SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
CERPROBE CORPORATION
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
1) Amount previously paid:
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2) Form, Schedule or Registration No.
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3) Filing party:
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4) Date filed:
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CERPROBE CORPORATION
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
June 4, 1997
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TO THE STOCKHOLDERS:
You are cordially invited to attend the annual meeting (the "Annual
Meeting") of the stockholders of Cerprobe Corporation, a Delaware corporation
(the "Company" or "Cerprobe"), to be held on June 4, 1997, at 10:00 a.m. local
time at the Mesa Hilton, Kachina Room, 1011 W. Holmes Avenue, Mesa, Arizona
85210, for the following purposes:
1. To elect directors to serve until the next annual meeting of
stockholders and until their successors are duly elected and qualified.
2. To approve the amendments to and restatement of the Company's 1995
Stock Option Plan (the "1995 Plan") to (a) increase the number of
shares of the Company's Common Stock that may be issued pursuant to the
1995 Plan from 500,000 to 800,000; (b) make revisions to comply with
the provisions of the recently adopted Section 16 rules (the "Rules")
under the Securities Exchange Act of 1934 (the "1934 Act") that do not
require stockholder approval; (c) permit participation by Senior
Committee Members in the Discretionary Grant Program under the 1995
Plan as permitted by the Rules; and (d) limit the number of shares of
the Company's Common Stock that may be granted to employees under the
1995 Plan in order to comply with Section 162 (m) of the Internal
Revenue Code of 1986, as amended.
3. To ratify the appointment of KPMG Peat Marwick LLP as the independent
auditors for the Company for the fiscal year ending December 31, 1997.
4. To act upon such other business as may properly come before the meeting
and any adjournment thereof.
Only stockholders of record at the close of business on April 30, 1997
(the "Record Date") are entitled to notice of and to vote at the meeting.
The enclosed Proxy Statement contains additional information pertaining to
the matters to be considered at the meeting. A copy of the Annual Report to
stockholders for the fiscal year ended December 31, 1996 also accompanies this
Notice.
It is important that your shares be represented at the Annual Meeting.
Whether or not you plan to attend the Annual Meeting, you are requested to
complete, date, sign, and return the enclosed proxy card as promptly as possible
in the enclosed postage-prepaid envelope. Any stockholder attending the meeting
may vote in person even if he or she has previously returned a proxy.
By order of the Board of Directors,
Tempe, Arizona Randal L. Buness
Dated: April 30, 1997 Secretary
<PAGE>
CERPROBE CORPORATION
600 South Rockford Drive
Tempe, Arizona 85281
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ANNUAL MEETING OF STOCKHOLDERS
June 4, 1997
PROXY STATEMENT
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VOTING AND OTHER MATTERS
General
This Proxy Statement is submitted in support of a proxy solicitation by the
Board of Directors of Cerprobe Corporation, a Delaware corporation (the
"Company" or "Cerprobe"), in connection with the Annual Meeting of Stockholders
(the "Annual Meeting") to be held on June 4, 1997 at 10:00 a.m. local time at
the Mesa Hilton, Kachina Room, 1011 W. Holmes Avenue, Mesa, Arizona 85210.
These proxy solicitation materials were mailed on or about May 1, 1997 to
all stockholders entitled to vote at the Annual Meeting.
Record Date
Stockholders entitled to notice of and to vote at the Annual Meeting, and
at any adjournment or adjournments thereof, are stockholders of record at the
close of business on April 30, 1997 (the "Record Date"). On the Record Date,
there were issued and outstanding 6,353,047 shares of the Company's common
stock, $.05 par value per share (the "Common Stock").
Revocability of Proxies
Any person giving a proxy may revoke the proxy at any time before its use
by delivering to the Secretary of the Company at the Company's offices at 600
South Rockford Drive, Tempe, Arizona 85281, written notification of revocation
or a duly executed proxy bearing a later date or by attending the Annual Meeting
and voting in person.
Voting Solicitation
The presence, in person or by proxy, of the holders of a majority of the
total number of shares of Common Stock outstanding constitutes a quorum for the
transaction of business at the Annual Meeting. Each share is entitled to one
vote on any matter coming before the Annual Meeting, except in the case of the
election of directors as described below.
For the election of directors, each stockholder is entitled to a number of
votes equal to the number of directors to be elected multiplied by the number of
shares held by such stockholder. Each stockholder may distribute votes among as
many candidates for director in such proportions as he or she sees fit. The five
candidates receiving the highest number of votes shall be elected. Any matter to
be voted upon, other than the election of directors, shall be resolved by a
majority of the votes cast thereon in person or by proxy at the Annual Meeting.
<PAGE>
The enclosed proxy, when properly signed and returned to the Company, will
be voted by the proxy holders at the Annual Meeting as directed therein. If a
stockholder specifies how the proxy is to be voted on any of the business to
come before the Annual Meeting, the proxy will be voted in accordance with such
specification. If no specification is made, the proxy will be voted (i) for the
election of the nominees for directors as proposed herein (and the proxy holders
may exercise their discretion in distributing cumulative votes among the
nominees); (ii) for approval of the amendments to and restatement of the
Company's 1995 Stock Option Plan (the "1995 Plan") to (a) increase the number of
shares of the Company's Common Stock that may be issued pursuant to the 1995
Plan from 500,000 to 800,000; (b) make revisions to comply with the provisions
of the recently adopted Section 16 rules (the "Rules") under the Securities
Exchange Act of 1934 (the "1934 Act") that do not require stockholder approval;
(c) permit participation by Senior Committee Members in the Discretionary Grant
Program under the 1995 Plan as permitted by the Rules; and (d) limit the number
of shares of the Company's Common Stock that may be granted to employees under
the 1995 Plan in order to comply with Section 162(m) of the Internal Revenue
Code of 1986, as amended, (iii) for the appointment of KPMG Peat Marwick LLP as
independent auditors for the Company for the current fiscal year; and (iv) in
the best judgment of the proxy holders, as to any other matters which may
properly come before the meeting.
The solicitation of proxies is made on behalf of the Company and all
expenses incurred herein will be borne by the Company. Some of the officers,
directors, and regular management employees of the Company may also solicit
proxies on behalf of management by telephone, telegraph, and personal interview,
without additional compensation. The Company will reimburse brokerage firms,
banks, and other custodians, nominees, and fiduciaries for their expenses
reasonably incurred in forwarding solicitation material to the beneficial owners
of the Company's Common Stock.
Annual Report
The 1996 Annual Report to stockholders, which is being mailed to
stockholders with this Proxy Statement, contains financial and other information
about the Company but is not incorporated into this Proxy Statement and is not
to be considered a part of the proxy soliciting materials.
Upon request, the Company will provide, without charge to each stockholder
of record as of the Record Date, a copy of the Company's annual report on Form
10-KSB for the year ended December 31, 1996 as filed with the Securities and
Exchange Commission. Any exhibits listed in the Form 10-KSB report also will be
furnished upon request at the actual expense incurred by the Company in
furnishing such exhibits. Any such requests should be directed to the Company's
Secretary at the Company's executive offices set forth in this Proxy Statement.
ELECTION OF DIRECTORS
Nominees
The following table sets forth certain information regarding the nominees
for directors of the Company.
Name Age Position(s) with Cerprobe
- ---- --- -------------------------
Ross J. Mangano 51 Chairman of the Board of Directors
C. Zane Close 47 President, Chief Executive Officer, and Director
William A. Fresh 68 Director
Kenneth W. Miller 65 Director
Donald F. Walter 64 Director
Ross J. Mangano has served as the Chairman of the Board of Directors of
Cerprobe since February 1993 and as a director of Cerprobe since February 1988.
Mr. Mangano has served as the President of Oliver Estate, Inc., an Indiana-based
management company, since 1996. Prior to that time, Mr. Mangano served in
various
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management positions with Oliver Estate, Inc., since 1971. Mr. Mangano also is
an investment analyst for Oliver Estate, Inc. From December 1993 to 1996, Mr.
Mangano served on the Board of Directors of Cole Taylor Financial Group, a
publicly held bank holding company based in Wheeling, Illinois. Since its
spin-off from Cole Taylor Financial Group in 1996, Mr. Mangano has served on the
Board of Directors of Reliance Acceptance Group. Inc., a publicly held
commercial banking and financial services company based in San Antonio, Texas.
C. Zane Close has served as President and Chief Executive Officer and as a
director of Cerprobe since July 1990. From September 1989 to July 1990, Mr.
Close served as Vice President and General Manager of Probe Technology
Corporation ("Probe Technology"), a corporation that develops, manufactures, and
markets probing devices for use in the testing of integrated circuits. Mr. Close
served as Vice President of Operations of Probe Technology from February 1985 to
September 1989.
William A. Fresh has served as a director of Cerprobe since April 7, 1995.
Mr. Fresh co-founded Fresh Test Technology Corporation ( "Fresh Test"), a
designer and manufacturer of probe and interface test technology for the
semiconductor industry, which was acquired by Cerprobe in April 1995. He served
as Chairman of the Board and Chief Executive Officer of Fresh Test from January
1986 through March 1995. Mr. Fresh also has served as the Chairman of the Board
and Chief Executive Officer of Magellan Technology, a public holding company;
and Orem Tek Development Corp., a real estate development company, since May
1990 and May 1991, respectively. Mr. Fresh served as Chairman of the Board and
Chief Executive Officer of Satellite Images System Corporation, a medical
information processing company, from February 1992 to August 1996, and since
August 1996 has served on the Board of Directors of the successor company known
as Satellite Images System, L.L.C. Mr. Fresh served as Chairman of the Board of
EFI Electronics, a publicly held power conditioning company; and Fresh
Technology Company, a PC-based software company, from 1991 to 1994. Since April
1996, Mr. Fresh has served on the Board of Directors of Sento Technical
Innovation Corporation, a publicly held software company.
Kenneth W. Miller has served as a director of Cerprobe since 1979. Mr.
Miller served as Treasurer of Cerprobe from June 1994 to June 1996 and as
Secretary of Cerprobe from October 1991 to June 1996. Since January 1992, Mr.
Miller has served as a business consultant to various companies involved in the
microelectronic industry. From April 1991 until October 1991, Mr. Miller served
as Marketing Director of Scranton Engineering, Inc., a manufacturer of hybrid
circuits and ceramic circuit boards located in Costa Mesa, California. From
September 1988 until April 1991, Mr. Miller served as Marketing Director of
Advanced Packaging Systems, a manufacturer of high-density ceramic and polymer
thin film interconnect products. From 1981 to September 1988, Mr. Miller served
as President of Interamics, a San Diego-based company that manufactured ceramic
packages for integrated circuits and hybrid substrates. From January 1977 to the
time he joined Interamics, Mr. Miller served as Vice President and General
Manager of a division of Siltec Corporation, a San Francisco-based manufacturer
of silicon wafers and ceramic packages.
Donald F. Walter has served as a director of Cerprobe since May 1, 1991.
Since 1982, Mr. Walter has been a financial consultant and is the principal of
Walter & Keenan Financial Consulting Co., a financial consulting firm located in
Niles, Michigan. Since 1982, Mr. Walter has served as a director of National
Standard Co., a publicly held company based in Niles, Michigan that manufactures
specialty wire products. Since 1988, Mr. Walter has served as a director of
Metro BanCorp, a publicly held bank based in Indianapolis, Indiana.
Directors hold office until their successors have been elected and
qualified. All officers are elected by the Board of Directors and hold office
until their successors have been duly elected and qualified, or until
resignation or removal. There currently is no classification of the Board of
Directors. There are no family relationships among any of the directors or
officers of Cerprobe.
The employment agreement between Cerprobe and Mr. Close provides that
Cerprobe will cause Mr. Close to be nominated to the Board of Directors so long
as Mr. Close is employed by Cerprobe. The stockholders of Cerprobe, however,
have no obligation to vote for Mr. Close and may withhold or distribute votes in
their discretion. Cerprobe knows of no other arrangements or understandings
between any director or executive officer and any other person pursuant to which
he has been selected as a director or executive officer.
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<PAGE>
Director Compensation and Other Information
Each outside director of Cerprobe receives $4,000 each quarter and a fee of
$500 for each meeting of the Board of Directors attended. Outside directors also
are eligible to receive stock options pursuant to Cerprobe's stock option plans
and are reimbursed for expenses incurred in attending meetings. Directors do not
receive additional compensation for committee participation or special
assignments.
SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS AND MANAGEMENT
The following table sets forth certain information regarding beneficial
ownership of the Company's Common Stock as of April 1, 1997 by (i) each director
and each nominee for director; (ii) each Named Officer set forth in the Summary
Compensation Table under the section entitled "Executive Compensation"; (iii)
all directors and executive officers of the Company as a group; and (iv) each
person known by the Company to be the beneficial owner of more than 5% of the
Common Stock. The information as to beneficial ownership is based upon
statements furnished to the Company by such persons.
<TABLE>
<CAPTION>
Name of Amount and Nature Percent of
Beneficial Owner(1) of Beneficial Ownership(2) Class(3)
- --------------------------------------------------------------------------------------------
Directors and Named Officers
- ----------------------------
<S> <C> <C>
Ross J. Mangano 614,467(4) 9.6%
C. Zane Close 71,600(5) 1.1%
William A. Fresh 342,964(6) 5.4%
Kenneth W. Miller 195,903(7) 3.1%
Donald F. Walter 21,667(8) *
Michael K. Bonham 106,700(9) 1.7%
Eswar Subramanian 110,900(10) 1.7%
Henry Wong 78,677(11) 1.2%
All executive officers and directors
as a group (ten persons) 1,581,878(12) 23.9%
5% Stockholders
- ---------------
Judd C. and Mary Morris Leighton (13) 460,000 7.2%
Souad Shrime 331,259(14) 5.2%
Troon & Co., Ross J. Mangano, et al.,
Trustees(15) 382,500 6.0%
</TABLE>
- ------------
*Less than 1%.
(1) Each director, nominee, and officer of the Company may be reached
through the Company at 600 Rockford Drive, Tempe, Arizona 85281.
(2) Unless otherwise indicated, and subject to community property laws
where applicable, all shares are owned of record by the persons named
and the beneficial ownership consists of sole voting power and sole
investment power.
(3) The percentages shown include the shares of Common Stock actually owned
as of April 1, 1997 and the shares of Common Stock that the identified
person or group had the right to acquire within 60 days of April 1,
1997 pursuant to the exercise of stock options. In calculating the
percentage of ownership, all shares of Common Stock that the identified
person or group had the right to acquire within 60 days of April 1,
1997 upon the exercise of stock options are deemed to be outstanding
for the purpose of computing the percentage of the shares of Common
Stock owned by such person or group, but are not
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<PAGE>
deemed to be outstanding for the purpose of computing the percentage of
the shares of Common Stock owned by any other person.
(4) Includes 20,000 shares in the name of Nat & Co. voted pursuant to a
power of attorney, 51,300 shares in the name of Oliver & Company voted
pursuant to a power of attorney, 120,000 shares in the name of Millie
M. Cunningham voted pursuant to a power of attorney, 382,500 shares
held in the name of Troon & Co., Ross J. Mangano, et al., Trustees for
which Mr. Mangano serves as a trustee, 20,000 shares that Mr. Mangano
has the right to acquire at an exercise price of $5.75 per share
pursuant to the exercise of options granted in September 1994, and 667
shares that Mr. Mangano has the right to acquire at an exercise price
of $8.25 per share pursuant to the exercise of options granted in June
1995.
(5) Includes 60,000 shares that Mr. Close has the right to acquire at an
exercise price of $5.75 per share pursuant to the exercise of options
granted in September 1994.
(6) Includes 162,700 shares held by WAF Investment Company, a company 100%
owned by Mr. Fresh and his wife, and 78,477 shares held by The William
A. and Reva Luana Fresh Charitable Remainder Unitrust, and reflects 667
shares that Mr. Fresh has the right to acquire at an exercise price of
$8.25 per share pursuant to the exercise of options granted in June
1995.
(7) Includes 125,236 shares held by U.S. Trust Company of California, N.A.,
as trustee for the Kenneth W. Miller Charitable Remainder Unitrust. Mr.
Miller disclaims beneficial ownership with respect to these shares.
Also includes 20,000 shares that Mr. Miller has the right to acquire at
an exercise price of $5.75 per share pursuant to the exercise of
options granted in September 1994, and 667 shares that Mr. Miller has
the right to acquire at an exercise price of $8.25 per share pursuant
to the exercise of options granted in June 1995.
(8) Includes 20,000 shares that Mr. Walter has the right to acquire at an
exercise price of $5.75 per share pursuant to the exercise of options
granted in September 1994 and 667 shares that Mr. Walter has the right
to acquire at an exercise price of $8.25 per share pursuant to the
exercise of options granted in June 1995.
(9) Includes 50,000 shares that Mr. Bonham has the right to acquire at an
exercise price of $5.75 per share pursuant to the exercise of options
granted in September 1994.
(10) Includes 35,000 shares that Mr. Subramanian has the right to acquire at
an exercise price of $5.75 per share pursuant to the exercise of
options granted in September 1994.
(11) Includes 10,000 shares that Mr. Wong has the right to acquire at an
exercise price of $10.50 per share pursuant to the exercise of options
granted in August 1995, 4,000 shares that Mr. Wong's spouse has the
right to acquire at an exercise price of $10.50 per share pursuant to
the exercise of options granted in August 1995, and 6,666 shares that
Mr. Wong has the right to acquire at an exercise price of $5.75
pursuant to the exercise of options granted in September 1994.
(12) Includes 264,334 shares that members of the group had the right to
acquire as of April 1, 1997 or within 60 days of April 1, 1997,
pursuant to the exercise of stock options.
(13) Judd C. and Mary Morris Leighton's address is 211 W. Washington Ave,
Suite 2400, South Bend, Indiana, 46601.
(14) Includes 1,227 shares held by Mrs. Shrime's children. Mrs. Shrime's
address is 9611 Milltrail, Dallas, Texas, 75238.
(15) The address of Troon & Co is P. O. Box 1655, South Bend, Indiana,
46634.
5
<PAGE>
EXECUTIVE COMPENSATION
Summary of Cash and Other Compensation
The following table sets forth information concerning the compensation for
the fiscal years ended December 31, 1996, 1995, and 1994 earned by the Company's
Chief Executive Officer and the Company's three most highly compensated
executive officers whose aggregate cash compensation exceeded $100,000 for
services rendered in all capacities to the Company and its subsidiaries for the
last fiscal year (the "Named Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term Compensation
---------------------------------
Annual Compensation Awards Payouts
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Other Restricted All
Annual Stock LTIP Other
Name and Compensation Award(s) Options Payouts Compen-
Principal Position Year Salary($) Bonus($) ($) (4) ($) /SARs(#) ($) sation ($)
- ------------------ ---- --------- -------- ------------ ---------- -------- -------- ----------
<S> <C> <C> <C> <C>
C. Zane Close 1996(1) 157,662
President and Chief 1995(2) 135,000 35,000
Executive Officer 1994(3) 116,252 13,000 60,000
Eswar Subramanian 1996(1) 132,155
Sr. Vice President and 1995(2) 108,000 25,000
Chief Operating Officer 1994(3) 98,067 12,000 35,000
Michael K. Bonham 1996(1) 122,386
Sr. Vice President of 1995(2) 108,000 25,000
Sales and Marketing 1994(3) 100,033 12,000 50,000
Henry Wong 1996(1) 109,733
Vice President and Executive 1995(2) 100,000 15,750 25,000
Director Cerprobe Asia 1994(3) 87,018 5,000 20,000
</TABLE>
- ---------------
(1) Includes $14,279, $28,000, $22,800, and $19,320 in salary and/or bonus
earned by Messrs. Close, Subramanian, Bonham, and Wong, respectively,
in 1996 but deferred to a future year.
(2) Includes $34,346, $44,863, $32,462, and $15,000 in salary and/or bonus
earned by Messrs. Close, Subramanian, Bonham, and Wong, respectively,
in 1995 but deferred to a future year.
(3) Includes $26,242, $23,662, $16,223, and $14,567 in salary and/or bonus
earned by Messrs. Close, Subramanian, Bonham, and Wong, respectively,
in 1994 but deferred to a future year.
(4) Other annual compensation did not exceed the lesser of $50,000 or 10%
of the total salary and bonus for any of the Named Officers except as
noted.
Option Grants
No stock options were granted to the Company's Named Officers during the
fiscal year ended December 31, 1996.
Option Exercises and Holdings
The following table provides information on options exercised in the last
fiscal year by the Company's Named Officers and the value of each such Named
Officer's unexercised options at December 31, 1996.
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AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
OPTION VALUE AS OF DECEMBER 31, 1996
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options
Shares Options at Fiscal Year-End (#) at Fiscal Year-End ($)(2)
Acquired on Value ------------------------------ ---------------------------
Name Exercise (#) Realized ($)(1) Exercisable Unexercisable Exercisable Unexercisable
- ---- ------------ --------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
C. Zane Close -0- $-0- 60,000 -0- $517,500 $-0-
Eswar Subramanian -0- $-0- 35,000 -0- $301,875 $-0-
Michael K. Bonham -0- $-0- 50,000 -0- $431,250 $-0-
Henry Wong 13,334 $123,340 16,666 15,000 $96,244 $58,125
</TABLE>
- -----------------
(1) Calculated based on the market price at exercise multiplied by the
number of options exercised less the total exercise price of the
options exercised.
(2) Calculated based on $14.375, which was the closing sale price of the
Common Stock as quoted on the Nasdaq National Market on December 31,
1996, multiplied by the number of applicable shares in-the-money less
the total exercise price.
Employment Agreements and Other Arrangements
Pursuant to employment agreements with Cerprobe, (each of which is subject
to automatic renewal for succeeding terms of one year unless either party gives
notice at least 90 days prior to the expiration of any term of its intention not
to renew) Messrs. Close, Subramanian, Bonham, and Wong receive $210,000,
$165,000, $135,000, and $120,000 respectively, in annual base salary during the
term of their employment. Each of the employment agreements provides for
additional increases in the base salary and bonuses as may be determined by
Cerprobe's Board of Directors in its sole discretion. Each of the agreements may
be terminated with or without cause by Cerprobe upon 90 days written notice to
the employee, and each employee may terminate his obligations under the
agreement by giving Cerprobe at least 90 days notice of his intent to terminate.
Employee Benefit Plans
In 1983, the Board of Directors and Cerprobe's stockholders adopted an
incentive stock option plan in order to provide for the grant of options to
employees to purchase shares of Common Stock that qualified as "incentive stock
options" under Section 422A of the Internal Revenue Code of 1954, as amended.
The incentive stock option plan originally provided for the issuance of options
to purchase a total of 100,000 shares of Common Stock. On January 7, 1984, the
Board of Directors approved, and on May 5, 1984, the stockholders ratified, the
reservation of an additional 120,000 shares of Cerprobe Common Stock for
issuance upon the exercise of options under the incentive stock option plan.
On February 2, 1987, the Board of Directors approved, and on May 2, 1987,
the stockholders ratified, a Plan of Modification to the incentive stock option
plan in order to allow Cerprobe certain tax deductions which were not allowed
under the incentive stock option plan. The Plan of Modification converted the
incentive stock option plan to a non-qualified stock option plan (the
"Non-Qualified Plan") and effected a re-grant of all options previously granted
under the incentive stock option plan. The original vesting schedules for
previously granted options were not affected by the re-grant. On April 22, 1988,
the Board of Directors approved the reservation of an additional 150,000 shares
of Common Stock for issuance upon the exercise of options under the
Non-Qualified Plan, thereby increasing the total number of shares subject to the
Non-Qualified Plan to 370,000.
On April 3, 1989, the Board of Directors approved, and on May 6, 1989, the
stockholders ratified, the adoption of an incentive stock option plan (the "ISO
Plan") to provide for the grant of options to key executive,
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<PAGE>
managerial or supervisory employees or other employees who are deemed by the
Board of Directors to have performed extraordinary services to Cerprobe, which
options will qualify for the tax benefits accorded "incentive stock options" as
defined in Section 422A of the Code. The Board of Directors also approved an
amendment to Cerprobe's Non-Qualified Plan on April 3, 1989 to provide that
Cerprobe's directors who are not employees of Cerprobe, and thus not eligible to
receive incentive stock options under the ISO Plan ("Unaffiliated Directors"),
would be eligible to receive options under the Non-Qualified Plan.
In connection with the adoption of the ISO Plan, all existing options under
the Non-Qualified Plan granted prior to April 3, 1989 were permitted to be
exchanged for incentive stock options under the ISO Plan at the option of the
holder. Subsequent to the adoption of the ISO Plan, the number of shares
reserved for issuance under the Non-Qualified Plan was reduced from 370,000 to
150,000. In July 1990, however, the number of shares reserved for issuance under
the Non-Qualified Plan was increased to 565,000 in order to grant options to
Messrs. Close, Subramanian, Bonham, and Wong in connection with their employment
by Cerprobe and in May 1991, the number of shares reserved for issuance under
the Non-Qualified Plan was again increased to 685,000. A maximum of 500,000
shares of Cerprobe Common Stock was reserved for issuance upon exercise of
options granted under the ISO Plan.
The Non-Qualified Plan and the ISO Plan together are referred to herein as
the "Stock Option Plans."
The purpose of the Stock Option Plans is to aid Cerprobe in attracting and
retaining directors and employees and to provide such persons with an incentive
to purchase a proprietary interest in Cerprobe in order to create an increased
personal interest in Cerprobe's continued success and progress, thereby
motivating them to exert their best efforts on behalf of Cerprobe. The Stock
Option Plans are administered by the Board of Directors, which has the sole
authority and discretion to select employees to participate in the Stock Option
Plans, to grant options under the Stock Option Plans, to specify the terms and
conditions of the options (within the limitations of the Stock Option Plans),
and otherwise to interpret and construe the terms and provisions of the Stock
Option Plans and any agreements governing options granted under the Stock Option
Plans. The Stock Option Plans authorize the Board of Directors to delegate its
administrative authority and discretion under the Stock Option Plans to the
Compensation Committee of the Board of Directors.
The exercise price of any options granted under the ISO Plan may not be
less than 100% of the fair market value of shares of Cerprobe Common Stock at
the time the option is granted (or, for incentive stock options granted to a
person who, at the time of the grant, is the beneficial owner of more than 10%
of the combined voting power of all classes of voting stock then outstanding of
Cerprobe or any parent or subsidiary of Cerprobe (a "10% Beneficial Owner"), not
less than 110% of the fair market value of Cerprobe Common Stock at the date of
grant). All options granted under the ISO Plan expire ten years from the date of
grant (five years in the case of a 10% Beneficial Owner), unless an earlier
expiration date is provided in the option agreement. The term of each option
granted under the Non-Qualified Plan is fixed by the Board of Directors or the
Compensation Committee at the date of grant. Options granted under the Stock
Option Plans are non-transferable by the optionholder, otherwise than by will or
the laws of descent and distribution, and are exercisable during the
optionholder's lifetime only by the optionholder, or in the event of the death
of the optionholder, by a person who acquires the right to exercise the option
by the laws of descent and distribution.
Only key executive, managerial, or supervisory employees of Cerprobe,
including directors who also are full time employees, and other employees who
are deemed by the Board of Directors to have performed extraordinary services to
Cerprobe, are eligible to receive options granted under the ISO Plan. Although
all employees of Cerprobe are eligible to receive options under the
Non-Qualified Plan, the Board of Directors intends to grant options under the
Non-Qualified Plan primarily to Cerprobe's Unaffiliated Directors.
The Stock Option Plans authorize the Board of Directors to amend the Stock
Option Plans without stockholder approval whenever the Board of Directors deems
an amendment proper and in the best interests of Cerprobe. However, the Board of
Directors may not amend the ISO Plan or otherwise take any action with respect
to the ISO Plan which would prevent any option granted under the ISO Plan from
qualifying as an "incentive stock
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option" within the meaning of Section 422A of the Code. Moreover, the Board of
Directors may not, without stockholder approval, increase the aggregate number
of shares of Cerprobe Common Stock which are subject to the ISO Plan, reduce the
exercise price at which options may be granted under the ISO Plan or at which
any outstanding option may be exercised, or extend the term of the ISO Plan.
Unless previously terminated by the Board of Directors, the ISO Plan will
terminate on April 3, 1999.
As a result of the adoption of the ISO Plan on April 3, 1989, all options
granted under the Non-Qualified Plan prior to April 3, 1989 (which had not
previously been canceled) were permitted to be exchanged for options under the
ISO Plan at the option of the holder; provided, however, that no options granted
under the ISO Plan in exchange for options previously granted under the
Non-Qualified Plan were permitted to be issued at a price that was less than
100% of the fair market value of Cerprobe's Common Stock at the time of the
exchange and re-grant (or, for incentive stock options granted to a 10%
Beneficial Owner, not less than 110% of the fair market value of the Common
Stock at the date of the exchange and re-grant). Such options generally are
exercisable over a three year period, with one-third exercisable on the date of
grant and an additional one-third to become exercisable on each anniversary of
the date of grant. For certain information regarding the exercise of options by
Named Officers, see the table entitled "Aggregated Option Exercises In Last
Fiscal Year And Option Value As Of December 31, 1996."
As of April 1, 1997, there were outstanding options to acquire 307,298
shares of Cerprobe Common Stock under the Stock Option Plans.
1995 Stock Option Plan
The 1995 Stock Option Plan (the "1995 Plan") provides for the granting of
options to acquire Common Stock, the direct granting of Common Stock, the
granting of stock appreciation rights, or the granting of other cash awards. The
1995 Plan is more fully discussed at "Proposal to Amend and Restate the
Company's 1995 Stock Option Plan."
COMPLIANCE WITH SECTION 16 OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and officers, and persons who own more than 10% of a registered class
of the Company's equity securities, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission (the "SEC"). Officers,
directors, and greater than 10% stockholders are required by SEC regulations to
furnish the Company with copies of all Section 16(a) forms filed with the SEC.
Based solely on the Company's review of the copies of such forms received
by it during the fiscal year ended December 31, 1996, and written
representations that no other reports were required, the Company believes that
each person who, at any time during such fiscal year, was a director, officer,
or beneficial owner of more than 10% of the Company's Common Stock complied with
all Section 16(a) filing requirements during such fiscal year or prior fiscal
years.
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Judd C. Leighton and Mary Morris Leighton, who together own 460,000 shares
of Common Stock, beneficially own an approximately 24% interest in CRPB
Investors, L.L.C, a limited liability company formed for the purpose of owning
and operating the 83,000 square foot facility Cerprobe will lease to serve as
Cerprobe's headquarters.
Henry Wong, a Vice President of Cerprobe and Executive Director of Cerprobe
Asia, owns 10% of Cerprobe Asia PTE LTD, Cerprobe's joint venture in Singapore
and Taiwan.
Pursuant to an agreement dated May 1, 1991, amended March 8, 1993 and
January 1994, between the Company and John W. Tarzwell and his wife, Mr.
Tarzwell agreed to resign as a director, an officer, and an employee of the
Company effective May 1, 1991. In connection with Mr. Tarzwell's resignation,
the Company agreed to pay Mr. Tarzwell $3,125 per month beginning May 15, 1991
and ending April 15, 1994. In addition, the Company agreed to provide Mr.
Tarzwell and his wife medical insurance coverage similar to the coverage
provided by the Company to employees of the Company, life insurance or
comparable coverage providing death benefits of up to $47,500, the use of a
Company-leased automobile until March 30, 1992 and reimbursement for all accrued
and unpaid vacation pay due Mr. Tarzwell as of April 30, 1991. Mr. Tarzwell
agreed to keep confidential all information with respect to the Company, its
businesses and affairs and to refrain from disclosing or using such information
for his benefit or the benefit of any other person for a period of four years.
Further, Mr. Tarzwell agreed to vote all of the Company's stock owned by Mr.
Tarzwell in favor of all issues that receive the recommendation of the Company's
Board of Directors. In January 1994, the Company's Board of Directors agreed to
extend the agreement with Mr. Tarzwell on a month-to-month basis, subject to a
30-day notice of termination.
PROPOSAL TO AMEND AND RESTATE THE 1995 STOCK OPTION PLAN
The 1995 Plan, as amended, is divided into two programs: the Discretionary
Grant Program and the Automatic Grant Program. The Discretionary Grant Program
provides for the granting of options to acquire Common Stock ("Options"), the
direct granting of Common Stock ("Stock Awards"), the grant of stock
appreciation rights ("SARs"), or the granting of other cash awards ("Cash
Awards") (Stock Awards, SARs, and Cash Awards are collectively referred to
herein as "Awards"). Options and Awards under the 1995 Plan may be issued to
executive officers, directors, employees, consultants, and other independent
contractors who provide valuable services to Cerprobe and its subsidiaries
(collectively, "Eligible Persons"). The Options issued may be incentive stock
options or non-qualified stock options. Cerprobe believes that the Discretionary
Grant Program represents an important factor in attracting and retaining
executive officers and other key employees and constitutes a significant part of
its compensation program, providing them with an opportunity to acquire a
proprietary interest in Cerprobe and giving them an additional incentive to use
their best efforts for the long-term success of Cerprobe. The Automatic Option
Program provides for the automatic grant of options to acquire the Common Stock
("Automatic Options"). Automatic Options are granted to non-employee members of
Cerprobe's Board of Directors ("Eligible Directors"). Cerprobe believes that the
Automatic Option Program promotes the interests of Cerprobe by providing such
directors the opportunity to acquire a proprietary interest, or otherwise
increase their proprietary interest, in Cerprobe and an increased personal
interest in Cerprobe's continued success and progress.
Shares Subject to the 1995 Plan
Prior to stockholder approval of the proposed amendments to and restatement
of the 1995 Plan, a maximum of 500,000 shares of Common Stock currently may be
issued under the 1995 Plan. If any Option or SAR terminates or expires without
having been exercised in full, stock not issued under such Option or SAR will
again be available for the purposes of the 1995 Plan. If any change is made in
the stock subject to the 1995 Plan or subject to any Option or SAR granted under
the 1995 Plan (through merger, consolidation, reorganization,
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recapitalization, stock dividend, split-up, combination of shares, exchange of
shares, change in corporate structure, or otherwise), the 1995 Plan provides
that appropriate adjustments will be made as to the maximum number of shares
subject to the 1995 Plan, and the number of shares and exercise price per share
of stock subject to outstanding Options or Awards. As of April 1, 1997, 42,000
shares of Common Stock have been issued upon exercise of Options granted
pursuant to the 1995 Plan, and there were outstanding Options to acquire 261,000
shares of Common Stock under the 1995 Plan.
Eligibility and Administration
Options and Awards may be granted pursuant to the Discretionary Grant
Program only to persons ("Eligible Persons") who at the time of grant are either
(i) key personnel (including officers and directors) of Cerprobe, or (ii)
consultants or independent contractors who provide valuable services to
Cerprobe. Options that are incentive stock options may be granted only to key
personnel of Cerprobe who are also employees of Cerprobe. To the extent that
granted Options are incentive stock options, the terms and conditions of those
Options must be consistent with the qualification requirements set forth in the
Internal Revenue Code.
The Eligible Persons under the Discretionary Grant Program are divided into
two groups, and there is a separate administrator (each a "Plan Administrator")
for each group. One group consists of Eligible Persons who are executive
officers and directors of Cerprobe and all persons who own 10% or more of
Cerprobe's issued and outstanding stock. The power to administer the 1995 Plan
with respect to those persons rests exclusively with a committee ("Senior
Committee") comprised of two or more non-employee directors who are appointed by
the Board of Directors. The power to administer the 1995 Plan with respect to
the remaining Eligible Persons is vested with the Senior Committee or a
committee of two or more directors appointed by the Board of Directors
("Employee Committee"). Each Plan Administrator determines (i) which of the
Eligible Persons in its group will be granted Options and Awards; (ii) the
amount and timing of the grant of such Options and Awards; and (iii) such other
terms and conditions as may be imposed by the Plan Administrator consistent with
the 1995 Plan. As described below, on February 18, 1997, the Board of Directors
amended the 1995 Plan, subject to stockholder approval, to provide that maximum
number of shares of Common Stock with respect to which Options or Awards may be
granted to any employee during the term of the 1995 Plan may not exceed 50% of
the shares of Common Stock covered by the 1995 Plan. See "Proposal to Amend and
Restate the Company's 1995 Stock Option Plan - Reasons for and Effect of the
Proposed Amendments and Restatement."
Exercise of Options
The expiration date, maximum number of shares purchasable, and the other
provisions of the Options are established at the time of grant, provided that no
options may be granted for terms of more than 10 years. Options vest and thereby
become exercisable in whole or in one or more installments at such time as may
be determined by the Plan Administrator upon the grant of the Options. However,
a Plan Administrator has the discretion to provide for the automatic
acceleration of the vesting of any Options or Awards granted under the
Discretionary Grant Program in the event of a "Change in Control." The
definition of "Change in Control" includes the following events: (i) the
acquisition of beneficial ownership by certain persons, acting alone or in
concert with others, of 40% or more of Cerprobe Common Stock pursuant to a
tender offer which the Board of Directors recommends that Cerprobe's
stockholders not accept, or (ii) a change in the composition of the Board of
Directors occurs such that those individuals who were elected to the Board of
Directors at the last stockholders' meeting at which there was not a contested
election for Board membership subsequently ceased to comprise a majority of the
Board of Directors by reason of a contested election.
Each Plan Administrator will determine the exercise prices of Options at
the time of grant. However, the exercise price of any Option may not be less
than 100% of the fair market value of the Common Stock at the time of the grant
(110% if the Option is granted to a person who at the time the Option is granted
owns 10% of the total combined voting power of all classes of stock of
Cerprobe). To exercise an Option, the optionholder will be required to deliver
to Cerprobe full payment of the exercise price for the shares as to which the
Option is being
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exercised. Generally, Options can be exercised by delivery of cash, bank
cashier's check, or shares of Common Stock.
Termination of Employment or Services
Except as otherwise allowed by the Plan Administrator with respect to
non-qualified Options, Options granted under the 1995 Plan are nontransferable
other than by will or by the laws of descent and distribution upon the death of
the optionholder and, during the lifetime of the optionholder, are exercisable
only by such optionholder. If any optionholder ceases to be employed by Cerprobe
for a reason other than death or permanent disability, such optionholder may,
within 30 days after the termination of such employment, exercise some or all of
the vested incentive stock options held by such employee. In the event of the
death of the participant incentive stock options may be exercised within 90 days
thereafter (but never later than the expiration of the term of the Option). If
an optionholder's employment is terminated by reason of permanent disability,
however, incentive stock options may be exercised by the optionholder or the
optionholder's estate or successor by bequest or inheritance during the period
ending 180 days after the optionholder's retirement (but not later than the
expiration of the term of the Option). Termination of employment at any time for
cause immediately terminates all Options held by the terminated employee.
If the proposed amended and restated 1995 Plan is approved by the
Stockholders, non-qualified Options that are outstanding at the time an
optionholder's service to Cerprobe terminates will remain exercisable for such
period of time thereafter as determined by the Plan Administrator at the time of
grant of such Options. However, if the optionholder is discharged for cause, all
Options held by such optionholder will terminate.
Awards
A Plan Administrator also may grant Awards to Eligible Persons under the
1995 Plan. Awards may be granted in the form of SARs, Stock Awards, or Cash
Awards.
Awards granted in the form of SARs entitle the recipient to receive a cash
payment equal to the appreciation in market value of a stated number of shares
of Common Stock from the price on the date the SAR was granted or became
effective to the market value of the Common Stock on the date first exercised or
surrendered. The Plan Administrators may determine, consistent with the 1995
Plan, such terms, conditions, restrictions, and/or limitations, if any, on any
SARs.
Awards granted in the form of Stock Awards entitle the recipient to receive
shares of Cerprobe Common Stock directly. Awards granted in the form of cash
entitle the recipient to receive direct payments of cash depending on the market
value or the appreciation of the Common Stock or other securities of Cerprobe.
The Plan Administrators may determine such other terms, conditions, or
limitations, if any, on any Awards.
The 1995 Plan states that it is not intended to be the exclusive means by
which Cerprobe may issue options or warrants to acquire its Common Stock, stock
awards, or any other type of award. To the extent permitted by applicable law,
Cerprobe may issue any other options, warrants, or awards other than pursuant to
the 1995 Plan without stockholder approval.
Terms and Conditions of Automatic Options
The 1995 Plan provides that each year at the meeting of the Board of
Directors held immediately after the annual meeting of stockholders, each
Eligible Director is granted an Automatic Option to acquire 2,000 shares of
Common Stock ("Annual Automatic Option"). The 1995 Plan will grant new Eligible
Directors an Automatic Option to acquire 20,000 shares of Common Stock ("Initial
Automatic Option") on the date of their first appointment or election to the
Board. Each Automatic Option becomes exercisable and vests in a series of three
equal and successive annual installments, with each annual installment to become
exercisable on the day before Cerprobe's annual meeting of stockholders
occurring in the applicable year. An Eligible Director is not eligible to
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receive an Annual Automatic Option if the grant date is within 30 days of such
Eligible Director receiving an Initial Automatic Option.
The exercise price per share of Common Stock subject to each Automatic
Option is equal to 100% of the fair market value per share on the date of the
grant of the Automatic Option. Each Automatic Option expires on the tenth
anniversary of the date on which an Automatic Option grant was made. Eligible
Directors also may be eligible to receive Options or Awards under the
Discretionary Grant Program or option grants or direct stock issuances under any
other plans of Cerprobe. Cessation of service on the Board terminates any
Automatic Options for shares that were not vested at the time of such cessation.
Automatic Options are nontransferable other than by will or the laws of descent
and distribution on the death of optionholder and, during the lifetime of the
optionholder, are exercisable only by such optionholder.
The 1995 Plan provides that, in the event of Change in Control, all
unvested Automatic Options will automatically accelerate and immediately vest so
that each outstanding Automatic Option will, immediately prior to the effective
date of such Change in Control, become fully exercisable.
Duration and Modification
The 1995 Plan will remain in force until May 9, 2005. The Board of
Directors of Cerprobe may at any time suspend, amend, or terminate the 1995
Plan, except that without approval by the affirmative vote of the holders of a
majority of the outstanding shares of Common Stock present in person or by proxy
at a meeting of stockholders of Cerprobe convened for such purpose, the Board of
Directors may not (i) increase, except in the case of certain organic changes to
Cerprobe, the maximum number of shares of Common Stock subject to the 1995 Plan,
(ii) reduce the exercise price at which Options may be granted or the exercise
price for which any outstanding Options may be exercised, (iii) extend the term
of the 1995 Plan, (iv) change the class of persons eligible to receive Options
or Awards under the 1995 Plan, or (v) materially increase the benefits accruing
to participants under the 1995 Plan. Notwithstanding the foregoing, the Board of
Directors may amend the 1995 Plan from time to time as it deems necessary in
order to meet the requirements of any amendments to Rule 16b-3 under the
Securities Exchange Act of 1934 without the consent of the stockholders of
Cerprobe.
Reasons for an Effect of the Proposed Amendments and Restatement
The Board of Directors believes that the approval of the proposed
amendments to and restatement of the 1995 Plan is necessary to achieve the
purposes of the 1995 Plan and to promote the welfare of Cerprobe and its
stockholders generally. The Board of Directors believes that the proposed
amendments to the 1995 Plan will aid Cerprobe in attracting and retaining
directors, officers, and key employees and motivating such persons to exert
their best efforts on behalf of Cerprobe. In addition, Cerprobe expects that the
proposed amendments will further strengthen the identity of interest of the
directors, officers, and key employees with that of the stockholders.
Increase in the Number of Shares Reserved for Issuance
It is proposed to increase the number of shares of Common Stock reserved
for issuance under the 1995 Plan from 500,000 to 800,000. The increase in the
number of shares of Common Stock reserved for issuance under the 1995 Plan
recognizes the growth of Cerprobe's operations and the increase in the number of
Stock issued in 1996 upon conversion of Series A Preferred Stock issued in 1996
and the exercise of options, as well as shares issued in 1996 and 1997 as a
result of two acquisitions. An increase in the number of shares issuable
pursuant to the 1995 Plan will enable Cerprobe to grant additional options and
other awards to current participants, which will enable such participants to
maintain their proportionate interest in Cerprobe and to attract such additional
personnel as may be necessary in view of Cerprobe's expanding operations.
In the event that the amendments to and restatement of Cerprobe's 1995
Stock Option Plan are not approved by the stockholders, the 1995 Plan will
remain in effect as previously adopted. Any options outstanding under the 1995
Plan prior to the amendments to and restatement of the 1995 Plan shall remain
valid and unchanged.
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Amendments Intended to Comply with Revised Rules
In May 1996, the Securities and Exchange Commission ("SEC") amended the
Rules promulgated pursuant to Section 16 of the Exchange Act. The amended Rules
became effective on November 1, 1996. In general, these Rules required
Cerprobe's officers, directors, and holders of more that 10% of the Common Stock
to file reports or ownership and changes in ownership of Common Stock with the
SEC. The Rules also exempt certain transactions in the Common Stock by
Cerprobe's officers, directors, and 10% stockholders from liability for
"short-swing profits" under Section 16 of the Exchange Act. Because the 1995
Plan is intended to comply with the Rules with respect to Options and Awards
granted pursuant to the 1995 Plan and issuance's of Common Stock amendments to
the 1995 Plan that are intended to bring the 1995 Plan into compliance with the
revised Rules. These amendments generally do not require stockholder approval,
except for the amendment that permits non-employee directors who are members of
the Senior Committee to receive grants of Options and Awards pursuant to the
Discretionary Grant Program in addition to Automatic Options granted to them
pursuant to the Automatic Grant Program. This provision, which was previously
prohibited under the Rules, is permitted under the revised Rules. The Board of
Directors believes that these amendments are necessary to attract, retain, and
motivate non-employee directors and to encourage non-employee directors to serve
as members of the Senior Committee.
Amendment Intended to Comply with Internal Revenue Code Section 162(m)
The Board of Directors has adopted an amendment to the 1995 Plan that
limits the number of shares of the Common Stock with respect to Options or
Awards that may be granted to employees of Cerprobe to a maximum of 50% of the
shares of Common Stock authorized for issuance under the 1995 Plan. This
amendment is being submitted to stockholders in order to satisfy the stockholder
approval requirements of Section 162(m) of the Internal Revenue Code. Section
162(m) generally allows a tax deduction to Cerprobe for compensation in excess
of $1.0 million paid in any year to its Chief Executive Officer and four other
most highly compensated executive officers (the "Highly Compensated Officers")
only if such compensation qualifies as "performance-based compensation." Upon
stockholder approval of the amendments to and restatement of the 1995 Plan,
non-qualified options granted following the date of the Meeting generally will
qualify as "performance-based compensation" and will entitle Cerprobe to take a
tax deduction for compensation paid as a result of option exercises by
Cerprobe's Highly Compensated Officers.
As required by Section 162(m), the Board of Directors has adopted a
resolution saying that, if the stockholders do not approve the amendment,
Cerprobe will not make any further grants of options under the 1995 Plan. In
effect, stockholders will be voting to reapprove the entire 1995 Plan. The Board
of Directors believes that it is in the best interest of Cerprobe to continue to
grant options and/or issue shares of Common Stock under the 1995 Plan and in
Cerprobe's best interests to adopt the proposed amendments to a restatement of
the 1995 Plan.
Restatement of the 1995 Plan
The restatement of the 1995 Plan is intended to reflect other minor
technical revisions and to provide on integrated document to avoid confusion.
Federal Income Tax Consequences
Certain options granted under the 1995 Plan will be intended to qualify as
incentive stock options under Code Section 422. Accordingly, there will be no
taxable income to an employee when an incentive stock option is extent the
amount by which the fair market value of the shares at the time of exercise
exceeds the option price is treated as an item of preference in computing the
alternate minimum taxable income of the optionholder. If an optionholder
exercises an incentive stock option and does not dispose of the shares within
either two years after the date of the grant of the option or one year after the
date the shares were transferred to the optionholder, any gain realized upon
disposition will be taxable to the optionholder as a capital gain. If the
optionholder does not satisfy the applicable holding periods,
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however, the difference between the option price and the fair market value of
the shares on the date of exercise of the option will be taxed as ordinary
income, and the balance of the gain, if any, will be taxed as capital gain. If
the shares are disposed of before the expiration of the one-year or two-year
periods and the amount realized is less than the fair market value of the shares
at the date of exercise, the employee's ordinary income is limited to the amount
realized less the option exercise price paid. The Company will be entitled to a
tax deduction only to the extent the optionholder has ordinary income upon the
sale or other disposition of the shares received when the option was exercised.
Certain other options issued under the 1995 Plan, including options issued
automatically to the non-employee members of the Board of Directors, will be
non-qualified options. The income tax consequences of non-qualified options will
be governed by Code Section 83. Under Code Section 83, the excess of the fair
market value of the shares of Common Stock acquired pursuant to the exercise of
any option over the amount paid for such stock (hereinafter referred to as
"Excess Value") must be included in the gross income of the optionholder in the
first taxable year in which the Common Stock acquired by the optionholder is not
subject to a substantial risk of forfeiture. In calculating Excess Value, fair
market value will be determined on the date that the substantial risk of
forfeiture expires, unless a Section 83(b) election is made to include the
Excess Value in income immediately after the acquisition, in which case fair
market value will be determined on the date of the acquisition. Generally, the
Company will be entitled to a federal income tax deduction in the same taxable
year that the optionholder recognizes income. The Company will be required to
withhold income tax with respect to income reportable pursuant to Code Section
83 by an optionholder. The basis of the shares acquired by an optionholder will
be equal to the option price of those shares plus any income recognized pursuant
to Code Section 83. Subsequent sales of the acquired shares will produce capital
gain or loss. Such capital gain or loss will be long term if the stock has been
held for one year from the date of the substantial risk of forfeiture lapsed,
or, if a Section 83(b) election is made, one year from the date the shares were
acquired.
Stockholder Vote Required
The holders of a majority of the outstanding shares of the Common Stock of
Cerprobe present in person or by proxy at the meeting of stockholders must
approve the amendments to the restatement of the 1995 Stock Option Plan. The
Board of Directors unanimously recommends a vote "FOR" approval of the
amendments to and restatement of the 1995 Stock Option Plan.
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors recommends that the stockholders ratify the
appointment of KPMG Peat Marwick LLP as independent auditors for the Company for
the fiscal year ending December 31, 1997. KPMG Peat Marwick LLP provided such
services to the Company for the fiscal year ended December 31, 1996 and is
serving in such capacity for the current fiscal year
Representatives of KPMG Peat Marwick LLP are expected to be present at the
Annual Meeting and will be given an opportunity to make a statement if so
desired and to respond to appropriate questions.
The Audit Committee of the Board of Directors, following a review of the
Company's audit requirement, approved and recommended to the Board and the Board
has approved the appointment of KPMG Peat Marwick LLP as the Company's
independent auditors for the fiscal year ending December 31, 1997.
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DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS
Under the rules of the Securities and Exchange Commission (the
"Commission"), any proposal that a stockholder intends to have presented at the
Company's annual meeting for the fiscal year ending December 31, 1997 must be
received by the Company no later than December 31, 1997 in order to be included
in the proxy statement and form of proxy relating to such meeting. Any proposal
that is submitted should be addressed to the attention of the Secretary of the
Company and must be accompanied by the notice required by the rules of the
Commission and must otherwise comply with such rules.
OTHER MATTERS
The Company knows of no other matters to be submitted to the Annual
Meeting. If any other matters properly come before the Annual Meeting, it is
intended that the shares represented by proxies will be voted in accordance with
the judgment of the proxy holders.
Dated: April 30, 1997
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APPENDIX A
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CERPROBE CORPORATION
1995 STOCK OPTION PLAN
(as amended through February 18, 1997)
ARTICLE I
General
1.1 Purpose of Plan; Term
(a) Adoption. On May 9, 1995, the Board of Directors (the
"Board") of Cerprobe Corporation, a Delaware corporation (the "Company"),
adopted this stock option plan to be known as the 1995 Stock Option Plan (the
"Original Plan"). The Original Plan was approved by the stockholders of the
Company on June 27, 1995. On February 18, 1997, the Board adopted a newly
Amended and Restated 1995 Stock Option Plan (the "Revised Plan") whereby
additional shares of Stock were authorized to be issued under the Plan and
certain other technical changes were made. The Revised Plan must be approved by
the stockholders of the Company within one year of the date of its adoption by
the Board. If not approved by the stockholders, the Original Plan shall continue
in effect. If the Revised Plan is not timely approved by the stockholders, any
Options or Awards issued after the date of the adoption of the Revised Plan
shall remain valid and unchanged to the extent that such Options or Awards
contain terms such that they could have been issued under the Original Plan.
This Amended and Restated Stock Option Plan shall be known as the Cerprobe
Corporation 1995 Stock Option Plan (the "Plan"). Any Options or Awards
outstanding prior to the adoption by the Board of the Revised Plan shall remain
valid and unchanged. When applicable, the term "Plan" shall include the Original
Plan and/or the Revised Plan.
(b) Defined Terms. All initially capitalized terms used
hereby shall have the meaning set forth in Article V hereto.
(c) General Purpose. The Plan shall be divided into two
programs: the Discretionary Grant Program and the Automatic Grant Program.
(i) Discretionary Grant Program. The purpose of the
Discretionary Grant Program is to further the interests of the Company and its
stockholders by encouraging key persons associated with the Company (or Parent
or Subsidiary Corporations) to acquire shares of the Company's Stock, thereby
acquiring a proprietary interest in its business and an increased personal
interest in its continued success and progress. Such purpose shall be
accomplished by providing for the discretionary granting of options to acquire
the Company's Stock ("Discretionary Options"), the direct granting of the
Company's Stock ("Stock Awards"), the granting of stock appreciation rights
("SARs"), or the granting of other cash awards ("Cash Awards") (Stock Awards,
SARs, and Cash Awards shall be collectively referred to herein as "Awards").
(ii) Automatic Grant Program. The purpose of the
Automatic Grant Program is to promote the interests of the Company by providing
non-employee members of the Company's Board of Directors (the "Board") the
opportunity to acquire a proprietary interest, or otherwise increase their
proprietary interest, in the Company and to thereby have an increased personal
interest in its continued success and progress. Such purpose shall be
accomplished by providing for the automatic grant of options to acquire the
Company's Stock ("Automatic Options").
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(d) Character of Options. Discretionary Options granted under
this Plan to employees of the Company (or Parent or Subsidiary Corporations)
that are intended to qualify as "incentive stock options" as defined in Code ss.
422 ("Incentive Stock Options") will be specified in the applicable stock option
agreement. All other Options granted under this Plan will be nonqualified
options.
(e) Rule 16b-3 Plan. With respect to persons subject to
Section 16 of the Securities Exchange Act of 1934, as amended ("1934 Act"), the
Plan is intended to comply with all applicable conditions of Rule 16b-3 (and all
subsequent revisions thereof) promulgated under the 1934 Act. In such instance,
to the extent any provision of the Plan or action by a Plan Administrator fails
to so comply, it shall be deemed null and void, to the extent permitted by law
and deemed advisable by such Plan Administrator. In addition, the Board may
amend the Plan from time to time as it deems necessary in order to meet the
requirements of any amendments to Rule 16b-3 without the consent of the
stockholders of the Company.
(f) Duration of Plan. The term of the Original Plan is 10
years commencing on the date of adoption of the Plan by the Board as specified
in Section 1.1(a) hereof. No Option or Award shall be granted under the Plan
unless granted within 10 years of the adoption of the Plan by the Board, but
Options or Awards outstanding on that date shall not be terminated or otherwise
affected by virtue of the Plan's expiration.
1.2 Stock and Maximum Number of Shares Subject to Plan.
(a) Description of Stock and Maximum Shares Allocated. The
stock subject to the provisions of the Plan and issuable upon the grant of Stock
Awards or upon the exercise of SARs or Options granted under the Plan is shares
of the Company's common stock, $.05 par value per share (the "Stock"), which may
be either unissued or treasury shares, as the Board may from time to time
determine. Subject to adjustment as provided in Section 4.1 hereof, the
aggregate number of shares of Stock covered by the Plan and issuable hereunder
shall be 800,000 shares of Stock.
(b) Calculation of Available Shares. For purposes of
calculating the maximum number of shares of Stock which may be issued under the
Plan: (i) the shares issued (including the shares, if any, withheld for tax
withholding requirements) upon exercise of an Option shall be counted, and (ii)
the shares issued (including the shares, if any, withheld for tax withholding
requirements) as a result of a grant of a Stock Award or an exercise of a SAR
shall be counted.
(c) Restoration of Unpurchased Shares. If an Option or SAR
expires or terminates for any reason prior to its exercise in full and before
the term of the Plan expires, the shares of Stock subject to, but not issued
under, such Option or SAR shall, without further action or by or on behalf of
the Company, again be available under the Plan.
1.3 Approval; Amendments.
(a) Approval by Stockholders. The Revised Plan shall be
submitted to the stockholders of the Company for their approval at a regular or
special meeting to be held within 12 months after the adoption of the Revised
Plan by the Board. Stockholder approval shall be evidenced by the affirmative
vote of the holders of a majority of the shares of the Company's Common Stock
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present in person or by proxy and voting at the meeting. The date such
stockholder approval has been obtained shall be referred to herein as the
"Effective Date."
(b) Commencement of Programs. The Automatic Grant Program, as
revised herein, shall commence immediately. The Discretionary Grant Program, as
revised herein, shall commence immediately, subject to the terms set forth in
Section 1.1(a).
(c) Amendments to Plan. The Board may, without action on the
part of the Company's stockholders, make such amendments to, changes in and
additions to the Plan as it may, from time to time, deem necessary or
appropriate and in the best interests of the Company; provided, the Board may
not, without the consent of the applicable Optionholder, take any action which
disqualifies any Discretionary Option previously granted under the Plan for
treatment as an Incentive Stock Option or which adversely affects or impairs the
rights of the Optionholder of any Discretionary Option outstanding under the
Plan, and further provided that, except as provided in Article IV hereof, the
Board may not, without the approval of the Company's stockholders, (i) increase
the aggregate number of shares of Stock subject to the Plan, (ii) reduce the
exercise price at which Discretionary Options may be granted or the exercise
price at which any outstanding Discretionary Option may be exercised, (iii)
extend the term of the Plan, (iv) change the class of persons eligible to
receive Discretionary Options or Awards under the Plan, or (v) materially
increase the benefits accruing to participants under the Plan. Notwithstanding
the foregoing, Discretionary Options or Awards may be granted under this Plan to
purchase shares of Stock in excess of the number of shares then available for
issuance under the Plan if (A) an amendment to increase the maximum number of
shares issuable under the Plan is adopted by the Board prior to the initial
grant of any such Option or Award and within one year thereafter such amendment
is approved by the Company's stockholders and (B) each such Discretionary Option
or Award granted is not to become exercisable or vested, in whole or in part, at
any time prior to the obtaining of such stockholder approval.
ARTICLE II
Discretionary Grant Program
2.1 Participants; Administration.
(a) Eligibility and Participation. Discretionary Options and
Awards may be granted only to persons ("Eligible Persons") who at the time of
grant are (i) key personnel (including officers and directors) of the Company or
Parent or Subsidiary Corporations, or (ii) consultants or independent
contractors who provide valuable services to the Company or Parent or Subsidiary
Corporations; provided that (A) Incentive Stock Options may only be granted to
key personnel of the Company (or its Parent or Subsidiary Corporations) who are
also employees of the Company (or its Parent or Subsidiary Corporations), and
(B) the maximum number of shares of Stock with respect to which Options, Awards,
or any combination thereof, may be granted to any employee during the term of
the Plan shall not exceed 50 percent of the shares of Stock covered by and
issuable under the Plan. A Plan Administrator shall have full authority to
determine which Eligible Persons in its administered group are to receive
Discretionary Option grants under the Plan, the number of shares to be covered
by each such grant, whether or not the granted Discretionary Option is to be an
Incentive Stock Option, the time or times at which each such Discretionary
Option is to become exercisable, and the maximum term for which the
Discretionary Option is to be outstanding. A Plan Administrator shall also have
full authority to determine which Eligible Persons in such group are to receive
Awards under the Discretionary Grant Program and the conditions relating to such
Award.
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(b) General Administration. Unless otherwise expressly
provided in this Plan, the power to administer the Discretionary Grant Program
shall be vested exclusively with a committee (the "Senior Committee"). The
membership of the Senior Committee shall be constituted so as to comply at all
times with the applicable requirements of Rule 16b-3 and Code ss.162(m);
provided, however, that if, at any time Rule 16b-3 and Code ss.162(m) and any
implementing regulations (and any successor provisions thereof) so permit
without adversely affecting the ability of the Plan to comply with the
conditions for exemption from Section 16 of the Exchange Act (or any successor
provision) provided by Rule 16b-3 and the exemption from the limitations on
deductibility of certain executive compensation provided by Code ss.162(m), the
Board may delegate the administration of the Plan, in whole or in part, on such
terms and conditions, and to such other person or persons as it may determine in
its discretion; provided further, however, that the Board may at any time
appoint a committee (the "Employee Committee") of two or more persons who are
members of the Board and delegate to such Employee Committee the power to
administer the Discretionary Grant Program with respect to Eligible Persons that
are not Affiliates. For purposes of this Plan, the term "Affiliates" shall mean
all "officers" (as that term is defined in Rule 16a-1(f) promulgated under the
1934 Act), all "covered persons" (as that term is defined in Code ss. 162(m)),
directors of the Company, and all persons who own 10 percent or more of the
Company's issued and outstanding equity securities.
(c) Plan Administrators. The Board, the Senior Committee,
and/or the Employee Committee, and/or any other committee allowed hereunder,
whichever is applicable, shall be each referred to herein as a "Plan
Administrator." Each Plan Administrator shall have the authority and discretion,
with respect to its administered group, to select which Eligible Persons shall
participate in the Discretionary Grant Program, to grant Discretionary Options
or Awards under the Discretionary Grant Program, to establish such rules and
regulations as they may deem appropriate with respect to the proper
administration of the Discretionary Grant Program and to make such
determinations under, and issue such interpretations of, the Discretionary Grant
Program and any outstanding Discretionary Option or Award as they may deem
necessary or advisable. Unless otherwise required by law or specified by the
Board with respect to any committee, decisions among the members of a Plan
Administrator shall be by majority vote. Decisions of a Plan Administrator shall
be final and binding on all parties who have an interest in the Discretionary
Grant Program or any outstanding Discretionary Option or Award. The Senior
Committee, the Employee Committee, and/or any other committee allowed hereunder,
in their respective sole discretion, may make specific grants of Discretionary
Options or Awards conditioned on approval of the Board.
The Board may establish an additional committee or committees
of persons who are members of the Board and delegate to such other committee or
committees the power to administer all or a portion of the Discretionary Grant
program with respect to all or a portion of the Eligible Persons. Members of the
Senior Committee, Employee Committee, or any other committee allowed hereunder
shall serve for such period of time as the Board may determine and shall be
subject to removal by the Board at any time. The Board may at any time terminate
all or a portion of the functions of the Senior Committee, the Employee
Committee, or any other committee allowed hereunder and reassume all or a
portion of powers and authority previously delegated to such committee.
(d) Guidelines for Participation. In designating and selecting
Eligible Persons for participation in the Discretionary Grant Program, a Plan
Administrator shall consult with and give consideration to the recommendations
and criticisms submitted by appropriate managerial and executive officers of the
Company. A Plan Administrator also shall take into account the duties and
responsibilities of the Eligible Persons, their past, present and potential
contributions to the success of the Company and
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such other factors as a Plan Administrator shall deem relevant in connection
with accomplishing the purpose of the Plan.
2.2 Terms and Conditions of Options
(a) Allotment of Shares. A Plan Administrator shall determine
the number of shares of Stock to be optioned from time to time and the number of
shares to be optioned to any Eligible Person (the "Optioned Shares"). The grant
of a Discretionary Option to a person shall neither entitle such person to, nor
disqualify such person from, participation in any other grant of Options or
Stock Awards under this Plan or any other stock option plan of the Company.
(b) Exercise Price. Upon the grant of any Discretionary
Option, a Plan Administrator shall specify the option price per share, which may
not be less than 100 percent of the fair market value per share of the Stock on
the date the Discretionary Option is granted (110 percent if the Discretionary
Option is intended to qualify as an Incentive Stock Option and is granted to a
stockholder who at the time the Discretionary Option is granted owns or is
deemed to own stock possessing more than 10 percent of the total combined voting
power of all classes of stock of the Company or of any Parent or Subsidiary
Corporation). The determination of the fair market value of the Stock shall be
made in accordance with the valuation provisions of Section 4.5 hereof.
(c) Individual Stock Option Agreements. Discretionary Options
granted under the Plan shall be evidenced by option agreements in such form and
content as a Plan Administrator from time to time approves, which agreements
shall substantially comply with and be subject to the terms of the Plan,
including the terms and conditions of this Section 2.2. As determined by a Plan
Administrator, each option agreement shall state (i) the total number of shares
to which it pertains, (ii) the exercise price for the shares covered by the
Option, (iii) the time at which the Options vest and become exercisable, and
(iv) the Option's scheduled expiration date. The option agreements may contain
such other provisions or conditions as a Plan Administrator deems necessary or
appropriate to effectuate the sense and purpose of the Plan, including covenants
by the Optionholder not to compete and remedies for the Company in the event of
the breach of any such covenant.
(d) Option Period. No Discretionary Option granted under the
Plan that is intended to be an Incentive Stock Option shall be exercisable for a
period in excess of 10 years from the date of its grant (five years if the
Discretionary Option is granted to a stockholder who at the time the
Discretionary Option is granted owns or is deemed to own stock possessing more
than 10 percent of the total combined voting power of all classes of stock of
the Company or of any Parent or Subsidiary Corporation), subject to earlier
termination in the event of termination of employment, retirement or death of
the Optionholder. A Discretionary Option may be exercised in full or in part at
any time or from time to time during the term of the Discretionary Option or
provide for its exercise in stated installments at stated times during the
Option's term.
(e) Vesting; Limitations. The time at which the Optioned
Shares vest with respect to an Optionholder shall be in the discretion of that
Optionholder's Plan Administrator. Notwithstanding the foregoing, to the extent
a Discretionary Option is intended to qualify as an Incentive Stock Option, the
aggregate fair market value (determined as of the respective date or dates of
grant) of the Stock for which one or more Options granted to any person under
this Plan (or any other option plan of the Company or any Parent or Subsidiary
Corporation) may for the first time become exercisable as Incentive Stock
Options during any one calendar year shall not exceed the sum of $100,000
(referred to herein as
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the "$100,000 Limitation"). To the extent that any person holds two or more
Options which become exercisable for the first time in the same calendar year,
the foregoing limitation on the exercisability as an Incentive Stock Option
shall be applied on the basis of the order in which such Options are granted.
(f) No Fractional Shares. Options shall be exercisable only
for whole shares; no fractional shares will be issuable upon exercise of any
Discretionary Option granted under the Plan.
(g) Method of Exercise. In order to exercise a Discretionary
Option with respect to any vested Optioned Shares, an Optionholder (or in the
case of an exercise after an Optionholder's death, such Optionholder's executor,
administrator, heir or legatee, as the case may be) must take the following
action:
(i) execute and deliver to the Company a written
notice of exercise signed in writing by the person exercising the Discretionary
Option specifying the number of shares of Stock with respect to which the
Discretionary Option is being exercised;
(ii) pay the aggregate Option Price in one of the
alternate forms as set forth in Section 2.2(h) below; and
(iii) furnish appropriate documentation that the
person or persons exercising the Discretionary Option (if other than the
Optionholder) has the right to exercise such Option.
As soon as practicable after the Exercise Date, the Company shall mail or
deliver to or on behalf of the Optionholder (or any other person or persons
exercising this Discretionary Option in accordance herewith) a certificate or
certificates representing the Stock for which the Discretionary Option has been
exercised in accordance with the provisions of this Plan. In no event may any
Discretionary Option be exercised for any fractional shares.
(h) Payment of Option Price. The aggregate Option Price shall
be payable in one of the alternative forms specified below:
(i) Full payment in cash or check made payable to the
Company's order; or
(ii) Full payment in shares of Stock held for the
requisite period necessary to avoid a charge to the Company's reported earnings
and valued at fair market value on the Exercise Date (as determined in
accordance with Section 4.5 hereof); or
(iii) If a cashless exercise program has been
implemented by the Board, full payment through a sale and remittance procedure
pursuant to which the Optionholder (A) shall provide irrevocable written
instructions to a designated brokerage firm to effect the immediate sale of the
Optioned Shares to be purchased and remitted to the Company, out of the sale
proceeds available on the settlement date, sufficient funds to cover the
aggregate exercise price payable for the Optioned Shares to be purchased, and
(B) shall concurrently provide written directives to the Company to deliver the
certificates for the Optioned Shares to be purchased directly to such brokerage
firm in order to complete the sale transaction.
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(i) Repurchase Right. The Plan Administrator may, in its sole
discretion, set forth other terms and conditions upon which the Company (or its
assigns) shall have the right to repurchase shares of Stock acquired by an
Optionholder pursuant to a Discretionary Option. Any repurchase right of the
Company shall be exercisable by the Company (or its assignees) upon such terms
and conditions as the Plan Administrator may specify in the Stock Repurchase
Agreement evidencing such right. The Plan Administrator may also, in its
discretion, establish as a term and condition of one or more Discretionary
Options granted under the Plan that the Company shall have a right of first
refusal with respect to any proposed sale or other disposition by the
Optionholder of any shares of Stock issued upon the exercise of such
Discretionary Options. Any such right of first refusal shall be exercisable by
the Company (or its assigns) in accordance with the terms and conditions set
forth in the Stock Repurchase Agreement.
(j) Termination of Incentive Stock Options
(i) Termination of Service. If any Optionholder
ceases to be in Service to the Company for a reason other than death, the
Optionholder's vested Incentive Stock Options on the date of termination of such
Service shall remain exercisable only for 30 days after the date of termination
of such Service or until the stated expiration date of the Optionholder's
Option, whichever occurs first; provided, that (i) if Optionholder is discharged
for Cause, or (ii) if after the Service of the Optionholder is terminated, the
Optionholder commits acts detrimental to the Company's interests, then the
Incentive Stock Option shall thereafter be void for all purposes. "Cause" shall
be limited to a termination of Service for (A) commission of a crime by the
Optionholder or for reasons involving moral turpitude; (B) an act by the
Optionholder which tends to bring the Company into disrepute; or (C) negligent,
fraudulent or willful misconduct by the Optionholder. Notwithstanding the
foregoing, if any Optionholder ceases to be in Service to the Company by reason
of permanent disability within the meaning of section 22(e)(3) of the Code (as
determined by the applicable Plan Administrator), the Optionholder shall have
180 days after the date of termination of Service, but in no event after the
stated expiration date of the Optionholder's Incentive Stock Options, to
exercise Incentive Stock Options that the Optionholder was entitled to exercise
on the date the Optionholder's Service terminated as a result of such
disability.
(ii) Death of Optionholder. If an Optionholder dies
while in the Company's Service, the Optionholder's vested Incentive Stock
Options on the date of death shall remain exercisable only for 90 days after the
date of death or until the stated expiration date of the Optionholder's Option,
whichever occurs first, and may be exercised only by the person or persons
("successors") to whom the Optionholder's rights pass under a will or by the
laws of descent and distribution. A Discretionary Option may be exercised and
payment of the Option Price made in full by the successors only after written
notice to the Company specifying the number of shares to be purchased. Such
notice shall state that the Option Price is being paid in full in the manner
specified in Section 2.2 hereof. As soon as practicable after receipt by the
Company of such notice and of payment in full of the Option Price, a certificate
or certificates representing the Optioned Shares shall be registered in the name
or names specified by the successors in the written notice of exercise and shall
be delivered to the successors.
(k) Termination of Nonqualified Options. Any Options which are
not Incentive Stock Options and which are outstanding at the time an
Optionholder dies while in Service to the Company or otherwise ceases to be in
Service to the Company shall remain exercisable for such period of time
thereafter as determined by the Plan Administrator at the time of grant and set
forth in the documents evidencing such Options; provided, that no Option shall
be exercisable after the Option's stated expiration date, and provided further,
that if the Optionholder is discharged for Cause or, if after
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the Optionholder's Service to the Company is terminated, the Optionholder
commits acts detrimental to the Company's interests, then the Option will
thereafter be void for all purposes.
(l) Other Plan Provisions Still Applicable. If a Discretionary
Option is exercised upon the termination of Service or death of an Optionholder
under this Section 2.2, the other provisions of the Plan shall still be
applicable to such exercise, including the requirement that the Optionholder or
its successor may be required to enter into a Stock Repurchase Agreement.
(m) Definition of "Service." For purposes of this Plan, unless
it is evidenced otherwise in the option agreement with the Optionholder, the
Optionholder shall be deemed to be in "Service" to the Company so long as such
individual renders continuous services on a periodic basis to the Company (or to
any Parent or Subsidiary Corporation) in the capacity of an employee, director,
or an independent consultant or advisor. In the discretion of a Plan
Administrator, an Optionholder shall be considered to be rendering continuous
services to the Company even if the type of services change, e.g., from employee
to independent consultant. The Optionholder shall be considered to be an
employee for so long as such individual remains in the employ of the Company or
one or more of its Parent or Subsidiary Corporations.
2.3 Terms and Conditions of Stock Awards
(a) Eligibility. All Eligible Persons shall be eligible to
receive Stock Awards. The Plan Administrator of each administered group shall
determine the number of shares of Stock to be awarded from time to time to any
Eligible Person in such group. The grant of a Stock Award to a person shall
neither entitle such person to, nor disqualify such person from participation
in, any other grant of options or awards by the Company, whether under this Plan
or under any other stock option or award plan of the Company.
(b) Award for Services Rendered. Stock Awards shall be granted
in recognition of an Eligible Person's past services to the Company. The grantee
of any such Stock Award shall not be required to pay any consideration to the
Company upon receipt of such Stock Award, except as may be required to satisfy
any applicable Delaware corporate law, employment tax, and/or income tax
withholding or other legal requirements.
(c) Conditions to Award. All Stock Awards shall be subject to
such terms, conditions, restrictions, or limitations as the applicable Plan
Administrator deems appropriate, including, by way of illustration but not by
way of limitation, restrictions on transferability, requirements of continued
employment, individual performance or the financial performance of the Company,
or payment by the recipient of any applicable employment or withholding taxes.
Such Plan Administrator may modify or accelerate the termination of the
restrictions applicable to any Stock Award under circumstances that it deems
appropriate.
(d) Award Agreements. A Plan Administrator may require as a
condition to a Stock Award that the recipient of such Stock Award enter into an
award agreement in such form and content as that Plan Administrator from time to
time approves.
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2.4 Terms and Conditions of SARs
(a) Eligibility. All Eligible Persons shall be eligible to
receive SARs. The Plan Administrator of each administered group shall determine
the SARs to be awarded from time to time to any Eligible Person in such group.
The grant of a SAR to a person shall neither entitle such person to, nor
disqualify such person from participation in, any other grant of options or
awards by the Company, whether under this Plan or under any other stock option
or award plan of the Company.
(b) Award of SARs. Concurrently with or subsequent to the
grant of any Discretionary Option to purchase one or more shares of Stock, a
Plan Administrator may award to the Optionholder with respect to each share of
Stock underlying the Option, a related SAR permitting the Optionholder to be
paid the appreciation on the Stock underlying the Discretionary Option in lieu
of exercising the Option. In addition, a Plan Administrator may award to any
Eligible Person a SAR permitting the Eligible Person to be paid the appreciation
on a designated number of shares of the Stock, whether or not such Shares are
actually issued.
(c) Conditions to SAR. All SARs shall be subject to such
terms, conditions, restrictions or limitations as the applicable Plan
Administrator deems appropriate, including, by way of illustration but not by
way of limitation, restrictions on transferability, requirements of continued
employment, individual performance, financial performance of the Company, or
payment by the recipient of any applicable employment or withholding taxes. Such
Plan Administrator may modify or accelerate the termination of the restrictions
applicable to any SAR under circumstances that it deems appropriate.
(d) SAR Agreements. A Plan Administrator may require as a
condition to the grant of a SAR that the recipient of such SAR enter into a SAR
agreement in such form and content as that Plan Administrator from time to time
approves.
(e) Exercise. An Eligible Person who has been granted a SAR
may exercise such SAR subject to the conditions specified by the Plan
Administrator in the SAR agreement.
(f) Amount of Payment. The amount of payment to which the
grantee of a SAR shall be entitled upon the exercise of each SAR shall be equal
to the amount, if any, by which the fair market value of the specified shares of
Stock on the exercise date exceeds the fair market value of the specified shares
of Stock on the date the Discretionary Option related to the SAR was granted or
became effective, or, if the SAR is not related to any Option, on the date the
SAR was granted or became effective.
(g) Form of Payment. The SAR may be paid in either cash or
Stock, as determined in the discretion of the applicable Plan Administrator and
set forth in the SAR agreement. If the payment is in Stock, the number of shares
to be delivered to the participant shall be determined by dividing the amount of
the payment determined pursuant to Section 2.4(f) by the fair market value of a
share of Stock on the exercise date of such SAR. As soon as practicable after
exercise, the Company shall deliver to the SAR grantee a certificate or
certificates for such shares of Stock.
(h) Termination of Employment; Death. Section 2.2(j),
applicable to Incentive Stock Options, and Section 2.2(k), applicable to
nonqualified options, shall apply equally to SARs issued in tandem with such
Options.
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2.5 Terms and Conditions of Cash Awards
(a) In General. The Plan Administrator of each administered
group shall have the discretion to make other awards of cash to Eligible Persons
in such group ("Cash Awards"). Such Cash Awards may relate to existing Options
or to the appreciation in the value of the Stock or other Company securities.
(b) Conditions to Award. All Cash Awards shall be subject to
such terms, conditions, restrictions, and limitations as the applicable Plan
Administrator deems appropriate, and such Plan Administrator may require as a
condition to such Cash Award that the recipient of such Cash Award enter into an
award agreement in such form and content as the Plan Administrator from time to
time approves.
ARTICLE III
Automatic Grant Program
3.1 Eligible Persons under the Automatic Grant Program. The persons
eligible to participate in the Automatic Grant Program shall be limited to Board
members who are not employed by the Company, whether or not such persons qualify
as Non-Employee directors as defined herein ("Eligible Directors"). Persons who
are eligible under the Automatic Grant Program may also be eligible to receive
Discretionary Options or Awards under the Discretionary Grant Program or option
grants or direct stock issuances under other plans of the Company.
3.2 Terms and Conditions of Automatic Option Grants
(a) Amount and Date of Grant. During the term of this Plan,
Automatic Grants shall be made to each Eligible Director ("Optionholder") as
follows:
(i) Annual Grants. Each year on the Annual Grant Date
an Automatic Option to acquire 2,000 shares of Stock shall be granted to each
Eligible Director for so long as there are shares of Stock available under
Section 1.2 hereof. The "Annual Grant Date" shall be the date of the Company's
annual stockholders meeting commencing as of the next annual meeting occurring
after the annual meeting held on the Effective Date. Any Person that was granted
an Automatic Option under Section 3.2(a)(ii) hereof within 30 days of an Annual
Grant Date shall be ineligible to receive an Automatic Option grant pursuant to
this Section 3.2(a)(i) on such Annual Grant Date.
(ii) Initial New Director Grants. On the Initial
Grant Date, every new member of the Board who is an Eligible Director and has
not previously received an Automatic Option grant under this Section 3.2(a)(ii)
shall be granted an Automatic Option to acquire 20,000 shares of Stock for so
long as there are shares of Stock available under Section 1.2 hereof. The
"Initial Grant Date" shall be the date that an Eligible Director is first
appointed or elected to the Board. Any Eligible Person that was granted an
Automatic Option pursuant to Section 3.2(a)(iii) shall be ineligible to receive
an Automatic Option grant pursuant to this Section 3.2(a)(ii).
(iii) Initial Existing Director Grants. On the date
the Original Plan was approved by the Company's stockholders, each Eligible
Director was granted an Automatic Option to acquire 2,000 shares of Stock.
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(b) Exercise Price. The exercise price per share of Stock
subject to each Automatic Option Grant shall be equal to 100 percent of the fair
market value per share of the Stock on the date the Automatic Option was granted
as determined in accordance with the valuation provisions of Section 4.5 hereof
(the "Option Price").
(c) Vesting. Each Automatic Option Grant shall become
exercisable and vest in a series of three equal and successive yearly
installments, with each annual installment to become exercisable on the day
before the Company's annual stockholders' meeting occurring in the applicable
year. Each installment of an Automatic Option shall only vest and become
exercisable if the Optionholder has not ceased serving as a Board member as of
such vesting date.
(d) Method of Exercise. In order to exercise an Automatic
Option with respect to any vested Optioned Shares, an Optionholder (or in the
case of an exercise after an Optionholder's death, such Optionholder's executor,
administrator, heir or legatee, as the case may be) must take the following
action:
(i) execute and deliver to the Company a written
notice of exercise signed in writing by the person exercising the Automatic
Option specifying the number of shares of Stock with respect to which the
Automatic Option is being exercised;
(ii) pay the aggregate Option Price in one of the
alternate forms as set forth in Section 3.2(e) below; and
(iii) furnish appropriate documentation that the
person or persons exercising the Automatic Option (if other than the
Optionholder) has the right to exercise such Option.
As soon as practicable after the Exercise Date, the Company shall mail or
deliver to or on behalf of the Optionholder (or any other person or persons
exercising the Automatic Option in accordance herewith) a certificate or
certificates representing the Stock for which the Automatic Option has been
exercised in accordance with the provisions of this Plan. In no event may any
Automatic Option be exercised for any fractional shares.
(e) Payment of Option Price. The aggregate Option Price shall
be payable in one of the alternative forms specified below:
(i) full payment in cash or check made payable to the
Company's order; or
(ii) full payment in shares of Stock held for the
requisite period necessary to avoid a charge to the Company's reported earnings
and valued at fair market value on the Exercise Date (as determined in
accordance with Section 4.5 hereof); or
(iii) if a cashless exercise program has been
implemented by the Board, full payment through a sale and remittance procedure
pursuant to which the Optionholder (A) shall provide irrevocable written
instructions to a designated brokerage firm to effect the immediate sale of the
Optioned Shares to be purchased and remit to the Company, out of the sale
proceeds available on the settlement date, sufficient funds to cover the
aggregate exercise price payable for the Optioned Shares to be purchased and (B)
shall concurrently provide written directives to the Company to deliver the
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certificates for the Optioned Shares to be purchased directly to such brokerage
firm in order to complete the sale transaction.
(f) Term of Option. Each Automatic Option shall expire on the
tenth anniversary of the date on which an Automatic Option Grant was made
("Expiration Date"). Except as provided in Section 4.4 hereof, should an
Optionholder's service as a Board member cease prior to the Expiration Date for
any reason while an Automatic Option remains outstanding and unexercised, then
the Automatic Option term shall immediately terminate and the Automatic Option
shall cease to be outstanding in accordance with the following provisions:
(i) The Automatic Option shall immediately terminate
and cease to be outstanding for any shares of Stock which were not vested at the
time of Optionholder's cessation of Board service.
(ii) Should an Optionholder cease, for any reason
other than death, to serve as a member of the Board, then the Optionholder shall
have 30 days measured from the date of such cessation of Board service in which
to exercise the Automatic Options which vested prior to the time of such
cessation of Board service. In no event, however, may any Automatic Option be
exercised after the Expiration Date of such Automatic Option.
(iii) Should an Optionholder die while serving as a
Board member or within 30 days after cessation of Board service, then the
personal representative of the Optionholder's estate (or the person or persons
to whom the Automatic Option is transferred pursuant to the Optionholder's will
or in accordance with the laws of descent and distribution) shall have a 90 day
period measured from the date of the Optionholder's cessation of Board service
in which to exercise the Automatic Options which vested prior to the time of
such cessation of Board service. In no event, however, may any Automatic Option
be exercised after the Expiration Date of such Automatic Option.
ARTICLE IV
Miscellaneous
4.1 Capital Adjustments. The aggregate number of shares of Stock
subject to the Plan, the number of shares covered by outstanding Options and
Awards, and the price per share stated in such Options and Awards shall be
proportionately adjusted for any increase or decrease in the number of
outstanding shares of Stock of the Company resulting from a subdivision or
consolidation of shares or any other capital adjustment or the payment of a
stock dividend or any other increase or decrease in the number of such shares
effected without the Company's receipt of consideration therefor in money,
services or property.
4.2 Mergers, Etc. If the Company is the surviving corporation in any
merger or consolidation (not including a Corporate Transaction), any Option or
Award granted under the Plan shall pertain to and apply to the securities to
which a holder of the number of shares of Stock subject to the Option or Award
would have been entitled prior to the merger or consolidation. Except as
provided in Section 4.3 hereof, a dissolution or liquidation of the Company
shall cause every Option or Award outstanding hereunder to terminate.
4.3 Corporate Transaction. In the event of stockholder approval of a
Corporate Transaction, (a) all unvested Automatic Options shall automatically
accelerate and immediately vest so
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that each outstanding Automatic Option shall, one week prior to the specified
effective date for the Corporate Transaction, become fully exercisable for all
of the Optioned Shares, and (b) the Plan Administrator shall have the discretion
and authority, exercisable at any time, to provide for the automatic
acceleration of one or more of the outstanding Discretionary Options or Awards
granted by it under the Plan. Upon the consummation of the Corporate
Transaction, all Options shall, to the extent not previously exercised,
terminate and cease to be outstanding.
4.4 Change in Control
(a) Automatic Grant Program. In the event of a Change in
Control, all unvested Automatic Options shall automatically accelerate and
immediately vest so that each outstanding Automatic Option shall, immediately
prior to the effective date of such Change in Control, become fully exercisable
for all of the Optioned Shares. Thereafter, each Automatic Option shall remain
exercisable until the Expiration Date of such Automatic Option.
(b) Discretionary Grant Program. In the event of a Change in
Control, a Plan Administrator shall have the discretion and authority,
exercisable at any time, whether before or after the Change in Control, to
provide for the automatic acceleration of one or more outstanding Discretionary
Options or Awards granted by it under the Plan upon the occurrence of such
Change in Control. A Plan Administrator may also impose limitations upon the
automatic acceleration of such Options or Awards to the extent it deems
appropriate. Any Options or Awards accelerated upon a Change in Control will
remain fully exercisable until the expiration or sooner termination of the
Option term.
4.5 Calculation of Fair Market Value of Stock. The fair market value of
a share of Stock on any relevant date shall be determined in accordance with the
following provisions:
(i) If the Stock is not at the time listed or
admitted to trading on any stock exchange but is traded in the over-the-counter
market, the fair market value shall be the mean between the highest bid and
lowest asked prices (or, if such information is available, the closing selling
price) per share of Stock on the date in question in the over-the-counter
market, as such prices are reported by the National Association of Securities
Dealers through its Nasdaq system or any successor system. If there are no
reported bid and asked prices (or closing selling price) for the Stock on the
date in question, then the mean between the highest bid price and lowest asked
price (or the closing selling price) on the last preceding date for which such
quotations exist shall be determinative of fair market value.
(ii) If the Stock is at the time listed or admitted
to trading on any stock exchange, then the fair market value shall be the
closing selling price per share of Stock on the date in question on the stock
exchange determined by the Board to be the primary market for the Stock, as such
price is officially quoted in the composite tape of transactions on such
exchange. If there is no reported sale of Stock on such exchange on the date in
question, then the fair market value shall be the closing selling price on the
exchange on the last preceding date for which such quotation exists.
(iii) If the Stock at the time is neither listed nor
admitted to trading on any stock exchange nor traded in the over-the-counter
market, then the fair market value shall be determined by the Board after taking
into account such factors as the Board shall deem appropriate, including one or
more independent professional appraisals.
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4.6 Use of Proceeds. The proceeds received by the Company from the sale
of Stock pursuant to the exercise of Options or Awards hereunder, if any, shall
be used for general corporate purposes.
4.7 Cancellation of Options. Each Plan Administrator shall have the
authority to effect, at any time and from time to time, with the consent of the
affected Optionholders, the cancellation of any or all outstanding Discretionary
Options granted under the Plan by that Plan Administrator and to grant in
substitution therefore new Discretionary Options under the Plan covering the
same or different numbers of shares of Stock as long as such new Discretionary
Options have an exercise price per share of Stock no less than the minimum
exercise price as set forth in Section 2.2(b) hereof on the new grant date.
4.8 Regulatory Approvals. The implementation of the Plan, the granting
of any Option or Award hereunder, and the issuance of Stock upon the exercise of
any such Option or Award shall be subject to the procurement by the Company of
all approvals and permits required by regulatory authorities having jurisdiction
over the Plan, the Options or Awards granted under it and the Stock issued
pursuant thereto.
4.9 Indemnification. Each and every member of a Plan Administrator, in
addition to such other available rights of indemnification as they may have, the
members of a Plan Administrator shall be indemnified and held harmless by the
Company, to the extent permitted under applicable law, for, from and against all
costs and expenses reasonably incurred by them in connection with any action,
suit, legal proceeding to which any member thereof may be a party by reason of
any action taken, failure to act under or in connection with the Plan or any
rights granted thereunder and against all amounts paid by them in settlement
thereof or paid by them in satisfaction of a judgment of any such action, suit
or proceeding, except a judgment based upon a finding of bad faith.
4.10 Plan Not Exclusive. This Plan is not intended to be the exclusive
means by which the Company may issue options or warrants to acquire its Stock,
stock awards or any other type of award. To the extent permitted by applicable
law, any such other option, warrants or awards may be issued by the Company
other than pursuant to this Plan without stockholder approval.
4.11 Company Rights. The grants of Options shall in no way affect the
right of the Company to adjust, reclassify, reorganize or otherwise change its
capital or business structure or to merge, consolidate, dissolve, liquidate or
sell or transfer all or any part of its business or assets.
4.12 Privilege of Stock Ownership. An Optionholder shall not have any
of the rights of a stockholder with respect to Optioned Shares until such
individual shall have exercised the Option and paid the Option Price for the
Optioned Shares. No adjustment will be made for dividends or other rights for
which the record date is prior to the date of such exercise and full payment for
such Optioned Shares.
4.13 Assignment. The right to acquire Stock or other assets under the
Plan may not be assigned, encumbered, or otherwise transferred by any
Optionholder except as specifically provided herein. Except as may be
specifically allowed by the Plan Administrator at the time of grant and set
forth in the documents evidencing a Discretionary Option or Award, no Option or
Award granted under the Plan or any of the rights and privileges conferred
thereby shall be assignable or transferable by an Optionholder or grantee other
than by will or the laws of descent and distribution, and such Option or Award
shall be exercisable during the Optionholder's or grantee's lifetime only by the
Optionholder or grantee. Notwithstanding the foregoing, no Incentive Stock
Option granted under the Plan or any of the rights and privileges conferred
thereby shall be assignable or transferable by an Optionholder or grantee
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other than by will or the laws of descent and distribution, and such Incentive
Stock Option shall be exercisable during the Optionholder's or grantee's
lifetime only by the Optionholder or grantee. The provisions of the Plan shall
inure to the benefit of, and be binding upon, the Company and its successors or
assigns, and the Optionholders, the legal representatives of their respective
estates, their respective heirs or legatees and their permitted assignees.
4.14 Securities Restrictions
(a) Legend on Certificates. All certificates representing
shares of Stock issued upon exercise of Options or Awards granted under the Plan
shall be endorsed with a legend reading as follows:
THE SHARES OF COMMON STOCK EVIDENCED BY THIS
CERTIFICATE HAVE BEEN ISSUED TO THE REGISTERED OWNER
IN RELIANCE UPON WRITTEN REPRESENTATIONS THAT THESE
SHARES HAVE BEEN PURCHASED SOLELY FOR INVESTMENT.
THESE SHARES MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED
UNLESS IN THE OPINION OF THE COMPANY AND ITS LEGAL
COUNSEL SUCH SALE, TRANSFER OR ASSIGNMENT WILL NOT BE
IN VIOLATION OF THE SECURITIES ACT OF 1933, AS
AMENDED, AND THE RULES AND REGULATIONS THEREUNDER.
(b) Private Offering for Investment Only. The Options and
Awards are and shall be made available only to a limited number of present and
future key personnel who have knowledge of the Company's financial condition,
management and its affairs. The Plan is not intended to provide additional
capital for the Company, but to encourage ownership of Stock among the Company's
key personnel. By the act of accepting an Option or Award, each grantee agrees
(i) that, any shares of Stock acquired pursuant to any Option or Award will be
solely for investment and not with any intention to resell or redistribute those
shares and, (ii) such intention will be confirmed by an appropriate certificate
at the time the Stock is acquired if requested by the Company. The neglect or
failure to execute such a certificate, however, shall not limit or negate the
foregoing agreement.
(c) Registration Statement. If a Registration Statement
covering the shares of Stock issuable upon exercise of Options granted under the
Plan is filed under the Securities Act of 1933, as amended, and is declared
effective by the Securities Exchange Commission, the provisions of Sections
4.14(a) and (b) shall terminate during the period of time that such Registration
Statement, as periodically amended, remains effective.
4.15 Tax Withholding
(a) General. The Company's obligation to deliver Stock upon
the exercise of Options under the Plan shall be subject to the satisfaction of
all applicable federal, state and local income tax withholding requirements.
(b) Shares to Pay for Withholding. The Board may, in its
discretion and in accordance with the provisions of this Section 4.15(b) and
such supplemental rules as it may from time to time adopt, provide any or all
Optionholders with the right to use shares of Stock in satisfaction of all or
part of the federal, state and local income tax liabilities ("Taxes") incurred
by such Optionholders in
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connection with the exercise of their Options. Such right may be provided to any
such Optionholder in either or both of the following formats:
(i) Stock Withholding. The Plan Administrator may, in
its discretion, provide the Optionholder with the election to have the Company
withhold, from the Stock otherwise issuable upon the exercise of an Option, a
portion of those shares of Stock with an aggregate fair market value equal to
the percentage (not to exceed 100 percent) of the applicable Taxes designated by
the Optionholder.
(ii) Stock Delivery. The Plan Administrator may, in
its discretion, provide the Optionholder with the election to deliver to the
Company, at the time the Option is exercised, one or more shares of Stock
previously acquired by such individual (other than pursuant to the transaction
triggering the Taxes) with an aggregate fair market value equal to the
percentage (not to exceed 100 percent) of the Taxes incurred in connection with
such Option exercise as designated by the Optionholder.
4.16 Governing Law. The Plan shall be governed by and all questions
hereunder shall be determined in accordance with the laws of the State of
Arizona, without regard to conflicts of laws principles.
ARTICLE V
Definitions
The following capitalized terms used in this Plan shall have the
meaning described below:
"Affiliates" shall mean all "executive officers" (as that term is
defined in Rule 16a-1(f) promulgated under the 1934 Act) and directors of the
Company and all persons who own ten percent or more of the Company's issued and
outstanding Stock.
"Annual Grant Date" shall mean the date of the Company's annual
stockholder meeting.
"Automatic Grant Program" shall mean that program set forth in Article
III of this Agreement pursuant to which Eligible Directors, as defined herein,
are automatically granted Options upon certain events.
"Automatic Option Grant" shall mean those automatic option grants made
on the Annual Grant Date and on the Initial Grant Date.
"Automatic Options" shall mean those Options granted pursuant to the
Automatic Grant Program.
"Award" shall mean a Stock Award, SAR or Cash Award.
"Board" shall mean the Board of Directors of the Company.
"Cash Award" shall mean an award to be paid in cash and granted under
Section 2.5 hereunder.
"Change in Control" shall mean and include the following transactions
or situations (i) a person or related group of persons, other than the Company
or a person that directly or indirectly controls, is
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controlled by, or under common control with the Company, acquires ownership of
40 percent or more of the Company's outstanding common stock pursuant to a
tender or exchange offer which the Board of Directors recommends that the
Company's stockholders not accept, or (ii) the change in the composition of the
Board occurs such that those individuals who were elected to the Board at the
last stockholders' meeting at which there was not a contested election for Board
membership subsequently ceased to comprise a majority of the Board by reason of
a contested election.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Company" shall mean Cerprobe Corporation, a Delaware corporation.
"Corporate Transaction" shall mean (a) a merger or consolidation in
which the Company is not the surviving entity, except for a transaction the
principal purposes of which is to change the state in which the Company is
incorporated; (b) the sale, transfer of or other disposition of all or
substantially all of the assets of the Company and complete liquidation or
dissolution of the Company, or (c) any reverse merger in which the Company is
the surviving entity but in which the securities possessing more than 50 percent
of the total combined voting power of the Company's outstanding securities are
transferred to a person or persons different from those who held such securities
immediately prior to such merger.
"Discretionary Grant Program" shall mean the program described in
Article II of this Plan pursuant to which certain Eligible Directors are granted
Options or Awards in the discretion of the Plan Administrator.
"Discretionary Options" shall mean Options granted under the
Discretionary Grant Program.
"Effective Date" shall mean the date that the Plan has been approved by
the stockholders as set forth in Section 1.3(a) hereof.
"Eligible Director" shall mean, with respect to the Automatic Grant
Program, those Board members who are not employed by the Company, whether or not
such members are Non-Employee Directors as defined herein.
"Eligible Persons" shall mean (a) with respect to the Discretionary
Grant Program, those persons who, at the time that the Discretionary Option or
Award is granted, are (i) key personnel (including officers and directors) of
the Company or Parent or Subsidiary Corporations, or (ii) consultants or
independent contractors who provide valuable services to the Company or Parent
or Subsidiary Corporations; and (b) with respect to the Automatic Grant Program,
the Eligible Directors.
"Employee Committee" shall mean that committee appointed by the Board
to administer the Plan with respect to the Non-Affiliates and comprised of two
or more persons who are members of the Board.
"Exercise Date" shall be the date on which written notice of the
exercise of an Option is delivered to the Company in accordance with the
requirements of the Plan.
"Expiration Date" shall be the 10-year anniversary of the date on which
an Automatic Option Grant was made.
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"Incentive Stock Option" shall mean a Discretionary Option that is
intended to qualify as an "incentive stock option" under Code ss. 422.
"Initial Grant Date" shall mean the date that an Eligible Director is
first appointed or elected to the Board.
"Non-Affiliates" shall mean all persons who are not Affiliates.
"Non-Employee Directors" shall mean those Directors who satisfy the
definition of "Non- Employee Director" under Rule 16b-3(b)(3)(i) promulgated
under the 1934 Act.
"$100,000 Limitation" shall mean the limitation pursuant to which the
aggregate fair market value (determined as of the respective date or dates of
grant) of the Stock for which one or more Options granted to any person under
this Plan (or any other option plan of the Company or any Parent or Subsidiary
Corporation) may for the first time be exercisable as Incentive Stock Options
during any one calendar year shall not exceed the sum of $100,000.
"Optionholder" shall mean an Eligible Person or Eligible Director to
whom Options have been granted.
"Optioned Shares" shall be those shares of Stock to be optioned from
time to time to any Eligible Director.
"Option Price" shall mean (i) with respect to Discretionary Options,
the exercise price per share as specified by the Plan Administrator pursuant to
Section 2.2(b) hereof, and (ii) with respect to Automatic Options, the exercise
price per share as specified by Section 3.2(b) hereof.
"Options" shall mean options to acquire Stock granted under the Plan.
"Parent Corporation" shall mean any corporation in the unbroken chain
of corporations ending with the employer corporation, where, at each link of the
chain, the corporation and the link above owns at least 50 percent of the
combined total voting power of all classes of the stock in the corporation in
the link below.
"Plan" shall mean this stock option plan for Cerprobe Corporation.
"Plan Administrator" shall mean (a) either the Board, the Senior
Committee, or any other committee, whichever is applicable, with respect to the
administration of the Discretionary Grant Program as it relates to Affiliates,
and (b) either the Board, the Employee Committee, or any other committee,
whichever is applicable, with respect to the administration of the Discretionary
Grant Program as it relates to Non-Affiliates and with respect to the Automatic
Grant Program.
"SAR" shall mean stock appreciation rights granted pursuant to Section
2.4 hereunder.
"Senior Committee" shall mean that committee appointed by the Board to
administer the Discretionary Grant Program with respect to the Affiliates and
comprised of two or more Disinterested Directors.
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"Service" shall have the meaning set forth in Section 2.2(m) hereof.
"Stock" shall mean shares of the Company's common stock, $.05 par value
per share, which may be unissued or treasury shares, as the Board may from time
to time determine.
"Stock Awards" shall mean Stock directly granted under the
Discretionary Grant Program.
"Subsidiary Corporation" shall mean any corporation in the unbroken
chain of corporations starting with the employer corporation, where, at each
link of the chain, the corporation and the link above owns at least 50 percent
of the combined voting power of all classes of stock in the corporation below.
EXECUTED as of the __th day of _________, 1997.
CERPROBE CORPORATION
By:_____________________________________
Name:___________________________________
ATTESTED BY: Its:____________________________________
__________________________________
Secretary
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This Proxy is Solicited on Behalf of the Board of Directors
CERPROBE CORPORATION
1997 ANNUAL MEETING OF STOCKHOLDERS
The undersigned stockholder of CERPROBE CORPORATION, a Delaware corporation, hereby acknowledges receipt of the Notice of Annual
Meeting of Stockholders and Proxy Statement, each dated April 30, 1997, and hereby appoints C. Zane Close and Randal L. Buness, and
each of them, proxies and attorneys-in-fact, with full power to each of substitution, on behalf and in the name of the undersigned,
to represent the undersigned at the 1997 Annual Meeting of Stockholders of CERPROBE CORPORATION, to be held on June 4, 1997, at
10:00 a.m. local time, at the Mesa Hilton, Kachina Room, 1011 W. Holmes Avenue, Mesa, Arizona 85210 and at any adjournments thereof,
and to vote all shares of Common Stock which the undersigned would be entitled to vote if then and there personally present, on the
matters set forth below.
1. ELECTION OF DIRECTORS:
(Mark only one)
(a) [ ] FOR all nominees listed below (except as indicated)
If you wish to withhold authority to vote for any individual nominee, strike a line through that nominee's name in the list below:
Ross J. Mangano; C. Zane Close; Kenneth W. Miller; Donald F. Walter; William A. Fresh
(b) [ ] CUMULATIVE VOTING OPTION (indicate number of votes for each nominee)
__________ Ross J. Mangano __________ Kenneth W. Miller __________ William A. Fresh
__________ C. Zane Close __________ Donald F. Walter
(c) [ ] WITHHOLD AUTHORITY to vote for all nominees
2. PROSPOSAL TO APPROVE AMENDMENTS TO AND RESTATEMENT OF THE COMPANY'S 1995 STOCK OPTION PLAN ( THE "1995 PLAN") TO (A) INCREASE
THE NUMBER OF SHARES OF THE COMPANY'S COMMON STOCK THAT MAY BE ISSUED PURSUANT TO THE 1995 PLAN; (B) MAKE REVISIONS TO COMPLY
WITH THE PROVISIONS OF THE RECENTLY ADOPTED SECTION 16 RULES (THE "RULES") UNDER THE SECURITIES EXCHANGE ACT OF 1934 THAT DO
NOT REQUIRE STOCKHOLDER APPROVAL; (C) PERMIT PARTICIPATION BY SENIOR COMMITTE MEMBERS IN THE DISCRETIONARY GRANT PROGRAM UNDER
THE 1995 PLAN AS PERMITTED BY THE RULES; AND (D) LIMIT THE NUMBER OF SHARES OF THE COMPANY'S COMMON STOCK THAT MAY BE GRANTED
TO EMPLOYEES UNDER THE 1995 PLAN IN ORDER TO COMPLY WITH SECTION 162(M) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
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3. PROPOSAL TO RATIFY THE APPOINTMENT OF KPMG PEAT MARWICK LLP AS THE INDEPENDENT AUDITORS OF THE COMPANY
[ ] FOR [ ] AGAINST [ ] ABSTAIN
and upon such matter or matters which may properly come before the meeting or any adjournment or adjustments thereof.
THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO CONTRARY DIRECTION IS INDICATED, WILL BE VOTED FOR THE ELECTION OF DIRECTORS; FOR
APPROVAL OF THE AMENDMENTS TO THE COMPANY'S 1995 PLAN; FOR THE RATIFICATION OF THE APPOINTMENT OF KPMG PEAT MARWICK LLP AS THE
INDEPENDENT AUDITORS OF THE COMPANY; AND AS SAID PROXIES DEEM ADVISABLE ON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE
MEETING.
A majority of such attorneys or substitutes as shall be present and shall act at said meeting or any adjournments thereof (or if
only one shall be present and act, then that one) shall have and may exercise all of the powers of said attorneys-in-fact hereunder.
Dated: __________________________, 1997
_________________________________________________________________
Signature
_________________________________________________________________
Signature
(This Proxy should be dated, signed by the stockholder(s) exactly
as his or her name appears here-on, and returned promptly in the
enclosed envelope. Persons signing in a fiduciary capacity should
so indicate. If shares are held by joint tenants or as community
property, both stockholders should sign.)
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