Stock
pursuant to the exercise of Options may be delayed, at the discretion of the
Plan Administrator until the Plan Administrator is
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satisfied that the applicable requirements of the federal and state securities
laws and the withholding provisions of the Code have been met.
(m) Stock Dividend, Reorganization or Liquidation.
The aggregate number and class of shares for which Options may be granted
under this Plan, the number and class of shares covered by each outstanding
Option and the exercise price per share thereof (but not the total price) shall
all be proportionately adjusted for any increase or decrease in the number of
issued shares of Common Stock of the Corporation resulting from a split-up or
consolidation of shares or any like capital adjustment, or the payment of any
stock dividend, and to the extent that such actions shall include an increase or
decrease in the number of shares of Common Stock subject to outstanding Options,
the number of shares available under Section 4 of this Plan shall automatically
be increased or decreased, as the case may be, proportionately, without further
action on the part of the Plan Administrator, the Corporation or the
Corporation's shareholders.
In the event of any adjustment in the number of shares covered by any
Option, any fractional shares resulting from such adjustment shall be
disregarded and each such Option shall cover only the number of full shares
resulting from such adjustment.
The foregoing adjustments in the shares subject to Options shall be made by
the Plan Administrator or by any successor administrator of the Plan, or by the
applicable terms of any assumption or substitution document, and any adjustments
so made shall be final, binding and conclusive.
Except as provided in this Section 5(m) or Section 5(n) below, no Optionee
shall have rights by reason of any subdivision or consolidation of shares of any
class including shares of Common Stock, or the payment of any Common Stock
dividend on shares of Common Stock or any other increase or decrease in the
number of shares of Common Stock, or by reason of any liquidation, dissolution,
corporate combination or division; and any issuance by the Corporation of shares
of any class including shares of Common Stock, or securities convertible into
shares of any class including shares of Common Stock, shall not affect, and no
adjustment by reason thereof shall be made with respect to, the number or price
of shares of Common Stock subject to any Option.
The grant of an Option shall not affect in any way the right or power of
the Corporation to make adjustments, reclassifications, reorganizations or
changes in its capital or business structure, or to merge, consolidate, dissolve
or liquidate, or to sell or transfer all or any part of its business or assets.
(n) Change in Control.
(1) For the purpose of this Section 5(n): (i) "Person" shall
include any individual, firm, corporation, partnership or other entity; (ii)
"Affiliate" and "Associate" shall have the meanings assigned to them in Rule
12b-2 under the Exchange Act of 1934 as amended (the "Exchange Act"); and (iii)
"Beneficial Owner" shall have the meaning assigned to it in Rule 16a-1 under the
Exchange Act.
(2) Any and all Options that have been outstanding under the
Plan for at least six (6) months at the time of occurrence of any of the events
described in Paragraphs (A), (B) and (C) below (an "Eligible Option") shall
become exercisable in full for the periods indicated (each such exercise period
referred to as an "Acceleration Window") in connection with the following
events:
(A) For a period of 45 days beginning on the day on which any Person,
together with all Affiliates and Associates of such Person shall become the
Beneficial Owner, directly or indirectly, of 25% or more of the combined voting
power of the then outstanding securities of the Company ordinarily (and apart
from rights accruing under special circumstances) having the right to vote in
the election of directors (calculated as provided in Rule 13d-3(d) under the
Exchange Act in the case of rights to acquire the Company's securities), but
shall not include the Corporation, any subsidiary of the Corporation, any
employee benefit plan of the Corporation or of any subsidiary of the
Corporation, or any Person or entity organized, appointed or established by the
Corporation for or pursuant to the terms of any such employee benefit plan;
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(B) Beginning on the date that a tender or exchange offer for Common
Stock by any Person (other than the Corporation, any subsidiary of the
Corporation, any employee benefit plan of the Corporation or of any subsidiary
of the Corporation, or any Person or entity organized, appointed or established
by the Corporation for or pursuant to the terms of any such employee benefit
plan) is first published or sent or given within the meaning of Rule 14d-2 under
the Exchange Act and continuing so long as such offer remains open (including
any extensions or renewals of such offer), unless by the terms of such offer the
offeror, upon consummation thereof, would be the Beneficial Owner of less than
30% of the shares of Common Stock then outstanding; or
(C) Immediately prior to consummation of (i) any merger,
consolidation, reorganization or other transaction pursuant to which the persons
who hold the outstanding shares of Common Stock immediately prior to the
transaction have immediately following the transaction less than forty percent
(40%) of the combined voting power of the outstanding securities of the
surviving entity ordinarily (and apart from rights accruing under special
circumstances) having the right to vote in the election of directors; or (ii)
any sale, lease, exchange or other transfer not in the ordinary course of
business (in one transaction or a series of related transactions) of all, or
substantially all, of the assets of the Company (the foregoing transactions
being referred to as "Approved Transactions"). The Company shall provide to each
Optionee notice of the pendency of any Approved Transaction at least twenty (20)
days prior to the expected date of consummation thereof. Each Optionee shall
thereupon be entitled to exercise his or her Options in full or in part at any
time prior to consummation of the Approved Transaction. Any such exercise as to
any portion of his or her Options that will only become vested immediately prior
to the consummation of the Approved Transaction in accordance with this
acceleration provision shall be contingent on such consummation. Any such
exercise as to any other portion of the Option will not be contingent on such
consummation unless so elected by the Optionee in a notice delivered to the
Company simultaneously with the exercise.
PROVIDED, HOWEVER, that the Plan Administrator may determine (by the
affirmative vote of a majority of all of the members thereof, excluding for such
purposes the votes of directors who are directors, officers, Affiliates or
Associates of, or have a material financial interest in, any Person (other than
the Corporation) who is a party to the event specified in Paragraphs (A), (B) or
(C) above which otherwise would trigger acceleration of vesting) that
acceleration shall not occur in connection with any one or any combination of
the foregoing events.
(3) The exercisability of any Eligible Option which remains
outstanding following expiration of an Acceleration Window shall be governed by
the vesting schedule and other terms of the Agreement representing such Option.
(4) If the shareholders of the Corporation receive shares of
capital stock of another Person ("Exchange Stock") in exchange for or in place
of shares of Common Stock in any transaction involving any merger,
consolidation, reorganization or other transaction providing for the conversion
or exchange of all or substantially all outstanding shares of Common Stock into
Exchange Stock, then at the closing of such transaction all Options granted
hereunder which have not been exercised as of the effective date of such
exchange transaction shall be converted into options to purchase shares of
Exchange Stock ("Exchange Stock Options") whereupon all rights to acquire shares
of Common Stock pursuant to Options shall end. The number of shares of Exchange
Stock issuable upon exercise of an Exchange Stock Option and the exercise price
therefor shall be determined by the Plan Administrator by adjusting the number
of shares of Common stock issuable upon exercise of the Option converted into
such Exchange Stock Option, and the exercise price therefor, in the same
proportion as used for determining the shares of Exchange Stock received by
holders of Common Stock in connection with a transaction described in this
Section 5(n)(3). Unless altered by the Plan Administrator or otherwise provided
above, the vesting schedule set forth in the Option Agreement shall continue to
apply to the Exchange Stock Options.
6. EFFECTIVE DATE; TERM.
This Plan shall be effective as of December 16, 1986 and Incentive Stock
Options may be granted by the Plan Administrator from time to time thereafter
until December 14, 2006; provided, however, that termination of
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the Plan shall not terminate any Option granted prior thereto. Non-Qualified
Stock Options may be granted hereunder until this Plan is terminated by the
Board in its sole discretion.
7. NO OBLIGATIONS TO EXERCISE OPTION.
The granting of an Option shall impose no obligation upon the Optionees to
exercise such Option.
8. NO RIGHT TO OPTIONS OR EMPLOYMENT.
Whether or not any Options are to be granted hereunder shall be exclusively
within the discretion of the Committee, and nothing contained herein shall be
construed as giving any Optionee any right to participate hereunder. Granting
of an Option hereunder shall in no way constitute any form of agreement or
understanding binding on the Corporation, express or implied, that the
Corporation will employ or contract with an Optionee for any length of time.
9. APPLICATION OF FUNDS.
The proceeds received by the Corporation from the sale of Common Stock,
pursuant to Options granted hereunder, will be used for general corporate
purposes, unless otherwise directed by the Board.
10. INDEMNIFICATION OF PLAN ADMINISTRATOR.
In addition to all other rights of indemnification they may have as members
of the Board or of any Committee, the Plan Administrators shall be indemnified
by the Corporation for all reasonable expenses and liabilities of any type or
nature, including attorneys' fees, incurred in connection with any action, suit
or proceeding to which they or any of them are a party by reason of, or in
connection with, the Plan or any Option granted hereunder, and against all
amounts paid by them in settlement thereof (provided such settlement is approved
by independent legal counsel selected by the Corporation), except to the extent
that such expenses relate to matters for which it is adjudged that such Plan
Administrator member is liable for willful misconduct; provided that within
fifteen (15) days after the institution of any such action, suit or proceeding,
the Plan Administrator involved therein shall, in writing, notify the
Corporation of such action, suit or proceeding, so that the Corporation may have
the opportunity to make appropriate arrangements to prosecute or defend the
same.
11. AMENDMENT OF THE PLAN.
The Plan Administrator may, at any time, modify or amend this Plan and
Options granted hereunder, except that no amendment with respect to an
outstanding Option shall be made over the objection of the Optionee thereof; and
provided, further, that any amendment for which shareholder approval is required
by Securities and Exchange Commission Rule 16b-3, as amended from time to time,
or any successor rule or regulatory requirements (the "Rule"), in order for the
Plan to be eligible or continue to qualify for the benefits of the Rule, shall
be subject to approval of the shareholders of the Corporation in accordance with
the Rule.
Effective as of December 16, 1986.
Amended and restated as of May 12, 1998.
DATA I/O CORPORATION
By: /s/ Joel S. Hatlen
-------------------------------------------
Joel S. Hatlen, Vice President of Finance
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EXHIBIT 5.1
OPINION OF HELLER EHRMAN WHITE & MCAULIFFE
<PAGE>
[LETTERHEAD OF HELLER EHRMAN WHITE & McAULIFFE]
June 3, 1998
Data I/O Corporation
10525 Willows Road N.E.
Redmond, Washington 98073-9746
Re: REGISTRATION STATEMENT ON FORM S-8
Ladies and Gentlemen:
We have acted as counsel to Data I/O Corporation, Inc., a Washington
corporation (the "Company"), in connection with the Registration Statement on
Form S-8 (the "Registration Statement") which the Company will be filing with
the Securities and Exchange Commission (the "Commission") for the purpose of
registering under the Securities Act of 1933, as amended, 300,000 shares of its
Common Stock, $0.005 par value (the "Shares"). The Shares are to be issued by
the Company upon the exercise of options to purchase shares (the "Options")
granted pursuant to the Company's 1986 Stock Option Plan, as Amended and
Restated as of May 12, 1998 (the "Plan").
In connection with the opinion expressed herein, we have, with your
consent, assumed the genuineness of all signatures, the legal capacity of all
natural persons, the completeness and the authenticity of all records,
documents, instruments and certificates submitted to us as originals, and the
exact conformity with the executed originals of all documents, records,
instruments and certificates submitted to us as copies. In rendering our
opinion, we have examined the following documents:
(a) the Articles of Incorporation of the Company, as amended to date,
certified to us by an officer of the Company as being complete and in
full force and effect as of the date of this opinion letter;
(b) the Bylaws of the Company certified to us by an officer of the Company
as being complete and in full force and effect as of the date of this
opinion letter;
(c) a Certificate of Existence/Authorization relating to the Company
issued by the Washington Secretary of State, dated as of June 3,
1998;
(d) records certified to us by an officer of the Company as constituting
all records of proceedings and actions of the board of directors and
the shareholders of the Company and any committees of the board of
directors relating to the issuance of the Shares; and
(e) the Plan.
The opinion expressed herein is limited to the laws of the state of
Washington, and we disclaim any opinion as to any statute, rule, regulation,
ordinance, order or other promulgation of any federal, regional or local
governmental body or as to any related judicial or administrative opinion.
<PAGE>
DATA I/O Corporation
June 3, 1998
Page 2
Based upon the foregoing and our examination of such questions of law as we
have deemed necessary or appropriate for the purpose of this opinion, and
subject to the qualifications and assumptions expressed herein and further
assuming that: (i) the Registration Statement becomes and remains effective
during the period when the Options are exercised, and (ii) all applicable
securities laws are complied with, it is our opinion that the Shares, when
issued, paid for and delivered upon the exercise of the Options in accordance
with the Registration Statement and the Plan, will be legally issued, fully paid
and nonassessable.
This opinion is rendered to you in connection with the Registration
Statement and is solely for your benefit. This opinion may not be relied upon
by you for any other purpose, or relied upon by any other person, firm,
corporation or other entity for any purpose, without our prior written consent.
We expressly disclaim any obligation to advise you of any change of law that
occurs, or any facts of which we become aware, after the date of this opinion.
We hereby authorize and consent to the use of this opinion as Exhibit 5.1
to the Registration Statement.
Very truly yours,
/s/ Heller Ehrman White & McAuliffe
<PAGE>
EXHIBIT 23.2
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
<PAGE>
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
on Form S-8 pertaining to the Data I/O Corporation 1986 Stock Option Plan, of
our report dated February 10, 1998, with respect to the consolidated financial
statements and schedule of Data I/O Corporation included in its Annual Report
(Form 10-K) for the year ended December 25, 1997, filed with the Securities and
Exchange Commission.
/s/ Ernst & Young LLP
Seattle, Washington
June 2, 1998
