<PAGE>
As filed with the Securities and Exchange Commission on June 9, 1999.
REGISTRATION NO. 333-
---------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
INPUT/OUTPUT, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 22-2286646
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
11104 WEST AIRPORT BOULEVARD
STAFFORD, TEXAS 77477
(281) 933-3339
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
INPUT/OUTPUT, INC. AMENDED AND RESTATED 1990 STOCK OPTION PLAN
INPUT/OUTPUT, INC. AMENDED AND RESTATED 1996 NON-EMPLOYEE DIRECTOR
STOCK OPTION PLAN
(Full Title of Plan)
ROBERT P. BRINDLEY
INPUT/OUTPUT, INC.
11104 WEST AIRPORT BOULEVARD
STAFFORD, TEXAS 77477
(281) 933-3339
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
WITH COPIES TO:
HAYNES AND BOONE, L.L.P.
1000 LOUISIANA, SUITE 4300
HOUSTON, TEXAS 77002
ATTN: MARC H. FOLLADORI
(713) 547-2000
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED
MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED(1)(2) PER SHARE(2) PRICE(2) FEE
- ------------------------------------------ -------------------- ------------------ -------------------- ---------------
<S> <C> <C> <C> <C>
Common Stock, par value $0.01 per share 1,800,000 shares $7.71875 $13,893,750.00 $3,863.00
========================================== ==================== ================== ==================== ===============
</TABLE>
(1) Pursuant to Rule 416(a), also registered hereunder is an indeterminate
number of shares of Common Stock issuable as a result of the
anti-dilution provisions of the Plans.
(2) The 1,800,000 shares registered hereby represent the following: (i) an
additional 1,500,000 shares issuable pursuant to the Company's Amended
and Restated 1990 Stock Option Plan (the "1990 Plan") and (ii) an
additional 300,000 shares issuable pursuant to the Company's Amended
and Restated 1996 Non-Employee Director Stock Option Plan (the "1996
Plan"). With respect to the shares registered hereby, the offering
price per share, the aggregate offering price and the registration fee
have been calculated in accordance with paragraphs (c) and (h)(1) of
Rule 457 on the basis of the average high and low sale prices for the
Company's Common Stock on June 4, 1999, as reported on the New York
Stock Exchange composite tape ($7.71875 per share).
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Input/Output, Inc. (the "Company") hereby incorporates by reference
the Company's Registration Statement on Form S-8 (Registration No. 333-14231)
filed with the Securities and Exchange Commission (the "Commission") on
October 16, 1996 (the "1996 Form S-8"). The Company also incorporates by
reference the Company's Registration Statements on Form S-8 (Registration
Nos. 33-85304, 33-54394 and 33-46386) filed with the Commission on October
19, 1994 (the "1994 Form S-8"), November 12, 1992 and March 16, 1992
(collectively, the "1992 Forms S-8"), respectively. The Company also
incorporates by reference the description of the Company's common stock, par
value $0.01 per share (the "Common Stock"), contained in the Company's
Registration Statement on Form 8-A filed with the Commission on October 17,
1994.
INPUT/OUTPUT, INC. AMENDED AND RESTATED 1990 STOCK OPTION PLAN AND
INPUT/OUTPUT, INC. AMENDED AND RESTATED 1996 NON-EMPLOYEE DIRECTOR STOCK
OPTION PLAN
By means of the 1994 Form S-8 and 1992 Forms S-8, the Company
registered 7,000,000 shares of Common Stock pursuant to its 1990 Plan. By
means of the 1996 Form S-8, the Company registered 400,000 shares of Common
Stock pursuant to its 1996 Plan. This Registration Statement registers an
additional 1,500,000 shares of Common Stock issuable pursuant to the 1990
Plan and an additional 300,000 shares issuable pursuant to the 1996 Plan, as
authorized by the Company's stockholders at the Company's Annual Meeting of
Stockholders held on September 28, 1998.
-2-
<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 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 Stafford, State of Texas, on
December 11, 1998.
INPUT/OUTPUT, INC.
By: /s/ RONALD A. HARRIS
----------------------------------
Ronald A. Harris
Vice President and Controller
(Principal Financial Officer)
POWER OF ATTORNEY
Each of the undersigned hereby appoints Chris E. Wolfe and Ronald A.
Harris and each of them (with full power to act alone), as attorney and
agents for the undersigned, with full power of substitution, for and in the
name, place and stead of the undersigned, to sign and file with the
Securities and Exchange Commission under the Securities Act of 1933 any and
all amendments and exhibits to this Registration Statement and any and all
applications, instruments and other documents to be filed with the Securities
and Exchange Commission pertaining to the registration of the securities
covered hereby, with full power and authority to do and perform any and all
acts and things whatsoever requisite or desirable.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on December 11, 1998.
<TABLE>
<CAPTION>
SIGNATURE TITLE
<S> <C>
/s/ W.J. ("ZEKE") ZERINGUE Director, Chairman of the Board of Directors and
- ------------------------------------------------ Chief Executive Officer (Principal Executive
W. J. ("Zeke") Zeringue Officer)
/s/ AXEL M. SIGMAR Director, President and Chief Operating Officer
- ------------------------------------------------
Axel M. Sigmar
/s/ ROBERT P. BRINDLEY Director and Executive Vice President - Worldwide
- ------------------------------------------------ Marketing and Sales
Robert P. Brindley
/s/ RONALD A. HARRIS Vice President and Controller
- ------------------------------------------------ (Principal Financial and Accounting Officer)
Ronald A. Harris
/s/ ERNEST E. COOK Director
- ------------------------------------------------
Ernest E. Cook
/s/ THEODORE H. ELLIOTT, JR. Director
- ------------------------------------------------
Theodore H. Elliott, Jr.
/s/ G. THOMAS GRAVES III Director
- ------------------------------------------------
G. Thomas Graves III
/s/ WILLIAM F. WALLACE Director
- ------------------------------------------------
William F. Wallace
/s/ JAMES M. LAPEYRE, JR. Director
- ------------------------------------------------
James M. Lapeyre, Jr.
</TABLE>
-3-
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit Description
------- -----------
<S> <C>
4.1 Specimen certificate for shares of the Company's common stock, par
value $0.01 per share. Exhibit F to the Company's Registration
Statement on Form 8-A (No. 1-13402), dated October 17, 1994, is
incorporated herein by reference.
4.2 The Company's Amended and Restated 1990 Stock Option Plan.
4.3 The Company's Amended and Restated 1996 Non-Employee Director
Stock Option Plan.
5.1 Opinion of Haynes and Boone, L.L.P.
23.1 Consent of KPMG LLP
23.2 Consent of Haynes and Boone, L.L.P. (included in Exhibit 5.1
opinion).
24.1 Power of Attorney (included on the signature page hereto).
</TABLE>
-4-
<PAGE>
EXHIBIT 4.2
INPUT/OUTPUT, INC.
AMENDED AND RESTATED 1990 STOCK OPTION PLAN
(Effective as of June 1, 1998)
1. PURPOSE.
The Amended and Restated 1990 Stock Option Plan (the "Plan") is intended
to provide a means of attracting and retaining, in the service of
Input/Output, Inc. (the "Company") and its Subsidiaries, certain key
employees of ability and potential, and to provide consideration for services
rendered by consultants and independent contractors for the Company and its
Subsidiaries, to encourage such persons to exert their best efforts on behalf
of the Company and to align their interests more closely with those of the
stockholders. It is intended that these purposes will be effected through
the granting of options, which may be in the form of stock options intended
to qualify ("Incentive Stock Options") under Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code") or stock options which are not
intended to so qualify ("Non-Qualified Stock Options").
2. ADMINISTRATION.
The Plan shall be administered by the Compensation Committee (the
"Committee") of the Board of Directors of the Company (the "Board"), which
Committee shall consist of at least two members.
The Committee shall have full power and authority to select the key
employees, consultants and independent contractors to be granted options
hereunder at such time or times, in such amounts, and upon such terms and
conditions as the Committee may prescribe. The Committee shall have full
power and authority to interpret and construe the Plan and to establish and
amend general rules and regulations for the administration of the Plan. The
Committee's interpretation and construction of the Plan shall be conclusive
and binding upon all persons. Administrative costs in connection with the
Plan shall be paid by the Company. The Committee may delegate to officers of
the Company or any affiliate of the Company the authority, subject to such
terms as the Committee shall determine, to perform specified functions under
the Plan; provided however, that any function relating to an optionee then
subject to Section 16 of the Securities Exchange Act of 1934, as amended (the
"1934 Act"), or relating to a "covered employee" as that term is defined
under Section 162(m) of the Code, shall be performed solely by the Committee
in order to ensure compliance with applicable requirements of Rule 16b-3
promulgated under the 1934 Act and Section 162(m) of the Code.
No current or previous member of the Board or the Committee, nor any
officer or employee of the Company acting on behalf of the Board or the
Committee, shall be personally liable for any action, determination, or
interpretation taken or made in good faith with respect to the Plan, and all
such members of the Board or the Committee and each and any officer or
employee of the Company acting on their behalf shall, to the extent permitted
by law, be fully indemnified and protected by the Company in respect of any
such action, determination or interpretation. The foregoing right of
indemnification shall not be exclusive of any other rights of indemnification
to which such individuals may be entitled under the Company's Certificate of
Incorporation or Bylaws, as a matter of law, or otherwise.
Each option shall be evidenced by a written stock option agreement.
Unless otherwise provided in the resolution approving such grant, the date on
which the Committee approves the granting of an option shall be considered
the date on which such option is granted. The Committee shall prescribe the
terms of each option agreement, which terms shall not be inconsistent with
the terms of this Plan.
3. ELIGIBILITY.
The individuals who shall be eligible to participate in the Plan shall
be such key employees (including officers and directors who are employees) of
the Company or of any corporation or entity (hereinafter called a
"Subsidiary") in which the Company has a proprietary interest by reason of
stock ownership or otherwise (including any corporation or entity in which
the Company acquires a proprietary interest after the adoption of this Plan),
but only if the Company owns, directly or indirectly, stock or equity
interests possessing not less than 50% of the total combined voting power of
all classes of stock or equity interests in such corporation. Such
Ex4.2-Page 1
<PAGE>
key employees shall be executive, administrative, professional or technical
personnel of the Company or of any Subsidiary who have principal or shared
responsibility for the management, direction and financial success of the
Company. The Committee may select, by the grant of options under this Plan,
certain consultants and independent contractors to be optionees. The
granting of options under this Plan shall be entirely discretionary and
nothing in this Plan shall be deemed to give any employee, consultant or
independent contractor a right to participate in this Plan or to be granted
an option.
More than one (1) option may be granted from time to time to any
employee, consultant, or independent contractor. The holders of options
shall not be, or have any of the rights or privileges of, a stockholder of
the Company in respect of any shares purchasable upon the exercise of any
part of an option unless and until certificates representing such shares
shall have been issued by the Company to such holders.
4. STOCKHOLDER APPROVAL AND TERM.
This Plan shall become effective as of the date approved by the
stockholders of the Company. Subject to its termination pursuant to Section
12, the Plan shall remain in effect until all options granted hereunder shall
have been exercised, earned, or distributed, or shall have expired or have
been canceled; PROVIDED however, that no options hereunder shall be granted
after September 1, 2000.
5. SHARES SUBJECT TO THE PLAN.
Subject to adjustment pursuant to Section 9, the total number of shares
of common stock of the Company, $.01 par value ("Common Stock"), with respect
to which stock options may be granted hereunder shall not exceed 8,500,000.
In the event that shares of Common Stock are delivered to the Company in full
or partial payment of the exercise price for the exercise of a stock option
granted under the Plan in accordance with Section 6 of this Plan, the number
of shares available for future grants of options under the Plan shall be
reduced only by the net number of shares issued upon the exercise of the
option.
The aggregate number of shares of Common Stock that may be represented
by grants of stock options made to any optionee during any consecutive
four-year period may not exceed in any event 1,200,000 shares. Should any
option granted under this Plan expire or terminate unexercised, in whole or
in part, the shares of Common Stock formerly subject to such option shall
again be available for grant under the Plan. Shares granted or issued
hereunder may be authorized but unissued Common Stock or shares reacquired by
the Company and held in its treasury, as may from time to time be determined
by the Committee.
6. STOCK OPTIONS.
All stock options granted hereunder shall be evidenced by written stock
option agreements setting forth the following terms and conditions:
(a) NUMBER OF SHARES. The option agreement shall state the total
number of shares to which it pertains.
(b) EXERCISE PRICE. The exercise price shall be not less than the
fair market value, as defined in Section 11(a) hereof, for each share of
Common Stock on the date of grant of the option. If an Incentive Stock
Option is granted to an employee and if the employee owns or is deemed to
own (by reason of the attribution rules applicable under Section 424(d) of
the Code) more than 10% of the combined voting power of all classes of
stock of the Company (or of any parent corporation or Subsidiary of the
Company), the exercise price for each share (to the extent required by the
Code at the time of grant) shall not be less than 110% of the fair market
value of a share of Common Stock on the date such Incentive Stock Option is
granted.
With respect to the 1,500,000 additional shares of Common Stock
authorized for issuance by the amendment to this Plan effective as of June
1, 1998 ("Additional Shares") and notwithstanding any provision contained
in this Plan to the contrary, neither the Board nor the Committee shall (i)
cancel and regrant any stock options granted hereunder covering Additional
Shares or (ii) lower the exercise price of stock options granted hereunder
covering Additional Shares.
Ex4.2-Page 2
<PAGE>
(c) EXERCISE OF STOCK OPTION. The Committee, in its sole discretion,
shall prescribe in each option agreement the time or times at which a stock
option shall be exercisable, in full or in part; PROVIDED that the
Committee, in its sole discretion, may accelerate the time or times at
which stock options shall became exercisable. In no event may an option be
exercised or shares be issued pursuant to an option if any necessary
listing of the shares on a securities exchange or any registration or
qualification required under applicable state or federal securities laws
has not been accomplished. Unless the Committee directs otherwise, an
option granted hereunder may be exercised no sooner than as follows:
<TABLE>
<CAPTION>
EXERCISE DATE NUMBER OF SHARES
- ----------------------------------------------------------------------------------------------------
<S> <C>
1. One (1) year from the date of grant Up to 25% of the total optioned shares under the option
2. Two (2) years from the date of grant Up to an additional 25% of the total optioned shares
3. Three (3) years from the date of grant Up to an additional 25% of the total optioned shares
4. Four (4) years from the date of grant Up to an additional 25% of the total optioned shares
</TABLE>
(d) EXERCISE PROCEDURES. A stock option shall be exercised by
delivery of written notice of exercise to the Secretary of the Company and
payment of the full exercise price of the shares for which the option is
being exercised. The exercise price may be paid:
(1) in cash or by check payable to the order of the Company, or
(2) through the delivery of Common Stock owned by the optionee,
having an aggregate fair market value on the date of
exercise equal to the exercise price, or
(3) by any combination of (1) and (2) above.
The Committee may impose such limitations and prohibitions on the use of
shares of Common Stock to exercise an option as it deems appropriate.
Additionally, shares covered by a stock option may be purchased upon
exercise, in whole or in part, in accordance with the applicable stock
option agreement, by authorizing a third party to sell the shares (or a
sufficient portion thereof) acquired upon exercise of a stock option, and
assigning the delivery to the Company of a sufficient amount of the sale
proceeds to pay for all the shares acquired through such exercise and any
tax withholding obligations resulting from such exercise.
(e) PERIOD OF OPTIONS. The Committee shall prescribe in each stock
option agreement the period during which a stock option may be exercised;
PROVIDED HOWEVER, that no stock option shall be granted for a period of
longer than ten years. However, if an employee owns or is deemed to own
(by reason of the attribution rules of Section 424(d) of the Code) more
than 10% of the combined voting power of all classes of stock of the
Company (or any parent corporation or Subsidiary of the Company) and an
Incentive Stock Option is granted to such employee, the term of such
Incentive Stock Option (to the extent required by the Code at the time of
grant) shall be no more than five years from the date of grant.
(f) INCENTIVE STOCK OPTIONS. To the extent required by the Code for
incentive stock options, the exercise of Incentive Stock Options granted
under the Plan shall be subject to the $100,000 calendar year limit as set
forth in Section 422(d) of the Code; to the extent that any grant exceeds
such $100,000 calendar year limit, the portion of such granted Stock Option
shall be deemed a Non-Qualified Stock Option. Only employees of the
Company and its subsidiaries may receive grants of Incentive Stock Options.
If Common Stock acquired upon exercise of an Incentive Stock Option is
disposed of by an optionee prior to the expiration of either two years from
the date of grant of such option or one year from the transfer of shares to
the optionee pursuant to the exercise of such option or in any other
disqualifying disposition within the meaning of Section 422 of the Code,
then such optionee shall promptly notify the Company in writing of the date
and terms of such disposition. A disqualifying disposition by an optionee
shall not affect the status of any other option granted under the Plan as
an Incentive Stock Option within the meaning of Section 422 of the Code.
Notwithstanding the provisions of Section 7, the option period of an
optionee's Incentive Stock Options shall terminate no later than ninety
(90) days after termination of such optionee's employment with the Company
and its
Ex4.2-Page 3
<PAGE>
Subsidiaries; PROVIDED that if such employment terminates by reason of
the death or total and permanent disability (as defined in Section 22(e)
of the Code) of the optionee, then the option period of such optionee's
Incentive Stock Options shall terminate no later than one hundred eighty
(180) days after such termination by reason of death or disability.
(g) GRANTS OF NON-QUALIFIED OPTIONS TO NEW FULL-TIME EMPLOYEES.
Effective December 19, 1996 and thereafter, the Committee shall be
authorized, at any time and from time, to adopt a policy or policies to
grant non-qualified stock options under the Plan to individuals on and
effective as of the date any such individual becomes a full-time
employee of the Company or a Subsidiary, to purchase a number of shares
to be from time to time designated by the Committee, each such stock
option to have an exercise price equal to the fair market value for each
share of Common Stock as of the date of grant in accordance with
sub-Section (b) of this Section 6, to have a term of ten years from the
date of grant and to vest and become exercisable in accordance with the
terms of sub-Section (c) of Section 6. Notwithstanding the foregoing,
nothing contained in this sub-Section (g) shall confer on any person any
contractual or similar rights to any such grant, or be evidence of any
agreement, contract or understanding, express or implied, that any
particular person will be employed by the Company or any Subsidiary or
have rights to any non-qualified stock option.
7. TERM OF EMPLOYMENT OR SERVICE.
In the event an employee shall cease to be employed by the Company, the
unexercised portions of such optionee's options which are eligible to be
exercised in accordance with this Plan as of the date of such termination of
employment may be exercised within one hundred eighty (180) days after such
date of termination; PROVIDED HOWEVER, that an option exercisable by an
employee, consultant, or independent contractor shall be exercisable as
follows in the event of death, disability or retirement:
(a) DEATH. In the event of death, all unmatured installments of
the stock option outstanding shall thereupon automatically be
accelerated and become fully vested and exercisable in full, and the
stock option may be exercised, for a period of twelve (12) months after
the optionee's death or until expiration of the option term (if sooner),
by the optionee's estate or personal representative, or by the person
who acquired the right to exercise the option by bequest or inheritance
or by reason of the optionee's death; and
(b) RETIREMENT OR DISABILITY. In the event of the termination of
employment of an employee as the result of retirement or disability, or
the termination of service as a consultant as the result of disability,
all unmatured installments of the stock option outstanding shall
thereupon automatically be accelerated and become fully vested and
exercisable in full, and the stock option may be exercised in full for a
period of twelve (12) months after such termination or until expiration
of the option term (if sooner). For the purposes of this Plan, the
"retirement" of an employee shall be deemed to be retirement after
qualification therefor pursuant to a retirement plan or a retirement
policy of the Company. Also, for the purposes of this Plan, the
"disability" of an employee or a consultant shall mean the total and
permanent disability (as that term is described in Section 22(e) of the
Code) of such optionee.
Notwithstanding the foregoing provisions of this Section 7, the Committee, in
its sole discretion, may extend the option exercise period for a period
beyond that otherwise provided in this Section, but in no event past the
expiration of the option term.
8. CHANGE OF CONTROL.
In the event of a Change of Control (as defined below) affecting the
Company in which the outstanding stock options granted by the Company prior
to such Change of Control (and the Company's obligations in connection
therewith) are not fully assumed by the Successor (as defined below) or
replaced by fully equivalent substitute options, then (1) all such unmatured
installments of outstanding options shall automatically be accelerated and
become fully vested and exercisable in full, without regard to the provisions
of subsection 6(c) hereof, as of the effective date of the Change of Control
and (2) the Company shall provide reasonable prior written notice to each
applicable optionee of (a) the date such unexercised options will terminate
and (b) the period during which such optionee may exercise the fully vested
options.
If there is a Change of Control of the Company in which the outstanding
stock options (including the unmatured installments thereof) granted by the
Company prior to such Change of Control (and the Company's obligations in
connection therewith) are fully assumed by the Successor pursuant to Section
9(d) of this Plan, or replaced by fully equivalent substitute options, then,
except as
Ex4.2-Page 4
<PAGE>
otherwise provided in this Section 8, no acceleration of vesting of any
unmatured installments of outstanding stock options granted by the Company
shall occur.
In addition, in the event that an optionee's employment is terminated by
the Company within the 18-month period following the effective date of a
Change of Control (i.e., with such period ending on the same day of the
eighteenth month following the effective date of the Change of Control) for
any reason (other than such optionee's (i) voluntary resignation or
retirement, (ii) termination as a result of death or disability, or (iii)
termination by the Company For Cause (as defined below)) or such optionee is
subject to a Change in Duties (as defined below) after the effective date of
the Change of Control and such optionee then resigns from his or her
employment with the Company within such 18-month period, then to the extent
the stock options granted to such optionee have not already become fully
vested pursuant to this Section 8, all unmatured installments of any
outstanding stock options granted by the Company to such optionee shall,
without further action by any person, immediately become fully vested and
exercisable in full effective as of the date of such termination of
employment.
For the purposes of this Plan, a "Change of Control" shall mean the
occurrence of any of the following events: (i) there shall be consummated
any merger or consolidation pursuant to which shares of the Company's Common
Stock would be converted into cash, securities or other property, or any
sale, lease, exchange or other disposition (excluding disposition by way of
mortgage, pledge or hypothecation), in one transaction or a series of related
transactions, of all or substantially all of the assets of the Company (a
"Business Combination"), in each case unless, following such Business
Combination, the holders of the outstanding Common Stock immediately prior to
such Business Combination beneficially own, directly or indirectly, more than
51% of the outstanding common stock or equivalent equity interests of the
corporation or entity resulting from such Business Combination (including,
without limitation, a corporation which as a result of such transaction owns
the Company or all or substantially all of the Company's assets either
directly or through one or more subsidiaries) in substantially the same
proportions as their ownership, immediately prior to such Business
Combination, of the outstanding Common Stock, (ii) the stockholders of the
Company approve any plan or proposal for the complete liquidation or
dissolution of the Company, (iii) any "person" (as such term is defined in
Section 3(a)(9) or Section 13(d)(3) under the Securities Exchange Act of 1934
(the "1934 Act") or any "group" (as such term is used in Rule 13d-5
promulgated under the 1934 Act), other than the Company, any successor of the
Company or any Subsidiary or any employee benefit plan of the Company or any
Subsidiary (including such plan's trustee), becomes a beneficial owner for
purposes of Rule 13d-3 promulgated under the 1934 Act, directly or
indirectly, of securities of the Company representing 40% or more of the
Company's then outstanding securities having the right to vote in the
election of directors, or (iv) during any period of two consecutive years,
individuals who, at the beginning of such period constituted the entire
Board, cease for any reason (other than death) to constitute a majority of
the directors, unless the election, or the nomination for election by the
Company's stockholders, of each new director was approved by a vote of at
least a majority of the directors then still in office who were directors at
the beginning of the period.
For the purposes of this Section 8, a "Successor" shall mean the Company
or any successor or assign (whether directly or indirectly, as a result of a
Change of Control or otherwise) to all or substantially all of the business
and/or assets of the Company.
For the purposes of this Section 8, "Change in Duties" means, (i) a
significant reduction in the nature or scope of an optionee's authority or
the duties that an optionee performs; (ii) a reduction in an optionee's
annual base salary; (iii) a significant diminution in an optionee's employee
benefits, perquisites or incentive bonus opportunity (other than changes made
as part of a program or plan modification that applies to such optionee and
his or her peers); (iv) a change of more than ___ miles in the location of
such optionee's principal place of employment (not including business travel
or temporary assignments); or (v) a determination by the Board that such
optionee is unable to exercise his or her authority or perform his or her
duties as a result of a Change of Control.
For the purposes of this Section 8, an optionee shall be deemed
terminated "For Cause" if he or she is terminated for (i) theft, dishonesty
or falsification of any employment or Company records; (ii) improper
disclosure of the Company's confidential or proprietary information; (iii)
any action by such optionee which has a material detrimental effect on the
Company's reputation or business; (iv) such optionee's failure or inability
to perform any reasonable assigned duties after written notice of, and a
reasonable opportunity to cure, such failure or inability; or (v) such
optionee's conviction of any criminal act which impairs his or her ability to
perform his or her duties for the Company.
Ex4.2-Page 5
<PAGE>
9. ADJUSTMENTS.
(a) If at any time while the Plan is in effect or unexercised options
are outstanding, there shall be any increase or decrease in the number of
issued and outstanding shares of Common Stock through the declaration of a
stock dividend or through any recapitalization resulting in a stock
split-up, combination, or exchange of shares of Common Stock, then and in
such event:
(1) An appropriate adjustment shall be made in the maximum
number of shares of Common Stock then subject to being
awarded under the Plan to the end that the same proportion
of the Company's issued and outstanding shares of Common
Stock shall continue to be subject to being so awarded; and
(2) Appropriate adjustments shall be made in the number of
shares of Common Stock and the exercise price per share
thereof then subject to purchase pursuant to each option
previously granted, to the end that the same proportion of
the Company's issued and outstanding shares of Common Stock
in each such instance shall remain subject to purchase at
the same aggregate exercise price.
(b) Except as otherwise expressly provided herein, the issuance by
the Company of shares of its capital stock of any class, or securities
convertible into shares of capital stock of any class, either in
connection with direct sale or upon the exercise of rights or warrants
to subscribe therefor, or upon conversion of obligations of the Company
convertible into such shares or other securities, shall not affect, and
no adjustment by reason thereof shall be made with respect to, the
number of or exercise price of shares of Common Stock then subject to
outstanding options granted under the Plan.
Without limiting the generality of the foregoing, the presence of
outstanding options granted under the Plan shall not affect in any
manner the right or power of the Company to make, authorize or
consummate (1) any or all adjustments, recapitalizations,
reorganizations or other changes in the Company's capital structure or
its business; (2) any merger or consolidation of the Company; (3) any
issuance by the Company of debt securities or preferred or preference
stock which would rank senior to the shares of Common Stock subject to
outstanding options; (4) the dissolution or liquidation of the Company;
(5) any sale, transfer or assignment of all or any part of the assets or
business of the Company; or (6) any other corporate act or proceeding,
whether of a similar character or otherwise.
(c) Subject to any required action by the stockholders, if the
Company shall be the surviving or resulting corporation in any
reorganization, merger or consolidation, any outstanding stock option
granted hereunder shall pertain to and apply to the securities or rights
(including cash, property or assets) to which a holder of the number of
shares of Common Stock subject to the stock option would have been
entitled. Notwithstanding any other provision of the Plan, and without
affecting the number of shares reserved or available hereunder, the
Committee shall authorize the issuance, continuation or assumption of
outstanding stock options or provide for other equitable adjustments
after changes in the shares of Common Stock resulting from any merger,
consolidation, sale of assets, acquisition of property or stock,
recapitalization, reorganization, or similar occurrence in which the
Company is the continuing or surviving corporation, upon such terms and
conditions as it may deem necessary in order to preserve optionees'
rights under the Plan.
(d) In the event of any reorganization, merger or consolidation
pursuant to which the Company is not the surviving or resulting
corporation, or of any proposed sale of all or substantially all of the
assets of the Company, there shall be substituted for each share of
Common Stock subject to the unexercised portions of such outstanding
stock option that number of shares of each class of stock or other
securities or that amount of cash, property or assets of the surviving
or consolidated company which were distributed or distributable to the
stockholders of the Company in respect of each share of Common Stock
held by them, such outstanding stock options to be thereafter
exercisable for such stock, securities, cash or property in accordance
with their terms.
(e) Upon the occurrence of each event requiring an adjustment of
the exercise price and/or the number of shares purchasable pursuant to
stock options granted pursuant to the terms of this Plan, the Company
shall mail forthwith to each optionee a copy of its computation of such
adjustment which shall be conclusive and shall be binding upon each such
optionee, except as to any optionee who contests such computation by
written notice to the Company within thirty (30) days after receipt
thereof by such optionee.
Ex4.2-Page 6
<PAGE>
10. OPTIONS IN SUBSTITUTION FOR STOCK OPTIONS GRANTED BY OTHER CORPORATIONS.
Stock options may be granted under the Plan from time to time in
substitution for such options held by employees of a corporation or other
entity who become or are about to become key employees of the Company or a
Subsidiary as the result of a merger or consolidation of the employing
corporation or entity with the Company or a Subsidiary or the acquisition by
the Company or a Subsidiary of equity securities of the employing corporation
or entity as the result of which it becomes a Subsidiary. The terms and
conditions of the substitute options so granted may vary from the terms and
conditions set forth in Section 6 of this Plan to such extent as the Board or
the Committee, as the case may be, at the time of grant deem appropriate to
conform, in whole or in part, to the provisions of the options in
substitution for which they are granted.
11. MISCELLANEOUS PROVISIONS.
The following provisions shall apply hereunder:
(a) FAIR MARKET VALUE. For the purposes of this Plan, "fair market
value" of the Company's shares of Common Stock means (i) the closing sales
price per share on the principal securities exchange on which the Common
Stock is traded (or if there is no sale on the relevant date, then on the
last previous day on which a sale was reported), or (ii) the mean between
the closing or average (as the case may be) bid and asked prices per share
of Common Stock on the over-the-counter market, whichever is applicable.
(b) NO RIGHT TO CONTINUE EMPLOYMENT. Nothing in the Plan or in any
stock option agreement confers upon any employee the right to continue in
the employ of the Company or interferes with or restricts in any way the
right of the Company to discharge any employee at any time.
(c) STOCKHOLDERS' RIGHTS. The holder of a stock option shall have
none of the rights or privileges of a stockholder except with respect to
shares which have been issued.
(d) TAX REQUIREMENTS. The optionee receiving shares issued upon
exercise of any stock option shall be required to pay the Company the
amount of any taxes which the Company is required to withhold with respect
to such shares of Common Stock. Such payment shall be required to be made
prior to or concurrent with the delivery of any certificate representing
such shares of Common Stock. Such payment may be made in cash, by check,
or through the delivery of shares of Common Stock which the optionee owns
or is entitled to receive after payment of the exercise price, which shares
have an aggregate fair market value equal to the required withholding
payment, or any combination thereof. With respect to an Incentive Stock
Option, in the event of a subsequent disqualifying disposition of Common
Stock within the meaning of Section 422 of the Code, such payment of taxes
may be made in cash, by check or through the delivery of shares of Common
Stock which the optionee then owns, which shares have an aggregate fair
market value equal to the required withholding payment, or any combination
thereof.
(e) GOVERNMENT REGULATIONS. Notwithstanding any of the provisions
hereof, or of any written agreements evidencing options granted hereunder,
the obligation of the Company to sell and deliver shares shall be subject
to all applicable laws, rules and regulations and to such approvals by any
government agencies or national securities exchanges as may be required.
The optionee shall agree not to exercise any stock option, and the Company
shall not be obligated to issue any shares, if the exercise thereof or if
the issuance of shares shall constitute a violation by the optionee or the
Company of any provision of any law or regulation of any governmental
authority.
(f) BENEFIT PLAN COMPUTATIONS. Any benefits received or amounts paid
to an employee with respect to any option under the Plan shall not affect
the level of benefits provided to or received by any employee, or the
employee's estate or beneficiary, pursuant to any employee benefit plan of
the Company.
(g) LIMITED ASSIGNABILITY OF OPTION. A stock option granted to an
optionee may not be transferred or assigned other than (i) by will or the
laws of descent and distribution or (ii) pursuant to a qualified domestic
relations order (as defined in Section 401(a)(13) of the Internal Revenue
Code of 1986, as amended (the "Code") or Section 206(d)(3) of the Employee
Retirement Income Security Act of 1974, as amended). In addition, the
Committee may, in its discretion, authorize all or a portion of the stock
options granted to an optionee to be on terms which permit transfer by such
optionee to (A) the spouse,
Ex4.2-Page 7
<PAGE>
ex-spouse, children, step children or grandchildren of the optionee
("Immediate Family Members"), (B) a trust or trusts for the exclusive
benefit of one or more Immediate Family Members, (C) a partnership or
limited liability company in which one or more Immediate Family Members are
the only partners or members, (D) an entity exempt from federal income tax
pursuant to Section 501(c)(3) of the Code or any successor provision and/or
(E) a split interest trust or pooled income fund described in
Section 2522(c)(2) of the Code or any successor provision, so long as
(x) the stock option agreement evidencing any option granted pursuant to
this Plan is approved by the Committee and expressly provides for
transferability in a manner consistent with this Section 11(g), and (y)
subsequent transfers of such option shall be prohibited except for
transfers by will or the laws of descent and distribution or pursuant to
a qualified domestic relations order (as described above). Furthermore,
the Committee may, in its discretion, authorize all or a portion of the
stock options granted to an optionee to be on terms which permit transfer
by such optionee to other entities or persons to whom the Committee may
in its discretion permit transfers of the option. Notwithstanding any
provision contained herein to the contrary, in the case of an Incentive
Stock Option, such transfer or assignment may occur only to the extent it
will not result in disqualifying such option as an incentive stock option
under Section 422 of the Code, or any successor provision.
Following any such transfer permitted by the terms hereof, such
option shall continue to be subject to the same terms and conditions as
were applicable immediately prior to transfer, provided that for purposes
of Sections 1, 2, 5, 6, 8, 9, 11 and 12 of this Plan any reference to
"optionee" shall be deemed to include the transferee. The provisions of
Section 7 of this Plan concerning events of termination of service shall
continue to be applied with respect to the original optionee, following
which event(s) any such affected stock options shall be exercisable by the
transferee only to the extent and for the periods specified therein or in
the stock option agreement. The Committee and the Company shall have no
obligation to inform any transferee of a stock option of any expiration,
termination, lapse or acceleration of such stock option. Subject to the
foregoing, during an optionee's lifetime, stock options granted to an
optionee may be exercised only by the optionee or, provided the particular
stock option agreement so provides, by the optionee's guardian or legal
representative. The designation by an optionee of a beneficiary will not
constitute a transfer of the stock option.
(h) EMPLOYMENT. Employment by the Company shall be deemed to include
employment by a Subsidiary. The Committee shall have the authority to
determine whether or not an optionee has terminated his employment with the
Company.
(i) INVESTMENT INTENT. The Company may require that there be
presented to and filed with it by any optionee(s) under the Plan, such
evidence as it may deem necessary to establish that the options or the
shares of Common Stock to be purchased or transferred are being acquired
for investment and not with a view to their distribution.
(j) INTERPRETATION. Where the context requires, words in the
masculine gender shall include the feminine and neuter genders, the plural
form of a word shall include the singular form, and the singular form of a
word shall include the plural form. All references in this Plan to
sections of the Code or sections of ERISA shall be deemed to include any
successor provisions to such sections as contained in any laws or
regulations adopted subsequent to August 1, 1996.
12. SUSPENSION, TERMINATION OR AMENDMENT OF THE PLAN.
Subject to the limitations set forth in this Section 12, the Board may
at any time and from time to time, without the consent of the optionees,
alter, amend, revise, suspend, or discontinue the Plan in whole or in part,
except that the Board shall not amend this Plan in any manner which would
have the effect of preventing Incentive Stock Options granted under this Plan
from being "incentive stock options" as defined in Section 422 of the Code,
although it is recognized that stock options are not prevented from being
"incentive stock options" at grant solely because the requirements of Section
422 of the Code are not met upon exercise of the stock option or sale of the
Common Stock acquired upon exercise, or as a result of any cancellation of
the stock option.
Notwithstanding anything contained in this Plan to the contrary, unless
required by law, no action contemplated or permitted by this Section 12 shall
adversely affect any rights of optionees or obligations of the Company to
optionees with respect to any stock options theretofore granted under the
Plan without the consent of the affected optionee.
Ex4.2-Page 8
<PAGE>
EXHIBIT 4.3
INPUT/OUTPUT, INC. AMENDED AND RESTATED
1996 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
(EFFECTIVE AS OF JUNE 1, 1998)
PURPOSE
The purpose of the Plan is to promote the long-term growth of the
Company by increasing the proprietary interest of Non-Employee Directors in
the Company, and to attract and retain highly qualified and capable
Non-Employee Directors by allowing these Non-Employee Directors to
participate in the long-term growth and financial success of the Company.
ARTICLE I
DEFINITIONS
For the purpose of this Plan, unless the context requires otherwise,
the following terms shall have the meanings indicated:
1.1 "Annual Grant" shall have the meaning set forth in Section 4.2
hereof.
1.2 "Board" means the board of directors of the Company.
1.3 "Change in Control" means the occurrence of any of the
following events: (i) there shall be consummated any merger or consolidation
pursuant to which shares of the Company's Common Stock would be converted
into cash, securities or other property, or any sale, lease, exchange or
other disposition (excluding disposition by way of mortgage, pledge or
hypothecation), in one transaction or a series of related transactions, of
all or substantially all of the assets of the Company (a "Business
Combination"), in each case unless, following such Business Combination, the
holders of the outstanding Common Stock immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 51% of the
outstanding common stock or equivalent equity interests of the corporation or
entity resulting from such Business Combination (including, without
limitation, a corporation which as a result of such transaction owns the
Company or all or substantially all of the Company's assets either directly
or through one or more subsidiaries) in substantially the same proportions as
their ownership, immediately prior to such Business Combination, of the
outstanding Common Stock, (ii) the stockholders of the Company approve any
plan or proposal for the complete liquidation or dissolution of the Company,
(iii) any "person" (as such term is defined in Section 3(a)(9) or Section
13(d)(3) under the 1934 Act) or any "group" (as such term is used in Rule
13d-5 promulgated under the 1934 Act), other than the Company, any successor
to the Company or any Subsidiary or any employee benefit plan of the Company
or any Subsidiary (including such plan's trustee), becomes a beneficial owner
for purposes of Rule 13d-3 promulgated under the 1934 Act, directly or
indirectly, of securities of the Company representing 40% or more of the
Company's then outstanding securities having the right to vote in the
election of directors, or (iv) during any period of two consecutive years,
individuals who, at the beginning of such period constituted the entire
Board, cease for any reason (other than death) to constitute a majority of
the directors, unless the election, or the nomination for election by the
Company's stockholders, of each new director was approved by a vote of at
least a majority of the directors then still in office who were directors at
the beginning of the period.
1.4 "Code" means the Internal Revenue Code of 1986, as amended.
1.5 "Common Stock" means the common stock which the Company is
currently authorized to issue or may in the future be authorized to issue.
1.6 "Company" means Input/Output, Inc., a Delaware corporation.
1.7 "Date of Grant" means the effective date on which an option is
awarded to a Participant as set forth in the relevant stock option agreement.
1.8 "Discretionary Grants" shall have the meaning set forth in
Section 4.3 hereof.
Ex4.3-Page 1
<PAGE>
1.9 "Fair Market Value" of the Company's shares of Common Stock
means (i) the closing sale price per share on the principal securities
exchange on which the Common Stock is traded (or if there is no sale on the
relevant date, then on the last previous day on which a sale was reported),
or (ii) the mean between the closing or average (as the case may be) bid and
asked prices per share of Common Stock on the over-the-counter market,
whichever is applicable.
1.10 "First Grant" shall have the meaning set forth in Section 4.2
hereof.
1.11 "1934 Act" means the Securities Exchange Act of 1934, as
amended.
1.12 "Non-Employee Director" means a director of the Company who is
not an employee of the Company or any Subsidiary.
1.13 "Nonqualified Stock Option" or "Stock Option" means an option
to purchase shares of Common Stock granted to a Participant pursuant to
Article IV and which is not intended to qualify as an incentive stock option
under Section 422 of the Code.
1.14 "Participant" means any Non-Employee Director who is, or who is
proposed to be, a recipient of a Stock Option pursuant to the terms of this
Plan.
1.15 "Plan" means the Amended and Restated Input/Output, Inc. 1996
Non-Employee Director Stock Option Plan, as it may be amended from time to
time.
1.16 "Second Grant" shall have the meaning set forth in Section 4.2
hereof.
1.17 "Stock Dividend" means a dividend or other distribution
declared on the shares of Common Stock payable in (i) capital stock of the
Company or any Subsidiary of the Company, or (ii) rights, options or warrants
to receive or purchase capital stock of the Company or any Subsidiary of the
Company, or (iii) securities convertible into or exchangeable for capital
stock of the Company or any Subsidiary of the Company, or (iv) any capital
stock received upon the exercise of, or with respect to, the foregoing.
1.18 "Subsidiary" means any corporation in an unbroken chain of
corporations beginning with the Company if, at the time of granting of the
Stock Option, each of the corporations other than the last corporation in the
unbroken chain owns stock possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in the chain,
and "Subsidiaries" means more than one of any such corporations.
1.19 "Third Grant" shall have the meaning set forth in Section 4.2
hereof.
ARTICLE II
ADMINISTRATION
Except as expressly set forth in Section 4.3 concerning Discretionary
Grants, the Plan shall be administered in accordance with the terms of this
Article II by the Compensation Committee (the "Committee") of the Board,
which shall consist of at least two members. Any member of the Committee may
be removed at any time, with or without cause, by resolution of the Board.
Any vacancy occurring in the membership of the Committee may be filled by
appointment by the Board.
The Board shall select one of its members to act as the Chairman of
the Committee, and the Committee shall make such rules and regulations for
its operation as it deems appropriate. A majority of the Committee shall
constitute a quorum, and the act of a majority of the members of the
Committee present at a meeting at which a quorum is present shall be the act
of the Committee.
The Committee shall have full authority and responsibility to
administer the Plan, including authority to interpret and construe any
provision of the Plan and to adopt such rules and regulations for
administering the Plan as it may deem necessary. Except as provided below,
any interpretation, determination, or other action made or taken by the
Committee shall be final, binding, and conclusive on all interested parties,
including the Company and all Participants.
Ex4.3-Page 2
<PAGE>
ARTICLE III
SHARES SUBJECT TO THE PLAN
Subject to the provisions of Articles X and XI of the Plan, the
aggregate number of shares which may be issued to Participants under grants
of Stock Options made by the Committee under the Plan shall not exceed
700,000. In the event that shares of Common Stock are delivered to the
Company in full or partial payment of the exercise price for the exercise of
a stock option granted under the Plan in accordance with Article V of this
Plan, the number of shares available for future grants of options under the
Plan shall be reduced only by the net number of shares issued upon the
exercise of the option.
Shares to be distributed and sold may be made available from either
authorized but unissued Common Stock or Common Stock held by the Company in
its treasury. Shares that by reason of the expiration or unexercised
termination of a Stock Option are no longer subject to purchase may be
reoffered under the Plan.
ARTICLE IV
STOCK OPTION GRANTS
4.1 ELIGIBILITY. Only Non-Employee Directors serving as such as of
the Date of Grant shall be eligible to receive grants of Stock Options under
this Plan.
4.2 NON-DISCRETIONARY GRANT OF STOCK OPTIONS. On the first
business day of November 1996, each person who is a then a Non-Employee
Director shall be granted a Nonqualified Stock Option to purchase 20,000
shares of Common Stock. Thereafter, on the first business day of November
1997, each such Non-Employee Director shall be granted a Nonqualified Stock
Option to purchase 10,000 shares; on the first business day of November 1998,
each such Non-Employee Director shall be granted a Nonqualified Stock Option
to purchase 10,000 shares; and on the first business day of November of each
year thereafter, so long as such Non-Employee Director is a Non-Employee
Director as of the Date of Grant in such year, each such Non-Employee
Director shall be granted a Nonqualified Stock Option to purchase 10,000
shares.
With respect to any Non-Employee Director who joins the Board after
the first business day of November 1996, on that date on which such person is
first elected or otherwise commences serving as a Non-Employee Director, such
person shall be granted a Nonqualified Stock Option to purchase 20,000
shares. Thereafter, on the first business day of the immediately succeeding
November following such date, such Non-Employee Director shall be granted a
Nonqualified Stock Option to purchase 10,000 shares; on the first business
day of the November immediately succeeding the date that such 10,000-share
Stock Option was granted, such Non-Employee Director shall be granted an
additional Nonqualified Stock Option to purchase 10,000 shares; and on the
first business day of November of each year thereafter, so long as such
Non-Employee Director is a Non-Employee Director as of the Date of Grant in
such year, each such Non-Employee Director shall be granted a Nonqualified
Stock Option to purchase 10,000 shares.
The first grant of a Nonqualified Stock Option for 20,000 shares
pursuant to this Section 4.2 is herein referred to as the "First Grant"; the
second grant and third grant of Nonqualified Stock Options for 10,000 shares
each pursuant to this Section 4.2 is herein referred to as the "Second Grant"
and the "Third Grant," respectively; and each subsequent grant of a
Nonqualified Stock Option for 10,000 shares pursuant to this Section 4.2 is
herein referred to as the "Annual Grant."
Notwithstanding any provision contained herein to the contrary, any
non-elective grant made pursuant to this Section 4.2 shall be conditioned on
the availability of sufficient shares reserved for issuance under the terms
of the Plan at the Date of Grant of such Stock Option. In the event that
insufficient shares are then available, the number of shares under
Nonqualified Stock Options to be granted shall be reduced to the extent
shares are then so available, on the basis of the seniority of the
Non-Employee Directors then eligible for grants hereunder (with the
Non-Employee Directors having less time of service on the Board being first
subject to reduction of the number of shares to be granted under their
particular Stock Option), or on such other basis as deemed advisable or
appropriate under the circumstances as determined by the Committee.
4.3 DISCRETIONARY STOCK OPTION GRANTS. In addition to the
Nonqualified Stock Option grants provided for in Section 4.2, the Board shall
have full power and authority, in its sole discretion, to grant Nonqualified
Stock Options hereunder to any or all Non-Employee Directors at such time or
times, in such amounts, and upon such terms and conditions as the Committee,
in its sole discretion, may prescribe. Grants of Nonqualified Stock Options
pursuant to this Section 4.3 are referred to herein as "Discretionary Grants."
Ex4.3-Page 3
<PAGE>
4.4 GRANTS EVIDENCED BY AGREEMENT. Each grant of Stock Options
shall be evidenced by a stock option agreement setting forth the number of
shares subject to the Stock Option, the option exercise price, the option
period of the Stock Option, and such other terms and provisions as, except to
the extent permitted herein, are not inconsistent with the Plan.
4.5 EXERCISE PRICE. The exercise price for a Stock Option shall be
equal to the Fair Market Value per share of the Common Stock on the Date of
Grant. Notwithstanding anything to the contrary contained in this Section
4.5, the exercise price of each Stock Option granted pursuant to the Plan
shall not be less than the par value per share of the Common Stock.
With respect to the 300,000 additional shares of Common Stock
authorized for issuance by the amendment to this Plan effective as of June 1,
1998 ("Additional Shares") and notwithstanding any provision contained in
this Plan to the contrary, neither the Board nor the Committee shall (i)
cancel and regrant any Stock Options granted hereunder covering Additional
Shares or (ii) lower the exercise price of Stock Options granted hereunder
covering Additional Shares.
4.6 VESTING; OPTION PERIOD. Each Stock Option shall vest and be
exercisable as follows: The First Grant Stock Options shall vest in 33.33%
installments on the first, second and third anniversary dates of the First
Grant; the Second Grant Stock Options shall vest in 50% installments on the
first and second anniversary dates of the Second Grant; the Third Grant Stock
Options shall be fully exercisable on and after the first anniversary date of
the Third Grant; and the Annual Grants shall each be fully exercisable on the
Date of Grant of each Annual Grant. In addition, Discretionary Grant Stock
Options shall vest in 33.33% consecutive annual installments commencing on
the first anniversary date of each such Discretionary Grant, or as the
Committee shall otherwise prescribe. In no event shall the period of time
during which a Nonqualified Stock Option may be exercised exceed ten years
from the Date of Grant of the Stock Option in question. No Stock Option may
be exercised at any time after the expiration of its option period. A Stock
Option, or portion thereof, may be exercised in whole or in part only with
respect to whole shares of Common Stock.
ARTICLE V
EXERCISE OF STOCK OPTIONS
Full payment for shares purchased upon exercise of a Stock Option
shall be made in cash or by the Participant's delivery to the Company of
shares of Common Stock which have a Fair Market Value equal to the exercise
price (or in any combination of cash and shares of Common Stock having an
aggregate Fair Market Value equal to the exercise price). No shares may be
issued until full payment of the purchase price therefor has been made, and a
Participant will have none of the rights of a stockholder until shares are
issued to him. Additionally, shares covered by a Stock Option may be
purchased upon exercise, in whole or in part, in accordance with the
applicable stock option agreement, by authorizing a third party to sell the
shares (or a sufficient portion thereof) acquired upon exercise of a Stock
Option, and assigning the delivery to the Company of a sufficient amount of
the sale proceeds to pay for all the shares acquired through such exercise
and any tax withholding obligations resulting from such exercise.
ARTICLE VI
TERMINATION OF EMPLOYMENT OR SERVICE
In the event a Participant shall cease to serve in his capacity as a
director of the Company for any reason other than death, disability or
retirement pursuant to Company policies, such Participant's Stock Options may
be exercised by the Participant for a period of one hundred eighty (180) days
after the Participant's termination of service, or until expiration of the
applicable Option Period (if sooner), to the extent of the shares with
respect to which such Stock Options could have been exercised by the
Participant on the date of termination, and thereafter to the extent not so
exercised, such Stock Options shall terminate. In addition, a Participant's
Stock Options may be exercised as follows in the event of such Participant's
death, disability or retirement:
(a) DEATH. In the event of death while serving as a director,
all unmatured installments of Stock Options outstanding shall thereupon
automatically be accelerated and become fully vested and exercisable in
full, and the Stock Option may be exercised for a period of twelve (12)
months after the Participant's death or until expiration of the Stock
Option period (if sooner), by the Participant's estate or personal
representative, or by the person who acquired the right to exercise the
Stock Option by bequest or inheritance or by reason of the Participant's
death; and
(b) DISABILITY OR RETIREMENT. In the event of termination of
service as a director as the result of a total and permanent disability
(as defined in Section 22(e) of the Code) or retirement as a director
pursuant to standard Company policies applicable to directors, then all
unmatured installments of Stock Options outstanding shall thereupon
automatically
Ex4.3-Page 4
<PAGE>
be accelerated and become fully vested and exercisable in full, and
the Stock Option may be exercised by the Participant or his guardian
or legal representative for a period of twelve (12) months after such
termination or until expiration of the Stock Option period (if sooner).
ARTICLE VII
AMENDMENT OR DISCONTINUANCE
The Board may at any time and from time to time, without the consent
of the Participants, alter, amend, revise, suspend, or discontinue the Plan
in whole or in part.
In addition, the Board shall have the power to amend the Plan in any
manner advisable in order for Stock Options granted under the Plan to qualify
for the exemption provided by Rule 16b-3 (or any successor rule relating to
exemption from Section 16(b) of the 1934 Act), including amendments as a
result of changes to Rule 16b-3 or the regulations thereunder to permit
greater flexibility with respect to Stock Options granted under the Plan, and
any such amendment shall, to the extent deemed necessary or advisable by the
Committee, be applicable to any outstanding Stock Options theretofore granted
under the Plan, notwithstanding any contrary provisions contained in any
stock option agreement. In the event of any such amendment to the Plan, the
holder of any Stock Option outstanding under the Plan shall, upon request of
the Committee and as a condition to the exercisability thereof, execute a
conforming amendment in the form prescribed by the Committee to any stock
option agreement relating thereto within such reasonable time as the
Committee shall specify in such request. Notwithstanding anything contained
in this Plan to the contrary, unless required by law, no action contemplated
or permitted by this Article VII shall adversely affect any rights of
Participants or obligations of the Company to Participants with respect to
any Stock Options theretofore granted under the Plan without the consent of
the affected Participant.
ARTICLE VIII
EFFECT OF THE PLAN
Neither the adoption of this Plan nor any action of the Board or the
Committee shall be deemed to give any director any right to be granted a
Stock Option, to purchase or receive Common Stock of the Company or any other
rights except as may be evidenced by a stock option agreement, or any
amendment thereto, duly authorized by and executed on behalf of the Company
and then only to the extent of and upon the terms and conditions expressly
set forth therein.
ARTICLE IX
TERM
The Plan shall be submitted to the Company's stockholders for their
approval. Unless sooner terminated by action of the Board, the Plan will
terminate on the 12th day of July, 2006. Stock Options under the Plan may
not be granted after that date, but Stock Options granted before that date
will continue to be effective in accordance with their terms and conditions.
ARTICLE X
CAPITAL ADJUSTMENTS
If at any time while the Plan is in effect or unexercised Stock
Options are outstanding there shall be any increase or decrease in the number
of issued and outstanding shares of Common Stock through the declaration of a
Stock Dividend or through any recapitalization resulting in a stock split-up,
combination, or exchange of shares of Common Stock, then and in such event:
(i) An appropriate adjustment shall be made in the
maximum number of shares of Common Stock then subject to being
awarded under grants pursuant to the Plan, to the end that the
same proportion of the Company's issued and outstanding shares of
Common Stock shall continue to be subject to being so awarded; and
(ii) Appropriate adjustments shall be made in the number
of shares of Common Stock and the exercise price per share thereof
then subject to purchase pursuant to each such Stock Option
previously granted and unexercised, to the end that the same
proportion of the Company's issued and outstanding shares of
Common Stock in each instance shall remain subject to purchase at
the same aggregate exercise price.
Ex4.3-Page 5
<PAGE>
Any fractional shares resulting from any adjustment made pursuant to
this Article X shall be eliminated for the purposes of such adjustment.
Except as otherwise expressly provided herein, the issuance by the Company of
shares of its capital stock of any class, or securities convertible into
shares of capital stock of any class, either in connection with direct sale
or upon the exercise of rights or warrants to subscribe therefor, or upon
conversion of shares or obligations of the Company convertible into such
shares or other securities, shall not affect, and no adjustment by reason
thereof shall be made with respect to, the number of or exercise price of
shares of Common Stock then subject to outstanding Stock Options granted
under the Plan.
ARTICLE XI
RECAPITALIZATION, MERGER AND CONSOLIDATION
11.1 The existence of this Plan and Stock Options granted hereunder
shall not affect in any way the right or power of the Company or its
stockholders to make or authorize any or all adjustments, recapitalizations,
reorganizations or other changes in the Company's capital structure or its
business, or any merger or consolidation of the Company, or any issue of
bonds, debentures, preferred or prior preference stocks ranking prior to or
otherwise affecting the Common Stock or the rights thereof (or any rights,
options or warrants to purchase same), or the dissolution or liquidation of
the Company, or any sale or transfer of all or any part of its assets or
business, or any other corporate act or proceeding, whether of a similar
character or otherwise.
11.2 Subject to any required action by the stockholders, if the
Company shall be the surviving or resulting corporation in any merger or
consolidation, any outstanding Stock Option granted hereunder shall pertain
to and apply to the securities or rights (including cash, property or assets)
to which a holder of the number of shares of Common Stock subject to the
Stock Option would have been entitled. Notwithstanding any other provision of
the Plan, and without affecting the number of shares reserved or available
hereunder, the Committee shall authorize the issuance, continuation or
assumption of outstanding Stock Options or provide for other equitable
adjustments after changes in the shares of Common Stock resulting from any
merger, consolidation, sale of assets, acquisition of property or stock,
recapitalization, reorganization, or similar occurrence in which the Company
is the continuing or surviving corporation, upon such terms and conditions as
it may deem necessary in order to preserve Participants' rights under the
Plan.
11.3 In the event of any reorganization, merger or consolidation
pursuant to which the Company is not the surviving or resulting corporation,
or of any proposed sale of substantially all of the assets of the Company,
there may be substituted for each share of Common Stock subject to the
unexercised portions of such outstanding Stock Option that number of shares
of each class of stock or other securities or that amount of cash, property
or assets of the surviving or consolidated company which were distributed or
distributable to the stockholders of the Company in respect of each share of
Common Stock held by them, such outstanding Stock Options to be thereafter
exercisable for such stock, securities, cash or property in accordance with
their terms.
11.4 In the event of a Change in Control of the Company, then,
notwithstanding any other provision in the Plan to the contrary, all
unmatured installments of Stock Options outstanding shall thereupon
automatically be accelerated and exercisable in full.
11.5 Upon the occurrence of each event requiring an adjustment of
the exercise price and/or the number of shares purchasable pursuant to Stock
Options granted pursuant to the terms of this Plan, the Company shall mail
forthwith to each Participant a copy of its computation of such adjustment
which shall be conclusive and shall be binding upon each such Participant,
except as to any Participant who contests such computation by written notice
to the Company within thirty (30) days after receipt thereof by such
Participant.
ARTICLE XII
OPTIONS IN SUBSTITUTION FOR STOCK OPTIONS
GRANTED BY OTHER CORPORATIONS
Stock Options may be granted under the Plan from time to time in
substitution for such stock options held by directors of a corporation who
become or are about to become directors of the Company as the result of a
merger or consolidation of the corporation with the Company or a Subsidiary
or the acquisition by either of the foregoing of stock of the corporation as
the result of which it becomes a Subsidiary.
Ex4.3-Page 6
<PAGE>
ARTICLE XIII
MISCELLANEOUS PROVISIONS
13.1 EXERCISE OF STOCK OPTIONS. Stock Options granted under
the Plan may be exercised during the option period, at such times and in such
amounts, in accordance with the terms and conditions and subject to such
restrictions as are set forth herein and in the applicable stock option
agreements. Notwithstanding anything to the contrary contained herein, Stock
Options may not be exercised, nor may shares be issued pursuant to a Stock
Option if any necessary listing of the shares on a stock exchange or any
registration or qualification under state or federal securities laws required
under the circumstances has not been accomplished.
13.2 LIMITED ASSIGNABILITY. A Stock Option granted to a Participant
may not be transferred or assigned, other than (i) by will or the laws of
descent and distribution or (ii) pursuant to a qualified domestic relations
order (as defined in Section 401(a)(13) of the Code or Section 206(d)(3) of
the Employee Retirement Income Security Act of 1974, as amended). In
addition, the Committee may, in its discretion, authorize all or a portion of
the Stock Options granted to a Participant to be on terms which permit
transfer by such Participant to (A) the spouse, ex-spouse, children, step
children or grandchildren of the Participant ("Immediate Family Members"),
(B) a trust or trusts for the exclusive benefit of one or more Immediate
Family Members, (C) a partnership or limited liability company in which one
or more Immediate Family Members are the only partners or members, (D) an
entity exempt from federal income tax pursuant to Section 501(c)(3) of the
Code or any successor provision and/or (E) a split interest trust or pooled
income fund described in Section 2522(c)(2) of the Code or any successor
provision, so long as (x) the stock option agreement evidencing any Stock
Option granted pursuant to this Plan is approved by the Committee and
expressly provides for transferability in a manner consistent with this
Section 13.2, and (y) subsequent transfers of such Stock Option shall be
prohibited except for transfers by will or the laws of descent and
distribution or pursuant to a qualified domestic relations order (as
described above). Furthermore, the Committee may, in its discretion,
authorize all or a portion of the Stock Options granted to a Participant to
be on terms which permit transfer by such Participant to other entities or
persons to whom the Committee may in its discretion permit transfers of Stock
Options.
Following transfer, such Stock Option shall continue to be subject to
the same terms and conditions as were applicable immediately prior to
transfer, provided that for purposes of Articles II, III, V, VII, X, XI and
XIII of this Plan the term "Participant" shall be deemed to include the
transferee. The provisions of Article VI of this Plan concerning events of
termination of service shall continue to be applied with respect to the
original Participant, following which event(s) any such affected stock
options shall be exercisable by the transferee only to the extent and for the
periods specified therein or in the stock option agreement. The Committee
and the Company shall have no obligation to inform any transferee of a Stock
Option of any expiration, termination, lapse or acceleration of such Stock
Option. Subject to the foregoing, during a Participant's lifetime, Stock
Options granted to a Participant may be exercised only by the Participant or,
if the particular stock option agreement so provides, by the Participant's
guardian or legal representative. The designation by a Participant of a
beneficiary will not constitute a transfer of the Stock Option.
13.3 INVESTMENT INTENT. The Company may require that there be
presented to and filed with it by any Participant(s) under the Plan, such
evidence as it may deem necessary to establish that the Stock Options granted
or the shares of Common Stock to be purchased or transferred are being
acquired for investment and not with a view to their distribution.
13.4 STOCKHOLDERS' RIGHTS. The holder of a Stock Option shall have
none of the rights or privileges of a stockholder except with respect to
shares which have been actually issued.
13.5 INDEMNIFICATION OF BOARD AND COMMITTEE. No current or previous
member of the Board or the Committee, nor any officer or employee of the
Company acting on behalf of the Board or the Committee, shall be personally
liable for any action, determination, or interpretation taken or made in good
faith with respect to the Plan, and all such members of the Board or the
Committee and each and any officer or employee of the Company acting on their
behalf shall, to the extent permitted by law, be fully indemnified and
protected by the Company in respect of any such action, determination or
interpretation. The foregoing right of indemnification shall not be
exclusive of any other rights of indemnification to which such individuals
may be entitled under the Company's Certificate of Incorporation or Bylaws,
as a matter of law, or otherwise.
13.6 INTERPRETATION. Where the context permits, words in the
masculine gender shall include the feminine and neuter genders, the plural
form of a word shall include the singular form, and the singular form of a
word shall include the plural form. All references in this Plan to sections
of the Code or ERISA shall be deemed to include any successor provisions to
such sections as contained in any laws or regulations adopted or promulgated
subsequent to August 1, 1996.
Ex4.3-Page 7
<PAGE>
ARTICLE XIV
EFFECTIVE DATE
This Plan was approved by the stockholders of the Company at the 1996
annual meeting of stockholders of the Company and became effective as of the
date of its approval by the Board and will continue in effect until the
expiration of its term or until earlier terminated, amended, or suspended in
accordance with the terms hereof.
Ex4.3-Page 8
<PAGE>
EXHIBIT 5.1
HAYNES AND BOONE, L.L.P.
1000 Louisiana Street, Suite 4300
Houston, Texas 77002
(713) 547-2000
June 4, 1999
Input/Output, Inc.
11104 West Airport Blvd.
Suite 200
Stafford, Texas 77477
Gentlemen:
We have acted as counsel to Input/Output, Inc., a Delaware corporation (the
"Company"), in connection with the preparation of the Registration Statement
on Form S-8 (the "Registration Statement") filed with the Securities and
Exchange Commission under the Securities Act of 1933, as amended, relating to
the registration of 1,500,000 shares of Common Stock, par value $0.01 per
share (the "Common Stock"), of the Company that may be issued pursuant to the
terms of the Company's Amended and Restated 1990 Stock Option Plan (the "1990
Plan") and 300,000 shares of Common Stock of the Company that may be issued
pursuant to the terms of the Company's Amended and Restated 1996 Non-Employee
Director Stock Option Plan (the "1996 Plan").
In connection therewith, we have examined (i) the Certificate of
Incorporation and the Bylaws of the Company, each as amended; (ii) minutes
and records of the corporate proceedings of the Company with respect to the
adoption of the 1990 Plan and the 1996 Plan; (iii) certificates of certain
officers and directors of the Company; (iv) the 1990 Plan; (v) the 1996 Plan
and (vi) such other documents as we have deemed necessary for the expression
of the opinions contained herein.
In making the foregoing examination, we have assumed the genuineness of all
signatures and the authenticity of all documents submitted to us as
originals, and the conformity to original documents of all documents
submitted to us as certified or photostatic copies. Furthermore, we have
assumed that prices paid for shares of Common Stock will equal or exceed the
par value per share of the Common Stock. As to questions of fact material to
this opinion, where such facts have not been independently established, and
as to the content and form of the Certificate of Incorporation (as amended),
Bylaws (as amended), minutes, records, resolutions and other documents or
writings of the Company, we have relied, to the extent we deem reasonably
appropriate, upon representations or certificates of officers or directors of
the Company and upon documents, records and instruments furnished to us by
the Company, without independent check or verification of their accuracy.
Based upon the foregoing, and having due regard for such legal considerations
as we deem relevant, we are of the opinion that the 1,500,000 shares of
Common Stock covered by the Registration Statement, which may be issued from
time to time pursuant to the purchase of shares of Common Stock in accordance
with the terms of the 1990 Plan, and 300,000 shares of Common Stock covered
by the Registration Statement, which may be issued from time to time pursuant
to the purchase of shares of Common Stock in accordance with the terms of the
1996 Plan, have been duly authorized for issuance by the Company, and, when
so issued in accordance with the respective terms and conditions of either
the 1992 Plan or the 1996 Plan, will be validly issued, fully paid and
nonassessable.
We hereby consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement.
Very truly yours,
/s/ Haynes and Boone, L.L.P.
Haynes and Boone, L.L.P.
Ex. 5.1 - Page 1
<PAGE>
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Input/Output, Inc.
We consent to incorporation by reference in the registration statement on
Form S-8 of Input/Output, Inc., of our report dated June 24, 1998, relating
to the consolidated balance sheets of Input/Output, Inc. and subsidiaries as
of May 31, 1998 and 1997, and the related consolidated statements of
operations, stockholders' equity, and cash flows for each of the years in the
three-year period ended May 31, 1998, and related financial statement
schedule, which report appears in the May 31, 1998 annual report on Form 10-K
of Input/Output, Inc.
/s/ KPMG LLP
KPMG LLP
Houston, Texas
June 4, 1999
Ex. 23.1 - Page 1
