AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 24, 1998
REGISTRATION NO. 333-__________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
----------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------------
FSI INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
MINNESOTA 41-1223238
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
322 LAKE HAZELTINE DRIVE 55318
CHASKA, MINNESOTA (Zip Code)
(Address of principal executive offices)
FSI INTERNATIONAL, INC. 1997 OMNIBUS STOCK PLAN
AND
FSI INTERNATIONAL, INC. EMPLOYEES STOCK PURCHASE PLAN
(Full title of the plans)
JOEL A. ELFTMANN
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
FSI INTERNATIONAL, INC.
322 LAKE HAZELTINE DRIVE
CHASKA, MINNESOTA 55318
(Name and address of agent for service)
(612) 448-5440
(Telephone number, including area code, of agent for service)
----------------------
CALCULATION OF REGISTRATION FEE
==============================================================================
Proposed
Proposed Maximum
Title of Amount Maximum Aggregate Amount of
Securities to to be Offering Price Offering Registration
be Registered Registered(1) Per Share(2) Price(2) Fee
- ------------------------------------------------------------------------------
Common Stock, 1,100,000
without par value Shares $11.88 $13,068,000 $3,856
==============================================================================
(1) This Registration Statement relates to an additional 750,000 shares to
be offered under the registrant's 1997 Omnibus Stock Plan, for which
1,000,000 shares of Common Stock were registered under Registration
Statement No. 333-30675, and an additional 350,000 shares of Common
Stock to be offered under the registrant's Employees Stock Purchase
Plan, for which 1,200,000 shares were registered under Registration
Statements Nos. 33-33647, 33-39920, 33-46296, 33-77852, and 333-19677.
(2) Estimated solely for the purpose of the registration fee under Rules
457(c) and (h)(1) under the Securities Act of 1933, as amended, based
on the average of the high and low sale prices per share of the
registrant's Common Stock on April 17, 1998, as reported on the Nasdaq
National Market System.
================================================================================
<PAGE>
PART II
INFORMATION REQUIRED BY GENERAL INSTRUCTION E OF
FORM S-8 REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
There are incorporated in this Registration Statement by reference the
contents of the registrant's Registration Statements Nos. 333-30675 and
33-33647, 33-39920, 33-46296, 33-77852, and 333-19677.
ITEM 8. EXHIBITS (REQUIRED OPINIONS AND CONSENTS).
Exhibit Description
------- -----------
5 Opinion of Faegre & Benson LLP.
23.1 Consent of Faegre & Benson LLP (included in Exhibit 5).
23.2 Consent of KPMG Peat Marwick LLP.
24 Powers of Attorney of directors and officers of the Company.
99.1 FSI International, Inc. 1997 Omnibus Stock Plan, as amended.
99.2 FSI International, Inc. Employees Stock Purchase Plan, as
amended.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Chaska, State of Minnesota, on April 23, 1998.
FSI INTERNATIONAL, INC.
By /s/ Benno G. Sand
--------------------------------------
Benno G. Sand
Its Chief Administrative Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed on April 23, 1998 by the following
persons in the capacities with FSI International, Inc. indicated:
JOEL A. ELFTMANN* Chairman, Chief Executive Officer, and Director
- ----------------------------- (Principal Executive Officer)
Joel A. Elftmann
PATRICIA M. HOLLISTER* Chief Financial Officer and Corporate Controller
- ----------------------------- (Principal Financial and Accounting Officer)
Partricia M. Hollister
JAMES A. BERNARDS )
NEIL R. BONKE )
JOEL A. ELFTMANN )
THOMAS D. GEORGE ) A majority of the Board of Directors*
TERRENCE W. GLARNER )
JOANNA T. LAU )
CHARLES R. WOFFORD )
- ----------------------------
* Benno G. Sand, by signing his name hereto, hereby signs this document on
behalf off each of the above-named officers or directors of FSI
International, Inc. pursuant to powers of attorney duly executed by those
persons.
/s/ Benno G. Sand
--------------------------------------------
Benno G. Sand
ATTORNEY-IN-FACT
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit Description
- ------- -----------
<S> <C>
5 Opinion of Faegre & Benson LLP...........................................Filed Electronically
23.1 Consent of Faegre & Benson LLP (included in Exhibit 5)
23.2 Consent of KPMG Peat Marwick LLP.........................................Filed Electronically
24 Powers of Attorney of directors and officers of the Company..............Filed Electronically
99.1 FSI International, Inc. 1997 Omnibus Stock Plan, as amended..............Filed Electronically
99.2 FSI International, Inc. Employees Stock Purchase Plan, as amended........Filed Electronically
</TABLE>
Exhibit 5
April 23, 1998
FSI International, Inc.
322 Lake Hazeltine Drive
Chaska, Minnesota 55318
Ladies and Gentlemen:
In connection with the Registration Statement on Form S-8 under the
Securities Act of 1933, as amended (the "Registration Statement"), relating to
the offering of up to an additional 1,100,000 shares of Common Stock, without
par value (the "Shares"), of FSI International, Inc., a Minnesota corporation
(the "Company"), pursuant to the Company's 1997 Omnibus Stock Plan, as amended,
and the Company's Employees Stock Purchase Plan, as amended (the "Plans"), we
have examined such corporate records and other documents, including the
Registration Statement, and have reviewed such matters of law as we have deemed
relevant hereto, and, based upon such examination and review, it is our opinion
that all necessary corporate action on the part of the Company has been taken to
authorize the issuance and sale of the Shares and that, when issued and sold as
contemplated by the Plans and the Registration Statement, the Shares will be
legally issued, fully paid and nonassessable under the current laws of the State
of Minnesota.
We are admitted to the practice of law in the State of Minnesota and
the foregoing opinions are limited to the laws of that state and the federal
laws of the United States of America.
We consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ Faegre & Benson LLP
FAEGRE & BENSON LLP
Exhibit 23.2
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
FSI International, Inc.:
We consent to the use of our reports incorporated herein by reference.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Minneapolis, Minnesota
April 24, 1998
Exhibit 24
FSI INTERNATIONAL, INC.
Power of Attorney
of Director or Officer
The undersigned director or officer of FSI INTERNATIONAL INC. (the
"Corporation"), a Minnesota corporation, hereby makes, constitutes, and appoints
JOEL A. ELFTMANN and BENNO G. SAND, and each one of them, the undersigned's true
and lawful attorneys-in-fact, with power of substitution, for the undersigned
and in the undersigned's name, place, and stead, to sign and affix the
undersigned's name as a director or officer of the Corporation to a Registration
Statement, under the Securities Act of 1933, as amended, on Form S-8 or other
applicable form, and all amendments thereto, to be filed by the Corporation with
the Securities and Exchange Commission, Washington, D.C., in connection with the
registration under the Securities Act of 1933, as amended, of shares of Common
Stock to be issued by the Corporation under its 1997 Omnibus Stock Plan and
Employees Stock Purchase Plan and to file the Registration Statement with the
Commission, granting unto the attorneys-in-fact, and each of them, full power
and authority to perform any and all acts necessary or incidental to the
performance and execution of the powers herein expressly granted.
IN WITNESS WHEREOF the undersigned has set the undersigned's hand this
23rd day of April, 1998.
/s/ Joel E. Elftmann
-----------------------------------
Joel E. Elftmann
<PAGE>
FSI INTERNATIONAL, INC.
Power of Attorney
of Director or Officer
The undersigned director or officer of FSI INTERNATIONAL INC. (the
"Corporation"), a Minnesota corporation, hereby makes, constitutes, and appoints
JOEL A. ELFTMANN and BENNO G. SAND, and each one of them, the undersigned's true
and lawful attorneys-in-fact, with power of substitution, for the undersigned
and in the undersigned's name, place, and stead, to sign and affix the
undersigned's name as a director or officer of the Corporation to a Registration
Statement, under the Securities Act of 1933, as amended, on Form S-8 or other
applicable form, and all amendments thereto, to be filed by the Corporation with
the Securities and Exchange Commission, Washington, D.C., in connection with the
registration under the Securities Act of 1933, as amended, of shares of Common
Stock to be issued by the Corporation under its 1997 Omnibus Stock Plan and
Employees Stock Purchase Plan and to file the Registration Statement with the
Commission, granting unto the attorneys-in-fact, and each of them, full power
and authority to perform any and all acts necessary or incidental to the
performance and execution of the powers herein expressly granted.
IN WITNESS WHEREOF the undersigned has set the undersigned's hand this
21st day of April, 1998.
/s/ Patricia M. Hollister
-----------------------------------
Patricia M. Hollister
<PAGE>
FSI INTERNATIONAL, INC.
Power of Attorney
of Director or Officer
The undersigned director or officer of FSI INTERNATIONAL INC. (the
"Corporation"), a Minnesota corporation, hereby makes, constitutes, and appoints
JOEL A. ELFTMANN and BENNO G. SAND, and each one of them, the undersigned's true
and lawful attorneys-in-fact, with power of substitution, for the undersigned
and in the undersigned's name, place, and stead, to sign and affix the
undersigned's name as a director or officer of the Corporation to a Registration
Statement, under the Securities Act of 1933, as amended, on Form S-8 or other
applicable form, and all amendments thereto, to be filed by the Corporation with
the Securities and Exchange Commission, Washington, D.C., in connection with the
registration under the Securities Act of 1933, as amended, of shares of Common
Stock to be issued by the Corporation under its 1997 Omnibus Stock Plan and
Employees Stock Purchase Plan and to file the Registration Statement with the
Commission, granting unto the attorneys-in-fact, and each of them, full power
and authority to perform any and all acts necessary or incidental to the
performance and execution of the powers herein expressly granted.
IN WITNESS WHEREOF the undersigned has set the undersigned's hand this
22nd day of April, 1998.
/s/ James A. Bernards
-----------------------------------
James A. Bernards
<PAGE>
FSI INTERNATIONAL, INC.
Power of Attorney
of Director or Officer
The undersigned director or officer of FSI INTERNATIONAL INC. (the
"Corporation"), a Minnesota corporation, hereby makes, constitutes, and appoints
JOEL A. ELFTMANN and BENNO G. SAND, and each one of them, the undersigned's true
and lawful attorneys-in-fact, with power of substitution, for the undersigned
and in the undersigned's name, place, and stead, to sign and affix the
undersigned's name as a director or officer of the Corporation to a Registration
Statement, under the Securities Act of 1933, as amended, on Form S-8 or other
applicable form, and all amendments thereto, to be filed by the Corporation with
the Securities and Exchange Commission, Washington, D.C., in connection with the
registration under the Securities Act of 1933, as amended, of shares of Common
Stock to be issued by the Corporation under its 1997 Omnibus Stock Plan and
Employees Stock Purchase Plan and to file the Registration Statement with the
Commission, granting unto the attorneys-in-fact, and each of them, full power
and authority to perform any and all acts necessary or incidental to the
performance and execution of the powers herein expressly granted.
IN WITNESS WHEREOF the undersigned has set the undersigned's hand this
21st day of April, 1998.
/s/ Neil R. Bonke
-----------------------------------
Neil R. Bonke
<PAGE>
FSI INTERNATIONAL, INC.
Power of Attorney
of Director or Officer
The undersigned director or officer of FSI INTERNATIONAL INC. (the
"Corporation"), a Minnesota corporation, hereby makes, constitutes, and appoints
JOEL A. ELFTMANN and BENNO G. SAND, and each one of them, the undersigned's true
and lawful attorneys-in-fact, with power of substitution, for the undersigned
and in the undersigned's name, place, and stead, to sign and affix the
undersigned's name as a director or officer of the Corporation to a Registration
Statement, under the Securities Act of 1933, as amended, on Form S-8 or other
applicable form, and all amendments thereto, to be filed by the Corporation with
the Securities and Exchange Commission, Washington, D.C., in connection with the
registration under the Securities Act of 1933, as amended, of shares of Common
Stock to be issued by the Corporation under its 1997 Omnibus Stock Plan and
Employees Stock Purchase Plan and to file the Registration Statement with the
Commission, granting unto the attorneys-in-fact, and each of them, full power
and authority to perform any and all acts necessary or incidental to the
performance and execution of the powers herein expressly granted.
IN WITNESS WHEREOF the undersigned has set the undersigned's hand this
21st day of April, 1998.
/s/ Thomas D. George
-----------------------------------
Thomas D. George
<PAGE>
FSI INTERNATIONAL, INC.
Power of Attorney
of Director or Officer
The undersigned director or officer of FSI INTERNATIONAL INC. (the
"Corporation"), a Minnesota corporation, hereby makes, constitutes, and appoints
JOEL A. ELFTMANN and BENNO G. SAND, and each one of them, the undersigned's true
and lawful attorneys-in-fact, with power of substitution, for the undersigned
and in the undersigned's name, place, and stead, to sign and affix the
undersigned's name as a director or officer of the Corporation to a Registration
Statement, under the Securities Act of 1933, as amended, on Form S-8 or other
applicable form, and all amendments thereto, to be filed by the Corporation with
the Securities and Exchange Commission, Washington, D.C., in connection with the
registration under the Securities Act of 1933, as amended, of shares of Common
Stock to be issued by the Corporation under its 1997 Omnibus Stock Plan and
Employees Stock Purchase Plan and to file the Registration Statement with the
Commission, granting unto the attorneys-in-fact, and each of them, full power
and authority to perform any and all acts necessary or incidental to the
performance and execution of the powers herein expressly granted.
IN WITNESS WHEREOF the undersigned has set the undersigned's hand this
22nd day of April, 1998.
/s/ Terrence W. Glarner
-----------------------------------
Terrence W. Glarner
<PAGE>
FSI INTERNATIONAL, INC.
Power of Attorney
of Director or Officer
The undersigned director or officer of FSI INTERNATIONAL INC. (the
"Corporation"), a Minnesota corporation, hereby makes, constitutes, and appoints
JOEL A. ELFTMANN and BENNO G. SAND, and each one of them, the undersigned's true
and lawful attorneys-in-fact, with power of substitution, for the undersigned
and in the undersigned's name, place, and stead, to sign and affix the
undersigned's name as a director or officer of the Corporation to a Registration
Statement, under the Securities Act of 1933, as amended, on Form S-8 or other
applicable form, and all amendments thereto, to be filed by the Corporation with
the Securities and Exchange Commission, Washington, D.C., in connection with the
registration under the Securities Act of 1933, as amended, of shares of Common
Stock to be issued by the Corporation under its 1997 Omnibus Stock Plan and
Employees Stock Purchase Plan and to file the Registration Statement with the
Commission, granting unto the attorneys-in-fact, and each of them, full power
and authority to perform any and all acts necessary or incidental to the
performance and execution of the powers herein expressly granted.
IN WITNESS WHEREOF the undersigned has set the undersigned's hand this
23rd day of April, 1998.
/s/ Joanna T. Lau
-----------------------------------
Joanna T. Lau
<PAGE>
FSI INTERNATIONAL, INC.
Power of Attorney
of Director or Officer
The undersigned director or officer of FSI INTERNATIONAL INC. (the
"Corporation"), a Minnesota corporation, hereby makes, constitutes, and appoints
JOEL A. ELFTMANN and BENNO G. SAND, and each one of them, the undersigned's true
and lawful attorneys-in-fact, with power of substitution, for the undersigned
and in the undersigned's name, place, and stead, to sign and affix the
undersigned's name as a director or officer of the Corporation to a Registration
Statement, under the Securities Act of 1933, as amended, on Form S-8 or other
applicable form, and all amendments thereto, to be filed by the Corporation with
the Securities and Exchange Commission, Washington, D.C., in connection with the
registration under the Securities Act of 1933, as amended, of shares of Common
Stock to be issued by the Corporation under its 1997 Omnibus Stock Plan and
Employees Stock Purchase Plan and to file the Registration Statement with the
Commission, granting unto the attorneys-in-fact, and each of them, full power
and authority to perform any and all acts necessary or incidental to the
performance and execution of the powers herein expressly granted.
IN WITNESS WHEREOF the undersigned has set the undersigned's hand this
23rd day of April, 1998.
/s/ Charles R. Wofford
-----------------------------------
Charles R. Wofford
Exhibit 99.1
FSI INTERNATIONAL, INC.
1997 OMNIBUS STOCK PLAN
(as amended effective January 1998)
1. Purpose. The purpose of the FSI International, Inc. 1997 Omnibus
Stock Plan (the "Plan") is to motivate key personnel to produce a superior
return to the shareholders of the Company by offering such personnel an
opportunity to realize Stock appreciation, by facilitating Stock ownership and
by rewarding them for achieving a high level of corporate financial performance.
The Plan is also intended to facilitate recruiting and retaining key personnel
of outstanding ability by providing an attractive capital accumulation
opportunity. Additionally, the Plan is intended to provide Outside Directors
with an opportunity to acquire a proprietary interest in the Company, to
compensate Outside Directors for their contribution to the Company and to aid in
attracting and retaining Outside Directors.
2. Definitions.
2.1 The terms defined in this Section are used (and
capitalized) elsewhere in the Plan.
(a) "Affiliate" means any corporation that is a
"parent corporation" or "subsidiary corporation" of the
Company, as those terms are defined in Code Section 424(e) and
(f), or any successor provisions.
(b) "Agreement" means (i) a written contract
consistent with the terms of the Plan entered into between the
Company or an Affiliate and a Participant, (ii) containing the
terms and conditions of an Award in such form and not
inconsistent with this Plan as the Committee shall approve
from time to time, together with all amendments thereto, which
amendments may be unilaterally made by the Company (with the
approval of the Committee) unless such amendments are deemed
by the Committee to be materially adverse to the Participant
and not required as a matter of law.
(c) "Award" or "Awards" means a grant made under this
Plan in the form of Restricted Stock, Options, Stock
Appreciation Rights, Performance Units, Stock or any other
stock-based award.
(d) "Board" means the Board of Directors of the
Company.
(e) "Code" means the Internal Revenue Code of 1986,
as amended and in effect from time to time or any successor
statute.
(f) "Committee" means the two or more Non-Employee
Directors designated by the Board to administer the Plan under
Plan Section 3.1 and constituted so as to permit grants
thereby to comply with Exchange Act Rule 16b-3.
(g) "Company" means FSI International, Inc., a
Minnesota corporation, or the successor to all or
substantially all of its businesses by merger, consolidation,
purchase of assets or otherwise.
(h) "Effective Date" means the date specified in Plan
Section 12.1.
(i) "Employee" means an employee (including an
officer or director who is also an employee) of the Company or
an Affiliate.
<PAGE>
(j) "Event" means any of the following:
(1) The acquisition by any individual,
entity or group (within the meaning of Exchange Act
Sections 13(d)(3) or 14(d)(2)) of beneficial
ownership (within the meaning of Exchange Act Rule
13d-3) of 30% or more of either (i) the then
outstanding shares of common stock of the Company
(the "Outstanding Company Common Stock") or (ii) the
combined voting power of the then outstanding voting
securities of the Company entitled to vote generally
in the election of the Board (the "Outstanding
Company Voting Securities"); provided, however, that
the following acquisitions shall not constitute an
Event:
(A) any acquisition of common stock
or voting securities of the Company directly
from the Company,
(B) any acquisition of common stock
or voting securities of the Company by the
Company or any of its wholly-owned
Subsidiaries,
(C) any acquisition of common stock
or voting securities of the Company by any
employee benefit plan (or related trust)
sponsored or maintained by the Company or
any of its Subsidiaries, or
(D) any acquisition by any
corporation with respect to which,
immediately following such acquisition, more
than 70% of, respectively, the then
outstanding shares of common stock of such
corporation and the combined voting power of
the then outstanding voting securities of
such corporation entitled to vote generally
in the election of directors is then
beneficially owned, directly or indirectly,
by all or substantially all of the
individuals and entities who were the
beneficial owners, respectively, of the
Outstanding Company Common Stock and
Outstanding Company Voting Securities
immediately prior to such acquisition in
substantially the same proportions as was
their ownership, immediately prior to such
acquisition, of the Outstanding Company
Common Stock and Outstanding Company Voting
Securities, as the case may be;
(2) Individuals who, as of the Effective
Date, constitute the Board (the "Incumbent Board")
cease for any reason to constitute at least a
majority of the Board; provided, however, that any
individual becoming a director of the Board
subsequent to the Effective Date whose election, or
nomination for election by the Company's
shareholders, was approved by a vote of at least a
majority of the directors then comprising the
Incumbent Board shall be considered a member of the
Incumbent Board, but excluding, for this purpose, any
such individual whose initial assumption of office
occurs as a result of an actual or threatened
election contest that was (or, if threatened, would
have been) subject to Exchange Act Rule 14a-11 or its
successor provision;
(3) Approval by the shareholders of the
Company of a reorganization, merger, consolidation or
statutory exchange of Outstanding Company Voting
Securities, unless immediately following such
reorganization, merger, consolidation or exchange,
all or substantially all of the individuals and
entities who were the beneficial owners,
respectively, of the Outstanding Company Common Stock
and Outstanding Company Voting Securities immediately
prior to such reorganization, merger, consolidation
or exchange beneficially own, directly or indirectly,
more than 70% of, respectively, the then outstanding
shares of common stock and the combined voting power
of the then outstanding voting securities entitled to
vote generally in the election of directors, as the
case may be, of the corporation resulting from such
reorganization, merger, consolidation or exchange in
substantially the same proportions as was their
ownership, immediately
<PAGE>
prior to such reorganization, merger, consolidation
or exchange, of the Outstanding Company Common Stock
and Outstanding Company Voting Securities, as the
case may be; or
(4) Approval by the shareholders of the
Company of (i) a complete liquidation or dissolution
of the Company or (ii) the sale or other disposition
of all or substantially all of the assets of the
Company, other than to a corporation with respect to
which, immediately following such sale or other
disposition, more than 70% of, respectively, the then
outstanding shares of common stock of such
corporation and the combined voting power of the then
outstanding voting securities of such corporation
entitled to vote generally in the election of
directors is then beneficially owned, directly or
indirectly, by all or substantially all of the
individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company
Common Stock and Outstanding Company Voting
Securities immediately prior to such sale or other
disposition in substantially the same proportion as
was their ownership, immediately prior to such sale
or other disposition, of the Outstanding Company
Common Stock and Outstanding Company Voting
Securities, as the case may be.
Notwithstanding the above, an Event shall not be deemed to
occur with respect to a recipient of an Award if the acquisition of the 30% or
greater interest referred to in paragraph (1) is by a group, acting in concert,
that includes that recipient of an Award or if at least 30% of the then
outstanding common stock or combined voting power of the then outstanding voting
securities (or voting equity interests) of the surviving corporation or of any
corporation (or other entity) acquiring all or substantially all of the assets
of the Company shall be beneficially owned, directly or indirectly, immediately
after a reorganization, merger, consolidation, statutory share exchange or
disposition of assets referred to in paragraphs (3) or (4) by a group, acting in
concert, that includes that recipient of an Award.
(k) "Exchange Act" means the Securities Exchange Act
of 1934, as amended and in effect from time to time, or any
successor statute.
(l) "Exchange Act Rule 16b-3" means Rule 16b-3
promulgated by the Securities and Exchange Commission under
the Exchange Act as now in force and in effect from time to
time or any successor regulation.
(m) "Fair Market Value" as of any date means, unless
otherwise expressly provided in the Plan:
(i) the closing price of a Share on the date
immediately preceding that date or, if no sale of
Shares shall have occurred on that date, on the next
preceding day on which a sale of Shares occurred
(A) on the composite tape for New
York Stock Exchange listed shares, or
(B) if the Shares are not quoted on
the composite tape for New York Stock
Exchange listed shares, on the principal
United States Securities Exchange registered
under the Exchange Act on which the Shares
are listed, or
(C) if the Shares are not listed on
any such exchange, on the National
Association of Securities Dealers, Inc.
Automated Quotations National Market System,
or
(ii) if clause (i) is inapplicable, the mean
between the closing "bid" and the closing "asked"
quotation of a Share on the date immediately
preceding that date, or, if
<PAGE>
no closing bid or asked quotation is made on that
date, on the next preceding day on which a closing
bid and asked quotation is made, on the National
Association of Securities Dealers, Inc. Automated
Quotations System or any system then in use, or
(iii) if clauses (i) and (ii) are
inapplicable, what the Committee determines in good
faith to be 100% of the fair market value of a Share
on that date, using such criteria as it shall
determine, in its sole discretion, to be appropriate
for valuation.
However, if the applicable securities exchange or system has
closed for the day at the time the event occurs that triggers a determination of
Fair Market Value, whether the grant of an Award, the exercise of an Option or
Stock Appreciation Right or otherwise, all references in this paragraph to the
"date immediately preceding that date" shall be deemed to be references to "that
date". In the case of an Incentive Stock Option, if this determination of Fair
Market Value is not consistent with the then current regulations of the
Secretary of the Treasury, Fair Market Value shall be determined in accordance
with those regulations. The determination of Fair Market Value shall be subject
to adjustment as provided in Plan Section 16.
(n) "Fundamental Change" shall mean a dissolution or
liquidation of the Company, a sale of substantially all of the
assets of the Company, a merger or consolidation of the
Company with or into any other corporation, regardless of
whether the Company is the surviving corporation, or a
statutory share exchange involving capital stock of the
Company.
(o) "Incentive Stock Option" means any Option
designated as such and granted in accordance with the
requirements of Code Section 422 or any successor provision.
(p) "Insider" as of a particular date means any
person who, as of that date is an officer of the Company as
defined under Exchange Act Rule 16a-1(f) or its successor
provision.
(q) "Non-Employee Director" means a member of the
Board who is considered a non-employee director within the
meaning of Exchange Act Rule 16b-3(b)(3) or its successor
provision.
(r) "Non-Statutory Stock Option" means an Option
other than an Incentive Stock Option.
(s) "Option" means a right to purchase Stock,
including both Non-Statutory Stock Options and Incentive Stock
Options.
(t) "Outside Director" means a director who is not an
Employee.
(u) "Participant" means a person or entity to whom an
Award is or has been made in accordance with the Plan.
(v) "Performance Cycle" means the period of time as
specified in an Agreement over which Performance Units are to
be earned.
(w) "Performance Units" means an Award made pursuant
to Plan Section 11.
(x) "Plan" means this FSI International, Inc. 1997
Omnibus Stock Plan, as may be amended and in effect from time
to time.
(y) "Restricted Stock" means Stock granted under Plan
Section 7 so long as such Stock remains subject to one or more
restrictions.
(z) "Section 16" or "Section 16(b)" means Section 16
or Section 16(b),
<PAGE>
respectively, of the Exchange Act or any successor statute and
the rules and regulations promulgated thereunder as in effect
and as amended from time to time.
(aa) "Share" means a share of Stock.
(bb) "Stock" means the common stock, no designated
par value, of the Company.
(cc) "Stock Appreciation Right" means a right, the
value of which is determined in relation to the appreciation
in value of Shares pursuant to an Award granted under Plan
Section 10.
(dd) "Subsidiary" means a "subsidiary corporation",
as that term is defined in Code Section 424(f), or any
successor provision.
(ee) "Successor" with respect to a Participant means
the legal representative of an incompetent Participant, and if
the Participant is deceased the estate of the Participant or
the person or persons who may, by bequest or inheritance, or
pursuant to the terms of an Award, acquire the right to
exercise an Option or Stock Appreciation Right or to receive
cash and/or Shares issuable in satisfaction of an Award in the
event of the Participant's death.
(ff) "Term" means the period during which an Option
or Stock Appreciation Right may be exercised or the period
during which the restrictions or terms and conditions placed
on Restricted Stock or any other Award are in effect.
(gg) "Transferee" means any member of the
Participant's immediate family (i.e., his or her children,
step-children, grandchildren and spouse) or to one or more
trusts for the benefit of such family members or partnerships
in which such family members are the only partners.
2.2 Gender and Number. Except when otherwise indicated by the
context, reference to the masculine gender shall include, when used, the
feminine gender and any term used in the singular shall also include the plural.
3. Administration and Indemnification.
3.1 Administration.
(a) The Committee shall administer the Plan. The
Committee shall have exclusive power to (i) make Awards, (ii)
determine when and to whom Awards will be granted, the form of
each Award, the amount of each Award (except as to the amount
of the Initial Outside Director Option and the Annual Outside
Director Option, as provided in Plan Section 9.3), and any
other terms or conditions of each Award consistent with the
Plan, and (iii) determine whether, to what extent and under
what circumstances, Awards may be settled, paid or exercised
in cash, Shares or other Awards, or other property or
canceled, forfeited or suspended. Each Award shall be subject
to an Agreement which has been authorized by the Committee.
(b) Solely for purposes of determining and
administering Awards to Participants who are not Insiders, the
Committee may delegate all or any portion of their authority
under the Plan to one or more persons who are not Non-Employee
Directors.
(c) To the extent within its discretion and subject
to Plan Sections 15 and 16, other than price, the Committee
may amend the terms and conditions of any outstanding Award.
(d) It is the intent that the Plan and all Awards
granted pursuant to it shall be administered by the Committee
so as to permit the Plan and Awards to comply with Exchange
Act
<PAGE>
Rule 16b-3, except in such instances as the Committee, in its
discretion, may so provide. If any provision of the Plan or of
any Award would otherwise frustrate or conflict with the
intent expressed in this Section 3.1(d), that provision to the
extent possible shall be interpreted and deemed amended in the
manner determined by the Committee so as to avoid the
conflict. To the extent of any remaining irreconcilable
conflict with this intent, the provision shall be deemed void
as applicable to Insiders to the extent permitted by law and
in the manner deemed advisable by the Committee.
(e) The Committee's interpretation of the Plan and of
any Award or Agreement made under the Plan and all related
decisions or resolutions of the Board or Committee shall be
final and binding on all parties with an interest therein.
Consistent with its terms, the Committee shall have the power
to establish, amend or waive regulations to administer the
Plan. In carrying out any of its responsibilities, the
Committee shall have discretionary authority to construe the
terms of the Plan and any Award or Agreement made under the
Plan.
3.2 Indemnification. Each person who is or shall have been a
member of the Committee, or of the Board, and any other person to whom the
Committee delegates authority under the Plan, shall be indemnified and held
harmless by the Company, to the extent permitted by law, against and from any
loss, cost, liability or expense that may be imposed upon or reasonably incurred
by such person in connection with or resulting from any claim, action, suit or
proceeding to which such person may be a party or in which such person may be
involved by reason of any action taken or failure to act, made in good faith,
under the Plan and against and from any and all amounts paid by such person in
settlement thereof, with the Company's approval, or paid by such person in
satisfaction of any judgment in any such action, suit or proceeding against such
person, provided such person shall give the Company an opportunity, at the
Company's expense, to handle and defend the same before such person undertakes
to handle and defend it on such person's own behalf. The foregoing right of
indemnification shall not be exclusive of any other rights of indemnification to
which such person or persons may be entitled under the Company's Articles of
Incorporation or By-laws, as a matter of law, or otherwise, or any power that
the Company may have to indemnify them or hold them harmless.
4. Shares Available Under the Plan.
(a) The number of Shares available for distribution
under this Plan shall not exceed 1,750,000 (subject to
adjustment pursuant to Plan Section 16).
(b) Any Shares subject to the terms and conditions of
an Award under this Plan that are not used because the terms
and conditions of the Award are not met may again be used for
an Award under the Plan. But Shares with respect to which a
Stock Appreciation Right has been exercised whether paid in
cash and/or in Shares may not again be awarded under this
Plan.
(c) Any unexercised or undistributed portion of any
terminated, expired, exchanged, or forfeited Award, or any
Award settled in cash in lieu of Shares (except as provided in
Plan Section 4(b)) shall be available for further Awards.
(d) For the purposes of computing the total number of
Shares granted under the Plan, the following rules shall apply
to Awards payable in Shares where appropriate:
(i) EACH OPTION SHALL BE DEEMED TO BE THE
EQUIVALENT OF THE MAXIMUM NUMBER OF SHARES THAT MAY
BE ISSUED UPON EXERCISE OF THE PARTICULAR OPTION;
(ii) AN AWARD (OTHER THAN AN OPTION) PAYABLE
IN SOME OTHER SECURITY SHALL BE DEEMED TO BE EQUAL TO
THE NUMBER OF SHARES TO WHICH IT RELATES;
(iii) WHERE THE NUMBER OF SHARES AVAILABLE
UNDER THE AWARD IS VARIABLE ON THE DATE IT IS
GRANTED, THE NUMBER OF SHARES SHALL BE DEEMED TO BE
THE MAXIMUM NUMBER
<PAGE>
OF SHARES THAT COULD BE RECEIVED UNDER THAT
PARTICULAR AWARD; AND
(iv) WHERE TWO OR MORE TYPES OF AWARDS (ALL
OF WHICH ARE PAYABLE IN SHARES) ARE GRANTED TO A
PARTICIPANT IN TANDEM WITH EACH OTHER, SUCH THAT THE
EXERCISE OF ONE TYPE OF AWARD WITH RESPECT TO A
NUMBER OF SHARES CANCELS AT LEAST AN EQUAL NUMBER OF
SHARES OF THE OTHER, EACH SUCH JOINT AWARD SHALL BE
DEEMED TO BE THE EQUIVALENT OF THE MAXIMUM NUMBER OF
SHARES AVAILABLE UNDER THE LARGEST SINGLE AWARD.
Additional rules for determining the number of Shares granted
under the Plan may be made by the Committee, as it deems necessary or desirable.
(e) No fractional Shares may be issued under the
Plan; however, cash shall be paid in lieu of any fractional
Share in settlement of an Award.
(f) The maximum number of Shares that may be awarded
to a Participant in any calendar year in the form of Options
is 100,000 and the maximum number of Shares that may be
awarded to a Participant in any calendar year in the form of
Stock Appreciation Rights is 100,000.
5. Eligibility. Participation in the Plan shall be limited to Employees
and to individuals or entities who are not Employees but who provide services to
the Company or an Affiliate, including services provided in the capacity of a
consultant, advisor or director. The granting of Awards is solely at the
discretion of the Committee, except that Incentive Stock Options may only be
granted to Employees and Awards to Outside Directors are subject to the limits
of Section 9.3(g).
6. General Terms of Awards.
6.1 Amount of Award. Each Agreement shall set forth the number
of Shares of Restricted Stock, Stock or Performance Units subject to the
Agreement, or the number of Shares to which the Option subject to the Agreement
applies or with respect to which payment upon the exercise of the Stock
Appreciation Right subject to the Agreement is to be determined, as the case may
be, together with such other terms and conditions applicable to the Award as
determined by the Committee acting in its sole discretion.
6.2 Term. Each Agreement, other than those relating solely to
Awards of Shares without restrictions, shall set forth the Term of the Option,
Stock Appreciation Right, Restricted Stock or other Award or the Performance
Cycle for the Performance Units, as the case may be. Acceleration of the
expiration of the applicable Term is permitted, upon such terms and conditions
as shall be set forth in the Agreement, which may, but need not, include without
limitation, acceleration resulting from the occurrence of an Event or in the
event of the Participant's death or retirement. Acceleration of the Performance
Cycle of Performance Units shall be subject to Plan Section 11.2.
6.3 Transferability. Except as provided in this Section,
during the lifetime of a Participant to whom an Award is granted, only that
Participant (or that Participant's legal representative) may exercise an Option
or Stock Appreciation Right, or receive payment with respect to Performance
Units or any other Award. No Award of Restricted Stock (prior to the expiration
of the restrictions), Options, Stock Appreciation Rights or Performance Units or
other Award may be sold, assigned, transferred, exchanged or otherwise
encumbered other than pursuant to a qualified domestic relations order as
defined in the Code or Title 1 of the Employee Retirement Income Security Act
("ERISA") or the rules thereunder; any attempted transfer in violation of this
Section 6.3 shall be of no effect. Notwithstanding the immediately preceding
sentence, the Committee, in an Agreement or otherwise at its discretion, may
provide (i) that the Award subject to the Agreement shall be transferable to a
Successor in the event of a Participant's death, or (ii) that the Award (other
than Incentive Stock Options) may be transferable to a Transferee. Any Award
held by a Transferee shall continue to be subject to the same terms and
conditions that were applicable to that Award immediately prior to the transfer
thereof to the Transferee.
6.4 Termination of Employment. No Option or Stock Appreciation
Right may be exercised
<PAGE>
by a Participant, all Restricted Stock held by a Participant or any other Award
then subject to restrictions shall be forfeited, and no payment with respect to
Performance Units for which the applicable Performance Cycle has not been
completed shall be made, if the Participant's employment or other relationship
with the Company and its Affiliates shall be voluntarily terminated or
involuntarily terminated with or without cause prior to the expiration of the
Term of the Option, Stock Appreciation Right, Restricted Stock or other Award,
or the completion of the Performance Cycle, as the case may be, except as, and
to the extent, provided in the Agreement applicable to that Award. An Award may
be exercised by, or paid to, a Transferee or the Successor of a Participant
following the death of the Participant to the extent, and during the period of
time, if any, provided in the applicable Agreement.
6.5 Rights as Shareholder. Each Agreement shall provide that a
Participant shall have no rights as a shareholder with respect to any securities
covered by an Award if and until the date the Participant becomes the holder of
record of the Stock, if any, to which the Award relates.
7. Restricted Stock Awards.
(a) An Award of Restricted Stock under the Plan shall
consist of Shares subject to restrictions on transfer and
conditions of forfeiture, which restrictions and conditions
shall be included in the applicable Agreement. The Committee
may provide for the lapse or waiver of any such restriction or
condition based on such factors or criteria as the Committee,
in its sole discretion, may determine.
(b) Except as otherwise provided in the applicable
Agreement, each Stock certificate issued with respect to an
Award of Restricted Stock shall either be deposited with the
Company or its designee, together with an assignment separate
from the certificate, in blank, signed by the Participant, or
bear such legends with respect to the restricted nature of the
Restricted Stock evidenced thereby as shall be provided for in
the applicable Agreement.
(c) The Agreement shall describe the terms and
conditions by which the restrictions and conditions of
forfeiture upon awarded Restricted Stock shall lapse. Upon the
lapse of the restrictions and conditions, Shares free of
restrictive legends, if any, relating to such restrictions
shall be issued to the Participant or a Successor or
Transferee.
(d) A Participant or a Transferee with a Restricted
Stock Award shall have all the other rights of a shareholder
including, but not limited to, the right to receive dividends
and the right to vote the Shares of Restricted Stock.
(e) No more than 100,000 of the total number of
Shares available for Awards under the Plan shall be issued
during the term of the Plan as Restricted Stock. This
limitation shall be calculated pursuant to the applicable
provisions of Plan Sections 4 and 16.
8. Other Awards. The Committee may from time to time grant Stock and
other Awards under the Plan including without limitations those Awards pursuant
to which Shares are or may in the future be acquired, Awards denominated in
Stock units, securities convertible into Stock and phantom securities. The
Committee, in its sole discretion, shall determine the terms and conditions of
such Awards provided that such Awards shall not be inconsistent with the terms
and purposes of this Plan. The Committee may, at its sole discretion, direct the
Company to issue Shares subject to restrictive legends and/or stop transfer
instructions that are consistent with the terms and conditions of the Award to
which the Shares relate.
No more than 25,000 of the total number of Shares available for Awards
under the Plan shall be issued during the term of the Plan in the form of Stock
without restrictions.
<PAGE>
9. Stock Options.
9.1 Terms of All Options.
(a) An Option shall be granted pursuant to an
Agreement as either an Incentive Stock Option or a
Non-Statutory Stock Option. The purchase price of each Share
subject to an Option shall be determined by the Committee and
set forth in the Agreement, but shall not be less than 100% of
the Fair Market Value of a Share as of the date the Option is
granted (except as provided in Plan Section 19).
(b) The purchase price of the Shares with respect to
which an Option is exercised shall be payable in full at the
time of exercise, provided that to the extent permitted by
law, the Agreement may permit some or all Participants to
simultaneously exercise Options and sell the Shares thereby
acquired pursuant to a brokerage or similar relationship and
use the proceeds from the sale as payment of the purchase
price of the Shares. The purchase price may be payable in
cash, in Shares having a Fair Market Value as of the date the
Option is exercised equal to the purchase price of the Shares
being purchased pursuant to the Option, or a combination
thereof, as determined by the Committee and provided in the
Agreement but no fractional Shares will be issued or accepted.
(c) The Committee may provide, in an Agreement or
otherwise, that a Participant who exercises an Option and pays
the Option price in whole or in part with Shares then owned by
the Participant will be entitled to receive another Option
covering the same number of shares tendered and with a price
of no less than Fair Market Value on the date of grant of such
additional Option ("Reload Option"). Unless otherwise provided
in the Agreement, a Participant, in order to be entitled to a
Reload Option, must pay with Shares that have been owned by
the Participant for at least the preceding 180 days.
(d) Each Option shall be exercisable in whole or in
part on the terms provided in the Agreement. In no event shall
any Option be exercisable at any time after the expiration of
its Term. When an Option is no longer exercisable, it shall be
deemed to have lapsed or terminated.
9.2 Incentive Stock Options. In addition to the other terms
and conditions applicable to all Options:
(i) THE AGGREGATE FAIR MARKET VALUE (DETERMINED AS OF
THE DATE THE OPTION IS GRANTED) OF THE SHARES WITH RESPECT TO
WHICH INCENTIVE STOCK OPTIONS HELD BY AN INDIVIDUAL FIRST
BECOME EXERCISABLE IN ANY CALENDAR YEAR (UNDER THIS PLAN AND
ALL OTHER INCENTIVE STOCK OPTION PLANS OF THE COMPANY AND ITS
AFFILIATES) SHALL NOT EXCEED $100,000 (OR SUCH OTHER LIMIT AS
MAY BE REQUIRED BY THE CODE) IF THIS LIMITATION IS NECESSARY
TO QUALIFY THE OPTION AS AN INCENTIVE STOCK OPTION AND TO THE
EXTENT AN OPTION OR OPTIONS GRANTED TO A PARTICIPANT EXCEED
THIS LIMIT THE OPTION OR OPTIONS SHALL BE TREATED AS A
NON-STATUTORY STOCK OPTION;
(ii) AN INCENTIVE STOCK OPTION SHALL NOT BE
EXERCISABLE MORE THAN 10 YEARS AFTER THE DATE OF GRANT (OR
SUCH OTHER LIMIT AS MAY BE REQUIRED BY THE CODE) IF THIS
LIMITATION IS NECESSARY TO QUALIFY THE OPTION AS AN INCENTIVE
STOCK OPTION;
(iii) THE AGREEMENT COVERING AN INCENTIVE STOCK
OPTION SHALL CONTAIN SUCH OTHER TERMS AND PROVISIONS THAT THE
COMMITTEE DETERMINES NECESSARY TO QUALIFY THIS OPTION AS AN
INCENTIVE STOCK OPTION; AND
(iv) NOTWITHSTANDING ANY OTHER PROVISION OF THIS PLAN
TO THE CONTRARY, NO PARTICIPANT MAY RECEIVE AN INCENTIVE STOCK
OPTION UNDER THE PLAN IF, AT THE TIME THE AWARD IS GRANTED,
THE PARTICIPANT OWNS (AFTER APPLICATION OF THE RULES CONTAINED
IN CODE SECTION 424(d), OR ITS SUCCESSOR PROVISION), SHARES
POSSESSING MORE THAN TEN PERCENT OF THE TOTAL COMBINED VOTING
POWER OF ALL
<PAGE>
CLASSES OF STOCK OF THE CORPORATION OR ITS SUBSIDIARIES,
UNLESS (i) THE OPTION PRICE FOR THAT INCENTIVE STOCK OPTION IS
AT LEAST 110 PERCENT OF THE FAIR MARKET VALUE OF THE SHARES
SUBJECT TO THAT INCENTIVE STOCK OPTION ON THE DATE OF GRANT
AND (ii) THAT OPTION IS NOT EXERCISABLE AFTER THE DATE FIVE
YEARS FROM THE DATE THAT INCENTIVE STOCK OPTION IS GRANTED.
9.3 Terms and Conditions of Outside Directors' Options.
(a) Initial Outside Directors' Options. Subject to
the terms and conditions of this Plan, any Outside Director
first elected or appointed to the Board on or after January
22, 1997 (the "Approval Date") shall receive, by virtue of
serving as a director of the Company, a single grant of a
Non-Statutory Stock Option to purchase 10,000 Shares (an
"Initial Outside Director Option").
(b) Vesting of Initial Outside Directors' Options.
Subject to the provisions of Plan Section 9.3(e), Initial
Outside Directors' Options granted pursuant to this Plan shall
vest and become exercisable six months after the date of
grant. Each Initial Outside Directors' Option, to the extent
exercisable, shall be exercisable in whole or in part
(c) Annual Outside Director Option Grants. For the
Annual Meeting of Shareholders for fiscal year 1997 (to be
held on January 22, 1997) and for each Annual Meeting of
Shareholders thereafter during the term of this Plan, each
Outside Director serving as an Outside Director of the
Company immediately following the Annual Meeting shall be
granted, by virtue of serving as an Outside Director of the
Company, a Non-Statutory Stock Option to purchase 4,000
Shares (an "Annual Outside Director Option"). Each Annual
Outside Director Option shall be deemed to be granted to each
Outside Director immediately after an Annual Meeting and
shall be granted regardless of whether or not an Outside
Director previously received, or simultaneously receives, an
Initial Outside Director Option. Initial Outside Director
Options and Annual Outside Director Options together are
sometimes referred to as "Outside Director Options."
(d) Vesting of Annual Director Options. Subject to
the provisions of Plan Section 9.3(e), Annual Outside
Director Options shall vest and become exercisable
cumulatively on an annual basis, as follows: one-third of the
total number of Shares subject to each Option shall become
exercisable on each of the first and second anniversaries of
the date of grant and the remaining Shares subject to the
Option shall become exercisable on the third anniversary of
the date of grant. Each Option, to the extent exercisable,
shall be exercisable in whole or in part.
(e) Termination of Initial and Annual Outside
Directors' Options. Each Outside Director Option granted
pursuant to this Plan and all rights to purchase Shares
thereunder shall terminate on the earliest of:
(i) ten years after the date that the Outside
Director Option was granted;
(ii) the expiration of the period specified in
the Agreement after the death or permanent
disability of an Outside Director;
(iii) February 28, 1997, if the shareholders of
the Company shall not have approved this
Plan as of or prior to that date at a duly
held shareholders' meeting; or
(iv) ninety days after the date the Outside
Director ceases to be a director of the
Company, provided, however, that the option
shall be exercisable during this 90-day
period only to the extent the option was
exercisable as of the date the person ceases
to be an Outside Director unless the
cessation results from the director's death
or permanent disability. Notwithstanding the
preceding sentence, if an Outside Director
who resigns or whose term expires then
<PAGE>
becomes a consultant or Employee of the
Company within ninety days of such
resignation or term expiration, the Outside
Director Options of such person shall
continue in full force and effect.
In no event shall an Option be exercisable at any
time after its original expiration date. When an Option is no
longer exercisable, it shall be deemed to have lapsed or
terminated and will no longer be outstanding.
(f) Allocation of Common Shares. If as of a date on
which an Option or Options are to be awarded pursuant to the
provisions of this Section 9.3, the number of Shares
available for issuance under the Plan as of this date are
less than the number of options to purchase Shares that
otherwise would be awarded, then the following formula shall
determine how the remaining number of Shares are to be
allocated:
(i) if only one Outside Director is to receive
an Option on the date, then that Outside
Director shall receive an Option to purchase
Shares equal to the number of Shares
remaining;
(ii) if two or more Outside Directors are to
receive Options on the date:
(1) all Initial Outside Director
Options shall first be awarded; if,
however, the number of Shares
available is less than the number
of options to purchase Shares that
would otherwise be awarded as
Initial Outside Director Options
then each Outside Director eligible
to receive an Initial Outside
Director Option shall receive the
number of Options that results from
the following equation: the whole
number of Shares available divided
by the number of Outside Directors
eligible to receive such an Option,
provided, however, that no
fractional shares shall be awarded;
and if such allocation occurs, any
remaining Shares shall not be
awarded and shall be deemed not
subject to distribution for
purposes of Plan Section 4; and
(2) If on that date all Initial Outside
Director Options to be awarded are
awarded in the full amount or if no
Initial Outside Director Options
are to be awarded, then each
Outside Director eligible for an
Annual Outside Director Option
shall receive an Annual Outside
Director Option to purchase Shares
in the amount that results from the
following equation: the whole
number of Shares available divided
by the number of Outside Directors
eligible for an Annual Outside
Director Option, provided, however,
that no fractional shares shall be
awarded; and any remaining Shares
shall not be awarded and shall be
deemed not subject to distribution
for purposes of Plan Section 4.
(g) Non-exclusivity of Section 9.3. The provisions of
this Section 9.3 are not intended to be exclusive; however,
the Committee, in its discretion, may grant Options or other
Awards to an Outside Director, but only in substitution for
Outside Director Options held by that director.
10. Stock Appreciation Rights. An Award of a Stock Appreciation Right
shall entitle the Participant (or a Successor or Transferee), subject to terms
and conditions determined by the Committee, to receive upon exercise of the
Stock Appreciation Right all or a portion of the excess of (i) the Fair Market
Value of a specified number of Shares as of the date of exercise of the Stock
Appreciation Right over (ii) a specified price that shall not be less than 100%
of the Fair Market Value of such Shares as of the date of grant of the Stock
Appreciation Right. A Stock Appreciation Right may be granted in connection with
part or all of, in addition to, or completely
<PAGE>
independent of an Option or any other Award under this Plan. If issued in
connection with a previously or contemporaneously granted Option, the Committee
may impose a condition that exercise of a Stock Appreciation Right cancels a pro
rata portion of the Option with which it is connected and vice versa. Each Stock
Appreciation Right may be exercisable in whole or in part on the terms provided
in the Agreement. Notwithstanding anything to the contrary stated in the Plan,
no Stock Appreciation Right shall be exercisable by a Participant or Successor
or Transferee prior to six months from the date of grant except in the event of
the death or disability of the Participant. No Stock Appreciation Right shall be
exercisable at any time after the expiration of its Term. When a Stock
Appreciation Right is no longer exercisable, it shall be deemed to have lapsed
or terminated. Upon exercise of a Stock Appreciation Right, payment to the
Participant or a Successor or Transferee shall be made at such time or times as
shall be provided in the Agreement in the form of cash, Shares or a combination
of cash and Shares as determined by the Committee and provided in the Agreement.
The Agreement may provide for a limitation upon the amount or percentage of the
total appreciation on which payment (whether in cash and/or Shares) may be made
in the event of the exercise of a Stock Appreciation Right.
11. Performance Units.
11.1 Initial Award.
(a) An Award of Performance Units under the Plan
shall entitle the Participant or a Successor or Transferee to
future payments of cash, Shares or a combination of cash and
Shares, as determined by the Committee and provided in the
Agreement, based upon the achievement of pre-established
performance targets. These performance targets may, but need
not, include without limitation targets relating to one or
more of the Company's or a group's, unit's, Affiliate's or an
individual's performance. The Agreement may establish that a
portion of the total potential of a Participant's Award will
be paid for performance that exceeds the minimum target but
falls below the maximum target applicable to the Award. The
Agreement shall also provide for the timing of the payment.
(b) Following the conclusion or acceleration of each
Performance Cycle, the Committee shall determine the extent to
which (i) performance targets have been attained, (ii) any
other terms and conditions with respect to an Award relating
to the Performance Cycle have been satisfied and (iii) payment
is due with respect to an Award of Performance Units.
11.2 Acceleration and Adjustment. The Agreement may permit an
acceleration of the Performance Cycle and an adjustment of performance targets
and payments with respect to some or all of the Performance Units awarded to a
Participant, upon such terms and conditions as shall be set forth in the
Agreement, upon the occurrence of certain events, which may, but need not
include without limitation an Event, a Fundamental Change, a recapitalization, a
change in the accounting practices of the Company, a change in the Participant's
title or employment responsibilities, the Participant's death or retirement or,
with respect to payments in Shares with respect to Performance Units, a
reclassification, stock dividend, stock split or stock combination as provided
in Plan Section 16. The Agreement also may provide for a limitation on the value
of an Award of Performance Units that a Participant may receive.
12. Effective Date and Duration of the Plan.
12.1 Effective Date. The Plan became effective as of January
22, 1997.
12.2 Duration of the Plan. The Plan shall remain in effect
until all Stock subject to it shall be distributed or until all Awards have
expired or lapsed, or the Plan is terminated pursuant to Plan Section 15 or
until January 23, 2007 (the "Termination Date"); provided, however, Awards made
prior to the Termination Date may be exercised, vested or otherwise effectuated
beyond the Termination Date unless limited in the Agreement or otherwise. No
Award of an Incentive Stock Option shall be made more than 10 years after the
Effective Date (or such other limit as may be required by the Code) if this
limitation is necessary to qualify the Option as an Incentive Stock Option. The
date and time of approval by the Committee of the granting of an Award (or such
other time as
<PAGE>
the Committee may designate) shall be considered the date and time at which the
Award is made or granted.
13. Plan Does Not Affect Employment Status.
(a) Status as an eligible Employee shall not be
construed as a commitment that any Award will be made under
the Plan to that eligible Employee or to eligible Employees
generally.
(b) Nothing in the Plan or in any Agreement or
related documents shall confer upon any Employee or
Participant any right to continue in the employment of the
Company or any Affiliate or constitute any contract of
employment or affect any right that the Company or any
Affiliate may have to change such person's compensation, other
benefits, job responsibilities, or title, or to terminate the
employment of such person with or without cause.
14. Tax Withholding. The Company shall have the right to withhold from
any cash payment under the Plan to a Participant or other person (including a
Successor or a Transferee) an amount sufficient to cover any required
withholding taxes. The Company shall have the right to require a Participant or
other person receiving Shares under the Plan to pay the Company a cash amount
sufficient to cover any required withholding taxes before actual receipt of
those Shares. In lieu of all or any part of a cash payment from a person
receiving Shares under the Plan, the Committee may permit the individual to
cover all or any part of the required withholdings, and to cover any additional
withholdings up to the amount needed to cover the individual's full FICA and
federal, state and local income taxes with respect to income arising from
payment of the Award, through a reduction of the number of Shares delivered or a
subsequent return to the Company of Shares held by the Participant or other
person, in each case valued in the same manner as used in computing the
withholding taxes under the applicable laws.
15. Amendment, Modification and Termination of the Plan.
(a) The Board may at any time and from time to time terminate,
suspend or modify the Plan. Except as limited in (b) below, the
Committee may at any time alter or amend any or all Agreements under
the Plan to the extent permitted by law. However, no such action may,
without further approval of the shareholders of the Company, be
effective if such approval is required in order that the Plan conform
to the requirements of Code Section 422.
(b) No termination, suspension, or modification of the Plan
will materially and adversely affect any right acquired by any
Participant or Successor or Transferee under an Award granted before
the date of termination, suspension, or modification, unless otherwise
agreed to by the Participant in the Agreement or otherwise, or required
as a matter of law; but it will be conclusively presumed that any
adjustment for changes in capitalization provided for in Plan Sections
11.2 or 16 does not adversely affect these rights.
16. Adjustment for Changes in Capitalization. Subject to any required
action by the Company's shareholders, appropriate adjustments, so as to prevent
enlargement of rights or inappropriate dilution - (i) in the aggregate number
and type of Shares available for Awards under the Plan, (ii) in the limitations
on the number of Shares that may be issued to an individual Participant as an
Option or a Stock Appreciation Right in any calendar year or that may be issued
in the form of Restricted Stock or Shares without restrictions, (iii) in the
number and type of Shares and amount of cash subject to Awards then outstanding,
(iv) in the Option price as to any outstanding Options and, (v) subject to Plan
Section 11.2, in outstanding Performance Units and payments with respect to
outstanding Performance Units - may be made by the Committee in its sole
discretion to give effect to adjustments made in the number or type of Shares
through a Fundamental Change (subject to Plan Section 17), recapitalization,
reclassification, stock dividend, stock split, stock combination or other
relevant change, provided that fractional Shares shall be rounded to the nearest
whole Share.
17. Fundamental Change. In the event of a proposed Fundamental Change,
the Committee may, but shall not be obligated to:
<PAGE>
(a) if the Fundamental Change is a merger or consolidation or
statutory share exchange, make appropriate provision for the protection
of the outstanding Options and Stock Appreciation Rights by the
substitution of options, stock appreciation rights and appropriate
voting common stock of the corporation surviving any merger or
consolidation or, if appropriate, the parent corporation of the Company
or such surviving corporation to be issuable upon the exercise of
Options or used to calculate payments upon the exercise of Stock
Appreciation Rights, in lieu of options, stock appreciation rights and
capital stock of the Company; or
(b) at least 30 days prior to the occurrence of the
Fundamental Change, declare, and provide written notice to each holder
of an Option or Stock Appreciation Right of the declaration, that each
outstanding Option and Stock Appreciation Right, whether or not then
exercisable, shall be canceled at the time of, or immediately prior to
the occurrence of the Fundamental Change in exchange for payment to
each holder of an Option or Stock Appreciation Right, within ten days
after the Fundamental Change, of cash equal to (i) for each Share
covered by the canceled Option, the amount, if any, by which the Fair
Market Value (as hereinafter defined in this Section) per Share exceeds
the exercise price per Share covered by such Option or (ii) for each
Stock Appreciation Right, the price determined pursuant to Section 10,
except that Fair Market Value of the Shares as of the date of exercise
of the Stock Appreciation Right, as used in clause (i) of Plan Section
10, shall be deemed to mean Fair Market Value for each Share with
respect to which the Stock Appreciation Right is calculated determined
in the manner hereinafter referred to in this Section. At the time of
the declaration provided for in the immediately preceding sentence,
each Stock Appreciation Right that has been outstanding for at least
six months and each Option shall immediately become exercisable in full
and each person holding an Option or a Stock Appreciation Right shall
have the right, during the period preceding the time of cancellation of
the Option or Stock Appreciation Right, to exercise the Option as to
all or any part of the Shares covered thereby or the Stock Appreciation
Right in whole or in part, as the case may be. In the event of a
declaration pursuant to this Plan Section 17(b), each outstanding
Option and Stock Appreciation Right granted pursuant to the Plan that
shall not have been exercised prior to the Fundamental Change shall be
canceled at the time of, or immediately prior to, the Fundamental
Change, as provided in the declaration. Notwithstanding the foregoing,
no person holding an Option or a Stock Appreciation Right shall be
entitled to the payment provided for in this Section 17(b) if such
Option or Stock Appreciation Right shall have expired pursuant to the
Agreement. For purposes of this Section only, "Fair Market Value" per
Share shall mean the cash plus the fair market value, as determined in
good faith by the Committee, of the non-cash consideration to be
received per Share by the shareholders of the Company upon the
occurrence of the Fundamental Change, notwithstanding anything to the
contrary provided in the Plan.
18. Forfeitures. An Agreement may provide that in the event a
Participant has received or been entitled to payment of cash, delivery of
Shares, or a combination thereof pursuant to an Award within six months prior to
the Participant's termination of employment with the Company and its Affiliates,
the Committee, in its sole discretion, may require the Participant to return or
forfeit the cash and/or Shares received with respect to the Award (or its
economic value as of (i) the date of the exercise of Options or Stock
Appreciation Rights, (ii) the date of, and immediately following, the lapse of
restrictions on Restricted Stock or the receipt of Shares without restrictions,
or (iii) the date on which the right of the Participant to payment with respect
to Performance Units vests, as the case may be) in the event of certain
occurrences specified in the Agreement. The Committee's right to require
forfeiture must be exercised within 90 days after discovery of such an
occurrence but in no event later than 15 months after the Participant's
termination of employment with the Company and its Affiliates. The occurrences
may, but need not, include competition with the Company or any Affiliate,
unauthorized disclosure of material proprietary information of the Company or
any Affiliate, a violation of applicable business ethics policies of the Company
or Affiliate or any other occurrence specified in the Agreement within the
period or periods of time specified in the Agreement.
19. Corporate Mergers, Acquisitions, Etc. The Committee may also grant
Options, Stock Appreciation Rights, Restricted Stock or other Awards under the
Plan having terms, conditions and provisions that vary from those specified in
this Plan provided that any such awards are granted in substitution for, or in
connection with the assumption of, existing options, stock appreciation rights,
restricted stock or other award granted, awarded
<PAGE>
or issued by another corporation and assumed or otherwise agreed to be provided
for by the Company pursuant to or by reason of a transaction involving a
corporate merger, consolidation, acquisition of property or stock, separation,
reorganization or liquidation to which the Company or a subsidiary is a party.
20. Unfunded Plan. The Plan shall be unfunded and the Company shall not
be required to segregate any assets that may at any time be represented by
Awards under the Plan. Neither the Company, its Affiliates, the Committee, nor
the Board of Directors shall be deemed to be a trustee of any amounts to be paid
under the Plan nor shall anything contained in the Plan or any action taken
pursuant to its provisions create or be construed to create a fiduciary
relationship between the Company and/or its Affiliates, and a Participant or
Successor or Transferee. To the extent any person acquires a right to receive an
Award under the Plan, this right shall be no greater than the right of an
unsecured general creditor of the Company.
21. Limits of Liability.
(a) Any liability of the Company to any Participant with
respect to an Award shall be based solely upon contractual obligations
created by the Plan and the Award Agreement.
(b) Except as may be required by law, neither the Company nor
any member of the Board of Directors or of the Committee, nor any other
person participating in any determination of any question under the
Plan, or in the interpretation, administration or application of the
Plan, shall have any liability to any party for any action taken, or
not taken, in good faith under the Plan.
22. Compliance with Applicable Legal Requirements. No certificate for
Shares distributable pursuant to this Plan shall be issued and delivered unless
the issuance of the certificate complies with all applicable legal requirements
including, without limitation, compliance with the provisions of applicable
state securities laws, the Securities Act of 1933, as amended and in effect from
time to time or any successor statute, the Exchange Act and the requirements of
the exchanges on which the Company's Shares may, at the time, be listed.
23. Deferrals and Settlements. The Committee may require or permit
Participants to elect to defer the issuance of Shares or the settlement of
Awards in cash under such rules and procedures as it may establish under the
Plan. It may also provide that deferred settlements include the payment or
crediting of interest on the deferral amounts.
24. Other Benefit and Compensation Programs. Payments and other
benefits received by a Participant under an Award made pursuant to the Plan
shall not be deemed a part of a Participant's regular, recurring compensation
for purposes of the termination, indemnity or severance pay laws of any country
and shall not be included in, nor have any effect on, the determination of
benefits under any other employee benefit plan, contract or similar arrangement
provided by the Company or an Affiliate unless expressly so provided by such
other plan, contract or arrangement, or unless the Committee expressly
determines that an Award or portion of an Award should be included to accurately
reflect competitive compensation practices or to recognize that an Award has
been made in lieu of a portion of competitive cash compensation.
25. Beneficiary Upon Participant's Death. To the extent that the
transfer of a Participant's Award at his or her death is permitted under an
Agreement, a Participant's Award shall be transferable at death to the estate or
to the person who acquires the right to succeed to the Award by bequest or
inheritance.
26. Change in Control Payments.
(a) Notwithstanding the provisions of Plan Section 17 above,
if any Award, either alone or together with other payments in the
nature of compensation to a Participant that are contingent on a change
in the ownership or effective control of the Company or in the
ownership of a substantial portion of the assets of the Company or
otherwise, would result in any portion thereof being subject to an
excise tax
<PAGE>
imposed under Code Section 4999, or any successor provision, or would
not be deductible in whole or in part by the Company, an affiliate of
the Company (as defined in Code Section 1504, or any successor
provision), or other person making such payments as a result of Code
Section 280G, or any successor provision, such Award and/or such other
benefits and payments shall be reduced (but not below zero) to the
largest aggregate amount as will result in no portion thereof being
subject to such an excise tax or being not so deductible.
(b) For purposes of Plan Section 26(a), (i) no portion of
payments the receipt or enjoyment of which a Participant shall have
effectively waived in writing prior to the date of distribution of an
Award shall be taken into account; (ii) no portion of such Award,
benefits and other payments shall be taken into account that in the
opinion of tax counsel selected by the Company's independent auditors
and acceptable to the Participant does not constitute a "parachute
payment" within the meaning of Code Section 280G(b)(2), or any
successor provision; and (iii) the value of any non-cash benefit or any
deferred payment or benefit included in such payment shall be
determined by the Company's independent auditors in accordance with the
principles of Code Sections 280G(d)(3) and (4) or any successor
provisions;
(c) Any Award not paid as a result of this Plan Section 26 or
reduced to zero as a result of the limitations imposed hereby, shall
remain outstanding in full force and effect in accordance with the
other terms and provisions of this Plan.
27. Requirements of Law.
(a) To the extent that Federal laws do not otherwise control,
the Plan and all determinations made and actions taken pursuant to the
Plan shall be governed by the laws of Minnesota without regard to its
conflicts of law principles and construed accordingly.
(b) In the event any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall
not effect the remaining parts of the Plan, and the Plan shall be
construed and enforced as if the illegal or invalid provision had not
been included.
28. Termination of Other Plan. Effective upon the approval of the Plan
by the Company's shareholders on January 22, 1997, the Company's 1994 Omnibus
Stock Plan and the Company's Directors' Nonstatutory Stock Option Plan ("Prior
Plans") terminated. Thereafter, all grants and awards made under the Prior Plans
prior to the approval by the shareholders shall continue in accordance with the
terms of the Prior Plans.
Exhibit 99.2
FSI INTERNATIONAL, INC.
EMPLOYEES STOCK PURCHASE PLAN
(AS AMENDED EFFECTIVE JANUARY 1998)
Section 1. Establishment and Purpose
1.1 Establishment. FSI International, Inc., a Minnesota corporation,
(hereinafter called "FSI" or the "Company"), hereby establishes a stock purchase
plan for employees as described herein, which shall be known as the FSI
INTERNATIONAL, INC. EMPLOYEES STOCK PURCHASE PLAN (hereinafter called the
"Plan").
1.2 Purpose. The purpose of this Plan is to permit employees to purchase Stock
from FSI at the price specified in Section 5. The Plan is intended to be an
"employee stock purchase plan" under Section 423 of the Internal Revenue Code of
1986, as amended (the "Code"), and shall be interpreted and administered in a
manner consistent with such intent.
Section 2. Definitions
2.1 Definitions. Whenever used hereinafter, the following terms shall have the
meanings set forth below:
(a) "Affiliate" means any corporation, a majority of the voting stock of which
is directly or indirectly owned by FSI and whose participation in the Plan the
Board has expressly approved.
(b) "Base Earnings" means a Participant's regular rate of pay including sick
pay, vacation pay, retro pay, overtime, on-call pay, shift differential and
short-term disability, but excluding incentive, discretionary, or signing
bonuses, commissions, foreign service premiums, relocation, expatriate or auto
allowances, and amounts payable under employee benefit plans.
(c) "Board" means the Board of Directors of FSI.
(d) "Code" means the Internal Revenue Code of 1986, as amended.
(e) "Committee" means a committee of at least three persons appointed by the
Board empowered to take actions as stated in this Plan. Each member of the
Committee will remain a member for the duration of the Plan, unless such member
resigns or is removed earlier by majority vote of the Board.
(f) "Eligible Employee" means a person who is an Employee on the day immediately
preceding the first day of a Purchase Period.
(g) "Employee" means any employee (including officers and directors who are also
employees) of FSI or its Affiliates.
(h) "Fair Market Value" of a share of Stock as of any date is the mean between
the high and low prices of a share of Stock on said date as published in the
Wall Street Journal, or, if no such prices are published for said date, on the
last preceding day for which such prices are published, or, if the Company's
Stock is listed on a national securities exchange or traded in the national
market system, the mean between the high and low sale prices for such Stock on
such exchange or market on said date, or, if no sale has been made on such
exchange or market on said date, on the last preceding day on which any such
sale shall have been made.
(i) "Interest" means interest as determined pursuant to Section 5.2.
(j) "Participant" means an Eligible Employee who has elected to participate in
the Plan pursuant to Section 4.1.
(k) "Purchase Period" means a six-month period beginning on January 1 or July 1
of each calendar year.
<PAGE>
(l) "Stock" means the common stock, no par value, of FSI.
Section 3. Stock Subject to the Plan
3.1 Number. The total number of shares of Stock available for distribution under
this Plan shall not exceed 1,550,000. These shares may consist, in whole or in
part, of authorized but unissued Stock not reserved for any other purpose.
3.2 Adjustment in Capitalization. In the event of any change in the outstanding
shares of Stock by reason of a Stock dividend or split, combination,
recapitalization, or reclassification, the shares of Stock issuable and the
price payable therefor under this Plan shall be appropriately adjusted by the
Committee, whose determination shall be conclusive, provided, however, that
fractional shares shall be rounded down to the nearest whole share. Except as
provided above, no adjustment shall be made in connection with the issuance by
FSI of any Stock or any warrants, rights, or options to acquire shares of Stock
or of securities convertible into Stock.
Section 4. Participation
4.1 Participation. An Eligible Employee may elect to become a Participant on the
first day of any Purchase Period, provided such Participant was an Eligible
Employee on the day immediately preceding the first day of such Purchase Period.
Any election to participate shall be made in accordance with rules adopted by
the Committee. However, in no event shall an Eligible Employee be granted the
right to purchase Stock under the Plan if after the purchase such Eligible
Employee would own stock of FSI possessing 5% or more of the total combined
voting power or value of all classes of stock of FSI. Also, an Eligible Employee
may not become or remain a Participant at any time when such Eligible Employee
owns stock possessing 5% or more of the total combined voting power or value of
all classes of stock of FSI. For purposes of this subsection, the rules of
Section 424(d) of the Code shall apply in determining the stock ownership of an
individual, and stock which an employee may purchase under outstanding options
shall be treated as stock owned by the employee.
Section 5. Purchase of Stock
5.1 Contributions for Purchase of Stock. At the time an Eligible Employee elects
to become a Participant in the Plan, such Eligible Employee shall also elect the
form and manner of contributing funds for the purchase of Stock. A Participant
may elect to contribute funds for the purchase of Stock by directing his or her
employer to withhold any whole percentage less than or equal to 10% of his or
her Base Earnings for the purpose of purchasing Stock from FSI. In no event
shall the aggregate contributions for the purchase of Stock exceed 10% of a
Participant's Base Earnings.
A Participant may modify the rate of withholding from such Participant's Base
Earnings only in accordance with the following:
(a) A Participant may at any time direct reduction of the rate of withholding to
a rate lower than that previously in effect. However, only one such direction to
continue withholding at a rate lower than that previously in effect may be made
in any one Purchase Period.
(b) A Participant may at any time direct discontinuance of withholding. If a
Participant directs discontinuance of withholding, such Participant may direct
resumption of withholding only as of the first day of any subsequent Purchase
Period.
(c) Except as provided in subsection (a) or (b) above, a Participant may direct
modification of the rate of withholding only as of the first day of any Purchase
Period. The modified rate may be any whole percentage less than or equal to 10%
of the Participant's Base Earnings. Unless otherwise elected by the Participant,
the rate of withholding such Participant has elected will remain in effect for
subsequent Purchase Periods.
<PAGE>
Any election or direction under this section shall be made in writing
pursuant to rules adopted by the Committee, and shall become effective at a time
specified by the Committee.
5.2 Disposition of Contributions. Amounts withheld pursuant to Section 5.1 shall
be held by the employer until the end of the Purchase Period during which they
were withheld, subject to the following:
(a) A Participant who elects pursuant to Section 5.1(b) to discontinue
withholding may at any time withdraw all or any part of the amounts previously
withheld or otherwise contributed. Any such withdrawal shall be paid to the
Participant by his or her employer in cash, with Interest.
(b) During the last calendar month of each Purchase Period, each Participant
shall be permitted to elect to have all or any part of the amounts withheld paid
to such Participant in cash with Interest.
(c) Any withdrawal under (a) or (b) above shall be deemed to be on a
first-in-first-out basis. Interest shall be applied to the average amount in the
Participant's account at the end of each full calendar month during the
completed portion of the Purchase Period. Prior to the first day of any Purchase
Period, the Committee shall determine the rate of Interest with respect to such
Purchase Period. The Committee shall give such publicity to said Interest rate
as it deems appropriate.
(d) Any portion of the amounts withheld that is not paid to the Participant in
cash shall be automatically applied to purchase Stock under Section 5.3.
(e) Any election or direction under this section shall be made in writing
pursuant to rules adopted by the Committee.
5.3 Purchases of Stock. Amounts withheld from a Participant during a Purchase
Period (except any amounts refunded to such Participant in cash under Section
5.2) shall be used as of the last business day of such Purchase Period to
purchase Stock from FSI for a price equal to the lesser of (a) or (b).
(a) 85% of the Fair Market Value of a share of Stock on the first business day
of the Purchase Period.
(b) 85% of the Fair Market Value of a share of Stock on the last business day of
the Purchase Period.
However, only whole shares shall be purchased under the foregoing provisions,
and any amount remaining that is not sufficient to purchase a whole share shall
be refunded to the Participant, without Interest, promptly after the end of the
Purchase Period.
5.4 Issuance of Stock Certificates. As soon as practicable after the close of
the Purchase Period, FSI shall, without stock issue or transfer taxes to the
Participant, deliver to the Participant a certificate or certificates for the
requisite number of shares of Stock.
5.5 Privileges of a Stockholder. A Participant shall not have stockholder
privileges with respect to any Stock until the date of issuance of a certificate
to such Participant for such Stock.
5.6 Limitation On Stock Purchases. As required by Section 423 of the Code, no
Participant may purchase Stock under this Plan and all other employee stock
purchase plans of the Company and its Affiliates at a rate in excess of $25,000
in Fair Market Value of such Stock (determined at the time the option to
purchase Stock is granted) for each calendar year in which any such option to
purchase Stock granted to such Participant is outstanding at any time.
Notwithstanding the foregoing, the Fair Market Value (determined on the first
day of any Purchase Period) of shares of Stock that may be purchased by a
Participant during such Purchase Period shall not exceed the excess, if any, of
(i) $25,000 over (ii) the Fair Market Value (determined on the first day of the
relevant Purchase Period) of shares of Stock previously acquired by the
Participant in any prior Purchase Period during such calendar year.
<PAGE>
Section 6. Termination of Employment
6.1 Termination of Employment. A Participant whose termination of employment
occurs more than three months prior to the close of a Purchase Period will not
be eligible to purchase any shares of Stock pursuant to this Plan with respect
to such Purchase Period. Any amount withheld from such a Participant during the
Purchase Period in which his or her termination of employment occurs shall be
paid to such Participant in cash with Interest calculated under Section 5.2(c)
promptly after such Participant's termination of employment. Any Participant
whose termination of employment occurs within three months prior to the last day
of a Purchase Period may direct Stock purchases or withdrawals with respect to
that Purchase Period pursuant to Sections 5.2 and 5.3. However, if a
Participant's death occurred at any time during the Purchase Period, any amount
withheld from the Participant during such Purchase Period shall be paid to the
Participant's personal representative in cash with Interest determined under
Section 5.2(c), and no portion thereof shall be applied to purchase Stock.
Section 7. Rights of Employees; Participants
7.1 Employment. Nothing in this Plan shall interfere with or limit in any way
the right of FSI or any of its Affiliates to terminate any Employee's, Eligible
Employee's, or Participant's employment at any time, nor confer upon any such
person any right to continue in the employ of FSI or any of its Affiliates.
7.2 Nontransferability. No right or interest of any Participant in this Plan
shall be assignable or transferable, or subject to any lien, directly or
indirectly, by operation of law, or otherwise, including execution, levy,
garnishment, attachment, pledge, or bankruptcy. Any attempted assignment,
transfer, pledge or other disposition of any rights under the Plan shall be null
and void, and shall automatically terminate all rights of a Participant under
the Plan.
Section 8. Administration
8.1 Administration. The Committee shall be responsible for the administration of
the Plan. The Committee, by majority action thereof, is authorized to interpret
the Plan, to prescribe, amend, and rescind rules and regulations relating to the
Plan, to provide for conditions and assurances deemed necessary or advisable to
protect the interests of FSI, and to make all other determinations necessary or
advisable for the administration of the Plan, but only to the extent not
contrary to the express provisions of the Plan. The determination of the
Committee, interpretation or other action made or taken pursuant to the
provisions of the Plan shall be final, and shall be binding and conclusive for
all purposes and upon all persons.
Section 9. Amendment, Modification, and Termination of Plan
9.1 Amendment, Modification, and Termination of the Plan. The Board, upon
recommendation of the Committee, at any time may terminate, and at any time and
from time to time and in any respect, may amend or modify the Plan, provided,
however, that no such action of the Board, without approval of the stockholders
of FSI, may:
(a) increase the total amount of Stock that may be awarded under the Plan,
except as provided in Section 3.2 of the Plan;
(b) change the class of Employees eligible to participate in the Plan;
(c) withdraw the administration of the Plan from the Committee;
(d) permit any person, while a member of the Committee, to be eligible to
participate in the Plan; or
(e) extend the duration of the Plan.
<PAGE>
Section 10. Requirements of Law
10.1 Requirements of Law. The issuance of Stock and the payment of cash pursuant
to this Plan shall be subject to all applicable laws, rules, and regulations,
and shares of Stock shall not be issued nor cash payments made except upon
approval of proper government agencies or stock exchanges as may be required.
10.2 Governing Law. The Plan, and all agreements hereunder, shall be construed
in accordance with and governed by the laws of the State of Minnesota.
Section 11. Effective Date of the Plan
11.1 Effective Date. The Plan, as amended, is effective as of January 1, 1998.
11.2 Duration of the Plan. Unless the Board terminates the Plan earlier, the
Plan shall remain in effect until all Stock subject to it shall be distributed
pursuant to the Plan.
