<PAGE>
As filed with the Securities and Exchange Commission on September 21, 1995
Registration No. 33-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
NOVELLUS SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
CALIFORNIA 77-00246
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
81 Vista Montana
San Jose, CA 95134
(Address of Principal Executive Office Including Zip Code)
NOVELLUS SYSTEMS, INC.
AMENDED AND RESTATED 1992 STOCK OPTION PLAN
AMENDED AND RESTATED 1992 EMPLOYEE STOCK PURCHASE PLAN
(Full titles of the plans)
Richard S. Hill
President and Chief Executive Officer
Novellus Systems, Inc.
81 Vista Montana
San Jose, CA 95134
(Name and address of agent for service)
(408) 943-9700
(Telephone number, including area code, of agent for service)
-------------------------------------------------------------------------------
CALCULATION OF REGISTRATION FEE
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Proposed
Proposed maximum
Title of securities to be Amount to be maximum offering aggregate offering Amount of
registered registered price per share (1) price (1) registration fee
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock 800,000 $75.125 $60,100,000 $20,724
--------------------------------------------------------------------------------------------------------------------
<FN>
(1) Estimated solely for the purpose of calculating the registration fee in accordance with Rules 457(h) and 457(c) under
the Securities Act of 1933 and based upon the average of the high and low prices reported on the Nasdaq National
Market on September 21, 1995.
</TABLE>
Page 1 of ___ Pages.
Exhibit Index Located at Page ___.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.
In accordance with General Instruction E to Form S-8, the contents of the
Registrant's Registration Statements on Form S-8, Commission File No. 33-51056
and No. 33-88156, including exhibits thereto, are hereby incorporated by
reference into this Registration Statement, except as the same may be modified
by the information set forth herein.
Item 8. EXHIBITS.
Exhibit
Number Description
------ -----------
4.1 Amended and Restated 1992 Stock Option Plan.
4.2 Amended and Restated 1992 Employee Stock Purchase Plan.
5.1 Opinion of Morrison & Foerster.
23.1 Consent of Counsel (included in Exhibit 5.1).
23.2 Consent of Ernst & Young LLP (see page II-5).
25.1 Power of Attorney (see page II-2).
II-1
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant, Novellus Systems, Inc., certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form S-8 and has
duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of San Jose, State of
California, on August 30, 1995.
NOVELLUS SYSTEMS, INC.
By: /s/ Richard S. Hill
-------------------------------------
Richard S. Hill
President and Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints
Richard S. Hill and William J. Wall, and each of them, as attorneys-in-fact,
each with the power of substitution, for him in any and all capacities, to sign
any amendment to this Registration Statement and to file the same, with exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, granting to said attorneys-in-fact, full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in connection therewith, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming the said attorney-
in-fact or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the date indicated.
Signature Capacity Date
--------- -------- ----
/s/ Richard S. Hill President, Chief August 30, 1995
----------------------------- Executive Officer
Richard S. Hill (PRINCIPAL EXECUTIVE
OFFICER) and Director
/s/ William J. Wall Vice President, Finance August 30, 1995
---------------------------- and Administration,
William J. Wall Chief Financial Officer
and Secretary (PRINCIPAL
FINANCIAL AND
ACCOUNTING OFFICER)
/s/ Robert F. Graham Chairman of the Board August 30, 1995
-----------------------------
Robert F. Graham
II-2
<PAGE>
Signature Capacity Date
--------- -------- ----
/s/ D. James Guzy Director August 30, 1995
-----------------------------
D. James Guzy
/s/ Joseph Van Poppelen Director August 30, 1995
-----------------------------
Joseph Van Poppelen
/s/ Glen G. Possley Director August 30, 1995
-----------------------------
Glen G. Possley
/s/ Robert H. Smith Director August 30, 1995
-----------------------------
Robert H. Smith
/s/ Tom Long Director August 30, 1995
-----------------------------
Tom Long
II-3
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
(Form S-8) pertaining to the Amended and Restated 1992 Stock Option Plan of
Novellus Systems, Inc. of our report dated January 20, 1995, with respect to
the consolidated financial statements of Novellus Systems, Inc. incorporated
by reference in its Annual Report (Form 10-K) for the year ended December 31,
1994 and the related financial statement schedule included therein, filed
with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
ERNST & YOUNG LLP
San Jose, California
September 15, 1995
II-4
<PAGE>
INDEX TO EXHIBITS
Exhibit Sequentially
Number Document Numbered Pages
------ -------- --------------
4.1 Amended and Restated 1992 Stock Option Plan.
4.2 Amended and Restated 1992 Employee Stock Purchase Plan.
5.1 Opinion of Morrison & Foerster.
23.1 Consent of Counsel (included in Exhibit 5.1).
23.2 Consent of Ernst & Young LLP (see page II-4).
25.1 Power of Attorney (see page II-2).
<PAGE>
EXHIBIT 4.1
Amended and Restated 1992 Stock Option Plan
<PAGE>
NOVELLUS SYSTEMS, INC.
AMENDED AND RESTATED
1992 STOCK OPTION PLAN
1. PURPOSES OF THE PLAN. The purposes of this Amended and Restated 1992
Stock Option Plan are to attract and retain the best available personnel for
positions of substantial responsibility, to provide additional incentives to the
Employees, Consultants and Outside Directors of the Company and to promote the
success of the Company's business.
The Plan provides Employees, Consultants and Outside Directors the
opportunity to purchase or acquire shares of Common Stock pursuant to (i)
options which may qualify as "incentive stock options," as defined in
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), (ii)
options which are not described in Sections 422 of the Code, referred to as
"nonstatutory stock options," (iii) a "restricted stock" agreement or, (iv) a
"stock bonus", at the discretion of the Board and as reflected in the terms of
the applicable written agreement.
2. DEFINITIONS. As used herein, the following definitions shall apply:
(a) "BOARD" shall mean the Committee, if one has been appointed, or
the Board of Directors of the Company, if no Committee is appointed.
(b) "COMMON STOCK" shall mean the Common Stock of the Company.
(c) "COMPANY" shall mean Novellus Systems, Inc., a California
corporation.
(d) "COMMITTEE" shall mean the Committee appointed by the Board of
Directors in accordance with paragraph (a) of Section 4 of the Plan, if one is
appointed.
(e) "CONSULTANT" shall mean any person who is engaged by the Company
or any Parent or Subsidiary to render consulting services and is compensated for
such consulting services, and any director of the Company whether compensated
for such services or not; provided that if and in the event the Company
registers any class of any equity security pursuant to Section 12 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), the term
Consultant shall thereafter not include directors who are not compensated for
their services or are paid only a director's fee by the Company.
(f) "CONTINUOUS STATUS AS AN EMPLOYEE OR CONSULTANT" shall, for the
purposes of this Plan and the Options granted and Shares issued hereunder only,
mean the absence of any interruption or termination of service as an Employee or
Consultant. Continuous Status as an Employee or Consultant shall not be
considered interrupted in the case of sick leave (including
1
<PAGE>
leave on account of disability or military leave, provided that such sick leave
or military leave is for a period or not more than 90 days, except as may
otherwise be approved by the Board and specified in writing by the Company, or
any other leave of absence approved by the Board and specified in writing by the
Company, subject to any conditions of such approval). In the event that at the
end of such leave the Employee or Consultant does not return to work for the
Company, his employment or consulting relationship with the Company (and his
Continuous Status as an Employee or Consultant) shall be deemed to have
terminated as of the end of the leave period.
(g) "DIRECTOR" shall mean a member of the Board of Directors of the
Company.
(h) "EMPLOYEE" shall mean any person, including officers and
directors, employed by the Company or any Parent or Subsidiary of the Company.
The payment of a director's fee by the Company shall not be sufficient to
constitute "employment" by the Company.
(i) "FAIR MARKET VALUE" means, as of any date, unless otherwise
determined by the Committee in good faith, (i) the last sales price per share of
Common Stock as reported by NASDAQ (or a successor system) or by the Wall Street
Journal for such date (or if there is no trading on such date, then on the last
preceding business day on which there was trading); (ii) if the Common Stock is
listed on any stock exchange, the closing sales price for such Common Stock as
quoted on such exchange for the date the Option is granted (or if there are no
sales for such date, then on the last preceding business day on which there were
sales); or (iii) the fair market value thereof, as determined in any other
manner adopted in good faith by the Board.
(j) "INCENTIVE STOCK OPTION" shall mean an Option intended to qualify
as an incentive stock option within the meaning of Section 422 of the Code.
(k) "NAMED EXECUTIVE" shall mean, for each taxable year of the
Company, the Chief Executive Officer of the Company as of the close of such
taxable year and each Employee whose total compensation is required to be
reported to shareholders under the Securities Exchange Act of 1934 by reason of
such Employee being among the four (4) highest compensated Employees for such
taxable year.
(l) "NONSTATUTORY STOCK OPTION" means any Option that is not an
Incentive Stock Option.
(m) "OPTION" shall mean a stock option granted pursuant to the Plan.
(n) "OPTIONED STOCK" shall mean the Common Stock subject to an
Option.
2
<PAGE>
(o) "OPTIONEE" shall mean an Employee, Consultant or Outside Director
who receives an Option.
(p) "OUTSIDE DIRECTOR" means a Director who is not an employee of the
Company.
(q) "PARENT" shall mean a "parent corporation", whether now or
hereafter existing, as defined in Section 424(e) of the Code.
(r) "PLAN" shall mean this 1992 Stock Option Plan.
(s) "RESTRICTED SHARES" shall mean shares of Common Stock subject to
restrictions, as defined in paragraph (b) of Section 19 of the Plan.
(t) "SHARE" shall mean a share of the Common Stock, as adjusted in
accordance with Section 10 of the Plan.
(u) "STOCK BONUS" shall mean the award of bonunses of Common Stock,
as defined in paragraph (c) of Section 19 of the Plan.
(v) "SUBCOMMITTEE" shall mean the special subcommittee of the
Committee described in paragraph (d) of Section 4 of the Plan, if one is
established.
(w) "SUBSIDIARY" shall mean a "subsidiary corporation", whether now
or hereafter existing, as defined in Section 424(f) of the Code.
3. STOCK SUBJECT TO THE PLAN. Subject to the provisions of Section 10 of
the Plan, the maximum aggregate number of shares which may be optioned and/or
sold under the Plan is 2,000,000 shares of Common Stock.
If an Option should expire or become unexercisable for any reason
without having been exercised in full, the unpurchased Shares which were subject
thereto shall, unless the Plan shall have been terminated, become available for
future grant under the Plan. However, any shares sold under the Plan and
subsequently repurchased by the Company shall not be available for new issuance
pursuant to the Plan.
4. ADMINISTRATION OF THE PLAN.
(a) PROCEDURE. Subject to Section 4(d) below, the Plan shall be
administered by a Committee that is designated by the Board to administer the
Plan. The Committee shall be constituted to permit the Plan to comply with Rule
16b-3 promulgated under the Securities Exchange Act of 1934 or any successor
thereto ("Rule 16b-3") with respect to a plan intended to qualify thereunder as
a discretionary plan. Once appointed, the Committee shall continue to serve
until otherwise directed by the Board. From time to time the Board may increase
the size
3
<PAGE>
of the Committee and appoint additional members thereof, remove members (with or
without cause) and appoint new members in substitution therefor, fill vacancies,
however caused, and remove all members of the Committee and thereafter directly
administer the Plan.
(b) POWERS OF THE COMMITTEE. Subject to the provisions of the Plan,
and except as set forth in Section 8(c) with respect to grants of Options to
Outside Directors, the Committee shall have the authority, in its discretion:
(i) to determine the Fair Market Value of the Common Stock; (ii) to determine,
in accordance with Section 7(a) of the Plan, the exercise price per Share of
Options to be granted; (iii) to determine the Employees and Consultants to whom,
and the time or times at which, Options shall be granted and, subject to Section
8(d) of the Plan, the number of Shares to be represented by each Option; (iv) to
interpret the Plan; (v) to determine the terms and conditions, not inconsistent
with the terms of the Plan, or any Option granted hereunder (including, but not
limited to, any restriction or limitation, or any vesting acceleration or waiver
of forfeiture restrictions regarding any Option and/or the Shares relating
thereto, based in each case on such factors as the Committee shall determine, in
its sole discretion); (vi) to approve forms of agreement for use under the Plan;
(vii) to prescribe, amend and rescind rules and regulations relating to the
Plan; (viii) to modify or amend each Option or accelerate the exercise date of
any Option (with the consent of the Optionee); (ix) to reduce the exercise price
of any Option to the then current Fair Market Value if the Fair Market Value of
the Common Stock covered by such Option shall have declined since the date the
Option was granted; (x) to authorize any person to execute on behalf of the
Company any instrument required to effectuate the grant of an Option previously
granted by the Committee; and (xi) to make all other determinations deemed
necessary or advisable for the administration of the Plan.
(c) EFFECT OF COMMITTEE'S DECISION. All decisions, determinations
and interpretations of the Committee shall be final and binding on all Optionees
and any other holders of any Options.
(d) SUBCOMMITTEE. Notwithstanding the foregoing provisions of this
Section 4, if the Committee at any time is not composed solely of two or more
outside directors (as defined below), then any grant of an Option to a Named
Executive shall be made only by a separate subcommittee of the Committee which
shall be so composed (the "Subcommittee"). Any actions taken by the Committee
under this Section 4 shall apply to Options held by a Named Executive only if
also authorized by the Subcommittee. Solely for purposes of this Section 4(d),
"outside directors" means directors other than (i) current employees of the
Company or any Subsidiary, (ii) former employees of the Company or any
Subsidiary who are currently receiving compensation for prior services (other
than benefits under a tax-qualified pension plan), (iii) current or former
officers of the Company or any Subsidiary, and (iv) persons currently receiving
compensation for personal services in any capacity other than as a director. If
the Subcommittee has not been formed pursuant to this Section 4(d), then all
references to the Subcommittee herein shall be treated as references to the
Committee.
5. ELIGIBILITY.
4
<PAGE>
(a) Nonstatutory Stock Options may be granted to Employees,
Consultants and Outside Directors. Incentive Stock Options may be granted only
to Employees. An Employee, Consultant or Outside Director who has been granted
an Option may, if he is otherwise eligible, be granted an additional Option or
Options.
(b) Each Option shall be designated in the written agreement
governing the Option as either an Incentive Stock Option or a Nonstatutory Stock
Option. However, notwithstanding such designations, to the extent that the
aggregate fair market value of the Shares with respect to which Options
designated as Incentive Stock Options are exercisable for the first time by any
Optionee during any calendar year (under all plans of the Company) exceeds
$100,000, such Options shall be treated as Nonstatutory Stock Options.
(c) For purposes of Section 5(b) hereof, Options shall be taken into
account in the order in which they were granted, and the Fair Market Value of
the Shares shall be determined as of the time the Option with respect to such
Shares is granted.
(d) The Plan shall not confer upon any Optionee any right with
respect to continuation of the employment or consulting relationship with the
Company, nor shall it interfere in any way with the Optionee's right or the
Company's right to terminate the Optionee's employment or consulting
relationship at any time, with or without cause.
6. TERM OF PLAN. The Plan shall become effective upon the earlier to
occur of its adoption by the Board of Directors or its approval by the
shareholders of the Company as described in Section 16 of the Plan. It shall
continue in effect for a term of ten (10) years unless sooner terminated under
Section 12 of the Plan.
7. EXERCISE PRICE AND CONSIDERATION.
(a) The per Share exercise price for the Shares to be issued pursuant
to exercise of an Option shall be such price as is determined by the Board, but
shall be subject to the following:
(i) In case of an Incentive Stock Option
(A) granted to an Employee who, at the time of the grant of
such Incentive Stock Option, owns stock representing more than ten percent (10%)
of the voting power of all classes of stock of the Company or any Parent or
Subsidiary, the per Share exercise price shall be no less than 110% of the Fair
Market Value per Share on the date of grant.
(B) granted to any Employee other than an Employee
described in clause (i)(A) above, the per Share exercise price shall be no less
than 100% of the Fair Market Value per Share on the date of grant.
(ii) In the case of a Nonstatutory Stock Option
5
<PAGE>
(A) granted to a person who, at the time of the grant of
such Option, owns stock representing more than ten percent (10%) of the voting
power of all classes of stock of the Company or any Parent or Subsidiary, the
per Share exercise price shall be no less than 110% of the Fair Market Value per
Share on the date of the grant.
(B) granted to a Named Executive, the per Share exercise
price shall be no less than 100% of the Fair Market Value per Share on the date
of grant.
(C) granted to any person other than a person described in
clauses (ii)(A) or (B) above, the per Share exercise price shall be no less than
85% of the Fair Market Value per Share on the date of grant.
(iii) In the case of any Option granted on or after the
effective date of registration of any class of equity security of the Company
pursuant to Section 12 of the Exchange Act and prior to six months after the
termination of such registration, the per Share exercise price shall be no less
than 100% of the Fair Market Value per Share on the date of grant.
(b) The consideration to be paid for the Shares to be issued upon
exercise of an Option, including the method of payment, shall be determined by
the Board at the time of grant and may consist entirely of cash, check,
promissory note, other Shares of Common Stock which (i) either have been owned
by the Optionee more than six (6) months on the date of surrender or were not
acquired, directly or indirectly, from the Company, and (ii) have a fair market
value on the date of surrender equal to the aggregate exercise price of the
Shares as to which said Option shall be exercised, or any combination of such
methods of payment, or such other consideration and method of payment for the
issuance of Shares to the extent permitted under Sections 408 and 409 of the
California Corporations Law. In making its determination as to the type of
consideration to accept, the Board shall consider whether acceptance of such
consideration may be reasonably expected to benefit the Company (Section 315(b)
of the California Corporations Law).
8. OPTIONS.
(a) TERM OF OPTION. Except as provided in Section 8(c)(iv)(A) hereof
with respect to Options granted to Outside Directors, the term of each Option
shall be ten (10) years from the date of grant thereof or such shorter term as
may be provided in the written agreement governing such Option. However, in the
case of an Option granted to an Optionee who, at the time the Option is granted,
owns stock representing more than ten percent (10%) of the voting power of all
classes of stock of the Company or any Parent or Subsidiary, the term of the
Option shall be five (5) years from the date of grant thereof or such shorter
time as may be provided in the written agreement governing such Option.
(b) EXERCISE OF OPTION.
6
<PAGE>
(i) PROCEDURE FOR EXERCISE; RIGHTS AS A SHAREHOLDER. Any Option
granted hereunder shall be exercisable and shall vest at such times and under
such conditions as are determined by the Board, including performance criteria
with respect to the Company and/or the Optionee, and as shall be permissible
under the terms of the Plan. For purposes of this provision, an Incentive Stock
Option shall be treated as outstanding until such Option is exercised in full or
expires by reason of lapse of time.
An Option may not be exercised for a fraction of a Share.
An Option shall be deemed to be exercised when written notice of such
exercise has been given to the Company in accordance with the terms of the
Option by the person entitled to exercise the Option and full payment for the
Shares with respect to which the Option is exercised has been received by the
Company. Full payment may, as authorized by the Board, consist of any
consideration and method of payment allowable under Section 7(b) of the Plan.
Until the issuance (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company) of the stock
certificate evidencing such Shares, no right to vote or receive dividends or any
other rights as a shareholder shall exist with respect to the Optioned Stock,
notwithstanding the exercise of the Option. No adjustment will be made for a
dividend or other right for which the record date is prior to the date the stock
certificate is issued, except as provided in Section 10 of the Plan.
Exercise of an Option in any manner shall result in a decrease in the
number of Shares that thereafter shall be available, both for purposes of the
Plan and for sale under the Option, by the number of Shares as to which the
Option is exercised. Any Shares issued and sold pursuant to the Plan and
repurchased by the Company shall not be available for reissuance under the Plan.
(ii) TERMINATION OF STATUS AS AN EMPLOYEE OR CONSULTANT. If an
Optionee's Continuous Status as an Employee or Consultant terminates or an
Optionee is an Outside Director and he ceases to serve on the Board, other than
by reason of death or total and permanent disability, the Optionee may, but only
within three (3) months after the date he ceases to be an Employee, Consultant
or Outside Director (as the case may be) of the Company (but in no event later
than the date of expiration of the term of such Option as set forth in the
written agreement governing the Option), exercise his Option to the extent that
he was entitled to exercise the Option at the date of such termination. To the
extent that the Optionee was not entitled to exercise the Option at the date of
such termination, or if the Optionee does not exercise such Option (which he was
entitled to exercise) within the time specified herein, the Option shall
terminate.
(iii) DISABILITY. Notwithstanding the provisions of
Section 8(b)(ii) above, (1) in the event of termination of Continuous Status as
an Employee or Consultant or (2) in the event that an Outside Director ceases to
serve on the Board, as a result of an Optionee's total and permanent disability
(as defined in Section 22(e)(3) of the Code), the Optionee may, but only within
twelve (12) months from the date of such termination (but in no event later than
the
7
<PAGE>
date of expiration of the term of such Option as set forth in the written
agreement governing the Option), exercise his Option to the extent that the
Optionee was entitled to exercise it at the date of such termination. To the
extent that the Optionee was not entitled to exercise the Option at the date of
such termination, or if the Optionee does not exercise such Option (which he was
entitled to exercise) within the time specified herein, the Option shall
terminate.
(iv) DEATH OF OPTIONEE. In the event of the death of an
Optionee:
(1) If the Optionee dies during the term of his Option,
where such Optionee is at the time of his death an Employee, Consultant or
Outside Director of the Company and such Optionee at the date of death shall
have been in Continuous Status as an Employee or Consultant or serving as an
Outside Director since the date of grant of the Option, the Option may be
exercised at any time within twelve (12) months following the date of death (but
in no event later than the date of expiration of the term of such Option as set
forth in the written agreement governing the Option), by the Optionee's estate
or by a person who acquired the right to exercise the Option by bequest or
inheritance, but only to the extent the Optionee was entitled to exercise the
Option at the time of death; or
(2) If the Optionee dies within three (3) months after the
termination of such Optionee's Continuous Status as an Employee or Consultant or
within three (3) months after he ceases to serve as an Outside Director, then
the Option may be exercised at any time within twelve (12) months following the
date of death (but in no event later than the date of expiration of the term of
such Option as set forth in the written agreement governing the Option), by the
Optionee's estate or by a person who acquired the right to exercise the Option
by bequest or inheritance, but only to the extent that the right to exercise the
Option had accrued at the date of termination.
(c) GRANTS TO OUTSIDE DIRECTORS. All grants of Options to Outside
Directors as set forth below shall be automatic and non-discretionary and shall
be made strictly in accordance with the following provisions:
(i) No person shall have any discretion to select which Outside
Directors shall be granted Options or to determine the number of shares to be
covered by Options granted to Outside Directors; provided, however, that nothing
in this Plan shall be construed to prevent an Outside Director from declining to
receive an Option under this Plan.
(ii) On the day immediately following the annual meeting of
shareholders of the Company, each Outside Director shall be automatically
granted an Option to purchase 4,000 shares of Common Stock (as adjusted in
accordance with Section 10 hereof) (a "Director's Option"), provided that at the
date of grant of each Director's Option such person is an Outside Director; and
provided, further, that sufficient shares are available under the Plan for the
grant of such Director's Option.
8
<PAGE>
(iii) The terms of a Director's Option granted under this
Section 8(c) shall be as follows:
(A) the term of the Director's Option shall be five
(5) years;
(B) the exercise price per share of Common Stock shall be
100% of the Fair Market Value on the date of grant of the Director's Option.
However, if any Outside Director is, on the date of grant, the owner of Common
Stock possessing more than 10% of the total combined voting power of all classes
of stock of the Company or any Parent or Subsidiary, then the exercise price per
share of Common Stock shall be 110% of the Fair Market Value on the date of
grant of the Director's Option;
(C) the shares subject to each Director's Option shall be
immediately exercisable.
(iv) The provisions set forth in this Section 8(c) (and any other
Sections of this Plan that affect the formula award terms required to be
specified herein by Rule 16b-3) shall not be amended more than once in any six-
month period, except to effect such amendments as may be necessary to comport
with changes in the Code, the Employee Retirement Income Security Act, or the
rules and regulations promulgated thereunder.
(d) NUMBER OF SHARES. The number of Shares subject to Options
granted to an Employee in any taxable year shall not exceed 100,000 Shares;
provided, that Options representing up to 200,000 Shares may be granted to an
Employee in any taxable year in connection with the commencement of such
Employee's employment with the Company.
9. NON-TRANSFERABILITY OF OPTIONS. Options may not be sold, pledged,
assigned, hypothecated, transferred or otherwise disposed of in any manner other
than by will or by the laws of descent or distribution or pursuant to a
qualified domestic relations order as defined by the Code or Title I of the
Employee Retirement Income Security Act, or the rules thereunder. The
designation of a beneficiary by an Optionee does not constitute a transfer. An
Option may be exercised, during the lifetime of the Optionee, only by the
Optionee or by a transferee permitted by this Section 9.
10. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION OR MERGER.
(a) SPLITS, DIVIDENDS, COMBINATIONS, OR RECLASSIFICATIONS. Subject
to any required action by the shareholders of the Company, the number of shares
of Common Stock covered by each outstanding Option, and the number of shares of
Common Stock which have been authorized for issuance under the Plan but as to
which no Options have yet been granted or which have been returned to the Plan
upon cancellation or expiration of an Option, as well as the price per share of
Common Stock covered by each such outstanding Option, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination or
9
<PAGE>
reclassification of the Common Stock, or any other increase or decrease in the
number of issued shares of Common Stock effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of shares of Common Stock subject to an Option.
(b) DISSOLUTION OR LIQUIDATION. In the event of the proposed
dissolution or liquidation of the Company, any outstanding Options shall
terminate immediately prior to the consummation of such proposed action, unless
otherwise provided by the Board. The Board may, in the exercise of its sole
discretion in such instances, declare that any Option shall terminate as of a
date fixed by the Board, and may give each Optionee the right to exercise his
Option as to all or any part of the Optioned Stock, including Shares as to which
the Option would not otherwise be exercisable.
(c) SALE OR MERGER. In the event of a proposed sale of all or
substantially all of the assets of the Company, or the merger of the Company
with or into another corporation, Options shall be assumed or an equivalent
option or right shall be substituted by such successor corporation or a parent
or subsidiary of such successor corporation, unless the Board determines, in the
exercise of its sole discretion and in lieu of such assumption or substitution,
that the Optionee shall have the right to exercise the Option as to all of the
Optioned Stock, including Shares as to which the Option would not otherwise be
exercisable. If the Board makes an Option fully exercisable in lieu of
assumption or substitution in the event of a merger or sale of assets, the Board
shall notify the Optionee that the Option shall be fully exercisable for a
period of thirty (30) days from the date of such notice, and the Option will
terminate upon the expiration of such period.
11. TIME OF GRANTING OPTIONS. The date of grant of an Option shall, for
all purposes, be the date on which the Board makes the determination granting
such Option. Notice of the determination shall be given to each Employee or
Consultant to whom an Option is so granted within a reasonable time after the
date of such grant.
12. AMENDMENT AND TERMINATION OF THE PLAN.
(a) AMENDMENT AND TERMINATION. The Board may at any time amend,
alter, suspend, or discontinue the Plan, but no amendment, alteration,
suspension, or discontinuation shall be made which would impair the rights of
any Optionee under any grant theretofore made, without his or her consent. In
addition, to the extent necessary to comply with Rule 16b-3 under the Exchange
Act or Section 422 of the Code (or any other applicable law or regulation), or
to the extent necessary to avoid non-deductibility of compensation income
recognized upon exercise
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of an Option under Section 162(m) of the Code, the Company shall obtain
shareholder approval of any Plan amendment in such a manner and to such a degree
as required.
(b) EFFECT OF AMENDMENT OR TERMINATION. Any such amendment or
termination of the Plan shall not affect Options already granted and such
Options shall remain in full force and effect as if this Plan had not been
amended or terminated unless otherwise mutually agreed between the Board and the
Optionee, which agreement must be in writing and signed by the Company and the
Optionee.
(c) SHAREHOLDER APPROVAL. If any amendment requiring shareholder
approval under Section 12(a) of the Plan is made subsequent to the first
registration of any class of equity security by the Company under Section 12 of
the Exchange Act, such shareholder approval shall be solicited as described in
Section 16(b) of the Plan.
13. CONDITIONS UPON ISSUANCE OF SHARES. Shares shall not be issued
pursuant to the exercise of an Option unless the exercise of such Option and the
issuance and delivery of such Shares pursuant thereto shall comply with all
relevant provisions of law, including, without limitation, the Securities Act of
1933, as amended, and the rules and regulations promulgated thereunder, the
Exchange Act and the rules and regulations promulgated thereunder, any rule
under Part 207 of Title 12 of the Code of Federal Regulations ("Regulation G")
as promulgated by the Federal Reserve Board, and the requirements of any stock
exchange upon which the Shares may then be listed, and shall be further subject
to the approval of counsel for the Company with respect to such compliance.
In addition, issuance of Shares pursuant to the exercise of a
Nonstatutory Stock Option shall be subject to satisfaction of applicable income
and employee tax withholding requirements.
14. RESERVATION OF SHARES; COMPLIANCE WITH LAW.
(a) The Company, during the term of this Plan, will at all times
reserve and keep available such number of Shares as shall be sufficient to
satisfy the requirements of the Plan.
(b) Inability of the Company to obtain authority from any regulatory
body having jurisdiction, which authority is deemed by the Company's counsel to
be necessary to the lawful issuance and sale of any Shares hereunder, shall
relieve the Company of any liability in respect of the failure to issue or sell
such Shares as to which such requisite authority shall not have been obtained.
15. OPTION AGREEMENTS. Options shall be evidenced by written option
agreements in such form as the Board shall approve.
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16. SHAREHOLDER APPROVAL.
(a) Continuance of the Plan shall be subject to approval by the
shareholders of the Company within twelve (12) months before or after the date
the Plan is adopted. If such shareholder approval is obtained at a duly held
shareholders' meeting, it must be obtained by the affirmative vote of the
holders of a majority of the votes cast at a shareholders' meeting at which a
quorum representing a majority of all outstanding voting stock is, either in
person or by proxy, present and voting on the Plan; or if such shareholder
approval is obtained by written consent, it must be obtained by the written
consent of the holders of a majority of the outstanding shares of the Company
entitled to vote on the Plan; provided, however, that approval at a meeting or
by written consent may be obtained by a lesser degree of shareholder approval if
the Board determines, in its discretion after consultation with the Company's
legal counsel, that such a lesser degree of shareholder approval will comply
with all applicable laws.
(b) If and in the event that the Company registers any class of
equity securities pursuant to Section 12 of the Exchange Act, any required
approval of the shareholders of the Company obtained after such registration
shall be solicited substantially in accordance with Section 14(a) of the
Exchange Act and the rules and regulations promulgated thereunder.
(c) If any required approval of the Plan or any amendment thereto by
the shareholders of the Company is solicited at any time otherwise than in the
manner described in Section 16(b) hereof, then the Company shall, at or prior to
the first annual meeting of shareholders held subsequent to the later of (1) the
first registration of any class of equity securities of the Company under
Section 12 of the Exchange Act or (2) the granting of an Option hereunder to an
officer or director after such registration, do the following:
(i) furnish in writing to the shareholders entitled to vote for
the Plan substantially the same information which would be required (if proxies
to be voted with respect to approval or disapproval of the Plan or the amendment
thereto were then being solicited) by the rules and regulations in effect under
Section 14(a) of the Exchange Act at the time such information is furnished; and
(ii) file with, or mail for filing to, the Securities and
Exchange Commission four copies of the written information referred to in
clause (c)(i) hereof not later than the date on which such information is first
sent or given to shareholders.
17. INFORMATION TO OPTIONEES. The Company shall provide or make available
to each Optionee, during the period for which such person has one or more
Options outstanding, copies of all annual reports and other information provided
to all shareholders of the Company. The Company shall not be required to
provide such information if the issuance of Options under the Plan is limited to
key employees whose duties on behalf of the Company ensure their access to
equivalent information.
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18. SALE RESTRICTIONS. In the event that Rule 16b-3 so requires, the
following restriction shall be applicable to Optionees subject to Section 16(b)
of the Exchange Act: No Optioned Stock may be sold by any Optionee subject to
Section 16(b) under the Exchange Act for at least six months after the grant of
the Option pursuant to which such Optioned Stock was acquired. In the event
that Rule 16b-3 does not require that the restriction set forth in the foregoing
sentence be applied to Optionees subject to Section 16(b) of the Exchange Act,
such restriction shall have no force or effect.
19. SALE OF RESTRICTED SHARES AND AWARDS OF STOCK BONUSES.
(a) COMMITTEE AUTHORITY. Pursuant to the terms of this Section and
the Plan, the Committee shall have the authority to grant the right to purchase
Common Stock subject to restrictions ("Restricted Shares") and to award bonuses
of Common Stock ("Stock Bonuses"), to eligible individuals in connection with
the performance of services for the Company within the share limitation provided
in Section 3. Individuals who shall be eligible to have granted to them
Restricted Shares or Stock Bonuses shall be such Employees, Consultants, and
Directors as the Committee, in its discretion, shall designate from time to
time. Notwithstanding the foregoing, Outside Directors shall not be eligible to
receive Restricted Shares or Stock Bonuses. The Committee shall determine the
timing of grants of Restricted Shares and the award of Stock Bonuses, the terms
thereof and the number of Shares to be granted or awarded.
(b) RESTRICTED SHARES. Restricted Shares shall be issued for such
consideration as the Committee deems appropriate; provided, however, that sales
of Restricted Shares shall not be for less than the Fair Market Value of such
Shares on the date the right to purchase the Shares is granted. Payment for
Restricted Shares can be in any combination of cash, Common Stock or other
consideration as determined by the Committee. Each sale of Restricted Shares
pursuant to the Plan will be evidenced by a written Restricted Stock Purchase
Agreement executed by the Company and the person to whom such Shares are sold.
The Restricted Stock Purchase Agreement may contain such terms, provisions and
conditions consistent with this Plan as may be determined by the Committee,
including not by way of limitation, restrictions on transfer, forfeiture
provisions, repurchase provisions, and vesting provisions. The Committee may
amend any Restricted Stock Purchase Agreement, but any amendment which would
adversely affect the shareholder's rights to the Shares shall not be made
without his or her written consent. Shares subject to a Restricted Stock
Purchase Agreement shall be transferable only as provided in such Agreement.
(c) STOCK BONUSES. The Committee shall have the authority to grant
Stock Bonuses consisting of a specified number of Shares to those eligible
persons as selected by the Committee. The Committee shall have the discretion
to impose restrictions on Shares awarded as Stock Bonuses. If Shares awarded as
a Stock Bonus are subject to restriction, such Shares shall be issued subject to
the terms of a Restricted Stock Bonus Agreement executed by the Company and the
person to whom the Stock Bonus is awarded. The Restricted Stock Bonus Agreement
may contain such terms, provisions, and conditions consistent with this Plan as
may be determined by the Committee, including not by way of limitation,
restrictions on transfer,
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forfeiture provisions, repurchase provisions, and vesting provisions. The
Committee may amend any Restricted Stock Bonus Agreement, but any amendment
which would adversely affect the shareholder's rights to the Shares shall not be
made without his or her written consent. Shares subject to a Restricted Stock
Bonus Agreement shall be transferable only as provided in such Agreement. The
recipient of a Stock Bonus will not pay the Company for such Shares received but
will include the Fair Market Value of such Shares on the date of grant in the
recipient's net income.
(d) WITHHOLDING TAXES. No grant of Restricted Shares or award of
Stock Bonuses shall be delivered to any recipient until the recipient has made
arrangements acceptable to the Committee for the satisfaction of federal, state,
and local income and social security tax withholding obligations.
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EXHIBIT 4.2
Amended and Restated 1992 Employee Stock Purchase Plan
<PAGE>
NOVELLUS SYSTEMS
AMENDED AND RESTATED
1992 EMPLOYEE STOCK PURCHASE PLAN
The following constitute the provisions of the Amended and Restated
1992 Employee Stock Purchase Plan of Novellus Systems, Inc.
1. PURPOSE. The purpose of the Plan is to provide employees of the
Company and its Designated Subsidiaries with an opportunity to purchase Common
Stock of the Company through accumulated payroll deductions. It is the
intention of the Company to have the Plan qualify as an "Employee Stock Purchase
Plan" under Section 423 of the Internal Revenue Code of 1986, as amended. The
provisions of the Plan shall, accordingly, be construed so as to extend and
limit participation in a manner consistent with the requirements of that section
of the Code.
2. DEFINITIONS.
(a) "BOARD" shall mean the Board of Directors of the Company.
(b) "CODE" shall mean the Internal Revenue Code of 1986, as
amended.
(c) "COMMON STOCK" shall mean the Common Stock, no par value, of
the Company.
(d) "COMPANY" shall mean Novellus Systems, Inc., a California
corporation.
(e) "COMPENSATION" shall mean all regular straight time gross
earnings, exclusive of payments for overtime, shift premium, incentive
compensation, incentive payments, bonuses, commissions or other compensation.
(f) "CONTINUOUS STATUS AS AN EMPLOYEE" shall mean the absence of
any interruption or termination of service as an Employee. Continuous Status as
an Employee shall not be considered interrupted in the case of a leave of
absence agreed to in writing by the Company, provided that such leave is for a
period of not more than 90 days or reemployment upon the expiration of such
leave is guaranteed by contract or statute.
(g) "DESIGNATED SUBSIDIARIES" shall mean the Subsidiaries which
have been designated by the Board from time to time in its sole discretion as
eligible to participate in the Plan.
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(h) "EMPLOYEE" shall mean any person, including an officer, who
is customarily employed for at least twenty (20) hours per week and more than
five (5) months in a calendar year by the Company or one of its Designated
Subsidiaries.
(i) "EXERCISE DATE" shall mean the last day of each offering
period of the Plan.
(j) "OFFERING DATE" shall mean the first day of each offering
period of the Plan.
(k) "PLAN" shall mean this Employee Stock Purchase Plan.
(l) "SUBSIDIARY" shall mean a corporation, domestic or foreign,
of which not less than 50% of the voting shares are held by the Company or a
Subsidiary, whether or not such corporation now exists or is hereafter organized
or acquired by the Company or a Subsidiary.
3. ELIGIBILITY.
(a) Any person who is an Employee as of the Offering Date of a
given offering period shall be eligible to participate in such offering period
under the Plan, subject to the requirements of paragraph 5(a) and the
limitations imposed by Section 423(b) of the Code.
(b) Any provisions of the Plan to the contrary notwithstanding,
no Employee shall be granted an option under the Plan (i) if, immediately after
the grant, such Employee (or any other person whose stock would be attributed to
such Employee pursuant to Section 424(d) of the Code) would own stock and/or
hold outstanding options to purchase stock possessing five percent (5%) or more
of the total combined voting power or value of all classes of stock of the
Company or of any subsidiary of the Company, or (ii) which permits his rights to
purchase stock under all employee stock purchase plans (described in Section 423
of the Code) of the Company and its subsidiaries to accrue at a rate which
exceeds Twenty-five Thousand dollars ($25,000) of fair market value of such
stock (determined at the time such option is granted) for each calendar year in
which such option is outstanding at any time.
4. OFFERING PERIODS. The Plan shall be implemented by one offering
during each six-month period of the Plan following commencement of the Plan
until the Plan is terminated in accordance with paragraph 19 hereof. The Board
of Directors of the Company shall have the power to change the duration of
offering periods with respect to future offerings without shareholder approval
if such change is announced at least fifteen (15) days prior to the scheduled
beginning of the first offering period to be affected.
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5. PARTICIPATION.
(a) An eligible Employee may become a participant in the Plan by
completing a subscription agreement authorizing payroll deduction on the form
provided by the Company and filing it with the Company's payroll office prior to
the applicable Offering Date, unless a later time for filing the subscription
agreement is set by the Board for all eligible Employees with respect to a given
offering.
(b) Payroll deductions for a participant shall commence on the
first payroll following the Offering Date and shall end on the Exercise Date of
the offering to which such authorization is applicable, unless sooner terminated
by the participant as provided in paragraph 10.
6. PAYROLL DEDUCTIONS.
(a) At the time a participant files his subscription agreement,
he shall elect to have payroll deductions made on each payday during the
offering period in an amount not exceeding fifteen percent (15%) of the
Compensation which he received on the payday immediately preceding the Offering
Date, and the aggregate of such payroll deductions during the offering period
shall not exceed the lesser of (i) 15% of his aggregate Compensation during said
offering period or (ii) $5,000.
(b) All payroll deductions made by a participant shall be
credited to his account under the Plan. A participant may not make any
additional payments into such account.
(c) A participant may discontinue his participation in the Plan
as provided in paragraph 10, or may lower, but not increase, the rate of his
payroll deductions during the offering period by completing or filing with the
Company a new authorization for payroll deduction. The change in rate shall be
effective fifteen (15) days following the Company's receipt of the new
authorization.
7. GRANT OF OPTION.
(a) On the Offering Date of each offering period, each eligible
Employee participating in the Plan shall be granted an option to purchase (at
the per share option price) up to a number of shares of the Company's Common
Stock determined by dividing such Employee's payroll deductions to be
accumulated during such offering period (not to exceed an amount equal to
fifteen percent (15%) of his Compensation as of the date of the commencement of
the applicable offering period) by eighty-five percent (85%) of the fair market
value of a share of the Company's Common Stock on the Offering Date, subject to
the limitations set forth in paragraph 3(b) and paragraph 12 hereof. Fair
market value of a share of the Company's Common Stock shall be determined as
provided in paragraph 7(b) herein.
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(b) The option price per share of the shares offered in a given
offering period shall be the lower of: (i) 85% of the fair market value of a
share of the Common Stock of the Company on the Offering Date; or (ii) 85% of
the fair market value of a share of the Common Stock of the Company on the
Exercise Date. The fair market value of the Company's Common Stock on a given
date shall be determined by the Board in its good faith discretion; provided,
however, that where there is a public market for the Common Stock, the fair
market value per share shall be the closing bid price or last sale price of the
Common Stock for such date, as reported in the WALL STREET JOURNAL (or, if not
so reported, as otherwise reported on the National Market System of the National
Association of Securities Dealers Automated Quotation (NASDAQ) or, in the event
the Common Stock is listed on a stock exchange, the fair market value per Share
shall be the closing price on such exchange on such date, as reported in the
WALL STREET JOURNAL.
8. EXERCISE OF OPTION. Unless a participant withdraws from the Plan
as provided in paragraph 10, his option for the purchase of shares will be
exercised automatically on the Exercise Date of the offering period, and the
maximum number of full shares subject to option will be purchased for him at the
applicable option price with the accumulated payroll deductions in his account.
The shares purchased upon exercise of an option hereunder shall be deemed to be
transferred to the participant on the Exercise Date. During his lifetime, a
participant's option to purchase shares hereunder is exercisable only by him.
9. DELIVERY. As promptly as practicable after the Exercise Date of
each offering period, the Company shall arrange the delivery to each
participant, or to a broker designated by the participant, as appropriate, of a
certificate representing the shares purchased upon exercise of his option. Any
cash remaining to the credit of a participant's account under the Plan after a
purchase by him of shares at the termination of each offering period, or which
is insufficient to purchase a full share of Common Stock of the Company, shall
be returned to said participant.
10. WITHDRAWAL; TERMINATION OF EMPLOYMENT.
(a) A participant may withdraw all but not less than all the
payroll deductions credited to his account under the Plan at any time prior to
the Exercise Date of the offering period by giving written notice to the
Company. All of the participant's payroll deductions credited to his account
will be paid to him promptly after receipt of his notice of withdrawal and his
option for the current period will be automatically terminated, and no further
payroll deductions for the purchase of shares will be made during the offering
period.
(b) Upon termination of the participant's Continuous Status as
an Employee prior to the Exercise Date of the offering period for any reason,
including retirement or death, the payroll deductions credited to his account
will be returned to him or, in the case of his death, to the person or persons
entitled thereto under paragraph 14, and his option will be automatically
terminated.
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(c) In the event an Employee fails to remain in Continuous
Status as an Employee of the Company for at least twenty (20) hours per week
during the offering period in which the employee is a participant, he will be
deemed to have elected to withdraw from the Plan and the payroll deductions
credited to his account will be returned to him and his option terminated.
(d) A participant's withdrawal from an offering will not have
any effect upon his eligibility to participate in a succeeding offering or in
any similar plan which may hereafter be adopted by the Company.
11. INTEREST. No interest shall accrue on the payroll deductions of
a participant in the Plan.
12. STOCK.
(a) The maximum number of shares of the Company's Common Stock
which shall be made available for sale under the Plan shall be 250,000 shares,
subject to adjustment upon changes in capitalization of the Company as provided
in paragraph 18. If the total number of shares which would otherwise be subject
to options granted pursuant to paragraph 7(a) hereof on the Offering Date of an
offering period exceeds the number of shares then available under the Plan
(after deduction of all shares for which options have been exercised or are then
outstanding), the Company shall make a PRO RATA allocation of the shares
remaining available for option grant in as uniform a manner as shall be
practicable and as it shall determine to be equitable. In such event, the
Company shall give written notice of such reduction of the number of shares
subject to the option to each Employee affected thereby and shall similarly
reduce the rate of payroll deductions, if necessary.
(b) The participant will have no interest or voting right in
shares covered by his option until such option has been exercised.
(c) Shares to be delivered to a participant under the Plan will
be registered in the name of the participant or in the name of the participant
and his spouse.
13. ADMINISTRATION. The Plan shall be administered by the Board of
the Company or a committee of members of the Board appointed by the Board. The
administration, interpretation or application of the Plan by the Board or its
committee shall be final, conclusive and binding upon all participants. Members
of the Board who are eligible Employees are permitted to participate in the
Plan, provided that:
(a) Members of the Board who are eligible to participate in the
Plan may not vote on any matter affecting the administration of the Plan or the
grant of any option pursuant to the Plan.
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(b) If a Committee is established to administer the Plan, no
member of the Board who is eligible to participate in the Plan may be a member
of the Committee.
14. DESIGNATION OF BENEFICIARY.
(a) A participant may file a written designation of a
beneficiary who is to receive any shares and cash, if any, from the
participant's account under the Plan in the event of such participant's death
subsequent to the end of the offering period but prior to delivery to him of
such shares and cash. In addition, a participant may file a written designation
of a beneficiary who is to receive any cash from the participant's account under
the Plan in the event of such participant's death prior to the Exercise Date of
the offering period.
(b) Such designation of beneficiary may be changed by the
participant at any time by written notice. In the event of the death of a
participant and in the absence of a beneficiary validly designated under the
Plan who is living at the time of such participant's death, the Company shall
deliver such shares and/or cash to the executor or administrator of the estate
of the participant, or if no such executor or administrator has been appointed
(to the knowledge of the Company), the Company, in its discretion, may deliver
such shares and/or cash to the spouse or to any one or more dependents or
relatives of the participant, or if no spouse, dependent or relative is known to
the Company, then to such other person as the Company may designate.
15. TRANSFERABILITY. Neither payroll deductions credited to a
participant's account nor any rights with regard to the exercise of an option or
to receive shares under the Plan may be assigned, transferred, pledged or
otherwise disposed of in any way (other than by will, the laws of descent and
distribution or as provided in paragraph 14 hereof) by the participant. Any
such attempt at assignment, transfer, pledge or other disposition shall be
without effect, except that the Company may treat such act as an election to
withdraw funds in accordance with paragraph 10.
16. USE OF FUNDS. All payroll deductions received or held by the
Company under the Plan may be used by the Company for any corporate purpose, and
the Company shall not be obligated to segregate such payroll deductions.
17. REPORTS. Individual accounts will be maintained for each
participant in the Plan. Statements of account will be given to participating
Employees promptly following the Exercise Date, which statements will set forth
the amounts of payroll deductions, the per share purchase price, the number of
shares purchased and the remaining cash balance, if any.
18. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. Subject to any
required action by the shareholders of the Company, the number of shares of
Common Stock covered by each option under the Plan which has not yet been
exercised and the number of shares of Common Stock which have been authorized
for issuance under the Plan but have not yet
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been placed under option (collectively, the "Reserves"), as well as the price
per share of Common Stock covered by each option under the Plan which has not
yet been exercised, shall be proportionately adjusted for any increase or
decrease in the number of issued shares of Common Stocks resulting from a stock
split, reverse stock split, stock dividend, combination or reclassification of
the Common Stock, or any other increase or decrease in the number of shares of
Common Stock effected without receipt of consideration by the Company; provided,
however, that conversion of any convertible securities of the Company shall not
be deemed to have been "effected without receipt of consideration". Such
adjustment shall be made by the Board, whose determination in that respect shall
be final, binding and conclusive. Except as expressly provided herein, no issue
by the Company of shares of stock of any class, or securities convertible into
shares of stock of any class, shall affect, and no adjustment by reason thereof
shall be made with respect to, the number or price of shares of Common Stock
subject to an option.
In the event of the proposed dissolution or liquidation of the
Company, the offering period will terminate immediately prior to the
consummation of such proposed action, unless otherwise provided by the Board.
In the event of a proposed sale of all or substantially all of the assets of the
Company, or the merger of the Company with or into another corporation, each
option under the Plan shall be assumed or an equivalent option shall be
substituted by such successor corporation or a parent or subsidiary of such
successor corporation, unless the Board determines, in the exercise of its sole
discretion and in lieu of such assumption or substitution, that the participant
shall have the right to exercise the option as to all of the optioned stock,
including shares as to which the option would not otherwise be exercisable. If
the Board makes an option fully exercisable in lieu of assumption or
substitution in the event of a merger or sale of assets, the Board shall notify
the participant that the option shall be fully exercisable for a period of
thirty (30) days from the date of such notice, and the option will terminate
upon the expiration of such period.
The Board may, if it so determines in the exercise of its sole
discretion, also make provision for adjusting the Reserves, as well as the price
per share of Common Stock covered by each outstanding option, in the event that
the Company effects one or more reorganizations, recapitalizations, rights
offerings or other increases or reductions of shares of its outstanding Common
Stock, and in the event of the Company being consolidated with or merged into
any other corporation.
19. AMENDMENT OR TERMINATION. The Board of Directors of the Company
may at any time terminate or amend the Plan. Except as provided in
paragraph 18, no such termination can affect options previously granted, nor may
an amendment make any change in any option theretofore granted which adversely
affects the rights of any participant, nor may an amendment be made without
prior approval of the shareholders of the Company (obtained in the manner
described in paragraph 21) if such amendment would:
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(a) Increase the number of shares that may be issued under the
Plan;
(b) Permit payroll deductions at a rate in excess of the lesser
of (i) fifteen percent (15%) of the participant's Compensation or (ii) $5,000
per offering period;
(c) Change the designation of the employees (or class of
employees) eligible for participation in the Plan; or
(d) If the Company has a class of equity securities registered
under Section 12 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") at the time of such amendment, materially increase the benefits
which may accrue to participants under the Plan.
If any amendment requiring shareholder approval under this
paragraph 19 of the Plan is made subsequent to the first registration of any
class of equity securities by the Company under Section 12 of the Exchange Act,
such shareholder approval shall be solicited as described in paragraph 21 of the
Plan.
20. NOTICES. All notices or other communications by a participant to
the Company under or in connection with the Plan shall be deemed to have been
duly given when received in the form specified by the Company at the location,
or by the person, designated by the Company for the receipt thereof.
21. SHAREHOLDER APPROVAL.
(a) Continuance of the Plan shall be subject to approval by the
shareholders of the Company within twelve (12) months before or after the date
the Plan is adopted. If such shareholder approval is obtained at a duly held
shareholders' meeting, it must be obtained by the affirmative vote of the
holders of a majority of the votes cast at a shareholders' meeting at which a
quorum representing a majority of all outstanding voting stock is, either in
person or by proxy, present and voting on the Plan; or if such shareholder
approval is obtained by written consent, it must be obtained by the written
consent of the holders of a majority of the outstanding shares of the Company
entitled to vote on the Plan; provided, however, that approval at a meeting or
by written consent may be obtained by a lesser degree of shareholder approval if
the Board determines, in its discretion after consultation with the Company's
legal counsel, that such a lesser degree of shareholder approval will comply
with all applicable laws and will not adversely affect the qualification of the
Plan under Section 423 of the Code.
(b) If any required approval by the shareholders of the Plan
itself or of any amendment thereto is solicited at any time otherwise than
substantially in accordance with Section 14(a) of the Exchange Act and the rules
and regulations promulgated thereunder, then the Company shall, at or prior to
the first annual meeting of shareholders
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held subsequent to the granting of an option hereunder to an officer or
director, do the following:
(i) furnish in writing to the holders entitled to vote for
the Plan substantially the same information which would be required (if proxies
to be voted with respect to approval or disapproval of the Plan or amendment
were then being solicited) by the rules and regulations in effect under
Section 14(a) of the Exchange Act at the time such information is furnished; and
(ii) file with, or mail for filing to, the Securities and
Exchange Commission four copies of the written information referred to in
subsection (i) hereof not later than the date on which such information is first
sent or given to shareholders.
22. CONDITIONS UPON ISSUANCE OF SHARES. Shares shall not be issued
with respect to an option unless the exercise of such option and the issuance
and delivery of such shares pursuant thereto shall comply with all applicable
provisions of law, domestic or foreign, including, without limitation, the
Securities Act of 1933, as amended, the Securities Act of 1934, as amended, the
rules and regulations promulgated thereunder, and the requirements of any stock
exchange upon which the shares may then be listed, and shall be further subject
to the approval of counsel for the Company with respect to such compliance.
23. TERM OF PLAN. The Plan shall become effective upon the earlier
to occur of its adoption by the Board of Directors or its approval by the
shareholders of the Company as described in paragraph 21. It shall continue in
effect for a term of twenty (20) years unless sooner terminated under
paragraph 19.
9
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EXHIBIT 5.1
Opinion of Morrison & Foerster
<PAGE>
[MORRISON & FOERSTER - LETTERHEAD]
September 21, 1995
Novellus Systems, Inc.
81 Vista Montana
San Jose, California 95134
Ladies and Gentlemen:
We have examined the Registration Statement on form S-8 to be filed by
Novellus Systems, Inc., a California corporation (the "Company"), with the
Securities and Exchange Commission on September 21, 1995 (the "Registration
Statement"), relating to the registration under the Securities Act of 1933, as
amended, of 800,000 shares of the Company's Common Stock, no par value (the
"Stock"). The Stock is reserved for issuance under the Company's Amended and
Restated 1992 Stock Option Plan and Amended and Restated 1992 Employee Stock
Purchase Plan. As counsel to the Company, we have examined the proceedings
taken by the Company in connection with the registration of the Stock.
It is our opinion that the Stock, when issued and sold in the manner
described in the Registration Statement and the related Prospectus, will be
legally and validly issued, fully paid and nonassessable.
We consent to the use of this opinion as an exhibit to the
Registration Statement and further consent to all references to us in the
Registration Statement and any amendments thereto.
Very truly yours,
/s/ Morrison & Foerster
MORRISON & FOERSTER
