<PAGE>
As filed with the Securities and Exchange Commission on August 13, 1999
Registration No. 333-______
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-----------
ULTRATECH STEPPER, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 94-3169580
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
3050 ZANKER ROAD, SAN JOSE, CALIFORNIA 95134
(Address of principal executive offices) (Zip Code)
ULTRATECH STEPPER, INC.
1993 STOCK OPTION/STOCK ISSUANCE PLAN
1998 SUPPLEMENTAL STOCK OPTION/STOCK ISSUANCE PLAN
EMPLOYEE STOCK PURCHASE PLAN
(Full title of the Plans)
-----------
ARTHUR W. ZAFIROPOULO
CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER
ULTRATECH STEPPER, INC.
3050 ZANKER ROAD, SAN JOSE, CALIFORNIA 95134
(Name and address of agent for service)
(408) 321-8835
(Telephone number, including area code, of agent for service)
-----------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price Offering Registration
Registered Registered(1) per Share(2) Price(2) Fee
---------- ---------- --------- ----- ---
<S> <C> <C> <C> <C>
1993 Stock Option/Stock Issuance Plan
- -------------------------------------
Common Stock, $0.001 par value 295,480 shares $ 13.56 $4,006,708.80 $1,113.87
1998 Supplemental Stock Option/Stock Issuance
- ----------------------------------------------
Plan
- ----
Common Stock, $0.001 par value 400,000 shares $ 13.56 $5,424,000 $1,507.87
Employee Stock Purchase Plan
- ----------------------------
Common Stock, $0.001 par value 500,000 shares $ 13.56 $6,780,000 $1,884.84
Aggregate Registration Fee $4,506.58
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) This Registration Statement shall also cover any additional shares of
Common Stock which become issuable under the Ultratech Stepper, Inc.
1993 Stock Option/Stock Issuance Plan, 1998 Supplemental Stock
Option/Stock Issuance Plan or the Employee Stock Purchase Plan by
reason of any stock dividend, stock split, recapitalization or other
similar transaction effected without the Registrant's receipt of
consideration which results in an increase in the number of the
outstanding shares of Registrant's Common Stock.
(2) Calculated solely for purposes of this offering under Rule 457(h) of
the Securities Act of 1933, as amended, (the "1933 Act"), on the
basis of the average of the high and low selling prices per share of
Registrant's Common Stock on August 10, 1999 as reported by the
Nasdaq National Market.
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. INCORPORATION OF DOCUMENTS BY REFERENCE
Ultratech Stepper, Inc. (the "Registrant") hereby incorporates
by reference into this Registration Statement the following documents previously
filed with the Securities and Exchange Commission (the "Commission"):
(a) The Registrant's Annual Report on Form 10-K for the
fiscal year ended December 31, 1998, filed with the
Commission on March 31, 1999;
(b) The Corporation's Quarterly Report on form 10-Q for
the fiscal quarter ended March 31, 1999 filed with
the Commission on May 14, 1999; and
(c) The Registrant's Registration Statement No. 0-22248
on Form 8-A, filed with the Commission on August 13,
1993 and subsequently amended on February 27, 1997,
pursuant to Section 12 of the Securities and Exchange
Act of 1934, as amended (the "1934 Act"), in which
there is described the terms, rights and provisions
applicable to the Registrant's outstanding Common
Stock.
All reports and definitive proxy or information statements
filed pursuant to Section 13(a), 13(c), 14 or 15(d) of the 1934 Act after the
date of this Registration Statement and prior to the filing of a post-effective
amendment which indicates that all securities offered hereby have been sold or
which deregisters all securities then remaining unsold shall be deemed to be
incorporated by reference into this Registration Statement and to be a part
hereof from the date of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Registration Statement
to the extent that a statement contained in any subsequently filed document
which also is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Registration Statement.
Item 4. DESCRIPTION OF SECURITIES
Not applicable.
Item 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not applicable.
Item 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Registrant's Amended and Restated Certificate of
Incorporation limits the liability of directors to the maximum extent permitted
by the Delaware General Corporation Law ("Delaware Law"). Delaware Law provides
that directors of a corporation will not be personally liable for monetary
damages for breach of their fiduciary duties as directors, except for liability
for (i) any breach of their duty of loyalty to the corporation or its
stockholders, (ii) acts or omissions not in good faith or that involve
intentional misconduct or a knowing violation of law, (iii) unlawful payments of
dividends or unlawful stock repurchases or redemptions as provided in Section
174 of the Delaware General Corporation Law or (iv) any transaction from which
the director derives an improper personal benefit.
The Registrant's Bylaws provide that the Registrant shall
indemnify its directors and may indemnify its officers, employees and other
agents to the fullest extent permitted by law. The Registrant believes
II-1
<PAGE>
that indemnification under its Bylaws covers at least negligence and gross
negligence on the part of an indemnified party in connection with the defense
of any action or proceeding arising out of such party's status or service as
a director, officer, employee or other agent of the Registrant upon an
undertaking by such party to repay such advances if it is ultimately
determined that such party is not entitled to indemnification.
The Registrant has entered into separate indemnification
agreements with each of its directors and officers. These agreements require the
Registrant, among other things, to indemnify such director or officer against
certain expenses (including attorneys' fees), judgments, fines and settlement
amounts paid by such individual in connection with any action, suit or
proceeding arising out of such individual's status or service as a director or
officer of the Registrant (other than expenses arising from willful misconduct
or conduct that is knowingly fraudulent or deliberately dishonest) and to
advance expenses incurred by such individual in connection with any proceeding
against such individual with respect to which such individual may be entitled to
indemnification by the Registrant. The Registrant believes that its Certificate
of Incorporation and Bylaw provisions and indemnification agreements are
necessary to attract and retain qualified persons as directors and officers.
Item 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
Item 8. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NUMBER EXHIBIT
-------------- -------
<S> <C>
4 Instruments Defining Rights of Shareholders. Reference
is made to Registrant's Registration Statement No. 0-22248
on Form 8-A which is incorporated herein by reference
pursuant to Item 3(c).
5 Opinion and Consent of Brobeck, Phleger & Harrison LLP.
23.1 Consent of Ernst & Young LLP, Independent Auditors.
23.2 Consent of Brobeck, Phleger & Harrison LLP is contained in
Exhibit 5.
24 Power of Attorney. Reference is made to page II-3 of this
Registration Statement.
99.1 Ultratech Stepper, Inc. 1993 Stock Option/Stock Issuance
Plan (as amended and restated as of January 4, 1999).
99.2* Notice of Grant of Stock Option and Stock Option Agreement.
99.3* Addendum to Stock Option Agreement (Change in Control).
99.4* Addendum to Stock Option Agreement (Special Tax Elections).
99.5* Addendum to Stock Option Agreement (Limited Stock
Appreciation Right).
99.6* Addendum to Stock Option Agreement (Financial Assistance).
99.7** Notice of Grant of Non-Employee Director Automatic Stock
Option and Non-Employee Director Automatic Stock Option
Agreement.
99.8* Stock Issuance Agreement.
99.9* Addendum to Stock Issuance Agreement (Special Tax
Elections).
99.10 Ultratech Stepper, Inc. 1998 Supplemental Stock
Option/Stock Issuance Plan.
99.11 Notice of Grant of Stock Option.
99.12 Stock Option Agreement.
99.13 Ultratech Stepper, Inc. Employee Stock Purchase Plan (as
amended and restated as of March 16, 1999).
99.14** Stock Purchase Agreement under the Employee Stock Purchase
Plan.
99.15** Enrollment/Change Form under Employee Stock Purchase Plan.
99.16** Amendment to Stock Purchase Plan.
</TABLE>
* Exhibits 99.2 through 99.6 and Exhibits 99.8 and 99.9 are
incorporated herein by reference to Exhibits 99.2 through 99.6 and Exhibits 99.8
and 99.9, respectively, to Registrant's Registration Statement No. 33-70790 on
Form S-8, filed with the Commission on October 22, 1993.
** Exhibits 99.7, 99.14, 99.15 and 99.16 are incorporated
herein by reference to Exhibits 99.7, 99.11, 99.12 and 99.14 to Registrant's
Registration Statement No. 333-33197 on Form S-8, filed with the Commission on
August 8, 1997.
II-2
<PAGE>
Item 9. UNDERTAKINGS
A. The undersigned Registrant hereby undertakes: (1) to file,
during any period in which offers or sales are being made, a post-effective
amendment to this Registration Statement (i) to include any prospectus required
by Section 10(a)(3) of the 1933 Act, (ii) to reflect in the prospectus any facts
or events arising after the effective date of the Registration Statement (or the
most recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
Registration Statement, and (iii) to include any material information with
respect to the plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the Registration
Statement; PROVIDED, however, that clauses (1)(i) and (1)(ii) shall not apply if
the information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
Section 13 or Section 15(d) of the 1934 Act that are incorporated by reference
into the Registration Statement; (2) that for the purpose of determining any
liability under the 1933 Act, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered therein
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof; and (3) to remove from registration by means
of a post-effective amendment any of the securities being registered which
remain unsold at the termination of the Registrant's 1993 Stock Option/Stock
Issuance Plan, Supplemental Stock Option/Stock Issuance Plan or the Employee
Stock Purchase Plan.
B. The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the 1933 Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
1934 Act that is incorporated by reference into the Registration Statement shall
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
C. Insofar as indemnification for liabilities arising under
the 1933 Act may be permitted to directors, officers or controlling persons of
the Registrant pursuant to the indemnification provisions summarized in Item 6
above or otherwise, the Registrant has been informed that, in the opinion of the
Commission, such indemnification is against public policy as expressed in the
1933 Act, and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the 1933 Act and
will be governed by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, 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 San Jose, State of California, on this 13th day
of August 1999.
ULTRATECH STEPPER, INC.
By: /s/ Arthur W. Zafiropoulo
--------------------------
Arthur W. Zafiropoulo
Chairman of the Board and
Chief Executive Officer
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned officers and directors of Ultratech
Stepper, Inc., a Delaware corporation, do hereby constitute and appoint Arthur
W. Zafiropoulo and Bruce R. Wright, and each of them, the lawful attorneys and
agents, with full power and authority to do any and all acts and things and to
execute any and all instruments which said attorneys and agents, and any one of
them, determine may be necessary or advisable or required to enable said
corporation to comply with the Securities Act of 1933, as amended, and any rules
or regulations or requirements of the Securities and Exchange Commission in
connection with this Registration Statement. Without limiting the generality of
the foregoing power and authority, the powers granted include the power and
authority to sign the names of the undersigned officers and directors in the
capacities indicated below to this Registration Statement, to any and all
amendments, both pre-effective and post-effective, and supplements to this
Registration Statement, and to any and all instruments or documents filed as
part of or in conjunction with this Registration Statement or amendments or
supplements thereof, and each of the undersigned hereby ratifies and confirms
all that said attorneys and agents, or any of them, shall do or cause to be done
by virtue hereof. This Power of Attorney may be signed in several counterparts.
IN WITNESS WHEREOF, each of the undersigned has executed this
Power of Attorney as of the date indicated.
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
- ---------- ----- ----
<S> <C> <C>
/s/ Arthur W. Zafiropoulo Chairman of the Board and Chief Executive August 13, 1999
- -------------------------- Officer
Arthur W. Zafiropoulo (Principal Executive Officer)
/s/ Bruce R. Wright Senior Vice President, Finance, Chief August 13, 1999
- -------------------------- Financial Officer, Secretary and Treasurer
Bruce R. Wright (Principal Financial and Accounting Officer)
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
- ---------- ----- ----
<S> <C> <C>
/s/ Gregory Harrison Director August 13, 1999
- -------------------------
Gregory Harrison
/s/ Kenneth Levy Director August 13, 1999
- -------------------------
Kenneth Levy
/s/ Larry R. Carter Director August 13, 1999
- -------------------------
Larry R. Carter
/s/ Joel F. Gemunder Director August 13, 1999
- -------------------------
Joel F. Gemunder
/s/ Tommy George Director August 13, 1999
- -------------------------
Tommy George
</TABLE>
II-5
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
EXHIBITS
TO
FORM S-8
UNDER
SECURITIES ACT OF 1933
ULTRATECH STEPPER, INC.
<PAGE>
EXHIBIT INDEX
-------------
<TABLE>
<CAPTION>
EXHIBIT NUMBER EXHIBIT
-------------- -------
<S> <C>
4 Instruments Defining Rights of Shareholders. Reference
is made to Registrant's Registration Statement No.
0-22248 on Form 8-A which is incorporated herein by
reference pursuant to Item 3(c).
5 Opinion and Consent of Brobeck, Phleger & Harrison LLP.
23.1 Consent of Ernst & Young LLP, Independent Auditors.
23.2 Consent of Brobeck, Phleger & Harrison LLP is contained
in Exhibit 5.
24 Power of Attorney. Reference is made to page II-3 of
this Registration Statement.
99.1 Ultratech Stepper, Inc. 1993 Stock Option/Stock
Issuance Plan (as amended and restated as of January 4,
1999).
99.2* Notice of Grant of Stock Option and Stock Option
Agreement.
99.3* Addendum to Stock Option Agreement (Change in Control).
99.4* Addendum to Stock Option Agreement (Special Tax
Elections).
99.5* Addendum to Stock Option Agreement (Limited Stock
Appreciation Right).
99.6* Addendum to Stock Option Agreement (Financial
Assistance).
99.7** Notice of Grant of Non-Employee Director Automatic
Stock Option and Non-Employee Director Automatic Stock
Option Agreement.
99.8* Stock Issuance Agreement.
99.9* Addendum to Stock Issuance Agreement (Special Tax
Elections).
99.10 Ultratech Stepper, Inc. 1998 Supplemental Stock Option/
Stock Issuance Plan.
99.11 Form of Notice of Grant of Stock Option.
99.12 Stock Option Agreement.
99.13 Ultratech Stepper, Inc. Employee Stock Purchase Plan (as
amended and restated as of March 16, 1999).
99.14** Stock Purchase Agreement under the Employee Stock
Purchase Plan.
99.15** Enrollment/Change Form under Employee Stock Purchase
Plan.
99.16** Amendment to Stock Purchase Plan.
</TABLE>
* Exhibits 99.2 through 99.7 and Exhibits 99.10 and 99.11 are
incorporated herein by reference to Exhibits 99.2 through 99.6 and Exhibits 99.8
and 99.9, respectively, to Registrant's Registration Statement No. 33-70790 on
Form S-8, filed with the Commission on October 22, 1993.
** Exhibits 99.7, 99.14, 99.15 and 99.16 are incorporated
herein by reference to Exhibits 99.7, 99.11, 99.12 and 99.14 to Registrant's
Registration Statement No. 333-33197 on Form S-8, filed with the Commission on
August 8, 1997.
<PAGE>
EXHIBIT 5
Opinion and Consent of Brobeck, Phleger & Harrison LLP
August 13, 1999
ULTRATECH STEPPER, INC.
3050 Zanker Road
San Jose, California 95134
Re: Ultratech Stepper, Inc.
Registration Statement for Registration
of 1,195,480 Shares of Common Stock
-----------------------------------
Ladies and Gentlemen:
We have acted as counsel to Ultratech Stepper, Inc., a
Delaware corporation (the "Company"), in connection with the registration on
Form S-8 (the "Registration Statement") under the Securities Act of 1933, as
amended, of 1,195,480 shares of the Company's common stock and related stock
options for issuance (the "Shares") under the Company's 1993 Stock
Option/Stock Issuance Plan (the "Option Plan"), 1998 Supplemental Stock
Option/Stock Issuance Plan (the "Supplemental Plan") and Employee Stock
Purchase Plan (the "Purchase Plan").
This opinion is being furnished in accordance with the
requirements of Item 8 of Form S-8 and Item 601(b)(5)(i) of Regulation S-K.
We have reviewed the Company's charter documents and the
corporate proceedings taken by the Company in connection with the
implementation of the automatic share increase provisions of the Option Plan,
the establishment of the Supplemental Plan and the implementation of the
share increase to the Purchase Plan. Based on such review, we are of the
opinion that if, as and when the Shares are issued and sold (and the
consideration therefor received) pursuant to (a) the provisions of option
agreements duly authorized under the Option Plan, the Supplemental Plan or
the Purchase Plan, and in accordance with the Registration Statement or (b)
duly authorized direct stock issuances in accordance with the provisions of
the Option Plan or the Supplemental Plan and the Registration Statement, such
Shares will be duly authorized, legally issued, fully paid and non-assessable.
We consent to the filing of this opinion letter as Exhibit 5
to the Registration Statement.
This opinion letter is rendered as of the date first
written above and we disclaim any obligation to advise you of facts,
circumstances, events or developments which hereafter may be brought to our
attention and which may alter, affect or modify the opinion expressed herein.
Our opinion is expressly limited to the matters set forth above and we render
no opinion, whether by implication or otherwise, as to any other matters
relating to the Company, the Option Plan, the Supplemental Plan or the
Purchase Plan and the Shares issuable under such plans.
Very truly yours,
/s/ BROBECK, PHLEGER & HARRISON LLP
BROBECK, PHLEGER & HARRISON LLP
<PAGE>
EXHIBIT 23.1
Consent of Ernst & Young LLP, Independent Auditors
We consent to the incorporation by reference in the Registration Statement
(Form S-8) pertaining to the 1993 Stock Option/Stock Issuance Plan, 1998
Supplemental Stock Option/Stock Issuance Plan and Employee Stock Purchase
Plan of Ultratech Stepper, Inc. of our report dated January 29, 1999 with
respect to the consolidated financial statements of Ultratech Stepper, Inc.
incorporated by reference in its Annual Report on Form 10-K for the year
ended December 31, 1998, and the related financial statement schedule
included therein, filed with the Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
ERNST & YOUNG LLP
San Jose, California
August 13, 1999
<PAGE>
Exhibit 99.1
ULTRATECH STEPPER, INC.
1993 STOCK OPTION/STOCK ISSUANCE PLAN
(Amended and Restated as of January 4, 1999)
ARTICLE ONE
GENERAL
I. PURPOSE OF THE PLAN
This 1993 Stock Option/Stock Issuance Plan ("Plan") is intended to
promote the interests of Ultratech Stepper, Inc., a Delaware corporation (the
"Corporation"), by providing (i) key employees (including officers) of the
Corporation (or its parent or subsidiary corporations) who are responsible
for the management, growth and financial success of the Corporation (or its
parent or subsidiary corporations), (ii) the non-employee members of the
Corporation's Board of Directors and (iii) independent consultants and other
advisors who provide valuable services to the Corporation (or its parent or
subsidiary corporations) with the opportunity to acquire a proprietary
interest, or otherwise increase their proprietary interest, in the
Corporation as an incentive for them to remain in the service of the
Corporation (or its parent or subsidiary corporations).
A. The Plan became effective on September 29, 1993, the date on
which the shares of the Corporation's Common Stock were registered under
Section 12(g) of the Securities Exchange Act of 1934, as amended (the "1934
Act"). Such date is hereby designated as the Effective Date for the Plan.
B. This Plan shall serve as the successor to the Corporation's
existing 1993 Stock Option and 1993 Stock Issuance Plans (the "Predecessor
Plans"), and no further option grants or share issuances shall be made under
the Predecessor Plans from and after the Effective Date of this Plan. All
outstanding stock options and unvested share issuances under the Predecessor
Plans on the Effective Date are hereby incorporated into this Plan and shall
accordingly be treated as outstanding stock options and unvested share
issuances under this Plan. However, each outstanding option grant and
unvested share issuance so incorporated shall continue to be governed solely
by the express terms and conditions of the instrument evidencing such grant
or issuance, and no provision of this Plan shall be deemed to affect or
otherwise modify the rights or obligations of the holders of such
incorporated options with respect to their acquisition of shares of Common
Stock thereunder. All unvested shares of Common Stock outstanding under the
Predecessor Plans on the Effective Date shall continue to be governed solely
by the express terms and conditions of the instruments evidencing such
issuances, and no provision of this Plan shall be deemed to affect or modify
the rights or obligations of the holders of such unvested shares.
<PAGE>
II. DEFINITIONS
A. For purposes of the Plan, the following definitions shall be
in effect:
BOARD: the Corporation's Board of Directors.
CODE: the Internal Revenue Code of 1986, as amended.
COMMITTEE: the committee of two (2) or more non-employee Board
members appointed by the Board to administer the Plan.
COMMON STOCK: shares of the Corporation's common stock.
CHANGE IN CONTROL: a change in ownership or control of the
Corporation effected through either of the following transactions:
a. any person or related group of persons (other than the
Corporation or a person that directly or indirectly controls, is controlled
by, or is under common control with, the Corporation) directly or indirectly
acquires beneficial ownership (within the meaning of Rule 13d-3 of the 1934
Act) of securities possessing more than fifty percent (50%) of the total
combined voting power of the Corporation's outstanding securities pursuant to
a tender or exchange offer made directly to the Corporation's stockholders; or
b. there is a change in the composition of the Board over a
period of thirty-six (36) consecutive months or less such that a majority of
the Board members ceases, by reason of one or more proxy contests for the
election of Board members, to be comprised of individuals who either (A) have
been Board members continuously since the beginning of such period or (B)
have been elected or nominated for election as Board members during such
period by at least a majority of the Board members described in clause (A)
who were still in office at the time such election or nomination was approved
by the Board.
CORPORATE TRANSACTION: any of the following stockholder-approved
transactions to which the Corporation is a party:
a. a merger or consolidation in which the Corporation is not
the surviving entity, except for a transaction the principal purpose of which
is to change the State in which the Corporation is incorporated,
b. the sale, transfer or other disposition of all or
substantially all of the assets of the Corporation in complete liquidation or
dissolution of the Corporation, or
c. any reverse merger in which the Corporation is the
surviving entity but in which securities possessing more than fifty percent
(50%) of the total combined voting power of the Corporation's outstanding
securities are transferred to person or persons different from the persons
holding those securities immediately prior to such merger.
2.
<PAGE>
EMPLOYEE: an individual who performs services while in the employ
of the Corporation or one or more parent or subsidiary corporations, subject
to the control and direction of the employer entity not only as to the work
to be performed but also as to the manner and method of performance.
FAIR MARKET VALUE: the Fair Market Value per share of Common Stock
determined in accordance with the following provisions:
a. If the Common Stock is not at the time listed or admitted
to trading on any national stock exchange but is traded on the Nasdaq
National Market, the Fair Market Value shall be the closing selling price per
share on the date in question, as such price is reported by the National
Association of Securities Dealers on the Nasdaq National Market or any
successor system. If there is no reported closing selling price for the
Common Stock on the date in question, then the closing selling price on the
last preceding date for which such quotation exists shall be determinative of
Fair Market Value.
b. If the Common Stock is at the time listed or admitted to
trading on any national stock exchange, then the Fair Market Value shall be
the closing selling price per share on the date in question on the exchange
determined by the Plan Administrator to be the primary market for the Common
Stock, as such price is officially quoted in the composite tape of
transactions on such exchange. If there is no reported sale of Common Stock
on such exchange on the date in question, then the Fair Market Value shall be
the closing selling price on the exchange on the last preceding date for
which such quotation exists.
HOSTILE TAKE-OVER: the acquisition, directly or indirectly, by any
person or related group of persons (other than the Corporation or a person
that directly or indirectly controls, is controlled by, or is under common
control with, the Corporation) of beneficial ownership (within the meaning of
Rule 13d-3 of the 1934 Act) of securities possessing more than fifty percent
(50%) of the total combined voting power of the Corporation's outstanding
securities pursuant to a tender or exchange offer made directly to the
Corporation's stockholders which the Board does not recommend such
stockholders to accept.
OPTIONEE: any person to whom an option is granted under the
Discretionary Option Grant or Automatic Option Grant Program in effect under
the Plan.
PARTICIPANT: any person who receives a direct issuance of Common
Stock under the Stock Issuance Program in effect under the Plan.
PLAN ADMINISTRATOR: the Committee in its capacity as the
administrator of the Plan.
PERMANENT DISABILITY or PERMANENTLY DISABLED: the inability of the
Optionee or the Participant to engage in any substantial gainful activity by
reason of any medically determinable physical or mental impairment expected
to result in death or to be of continuous duration of twelve (12) months or
more.
3.
<PAGE>
SERVICE: the performance of services on a periodic basis to the
Corporation (or any parent or subsidiary corporation) in the capacity of an
Employee, a non-employee member of the board of directors or an independent
consultant or advisor, except to the extent otherwise specifically provided
in the applicable stock option or stock issuance agreement.
TAKE-OVER PRICE: the GREATER of (a) the Fair Market Value per share
of Common Stock on the date the option is surrendered to the Corporation in
connection with a Hostile Take-Over or (b) the highest reported price per
share of Common Stock paid by the tender offeror in effecting such Hostile
Take-Over. However, if the surrendered option is an Incentive Option, the
Take-Over Price shall not exceed the clause (a) price per share.
B. The following provisions shall be applicable in
determining the parent and subsidiary corporations of the Corporation:
Any corporation (other than the Corporation) in an unbroken
chain of corporations ending with the Corporation shall be considered to be a
PARENT of the Corporation, provided each such corporation in the unbroken
chain (other than the Corporation) owns, at the time of the determination,
stock possessing fifty percent (50%) or more of the total combined voting
power of all classes of stock in one of the other corporations in such chain.
Each corporation (other than the Corporation) in an unbroken
chain of corporations which begins with the Corporation shall be considered
to be a SUBSIDIARY of the Corporation, provided each such corporation (other
than the last corporation) in the unbroken chain owns, at the time of the
determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other
corporations in such chain.
III. STRUCTURE OF THE PLAN
A. STOCK PROGRAMS. The Plan shall be divided into three separate
components: the Discretionary Option Grant Program specified in Article Two,
the Automatic Option Grant Program specified in Article Three and the Stock
Issuance Program specified in Article Four. Under the Discretionary Option
Grant Program, eligible individuals may, at the discretion of the Plan
Administrator, be granted options to purchase shares of Common Stock in
accordance with the provisions of Article Two. Under the Automatic Option
Grant Program, non-employee Board members will receive a series of automatic
option grants over their period of continued Board service to purchase shares
of Common Stock in accordance with the provisions of Article Three. Under the
Stock Issuance Program, eligible individuals may be issued shares of Common
Stock directly, either through the immediate purchase of such shares at Fair
Market Value at the time of issuance or as a bonus tied to the performance of
services or the Corporation's attainment of financial objectives, without any
cash payment required of the recipient.
B. GENERAL PROVISIONS. Unless the context clearly indicates
otherwise, the provisions of Articles One and Five shall apply to the
Discretionary Option Grant Program, the Automatic Option Grant Program and
the Stock Issuance Program and shall accordingly govern the interests of all
individuals under the Plan.
4.
<PAGE>
IV. ADMINISTRATION OF THE PLAN
A. Both the Discretionary Option Grant Program and the Stock
Issuance Program shall be administered by a committee ("Committee") of two or
more non-employee Board members. Members of the Committee shall serve for
such period of time as the Board may determine and shall be subject to
removal by the Board at any time.
B. The Committee as Plan Administrator shall have full power and
authority (subject to the express provisions of the Plan) to establish rules
and regulations for the proper administration of the Discretionary Option
Grant and Stock Issuance Programs and to make such determinations under, and
issue such interpretations of, the provisions of such programs and any
outstanding option grants or stock issuances thereunder as it may deem
necessary or advisable. Decisions of the Plan Administrator shall be final
and binding on all parties who have an interest in the Discretionary Option
Grant or Stock Issuance Program or any outstanding option or share issuance
thereunder.
C. Administration of the Automatic Option Grant Program shall be
self-executing in accordance with the express terms and conditions of Article
Three, and the Committee as Plan Administrator shall exercise no
discretionary functions with respect to option grants made pursuant to that
program.
V. OPTION GRANTS AND STOCK ISSUANCES
A. The persons eligible to participate in the Discretionary
Option Grant Program under Article Two or the Stock Issuance Program under
Article Four shall be limited to the following:
1. officers and other key employees of the Corporation (or
its parent or subsidiary corporations) who render services which contribute
to the management, growth and financial success of the Corporation (or its
parent or subsidiary corporations);
2. non-employee members of the Board; and
3. those independent consultants or other advisors who
provide valuable services to the Corporation (or its parent or subsidiary
corporations).
B. The Plan Administrator shall have full authority to determine,
(I) with respect to the option grants made under the Discretionary Option
Grant Program, which eligible individuals are to receive option grants, the
time or time when such grants are to be made, the number of shares to be
covered by each such grant, the status of the granted option as either an
incentive stock option ("Incentive Option") which satisfies the requirements
of Section 422 of the Code or a non-statutory option not intended to meet
such requirements, the time or times at which each granted option is to
become exercisable and the maximum term for which the option may remain
outstanding and (II), with respect to stock issuances under the Stock
Issuance Program, the number of shares to be issued to each Participant, the
vesting schedule (if any) to be applicable to the issued shares, and the
consideration to be paid by the individual for such shares.
5.
<PAGE>
VI. STOCK SUBJECT TO THE PLAN
A. Shares of Common Stock shall be available for issuance under
the Plan and shall be drawn from either the Corporation's authorized but
unissued shares of Common Stock or from reacquired shares of Common Stock,
including shares repurchased by the Corporation on the open market. The
maximum number of shares of Common Stock reserved for issuance over the term
of the Plan shall be limited to 5,826,739 shares(1). Such share reserve
includes (i) the initial number of shares incorporated into this Plan from
the Predecessor Plans on the Effective Date, (ii) an additional 600,000-share
increase authorized by the Board on March 21, 1996 and approved by the
stockholders at the 1996 Annual Stockholders Meeting, (iii) an additional
277,239 shares attributable to the automatic annual share increase for fiscal
1996 which was effected on January 2, 1996, (iv) an additional 284,346 shares
attributable to the automatic annual share increase for fiscal 1997 which was
effected on January 2, 1997, (v) an additional 450,000 shares authorized by
the Board on March 18, 1997 and approved by the stockholders at the 1997
Annual Meeting, (vi) an additional 291,008 shares attributable to the
automatic annual share increase for fiscal 1998 which was effected on January
2, 1998 and (vii) an additional 295,480 shares attributable to the automatic
annual share increase for fiscal 1999 which was effected on January 4, 1999.
Such share reserve shall automatically increase on the first trading day in
fiscal year 2000 by an amount equal to 1.4% of the total number of shares of
Common Stock outstanding on the last trading day of December in the
immediately preceding fiscal year. The share reserve in effect from time to
time under the Plan shall be subject to periodic adjustment in accordance
with the provisions of this Section VI. To the extent one or more outstanding
options under the Predecessor Plans which have been incorporated into this
Plan are subsequently exercised, the number of shares issued with respect to
each such option shall reduce, on a share-for-share basis, the number of
shares available for issuance under this Plan.
B. In no event may the aggregate number of shares of Common Stock
for which any one individual participating in the Plan may be granted stock
options, separately-exercisable stock appreciation rights and direct stock
issuances exceed 400,000 shares per fiscal year, beginning with the 1995
fiscal year. However, for the fiscal year in which an individual receives his
or her initial stock option grant or direct stock issuance under the Plan,
the limit shall be increased to 600,000 shares. Such limitations shall be
subject to adjustment from time to time in accordance with the provisions of
this Section VI.
C. Should one or more outstanding options under this Plan
(including outstanding options under the Predecessor Plans incorporated into
this Plan) expire or terminate for any reason prior to exercise in full
(including any option cancelled in accordance with the cancellation-regrant
provisions of Section IV of Article Two of the Plan), then the shares subject
to the portion of each option not so exercised shall be available for
subsequent issuance under the Plan. Unvested shares issued under the Plan and
subsequently repurchased by the Corporation, at the original exercise or
issue price paid per share, pursuant to the Corporation's repurchase rights
under the Plan shall be added back to the number of shares of Common Stock
reserved for issuance under the Plan and shall accordingly be available for
reissuance through one or more
- --------
(1) All figures have been adjusted to reflect the 2:1 stock split the
Corporation effected May 10, 1995.
6.
<PAGE>
subsequent option grants or direct stock issuances under the Plan. Shares
subject to any option or portion thereof surrendered or cancelled in
accordance with Section V of Article Two shall reduce on a share-for-share
basis the number of shares of Common Stock available for subsequent issuance
under the Plan. In addition, should the exercise price of an outstanding
option under the Plan (including any option incorporated from the Predecessor
Plans) be paid with shares of Common Stock or should shares of Common Stock
otherwise issuable under the Plan be withheld by the Corporation in
satisfaction of the withholding taxes incurred in connection with the
exercise of an outstanding option under the Plan or the vesting of a direct
share issuance made under the Plan, then the number of shares of Common Stock
available for issuance under the Plan shall be reduced by the gross number of
shares for which the option is exercised or which vest under the share
issuance, and not by the net number of shares of Common Stock actually issued
to the holder of such option or share issuance.
D. Should any change be made to the Common Stock issuable under
the Plan by reason of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares or other change affecting the
outstanding Common Stock as a class without the Corporation's receipt of
consideration, then appropriate adjustments shall be made to (i) the maximum
number and/or class of securities issuable under the Plan, (ii) the maximum
number and/or class of securities for which any one person may be granted
stock options, separately exercisable stock appreciations rights and direct
stock issuances under this Plan per calendar year, (iii) the number and/or
class of securities for which automatic option grants are to be subsequently
made per eligible non-employee Board member under the Automatic Option Grant
Program, (iv) the number and/or class of securities and price per share in
effect under each option outstanding under either the Discretionary Option
Grant or Automatic Option Grant Program and (v) the number and/or class of
securities and price per share in effect under each outstanding option
incorporated into this Plan from the Predecessor Plans. Such adjustments to
the outstanding options are to be effected in a manner which shall preclude
the enlargement or dilution of rights and benefits under such options. The
adjustments deter-mined by the Plan Administrator shall be final, binding and
conclusive.
7.
<PAGE>
ARTICLE TWO
DISCRETIONARY OPTION GRANT PROGRAM
I. TERMS AND CONDITIONS OF OPTIONS
Options granted pursuant to the Discretionary Option Grant Program
shall be authorized by action of the Plan Administrator and may, at the Plan
Administrator's discretion, be either Incentive Options or non-statutory
options. Individuals who are not Employees of the Corporation or its parent
or subsidiary corporations may only be granted non-statutory options. Each
granted option shall be evidenced by one or more instruments in the form
approved by the Plan Administrator; provided, however, that each such
instrument shall comply with the terms and conditions specified below. Each
instrument evidencing an Incentive Option shall, in addition, be subject to
the applicable provisions of Section II of this Article Two.
A. OPTION PRICE.
1. The option price per share shall be fixed by the Plan
Administrator and shall in no event be less than one hundred percent (100%)
of the fair market value of such Common Stock on the grant date.
2. The option price shall become immediately due upon
exercise of the option and, subject to the provisions of Section I of Article
Four and the instrument evidencing the grant, shall be payable in one of the
following alternative forms specified below:
- full payment in cash or check drawn to the Corporation's
order; or
- full payment in shares of Common Stock held for the
requisite period necessary to avoid a charge to the Corporation's earnings
for financial reporting purposes and valued at Fair Market Value on the
Exercise Date (as such term is defined below); or
- full payment in a combination of shares of Common Stock
held for the requisite period necessary to avoid a charge to the
Corporation's earnings for financial reporting purposes and valued at Fair
Market Value on the Exercise Date and cash or check drawn to the
Corporation's order; or
- full payment through a broker-dealer sale and remittance
procedure pursuant to which the Optionee (I) shall provide irrevocable
written instructions to a Corporation-designated brokerage firm to effect
the immediate sale of the purchased shares and remit to the Corporation,
out of the sale proceeds available on the settlement date, sufficient funds
to cover the aggregate option price payable for the purchased shares plus
all applicable
8.
<PAGE>
Federal and State income and employment taxes required to be withheld by
the Corporation in connection with such purchase and (II) shall provide
written directives to the Corporation to deliver the certificates for the
purchased shares directly to such brokerage firm in order to complete the
sale transaction.
For purposes of this subparagraph (2), the Exercise Date shall be the
date on which written notice of the option exercise is delivered to the
Corporation. Except to the extent the sale and remittance procedure is utilized
in connection with the exercise of the option, payment of the option price for
the purchased shares must accompany such notice.
B. TERM AND EXERCISE OF OPTIONS. Each option granted under this
Discretionary Option Grant Program shall be exercisable at such time or times
and during such period as is determined by the Plan Administrator and set
forth in the instrument evidencing the grant. No such option, however, shall
have a maximum term in excess of ten (10) years from the grant date.
C. LIMITED TRANSFERABILITY. During the lifetime of the Optionee,
Incentive Options shall be exercisable only by the Optionee and shall not be
assignable or transferable other than by will or by the laws of descent and
distribution following the Optionee's death. However, non-statutory options may,
in connection with the Optionee's estate plan, be assigned in whole or in part
during the Optionee's lifetime to one or more members of the Optionee's
immediate family or to a trust established exclusively for one or more such
family members. The assigned portion may only be exercised by the person or
persons who acquire a proprietary interest in the option pursuant to the
assignment. The terms applicable to the assigned portion shall be the same as
those in effect for the option immediately prior to such assignment and shall be
set forth in such documents issued to the assignee as the Plan Administrator may
deem appropriate.
D. TERMINATION OF SERVICE.
1. The following provisions shall govern the exercise period
applicable to any outstanding options held by the Optionee at the time of
cessation of Service or death.
- Should an Optionee cease Service for any reason (including
death or Permanent Disability) while holding one or more outstanding
options under this Article Two, then none of those options shall (except to
the extent otherwise provided pursuant to subparagraph D.(3) below) remain
exercisable for more than a thirty-six (36)-month period (or such shorter
period determined by the Plan Administrator and set forth in the instrument
evidencing the grant) measured from the date of such cessation of Service.
- Any option held by the Optionee under this Article Two and
exercisable in whole or in part on the date of his or her death may be
subsequently exercised by the personal representative of the Optionee's
estate or by the person or persons to whom the option is transferred
pursuant to the Optionee's will or in accordance with the laws of descent
and distribution. Such
9.
<PAGE>
exercise, however, must occur prior to the earlier of (i) the first
anniversary of the date of the Optionee's death or (ii) the specified
expiration date of the option term. Upon the occurrence of the earlier
event, the option shall terminate.
- Under no circumstances shall any such option be
exercisable after the specified expiration date of the option term.
- During the applicable post-Service exercise period, the
option may not be exercised in the aggregate for more than the number of
shares (if any) in which the Optionee is vested at the time of his or her
cessation of Service. Upon the expiration of the limited post-Service
exercise period or (if earlier) upon the specified expiration date of the
option term, each such option shall terminate and cease to be outstanding
with respect to any vested shares for which the option has not otherwise
been exercised. However, each outstanding option shall, immediately upon
the Optionee's cessation of Service for any reason, terminate and cease to
be outstanding with respect to any shares for which the option is not
otherwise at that time exercisable or in which the Optionee is not
otherwise at that time vested.
- Should (i) the Optionee's Service be terminated for
misconduct (including, but not limited to, any act of dishonesty, willful
misconduct, fraud or embezzlement) or (ii) the Optionee make any
unauthorized use or disclosure of confidential information or trade secrets
of the Corporation or its parent or subsidiary corporations, then in any
such event all outstanding options held by the Optionee under this Article
Two shall terminate immediately and cease to be outstanding.
2. The Plan Administrator shall have complete discretion,
exercisable either at the time the option is granted or at any time while the
option remains outstanding, to permit one or more options held by the Optionee
under this Article Two to be exercised, during the limited post-Service exercise
period applicable under subparagraph (1) above, not only with respect to the
number of vested shares of Common Stock for which each such option is
exercisable at the time of the Optionee's cessation of Service but also with
respect to one or more subsequent installments of the option shares in which the
Optionee would have otherwise vested had such cessation of Service not occurred.
3. The Plan Administrator shall also have full power and
authority to extend the period of time for which the option is to remain
exercisable following the Optionee's cessation of Service or death from the
limited period in effect under subparagraph (1) above to such greater period of
time as the Plan Administrator shall deem appropriate. In no event, however,
shall such option be exercisable after the specified expiration date of the
option term.
10.
<PAGE>
E. STOCKHOLDER RIGHTS.
An Optionee shall have no stockholder rights with respect to any
shares covered by the option until such individual shall have exercised the
option and paid the option price for the purchased shares.
F. REPURCHASE RIGHTS.
The shares of Common Stock acquired upon the exercise of any Article
Two option grant may be subject to repurchase by the Corporation in accordance
with the following provisions:
(a) The Plan Administrator shall have the discretion to
authorize the issuance of unvested shares of Common Stock under this Article
Two. Should the Optionee cease Service while holding such unvested shares, the
Corporation shall have the right to repurchase any or all of those unvested
shares at the option price paid per share. The terms and conditions upon which
such repurchase right shall be exercisable (including the period and procedure
for exercise and the appropriate vesting schedule for the purchased shares)
shall be established by the Plan Administrator and set forth in the instrument
evidencing such repurchase right.
(b) All of the Corporation's outstanding repurchase rights under
this Article Two shall automatically terminate, and all shares subject to such
terminated rights shall immediately vest in full, upon the occurrence of a
Corporate Transaction, except to the extent: (i) any such repurchase right is
expressly assigned to the successor corporation (or parent thereof) in
connection with the Corporate Transaction or (ii) such accelerated vesting is
precluded by other limitations imposed by the Plan Administrator at the time the
repurchase right is issued.
(c) The Plan Administrator shall have the discretionary
authority, exercisable either before or after the Optionee's cessation of
Service, to cancel the Corporation's outstanding repurchase rights with respect
to one or more shares purchased or purchasable by the Optionee under this Option
Grant Program and thereby accelerate the vesting of such shares in whole or in
part at any time.
II. INCENTIVE OPTIONS
The terms and conditions specified below shall be applicable to all
Incentive Options granted under this Article Two. Incentive Options may only be
granted to individuals who are Employees of the Corporation. Options which are
specifically designated as "non-statutory" options when issued under the Plan
shall not be subject to such terms and conditions.
A. DOLLAR LIMITATION. The aggregate fair market value (determined as
of the respective date or dates of grant) of the Common Stock for which one or
more options granted to any Employee after December 31, 1986 under this Plan (or
any other option plan of the Corporation or its parent or subsidiary
corporations) may for the first time become exercisable as incentive stock
options under the Federal tax laws during any one calendar year shall not exceed
the sum of One Hundred Thousand Dollars ($100,000). To the extent the Employee
holds two
11.
<PAGE>
(2) or more such options which become exercisable for the first time in the
same calendar year, the foregoing limitation on the exercisability of such
options as incentive stock options under the Federal tax laws shall be
applied on the basis of the order in which such options are granted. Should
the number of shares of Common Stock for which any Incentive Option first
becomes exercisable in any calendar year exceed the applicable One Hundred
Thousand Dollar ($100,000) limitation, then that option may nevertheless be
exercised in that calendar year for the excess number of shares as a
non-statutory option under the Federal tax laws.
B. 10% STOCKHOLDER. If any individual to whom an Incentive Option is
granted is the owner of stock (as determined under Section 424(d) of the Code)
possessing ten percent (10%) or more of the total combined voting power of all
classes of stock of the Corporation or any one of its parent or subsidiary
corporations, then the option price per share shall not be less than one hundred
and ten percent (110%) of the fair market value per share of Common Stock on the
grant date, and the option term shall not exceed five (5) years, measured from
the grant date.
Except as modified by the preceding provisions of this Section II, the
provisions of Articles One, Two and Five of the Plan shall apply to all
Incentive Options granted hereunder.
III. CORPORATE TRANSACTIONS/CHANGES IN CONTROL
A. In the event of any Corporate Transaction, each option which is
at the time outstanding under this Article Two shall automatically accelerate so
that each such option shall, immediately prior to the specified effective date
for the Corporate Transaction, become fully exercisable with respect to the
total number of shares of Common Stock at the time subject to such option and
may be exercised for all or any portion of such shares as fully-vested shares.
However, an outstanding option under this Article Two shall NOT so accelerate if
and to the extent: (i) such option is, in connection with the Corporate
Transaction, either to be assumed by the successor corporation or parent thereof
or to be replaced with a comparable option to purchase shares of the capital
stock of the successor corporation or parent thereof, (ii) such option is to be
replaced with a cash incentive program of the successor corporation which
preserves the option spread existing at the time of the Corporate Transaction
and provides for subsequent payout in accordance with the same vesting schedule
applicable to such option, or (iii) the acceleration of such option is subject
to other limitations imposed by the Plan Administrator at the time of the option
grant. The determination of option comparability under clause (i) above shall be
made by the Plan Administrator, and its determination shall be final, binding
and conclusive.
B. Immediately following the consummation of the Corporate
Transaction, all outstanding options under this Article Two shall terminate and
cease to be outstanding, except to the extent assumed by the successor
corporation or its parent company.
C. Each outstanding option under this Article Two which is assumed
in connection with the Corporate Transaction or is otherwise to continue in
effect shall be appropriately adjusted, immediately after such Corporate
Transaction, to apply and pertain to the number and class of securities which
would have been issued to the option holder, in consummation of such Corporate
Transaction, had such person exercised the option immediately
12.
<PAGE>
prior to such Corporate Transaction. Appropriate adjustments shall also be
made to the option price payable per share, PROVIDED the aggregate option
price payable for such securities shall remain the same. In addition,
appropriate adjustments to reflect the Corporate Transaction shall be made to
(i) the class and number of securities available for issuance over the
remaining term of the Plan, (ii) the maximum number and/or class of
securities for which any one person may be granted stock options, separately
exercisable stock appreciation rights and direct stock issuances under this
Plan per calendar year and (iii) the maximum number and/or class of
securities which may be issued pursuant to Incentive Options granted under
the Plan.
D. The Plan Administrator shall have the discretion, exercisable
either at the time the option is granted or at any time while the option remains
outstanding, to provide (upon such terms as it may deem appropriate) for the
automatic acceleration of one or more outstanding options which are assumed or
replaced in the Corporate Transaction and do not otherwise accelerate at that
time, in the event the Optionee's Service should subsequently terminate within a
designated period following the effective date of such Corporate Transaction.
E. The grant of options under this Article Two shall in no way
affect the right of the Corporation to adjust, reclassify, reorganize or
otherwise change its capital or business structure or to merge, consolidate,
dissolve, liquidate or sell or transfer all or any part of its business or
assets.
F. The Plan Administrator shall have the discretionary authority,
exercisable either at the time the option is granted or at any time while the
option remains outstanding, to provide for the automatic acceleration of one or
more outstanding options under this Article Two (and the termination of one or
more of the Corporation's outstanding repurchase rights under this Article Two)
upon the occurrence of any Change in Control. The Plan Administrator shall also
have full power and authority to condition any such option acceleration (and the
termination of any outstanding repurchase rights) upon the subsequent
termination of the Optionee's Service within a specified period following the
Change in Control.
G. Any options accelerated in connection with the Change in Control
shall remain fully exercisable until the expiration or sooner termination of the
option term.
H. The exercisability as incentive stock options under the Federal
tax laws of any options accelerated under this Section III in connection with a
Corporate Transaction or Change in Control shall remain subject to the dollar
limitation of Section II of this Article Two. To the extent such dollar
limitation is exceeded, the accelerated option shall be exercisable as a
non-statutory option under the Federal tax laws.
IV. CANCELLATION AND REGRANT OF OPTIONS
The Plan Administrator shall have the authority to effect, at any time
and from time to time, with the consent of the affected optionees, the
cancellation of any or all outstanding options under this Article Two (including
outstanding options under the Predecessor Plans incorporated into this Plan) and
to grant in substitution new options under the Plan covering the same or
different numbers of shares of Common Stock but with an option price per share
not less than the Fair Market Value of the Common Stock on the new grant date.
13.
<PAGE>
V. STOCK APPRECIATION RIGHTS
A. Provided and only if the Plan Administrator determines in its
discretion to implement the stock appreciation right provisions of this Section
V, one or more Optionees may be granted the right, exercisable upon such terms
and conditions as the Plan Administrator may establish, to surrender all or part
of an unexercised option under this Article Two in exchange for a distribution
from the Corporation in an amount equal to the excess of (i) the Fair Market
Value (on the option surrender date) of the number of shares in which the
Optionee is at the time vested under the surrendered option (or surrendered
portion thereof) over (ii) the aggregate option price payable for such vested
shares.
B. No surrender of an option shall be effective hereunder unless it
is approved by the Plan Administrator. If the surrender is so approved, then the
distribution to which the Optionee shall accordingly become entitled under this
Section V may be made in shares of Common Stock valued at Fair Market Value on
the option surrender date, in cash, or partly in shares and partly in cash, as
the Plan Administrator shall in its sole discretion deem appropriate.
C. If the surrender of an option is rejected by the Plan
Administrator, then the Optionee shall retain whatever rights the Optionee had
under the surrendered option (or surrendered portion thereof) on the option
surrender date and may exercise such rights at any time prior to the later of
(i) five (5) business days after the receipt of the rejection notice or (ii) the
last day on which the option is otherwise exercisable in accordance with the
terms of the instrument evidencing such option, but in no event may such rights
be exercised more than ten (10) years after the date of the option grant.
D. One or more officers of the Corporation subject to the short-
swing profit restrictions of the Federal securities laws may, in the Plan
Administrator's sole discretion, be granted limited stock appreciation rights in
tandem with their outstanding options under the Plan. Upon the occurrence of a
Hostile Take-Over effected at any time when the Corporation's outstanding Common
Stock is registered under Section 12(g) of the 1934 Act, the officer shall have
a thirty (30)-day period in which he or she may surrender any outstanding option
with such a limited stock appreciation right to the Corporation, to the extent
such option is at the time exercisable for fully-vested shares of Common Stock.
The officer shall in return be entitled to a cash distribution from the
Corporation in an amount equal to the excess of (i) the Take-Over Price of the
vested shares of Common Stock at the time subject to each surrendered option (or
surrendered portion of such option) over (ii) the aggregate exercise price
payable for such shares. The cash distribution payable upon such option
surrender shall be made within five (5) days following the consummation of the
Hostile Take-Over. The Plan Administrator shall pre-approve, at the time the
limited stock appreciation right is granted, the subsequent exercise of that
right in accordance with the terms of the grant and the provisions of this
Section V.D. No additional approval of the Plan Administrator or the Board shall
be required at the time of the actual option surrender and distribution. Any
unsurrendered portion of the option shall continue to remain outstanding and
become exercisable in accordance with the terms of the instrument evidencing
such grant.
14.
<PAGE>
E. The shares of Common Stock subject to any option surrendered for
an appreciation distribution pursuant to this Section V shall NOT be available
for subsequent issuance under the Plan.
15.
<PAGE>
ARTICLE THREE
AUTOMATIC OPTION GRANT PROGRAM
I. ELIGIBILITY
The provisions of the Automatic Option Grant Program were revised,
effective March 1, 1996, to eliminate the special one-time option grant for
28,800 shares of Common Stock to each newly-elected or newly-appointed
non-employee Board member and to implement a new program of periodic option
grants to all eligible non-employee Board members. Under the revised Automatic
Option Grant Program, the following individuals shall be eligible to receive
automatic option grants over their period of Board service: (i) those
individuals who were serving as non-employee Board members on the date of the
1996 Annual Stockholders Meeting but who first joined the Board after September
29, 1993, (ii) those individuals who first join the Board as non-employee Board
members after the date of the 1996 Annual Stockholders Meeting and (iii) those
individuals who first joined the Board prior to September 30, 1993 and continue
to serve as non-employee Board members through one or more Annual Stockholders
Meetings, beginning with the 1996 Annual Meeting. However, a non-employee Board
member who has previously been in the employ of the Corporation (or any Parent
or Subsidiary) shall not be eligible to receive a 12,000-share option grant at
the time of his or her initial election or appointment to the Board, but such
individual shall be eligible to receive one or more 4,000-share annual option
grants over his or her period of continued Board service. Each non-employee
Board member eligible to participate in the Automatic Option Grant Program
pursuant to the foregoing criteria shall be designated an Eligible Director for
purposes of the Plan.
II. TERMS AND CONDITIONS OF AUTOMATIC OPTION GRANTS
A. GRANT DATE.
1. Each individual serving as a non-employee Board member on
the date of the 1996 Annual Stockholders Meeting shall be granted on that date a
non-statutory stock option to purchase 12,000 shares of Common Stock upon the
terms and conditions of this Article Three, provided such individual (i) has not
previously been in the employ of the Corporation (or any Parent or Subsidiary)
and (ii) did not join the Board prior to September 30, 1993. If any such
individual previously received an automatic option grant for 28,800 shares of
Common Stock at the time of his or her initial election or appointment to the
Board, then that option was automatically cancelled upon stockholder approval of
the revised Automatic Option Grant Program at the 1996 Annual Meeting.
2. Each individual who is first elected or appointed as a
non-employee Board member after the date of the 1996 Annual Stockholders Meeting
shall automatically be granted, on the date of such initial election or
appointment, a non-statutory stock option to purchase 12,000 shares of Common
Stock upon the terms and conditions of this Article Three, provided such
individual has not previously been in the employ of the Corporation (or any
Parent or Subsidiary).
16.
<PAGE>
3. On the date of each Annual Stockholders Meeting, beginning
with the 1996 Annual Stockholders Meeting, each individual who is to continue to
serve as a non-employee Board member, whether or not he or she is standing for
re-election to the Board at that particular Annual Meeting, shall automatically
be granted a Non-Statutory Option to purchase 4,000 shares of Common Stock,
provided such individual did not receive any other option grants under this
Automatic Option Grant Program within the preceding six (6) months. There shall
be no limit on the number of such 4,000-share option grants any one Eligible
Director may receive over his or her period of Board service, and individuals
who have previously been in the employ of the Corporation (or any Parent or
Subsidiary) shall be eligible to receive such annual option grants over their
period of continued Board service.
B. EXERCISE PRICE. The exercise price per share of Common Stock
subject to each automatic option grant made under this Article Three shall be
equal to one hundred percent (100%) of the Fair Market Value per share of
Common Stock on the automatic grant date.
C. PAYMENT.
The exercise price shall be payable in one of the alternative
forms specified below:
(i) full payment in cash or check made payable to the
Corporation's order; or
(ii) full payment in shares of Common Stock held for the
requisite period necessary to avoid a charge to the Corporation's reported
earnings and valued at Fair Market Value on the Exercise Date (as such term is
defined below); or
(iii) full payment in a combination of shares of Common Stock
held for the requisite period necessary to avoid a charge to the Corporation's
reported earnings and valued at Fair Market Value on the Exercise Date and cash
or check payable to the Corporation's order; or
(iv) to the extent the option is exercised for vested shares,
full payment through a sale and remittance procedure pursuant to which the
non-employee Board member (I) shall provide irrevocable written instructions to
a Corporation-designated brokerage firm to effect the immediate sale of the
purchased shares and remit to the Corporation, out of the sale proceeds
available on the settlement date, sufficient funds to cover the aggregate
exercise price payable for the purchased shares and shall (II) concurrently
provide written directives to the Corporation to deliver the certificates for
the purchased shares directly to such brokerage firm in order to complete the
sale transaction.
For purposes of this subparagraph C, the Exercise Date shall be the
date on which written notice of the option exercise is delivered to the
Corporation. Except to the extent the sale and remittance procedure specified
above is utilized in connection with the exercise of the option for vested
shares, payment of the option price for the purchased shares must accompany the
exercise notice. However, if the option is exercised for any unvested shares,
then the optionee must also execute and deliver to the Corporation a stock
purchase agreement for those unvested shares which provides the Corporation with
the right to repurchase, at the exercise price paid per
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share, any unvested shares held by the optionee at the time of cessation of
Board service and which precludes the sale, transfer or other disposition of
any shares purchased under the option, to the extent those shares are subject
to the Corporation's repurchase right.
D. OPTION TERM. Each automatic grant under this Article Three
shall have a maximum term of ten (10) years measured from the automatic grant
date.
E. EXERCISABILITY/VESTING. Each automatic grant shall be
immediately exercisable for any or all of the option shares. However, any
shares purchased under the option shall be subject to repurchase by the
Corporation, at the exercise price paid per share, upon the Optionee's
cessation of Board service prior to vesting in those shares. The shares
subject to each 12,000-share initial automatic option grant shall vest as
follows: (i) fifty percent (50%) of the shares shall vest upon the optionee's
completion of one (1) year of Board service measured from the grant date, and
(ii) the remaining shares shall vest in three (3) successive equal annual
installments upon the optionee's completion of each of the next three (3)
years of Board service thereafter. The shares subject to each 4,000-share
annual automatic option grant shall vest upon the optionee's completion of
one (1) year of Board service measured from the grant date. Vesting of the
option shares shall be subject to acceleration as provided in Section II.G
and Section III of this Article Three.
F. LIMITED TRANSFERABILITY. Each option granted under this
Automatic Option Grant Program prior to the 1997 Annual Stockholders Meeting
shall, during the lifetime of the optionee, be exercisable only by the
optionee and shall not be assignable or transferable by the optionee
otherwise than by will or the by the laws of descent and distribution
following the optionee's death. However, each option granted under this
Automatic Option Grant Program on or after the 1997 Annual Stockholders
Meeting shall be assignable in whole or in part by the optionee during his or
her lifetime, but only to the extent such assignment is made in connection
with the optionee's estate plan to one or more members of the optionee's
immediate family or to a trust established exclusively for one or more such
family members. The assigned portion may only be exercised by the person or
persons who acquire a proprietary interest in the option pursuant to the
assignment. The terms applicable to the assigned portion shall be the same as
those in effect for the option immediately prior to such assignment and shall
be set forth in such documents issued to the assignee as the Plan
Administrator may deem appropriate.
G. EFFECT OF TERMINATION OF BOARD SERVICE.
1. Should the Optionee cease to serve as a Board member for any
reason (other than death or Permanent Disability) while holding an automatic
option grant under this Article Three, then such individual shall have a six
(6)--month period following the date of such cessation of Board service in which
to exercise such option for any or all of the option shares in which the
Optionee is vested at the time of such cessation of Board service. The option
shall immediately terminate and cease to be outstanding, at the time of such
cessation of Board service, with respect to any option shares in which the
Optionee is not otherwise at that time vested.
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2. Should the Optionee die within six (6) months after
cessation of Board service, then any automatic option grant held by the Optionee
at the time of death may subsequently be exercised, for any or all of the option
shares in which the Optionee is vested at the time of his or her cessation of
Board service (less any vested option shares subsequently purchased by the
Optionee prior to death), by the personal representative of the Optionee's
estate or by the person or persons to whom the option is transferred pursuant to
the Optionee's will or in accordance with the laws of descent and distribution.
Any such exercise must occur within twelve (12) months after the date of the
Optionee's death.
3. Should the Optionee die or become Permanent Disabled while
serving as a Board member, then the shares of Common Stock at the time subject
to each automatic option grant held by such Optionee under this Article Three
shall immediately vest in full, and the Optionee (or the representative of the
Optionee's estate or the person or persons to whom the option is transferred
upon the Optionee's death) shall have a twelve (12)-month period following the
date of the Optionee's cessation of Board service in which to exercise such
option for any or all of those vested shares of Common Stock.
4. In no event shall any automatic grant under this Article
Three remain exercisable after the expiration date of the ten (10)-year option
term. Upon the expiration of the applicable post-service exercise period under
subparagraph 1, 2 or 3 above or (if earlier) upon the expiration of the ten
(10)-year option term, the automatic grant shall terminate and cease to be
outstanding for any option shares in which the Optionee was vested at the time
of his or her cessation of Board service but which were not otherwise purchased
thereunder.
H. STOCKHOLDER RIGHTS. The holder of an automatic option grant
under this Article Three shall have none of the rights of a stockholder with
respect to any shares subject to such option until such individual shall have
exercised the option and paid the exercise price for the purchased shares.
I. REMAINING TERMS. The remaining terms and conditions of each
automatic option grant shall be as set forth in the form Non-statutory Stock
Option Agreement attached as Exhibit A.
III. CORPORATE TRANSACTION/CHANGE IN CONTROL/HOSTILE TAKE-OVER
A. In the event of any Corporate Transaction, the shares of Common
Stock at the time subject to each outstanding option under this Article Three
but not otherwise vested shall automatically vest in full so that each such
option shall, immediately prior to the specified effective date for the
Corporate Transaction, become fully exercisable for all of the shares of Common
Stock at the time subject to that option and may be exercised for all or any
portion of such shares as fully-vested shares of Common Stock. Immediately
following the consummation of the Corporate Transaction, all automatic option
grants under this Article Three shall terminate and cease to be outstanding,
unless assumed by the successor corporation or its parent company.
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B. In connection with any Change in Control of the Corporation, the
shares of Common Stock at the time subject to each outstanding option under this
Article Three but not otherwise vested shall automatically vest in full so that
each such option shall, immediately prior to the specified effective date for
the Change in Control, become fully exercisable for all of the shares of Common
Stock at the time subject to that option and may be exercised for all or any
portion of such shares as fully-vested shares of Common Stock. Each such option
shall remain fully exercisable for the option shares which vest in connection
with the Change in Control until the expiration or sooner termination of the
option term.
C. Upon the occurrence of a Hostile Take-Over, the Optionee shall
have a thirty (30)-day period in which to surrender each option held by him or
her under this Article Three to the Corporation. The Optionee shall in return be
entitled to a cash distribution from the Corporation in an amount equal to the
excess of (i) the Take-Over Price of the shares of Common Stock at the time
subject to the surrendered option (whether or not the Optionee is otherwise at
the time vested in those shares) over (ii) the aggregate exercise price payable
for such shares. Such cash distribution shall be paid within five (5) days
following the consummation of the Hostile Take-Over. Stockholder approval of
this March 1997 restatement of the Plan shall constitute pre-approval of each
option subsequently granted with a surrender provision and the subsequent
surrender of that option in accordance with the terms and provisions of this
Section III.C. No additional approval of the Plan Administrator or the Board
shall be required at the time of the actual option cancellation and cash
distribution.
D. The shares of Common Stock subject to each option surrendered in
connection with the Hostile Take-Over shall NOT be available for subsequent
issuance under this Plan.
E. The automatic option grants outstanding under this Article Three
shall in no way affect the right of the Corporation to adjust, reclassify,
reorganize or otherwise change its capital or business structure or to merge,
consolidate, dissolve, liquidate or sell or transfer all or any part of its
business or assets.
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ARTICLE FOUR
STOCK ISSUANCE PROGRAM
I. TERMS AND CONDITIONS OF STOCK ISSUANCES
Shares may be issued under the Stock Issuance Program through direct
and immediate purchases without any intervening stock option grants. The issued
shares shall be evidenced by a Stock Issuance Agreement ("Issuance Agreement")
that complies with the terms and conditions of this Article Four.
A. CONSIDERATION.
1. Shares of Common Stock drawn from the Corporation's
authorized but unissued shares of Common Stock ("Newly Issued Shares") shall be
issued under the Stock Issuance Program for one or more of the following items
of consideration which the Plan Administrator may deem appropriate in each
individual instance:
(i) cash or cash equivalents (such as a personal check or
bank draft) paid the Corporation;
(ii) a promissory note payable to the Corporation's order
in one or more installments, which may be subject to cancellation in whole or in
part upon terms and conditions established by the Plan Administrator; or
(iii) past services rendered to the Corporation or any
parent or subsidiary corporation.
2. The consideration for any Newly Issued Shares issued under
this Stock Issuance Program shall have a value determined by the Plan
Administrator to be not less than one-hundred percent (100%) of the Fair Market
Value of those shares at the time of issuance.
3. Shares of Common Stock reacquired by the Corporation and
held as treasury shares ("Treasury Shares") may be issued under the Stock
Issuance Program for such consideration (including one or more of the items of
consideration specified in subparagraph 1. above) as the Plan Administrator may
deem appropriate, whether such consideration is in an amount less than, equal
to, or greater than the Fair Market Value of the Treasury Shares at the time of
issuance. Treasury Shares may, in lieu of any cash consideration, be issued
subject to such vesting requirements tied to the Participant's period of future
Service or the Corporation's attainment of specified performance objectives as
the Plan Administrator may establish at the time of issuance.
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B. VESTING PROVISIONS.
1. Shares of Common Stock issued under the Stock Issuance
Program may, in the absolute discretion of the Plan Administrator, be fully and
immediately vested upon issuance or may vest in one or more installments over
the Participant's period of Service. The elements of the vesting schedule
applicable to any unvested shares of Common Stock issued under the Stock
Issuance Program, namely:
(i) the Service period to be completed by the Participant
or the performance objectives to be achieved by the Corporation,
(ii) the number of installments in which the shares are to
vest,
(iii) the interval or intervals (if any) which are to lapse
between installments, and
(iv) the effect which death, Permanent Disability or other
event designated by the Plan Administrator is to have upon the vesting schedule,
shall be determined by the Plan Administrator and incorporated into the Issuance
Agreement executed by the Corporation and the Participant at the time such
unvested shares are issued.
2. The Participant shall have full stockholder rights with
respect to any shares of Common Stock issued to him or her under the Plan,
whether or not his or her interest in those shares is vested. Accordingly, the
Participant shall have the right to vote such shares and to receive any regular
cash dividends paid on such shares. Any new, additional or different shares of
stock or other property (including money paid other than as a regular cash
dividend) which the Participant may have the right to receive with respect to
his or her unvested shares by reason of any stock dividend, stock split,
reclassification of Common Stock or other similar change in the Corporation's
capital structure or by reason of any Corporate Transaction shall be issued,
subject to (i) the same vesting requirements applicable to his or her unvested
shares and (ii) such escrow arrangements as the Plan Administrator shall deem
appropriate.
3. Should the Participant cease to remain in Service while
holding one or more unvested shares of Common Stock under the Plan, then those
shares shall be immediately surrendered to the Corporation for cancellation, and
the Participant shall have no further stockholder rights with respect to those
shares. To the extent the surrendered shares were previously issued to the
Participant for consideration paid in cash or cash equivalent (including the
Participant's purchase-money promissory note), the Corporation shall repay to
the Participant the cash consideration paid for the surrendered shares and shall
cancel the unpaid principal balance of any outstanding purchase-money note of
the Participant attributable to such surrendered shares. The surrendered shares
may, at the Plan Administrator's discretion, be retained by the Corporation as
Treasury Shares or may be retired to authorized but unissued share status.
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4. The Plan Administrator may in its discretion elect to waive
the surrender and cancellation of one or more unvested shares of Common Stock
(or other assets attributable thereto) which would otherwise occur upon the
non-completion of the vesting schedule applicable to such shares. Such waiver
shall result in the immediate vesting of the Participant's interest in the
shares of Common Stock as to which the waiver applies. Such waiver may be
effected at any time, whether before or after the Participant's cessation of
Service or the attainment or non-attainment of the applicable performance
objectives.
II. CORPORATE TRANSACTIONS/CHANGE IN CONTROL
A. Upon the occurrence of any Corporate Transaction, all unvested
shares of Common Stock at the time outstanding under the Stock Issuance Program
shall immediately vest in full, except to the extent the Plan Administrator
imposes limitations in the Issuance Agreement which preclude such accelerated
vesting in whole or in part.
B. The Plan Administrator shall have the discretionary authority,
exercisable either in advance of any actually-anticipated Change in Control or
at the time of an actual Change in Control, to provide for the immediate and
automatic vesting of one or more unvested shares outstanding under the Stock
Issuance Program at the time of such Change in Control. The Plan Administrator
shall also have full power and authority to condition any such accelerated
vesting upon the subsequent termination of the Participant's Service within a
specified period following the Change in Control.
III. TRANSFER RESTRICTIONS/SHARE ESCROW
A. Unvested shares may, in the Plan Administrator's discretion, be
held in escrow by the Corporation until the Participant's interest in such
shares vests or may be issued directly to the Participant with restrictive
legends on the certificates evidencing such unvested shares. To the extent an
escrow arrangement is utilized, the unvested shares and any securities or other
assets issued with respect to such shares (other than regular cash dividends)
shall be delivered in escrow to the Corporation to be held until the
Participant's interest in such shares (or other securities or assets) vests.
Alternatively, if the unvested shares are issued directly to the Participant,
the restrictive legend on the certificates for such shares shall read
substantially as follows:
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE UNVESTED AND ARE
ACCORDINGLY SUBJECT TO (I) CERTAIN TRANSFER RESTRICTIONS AND (II)
CANCELLATION OR REPURCHASE IN THE EVENT THE REGISTERED HOLDER (OR HIS/HER
PREDECESSOR IN INTEREST) CEASES TO REMAIN IN THE CORPORATION'S SERVICE.
SUCH TRANSFER RESTRICTIONS AND THE TERMS AND CONDITIONS OF SUCH
CANCELLATION OR REPURCHASE ARE SET FORTH IN A STOCK ISSUANCE AGREEMENT
BETWEEN THE CORPORATION AND THE REGISTERED HOLDER (OR HIS/HER PREDECESSOR
IN INTEREST) DATED _____________, 199__, A COPY OF WHICH IS ON FILE AT THE
PRINCIPAL OFFICE OF THE CORPORATION."
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B. The Participant shall have no right to transfer any unvested
shares of Common Stock issued to him or her under the Stock Issuance Program.
For purposes of this restriction, the term "transfer" shall include (without
limitation) any sale, pledge, assignment, encumbrance, gift, or other
disposition of such shares, whether voluntary or involuntary. Upon any such
attempted transfer, the unvested shares shall immediately be cancelled, and
neither the Participant nor the proposed transferee shall have any rights with
respect to those shares. However, the Participant shall have the right to make a
gift of unvested shares acquired under the Stock Issuance Program to his or her
spouse or issue, including adopted children, or to a trust established for such
spouse or issue, provided the donee of such shares delivers to the Corporation a
written agreement to be bound by all the provisions of the Stock Issuance
Program and the Issuance Agreement applicable to the gifted shares.
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ARTICLE FIVE
MISCELLANEOUS
I. LOANS OR INSTALLMENT PAYMENTS
A. The Plan Administrator may, in its discretion, assist any
Optionee or Participant (including an Optionee or Participant who is an officer
of the Corporation) in the exercise of one or more options granted to such
Optionee under the Discretionary Option Grant Program or the purchase of one or
more shares issued to such Participant under the Stock Issuance Program,
including the satisfaction of any Federal and State income and employment tax
obligations arising therefrom, by (i) authorizing the extension of a loan from
the Corporation to such Optionee or Participant or (ii) permitting the Optionee
or Participant to pay the option price or purchase price for the purchased
Common Stock in installments over a period of years. The terms of any loan or
installment method of payment (including the interest rate and terms of
repayment) shall be upon such terms as the Plan Administrator specifies in the
applicable option or issuance agreement or otherwise deems appropriate under the
circumstances. Loans or installment payments may be authorized with or without
security or collateral. However, the maximum credit available to the Optionee or
Participant may not exceed the option or purchase price of the acquired shares
(less the par value of such shares) plus any Federal and State income and
employment tax liability incurred by the Optionee or Participant in connection
with the acquisition of such shares.
B. The Plan Administrator may, in its absolute discretion, determine
that one or more loans extended under this financial assistance program shall be
subject to forgiveness by the Corporation in whole or in part upon such terms
and conditions as the Plan Administrator may deem appropriate.
II. AMENDMENT OF THE PLAN AND AWARDS
A. The Board has complete and exclusive power and authority to amend
or modify the Plan (or any component thereof) in any or all respects whatsoever.
However, no such amendment or modification shall adversely affect rights and
obligations with respect to options at the time outstanding under the Plan, nor
adversely affect the rights of any Participant with respect to Common Stock
issued under the Stock Issuance Program prior to such action, unless the
Optionee or Participant consents to such amendment. In addition, certain
amendments may require stockholder approval pursuant to applicable laws or
regulations.
B. (i) Options to purchase shares of Common Stock may be granted
under the Discretionary Option Grant Program and (ii) shares of Common Stock may
be issued under the Stock Issuance Program, which are in both instances in
excess of the number of shares then available for issuance under the Plan,
provided any excess shares actually issued under the Discretionary Option Grant
Program or the Stock Issuance Program are held in escrow until stockholder
approval is obtained for a sufficient increase in the number of shares available
for issuance under the Plan. If such stockholder approval is not obtained within
twelve (12) months
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after the date the first such excess option grants or excess share issuances are
made, then (I) any unexercised excess options shall terminate and cease to be
exercisable and (II) the Corporation shall promptly refund the purchase price
paid for any excess shares actually issued under the Plan and held in escrow,
together with interest (at the applicable Short Term Federal Rate) for the
period the shares were held in escrow.
III. TAX WITHHOLDING
The Corporation's obligation to deliver shares of Common Stock upon
the exercise of stock options for such shares or the vesting of such shares
under the Plan shall be subject to the satisfaction of all applicable Federal,
State and local income tax and employment tax withholding requirements.
The Plan Administrator may, in its discretion and in accordance with
the provisions of this Section III of Article Five and such supplemental rules
as the Plan Administrator may from time to time adopt (including the applicable
safe-harbor provisions of SEC Rule 16b-3), provide any or all holders of
non-statutory options (other than the automatic grants made pursuant to Article
Three of the Plan) or unvested shares under the Plan with the right to use
shares of Common Stock in satisfaction of all or part of the Federal, State and
local income and employment withholding taxes to which such holders may become
subject in connection with the exercise of their options or the vesting of their
shares (the "Withholding Taxes"). Such right may be provided to any such holder
in either or both of the following formats:
(a) STOCK WITHHOLDING: The holder of the non-statutory option or
unvested shares may be provided with the election to have the Corporation
withhold, from the shares of Common Stock otherwise issuable upon the exercise
of such non-statutory option or the vesting of such shares, a portion of those
shares with an aggregate Fair Market Value equal to the percentage of the
applicable Withholding Taxes (not to exceed one hundred percent (100%))
designated by the holder.
(b) STOCK DELIVERY: The Plan Administrator may, in its
discretion, provide the holder of the non-statutory option or the unvested
shares with the election to deliver to the Corporation, at the time the
non-statutory option is exercised or the shares vest, one or more shares of
Common Stock previously acquired by such individual (other than in connection
with the option exercise or share vesting triggering the Withholding Taxes) with
an aggregate Fair Market Value equal to the percentage of the Withholding Taxes
incurred in connection with such option exercise or share vesting (not to exceed
one hundred percent (100%)) designated by the holder.
IV. EFFECTIVE DATE AND TERM OF PLAN
A. The Plan was adopted by the Board on July 23, 1993, and was
approved by the stockholders on the same date. The Plan became effective on
September 29, 1993, the date on which the shares of the Corporation's Common
Stock were first registered under the 1934 Act. No further option grants or
stock issuances shall be made under the Predecessor Plans from and after the
Effective Date.
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B. Each stock option grant outstanding under the Predecessor Plans
immediately prior to the Effective Date of the Discretionary Option Grant
Program shall be incorporated into this Plan and treated as an outstanding
option under this Plan, but each such option shall continue to be governed
solely by the terms and conditions of the instrument evidencing such grant, and
nothing in this Plan shall be deemed to affect or otherwise modify the rights or
obligations of the holders of such options with respect to their acquisition of
shares of Common Stock thereunder. Each unvested share of Common Stock
outstanding under the Predecessor Plans on the Effective Date of the Stock
Issuance Program shall continue to be governed solely by the terms and
conditions of the instrument evidencing such share issuance, and nothing in this
Plan shall be deemed to affect or otherwise modify the rights or obligations of
the holder of such unvested shares.
C. The option/vesting acceleration provisions of Section III of
Article Two and Section II of Article Four relating to Corporate Transactions
and Changes in Control may, in the Plan Administrator's discretion, be extended
to one or more stock options or unvested share issuances which are outstanding
under the Predecessor Plans on the Effective Date of the Discretionary Option
Grant and Stock Issuance Programs but which do not otherwise provide for such
acceleration.
D. On March 16, 1995, the Board adopted an amendment to the Plan
which (i) increased the number of shares of Common Stock available for issuance
under the Plan by an additional 600,000 shares (as adjusted for the May 1995
stock split), (ii) provided for an automatic annual increase to the existing
share reserve on the first trading day in each of the next five (5) fiscal
years, beginning with the 1996 fiscal year and continuing through fiscal year
2000, equal to 1.4% of the total number of shares of Common Stock outstanding on
the last trading day of the fiscal year immediately preceding the fiscal year of
each such share increase and (iii) imposed certain limitations required under
applicable Federal tax laws with respect to Incentive Option grants. The
amendment was approved by the stockholders at the 1995 Annual Meeting on May 17,
1995.
E. On March 21, 1996, the Board adopted an amendment to the Plan
which (i) increased the number of shares of Common Stock available for issuance
under the Plan by an additional 600,000 shares, (ii) increased the limit on the
maximum number of shares of Common Stock issuable under the 1993 Plan prior to
the required cessation of further Incentive Option grants to 3,780,000 shares
plus an additional increase of 277,000 shares per fiscal year over each of the
next four (4) fiscal years, beginning with the 1997 fiscal year, (iii) revised
the Automatic Option Grant Program to eliminate the special one-time option
grant for 28,800 shares of Common Stock to each newly-elected or newly-appointed
non-employee Board member and implement a new option grant program pursuant to
which all eligible non-employee Board members will receive a series of automatic
option grants over their period of continued Board service. The amendment was
approved by the stockholders at the 1996 Annual Meeting.
F. On March 18, 1997, the Board adopted a series of amendments to
the Plan which (i) increased the number of shares of Common Stock reserved for
issuance over the term of the Plan by an additional 450,000 shares, (ii)
rendered all non-employee Board members eligible to receive option grants and
direct stock issuances under the Discretionary Option Grant and Stock Issuance
Programs, (iii) allowed unvested shares issued under the Plan and
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subsequently repurchased by the Corporation at the option exercise price or
direct issue price paid per share to be reissued under the Plan, (iv)
eliminated the plan limitation which precluded the grant of additional
Incentive Options once the number of shares of Common Stock issued under the
Plan, whether as vested or unvested shares, exceeded a certain level, (v)
removed certain restrictions on the eligibility of non-employee Board members
to serve as Plan Administrator, and (vi) effected a series of additional
changes to the provisions of the Plan (including the stockholder approval
requirements) in order to take advantage of the recent amendments to Rule
16b-3 of the 1934 Act which exempts certain officer and director transactions
under the Plan from the short-swing liability provisions of the federal
securities laws. The March 18, 1997 amendments were approved by the
stockholders at the 1997 Annual Meeting.
G. The Plan shall terminate upon the EARLIER of (i) June 30, 2003 or
(ii) the date on which all shares available for issuance under the Plan shall
have been issued as vested shares or cancelled pursuant to the exercise of stock
appreciation or other cash-out rights granted under the Plan. If the date of the
plan termination is determined under clause (i) above, then all option grants
and unvested share issuances outstanding on such date shall thereafter continue
to have force and effect in accordance with the provisions of the instruments
evidencing such grants or issuances.
V. USE OF PROCEEDS
Any cash proceeds received by the Corporation from the sale of shares
pursuant to option grants or share issuances under the Plan shall be used for
general corporate purposes.
VI. REGULATORY APPROVALS
A. The implementation of the Plan, the granting of any option under
the Plan, the issuance of any shares under the Stock Issuance Program, and the
issuance of Common Stock upon the exercise or surrender of the option grants
made hereunder shall be subject to the Corporation's procurement of all
approvals and permits required by regulatory authorities having jurisdiction
over the Plan, the options granted under it, and the Common Stock issued
pursuant to it.
B. No shares of Common Stock or other assets shall be issued or
delivered under this Plan unless and until there shall have been compliance with
all applicable requirements of Federal and State securities laws, including the
filing and effectiveness of the Form S-8 registration statement for the shares
of Common Stock issuable under the Plan, and all applicable listing requirements
of any securities exchange (or the Nasdaq National Market, if applicable) on
which shares of the Common Stock are then listed for trading.
VII. NO EMPLOYMENT/SERVICE RIGHTS
Neither the action of the Corporation in establishing the Plan, nor
any action taken by the Plan Administrator hereunder, nor any provision of the
Plan shall be construed so as to grant any individual the right to remain in the
employ or service of the Corporation (or any
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parent or subsidiary corporation) for any period of specific duration, and the
Corporation (or any parent or subsidiary corporation retaining the services of
such individual) may terminate such individual's employment or service at any
time and for any reason, with or without cause.
VIII. MISCELLANEOUS PROVISIONS
A. The right to acquire Common Stock or other assets under the Plan
may not be assigned, encumbered or otherwise transferred by any Optionee or
Participant.
B. The provisions of the Plan relating to the exercise of options
and the vesting of shares shall be governed by the laws of the State of
California, as such laws are applied to contracts entered into and performed in
such State.
C. The provisions of the Plan shall inure to the benefit of, and be
binding upon, the Corporation and its successors or assigns, whether by
Corporate Transaction or otherwise, and the Participants and Optionees and the
legal representatives, heirs or legatees of their respective estates.
29.
<PAGE>
Exhibit 99.10
ULTRATECH STEPPER, INC.
SUPPLEMENTAL STOCK OPTION/STOCK ISSUANCE PLAN
---------------------------------------------
ARTICLE ONE
GENERAL
A. This Supplemental Stock Option/Stock Issuance Plan is intended to
promote the interests of Ultratech Stepper, Inc., a Delaware corporation, by
authorizing an additional reserve of shares of the Corporation's common stock
for issuance through long-term option grants or direct stock issuances to
individuals in the employ of the Corporation (or any Parent or Subsidiary) who
are NOT: (i) officers of the Corporation, (ii) employees with the title of Vice
President, General Manager or (iii) members of the Board.
B. The Plan shall become effective immediately upon adoption by the
Board on October 20, 1998.
C. The Plan shall supplement the authorized share reserve under the
Corporation's 1993 Stock Option/Stock Issuance Plan, and share issuances under
this Plan shall not reduce or otherwise affect the number of shares of the
Corporation's common stock available for issuance under the 1993 Stock
Option/Stock Issuance Plan. In addition, share issuances under the 1993 Stock
Option/Stock Issuance Plan shall not reduce or otherwise affect the number of
shares of the Corporation's common stock available for issuance under this Plan.
Capitalized terms shall have the meanings assigned to such terms in
the attached Appendix.
I. STRUCTURE OF THE PLAN
A. The Plan shall be divided into two (2) separate equity programs:
(i) the Option Grant Program under which eligible persons
may, at the discretion of the Plan Administrator, be granted options to
purchase shares of Common Stock, and
(ii) the Stock Issuance Program under which eligible
persons may, at the discretion of the Plan Administrator, be issued shares
of Common Stock directly, either through the immediate purchase of such
shares or as a bonus for services rendered the Corporation (or any Parent
or Subsidiary) or the attainment of designated performance goals.
<PAGE>
II. ADMINISTRATION OF THE PLAN
A. The Plan Administrator shall have full power and discretion
(subject to the express provisions of the Plan) to establish such rules and
regulations as it may deem appropriate for the proper administration of the Plan
and to make such determinations under, and issue such interpretations of, the
provisions of the Plan and any outstanding option grants or unvested stock
issuances thereunder as it may deem necessary or advisable. Decisions of the
Plan Administrator shall be final and binding on all parties who have an
interest in the Plan or any outstanding stock option or stock issuance
thereunder.
B. The individuals serving as Plan Administrator shall serve for
such period as the Board may determine and shall be subject to removal by the
Board at any time.
C. Service as Plan Administrator shall constitute service as a Board
member, and each Board member serving as Plan Administrator shall accordingly be
entitled to full indemnification and reimbursement as a Board member for such
service. No individual serving as Plan Administrator shall be liable for any
act or omission made in good faith with respect to the Plan or any option grant
or stock issuance made under the Plan.
III. ELIGIBILITY
A. The persons eligible to participate in the Plan shall be limited
to those Employees who are NOT: (i) officers of the Corporation, (ii) Employees
with the title of Vice President, General Manager or (iii) members of the Board.
B. The Plan Administrator shall have full authority to determine (i)
with respect to the Option Grant Program, which eligible Employees are to
receive option grants under the Plan, the time or times when the grants are to
be made, the number of shares subject to each such grant, the time or times when
each granted option is to become exercisable and the maximum term for which the
option may remain outstanding and (ii) with respect to stock issuances under the
Stock Issuance Program, which eligible persons are to receive stock issuances,
the time or times when such issuances are to be made, the number of shares to be
issued to each Participant, the vesting schedule (if any) applicable to the
issued shares and the consideration for such shares. All options granted under
the Plan shall be Non-Statutory Options.
2.
<PAGE>
IV. STOCK SUBJECT TO THE PLAN
A. Shares of Common Stock shall be available for issuance under the
Plan and shall be drawn from either the Corporation's authorized but unissued
shares of Common Stock or from reacquired shares of Common Stock, including
shares repurchased by the Corporation on the open market. The maximum number of
shares of Common Stock reserved for issuance over the term of the Plan shall be
limited to 400,000 shares, subject to adjustment from time to time in accordance
with the provisions of Section IV.C.
B. Should one or more outstanding options under this Plan expire or
terminate for any reason prior to exercise in full, then the shares subject to
the portion of each option not so exercised shall be available for subsequent
issuance under the Plan. Unvested shares issued under the Plan and subsequently
cancelled or repurchased by the Corporation, at the original issue price paid
per share, pursuant to the Corporation's repurchase rights under the Plan shall
be added back to the number of shares of Common Stock reserved for issuance
under the Plan and shall accordingly be available for reissuance through one or
more subsequent option grants or direct stock issuances under the Plan. Should
the exercise price of an outstanding option under the Plan be paid with shares
of Common Stock, then the number of shares of Common Stock available for
issuance under the Plan shall be reduced by the gross number of shares for which
the option is exercised, and not by the net number of shares of Common Stock
actually issued to the holder of such option.
C. Should any change be made to the Common Stock issuable under the
Plan by reason of any stock split, stock dividend, recapitalization, combination
of shares, exchange of shares or other change affecting the outstanding Common
Stock as a class without the Corporation's receipt of consideration, then
appropriate adjustments shall be made to (i) the maximum number and/or class of
securities issuable under the Plan, and (ii) the number and/or class of
securities and price per share in effect under each option outstanding under the
Plan. Such adjustments to the outstanding securities are to be effected in a
manner which shall preclude the enlargement or dilution of rights and benefits
under such options. The adjustments determined by the Plan Administrator shall
be final, binding and conclusive.
3.
<PAGE>
ARTICLE TWO
OPTION GRANT PROGRAM
--------------------
I. OPTION TERMS
Options granted under the Plan shall be authorized by action of the
Plan Administrator and shall be evidenced by one or more instruments in the form
approved by the Plan Administrator; PROVIDED, however, that each such instrument
shall comply with the terms and conditions specified below. All such granted
options shall be Non-Statutory Options.
A. EXERCISE PRICE.
1. The exercise price per share shall be fixed by the Plan
Administrator but shall not be less than one hundred percent (100%) of the Fair
Market Value per share of Common Stock on the grant date.
2. Full payment of the exercise price shall become immediately
due upon exercise of the option and shall be payable in one or more of the forms
specified below:
(i) cash or check made payable to the Corporation,
(ii) shares of Common Stock held for the requisite
period necessary to avoid a charge to the Corporation's earnings for
financial reporting purposes and valued at Fair Market Value on the
Exercise Date, or
(iii) through a special sale and remittance procedure
pursuant to which the Optionee shall concurrently provide irrevocable
instructions (a) to a Corporation-designated brokerage firm to effect
the immediate sale of the purchased shares and remit to the
Corporation, out of the sale proceeds available on the settlement
date, sufficient funds to cover the aggregate exercise price payable
for the purchased shares plus all applicable Federal, state and local
income and employment taxes required to be withheld by the Corporation
in connection with such purchase and (b) to the Corporation to deliver
the certificates for the purchased shares directly to such brokerage
firm in order to complete the sale transaction.
Except to the extent such sale and remittance procedure is utilized,
payment of the exercise price for the purchased shares must be made on the
Exercise Date.
4.
<PAGE>
B. EXERCISE AND TERM OF OPTIONS. Each option shall be exercisable
at such time or times, during such period and for such number of shares as shall
be determined by the Plan Administrator and set forth in the documents
evidencing such option. No option shall have a maximum term in excess of ten
(10) years measured from the option grant date.
C. LIMITED TRANSFERABILITY. Each option granted under the Plan may,
in connection with the Optionee's estate plan, be assigned in whole or in part
during the Optionee's lifetime to one or more members of the Optionee's
immediate family or to a trust established exclusively for one or more such
family members. The assigned portion may only be exercised by the person or
persons who acquire a proprietary interest in the option pursuant to the
assignment. The terms applicable to the assigned portion shall be the same as
those in effect for the option immediately prior to such assignment and shall be
set forth in such documents issued to the assignee as the Plan Administrator may
deem appropriate.
D. EFFECT OF TERMINATION OF SERVICE.
1. The following provisions shall govern the exercise of any
options held by the Optionee at the time of cessation of Service or death:
(i) Any option outstanding at the time of the
Optionee's cessation of Service for any reason shall remain
exercisable for such period of time thereafter as shall be determined
by the Plan Administrator and set forth in the documents evidencing
the option, but no such option shall be exercisable after the
expiration of the option term.
(ii) Any option exercisable in whole or in part by
the Optionee at the time of death may be subsequently exercised by the
personal representative of the Optionee's estate or by the person or
persons to whom the option is transferred pursuant to the Optionee's
will or in accordance with the laws of descent and distribution.
(iii) Should the Optionee's Service be terminated for
Misconduct, then all outstanding options held by the Optionee shall
terminate immediately and cease to be outstanding.
(iv) During the applicable post-Service exercise
period, the option may not be exercised in the aggregate for more than
the number of shares for which the option is exercisable on the date of
Optionee's cessation of Service. Upon the expiration of such
post-Service exercise period or (if earlier) upon the expiration of the
option term, the option shall terminate and cease to be outstanding for
any otherwise exercisable shares for which the option has not been
exercised.
5.
<PAGE>
However, the option shall, immediately upon Optionee's cessation of Service
for any reason, terminate and cease to be outstanding with respect to any
and all option shares for which the option is not otherwise at the time
exercisable.
2. The Plan Administrator shall have the discretion,
exercisable either at the time an option is granted or at any time while the
option remains outstanding, to:
(i) extend the period of time for which the option
is to remain exercisable following Optionee's cessation of Service or
death from the limited period otherwise in effect for that option to
such greater period of time as the Plan Administrator shall deem
appropriate, but in no event beyond the expiration of the option term,
and/or
(ii) permit the option to be exercised, during the
applicable post-Service exercise period, not only with respect to the
number of shares of Common Stock for which such option is exercisable
at the time of the Optionee's cessation of Service but also with
respect to one or more additional installments for which the option
would have become exercisable had the Optionee continued in Service.
C. STOCKHOLDER RIGHTS. No Optionee shall have any stockholder
rights with respect to any option shares until such person shall have exercised
the option and paid the exercise price for the purchased shares.
D. REPURCHASE RIGHTS.
1. The Plan Administrator shall have discretion to authorize
the issuance of unvested shares of Common Stock under this Article Two.
Should the Optionee cease Service while holding such unvested shares, the
Corporation shall have the right to repurchase any or all of those unvested
shares at the option exercise price paid per share. The terms and
conditions upon which such repurchase right shall be exercisable (including
the period and procedure for exercise and the appropriate vesting schedule
for the purchased shares) shall be established by the Plan Administrator
and set forth in the instrument evidencing such repurchase rights.
2. The Plan Administrator shall have the discretionary
authority, exercisable at any time while the Corporation's repurchase right
remains outstanding, to cancel that repurchase right with respect to one or more
shares purchased or purchasable by the Optionee under this Article Two and
thereby accelerate the vesting of those shares in whole or in part at any time.
6.
<PAGE>
II. CORPORATE TRANSACTION/CHANGE IN CONTROL
A. Each option outstanding under the Plan at the time of a Corporate
Transaction shall automatically accelerate so that each such option shall,
immediately prior to the specified effective date for the Corporate Transaction,
become fully exercisable with respect to the total number of shares of Common
Stock at the time subject to that option and may be exercised for all or any
portion of those shares as fully-vested shares. However, an outstanding option
under the Plan shall NOT become exercisable on such an accelerated basis if and
to the extent: (i) such option is, in connection with the Corporate
Transaction, either to be assumed by the successor corporation or parent thereof
or to be replaced with a comparable option to purchase shares of the capital
stock of the successor corporation or parent thereof, (ii) such option is to be
replaced with a cash incentive program of the successor corporation which
preserves the option spread existing at the time of the Corporate Transaction on
the shares for which the option is not otherwise at that time exercisable and
provides for subsequent payout in accordance with the same vesting schedule
applicable to such option or (iii) the acceleration of such option is subject to
other limitations imposed by the Plan Administrator at the time of the option
grant. The determination of option comparability under clause (i) above shall
be made by the Plan Administrator, and its determination shall be final, binding
and conclusive.
B. All of the Corporation's outstanding repurchase rights under this
Article Two shall automatically terminate, and the shares subject to those
terminated rights shall immediately vest in full, upon the occurrence of a
Corporate Transaction, except to the extent (i) any such repurchase right is to
be assigned to the successor corporation (or parent thereof) in connection with
the Corporate Transaction or (ii) such accelerated vesting is precluded by other
limitations imposed by the Plan Administrator at the time the repurchase right
is granted.
C. The Plan Administrator shall have the discretionary authority,
exercisable either at the time the option is granted or at any time while the
option remains outstanding, to provide (upon such terms as it may deem
appropriate) for the automatic acceleration of one or more outstanding options
which are assumed or replaced in the Corporate Transaction and do not otherwise
accelerate at that time (and the termination of any outstanding repurchase
rights), in the event the Optionee's Service should subsequently terminate
within a designated period following the effective date of such Corporate
Transaction.
D. Immediately following the consummation of the Corporate
Transaction, all outstanding options under the Plan shall terminate and cease to
remain outstanding, except to the extent assumed by the successor corporation or
its parent company.
E. Each outstanding option which is assumed in connection with the
Corporate Transaction shall be appropriately adjusted, immediately after such
Corporate Transaction, to apply and pertain to the number and class of
securities which would have been issued to the Optionee, in consummation of the
Corporate Transaction, had such person exercised the option immediately
7.
<PAGE>
prior to the Corporate Transaction. Appropriate adjustments shall also be
made to the exercise price payable per share, PROVIDED the aggregate exercise
price payable for such securities shall remain the same. In addition, the
class and number of securities available for issuance under the Plan
following the consummation of the Corporate Transaction shall be
appropriately adjusted.
F. The Plan Administrator shall have the discretionary authority,
exercisable either at the time the option is granted or at any time while the
option remains outstanding, to provide for the automatic acceleration of one or
more outstanding options under the Plan (and the termination of one or more of
the Corporation's outstanding repurchase rights) upon the occurrence of any
Change in Control. The Plan Administrator shall also have full power and
authority to condition any such option acceleration (and the termination of any
outstanding repurchase rights) upon the subsequent termination of the Optionee's
Service within a specified period following the Change in Control. Any options
accelerated in connection with the Change in Control shall remain fully
exercisable until the expiration or sooner termination of the option term.
G. The grant of options under the Plan shall in no way affect the
right of the Corporation to adjust, reclassify, reorganize or otherwise change
its capital or business structure or to merge, consolidate, dissolve, liquidate
or sell or transfer all or any part of its business or assets.
III. CANCELLATION AND REGRANT OF OPTIONS
The Plan Administrator shall have the authority to effect, at any time
and from time to time, with the consent of the affected optionees, the
cancellation of any or all outstanding options under this Article Two and to
grant in substitution new options under the Plan covering the same or different
numbers of shares of Common Stock but with an option exercise price per share
not less than the Fair Market Value of the Common Stock on the new grant date.
8.
<PAGE>
ARTICLE THREE
STOCK ISSUANCE PROGRAM
----------------------
I. STOCK ISSUANCE TERMS
Shares of Common Stock may be issued under the Stock Issuance Program
through direct and immediate issuances without any intervening option grants.
Each such stock issuance shall be evidenced by a Stock Issuance Agreement which
complies with the terms specified below. Shares of Common Stock may also be
issued under the Stock Issuance Program pursuant to share right awards which
entitle the recipients to receive those shares upon the attainment of designated
performance goals.
A. PURCHASE PRICE.
1. The purchase price per share of Common Stock subject to
direct issuance shall be fixed by the Plan Administrator, but shall not be less
than one hundred percent (100%) of the Fair Market Value per share of Common
Stock on the issuance date.
2. Shares of Common Stock may be issued under the Stock
Issuance Program for any of the following items of consideration which the Plan
Administrator may deem appropriate in each individual instance:
(i) cash or check made payable to the Corporation,
or
(ii) past services rendered to the Corporation (or
any Parent or Subsidiary).
B. VESTING/ISSUANCE PROVISIONS.
1. Shares of Common Stock issued under the Stock Issuance
Program may, in the discretion of the Plan Administrator, be fully and
immediately vested upon issuance or may vest in one or more installments over
the Participant's period of Service or upon attainment of specified performance
objectives. Alternatively, the Plan Administrator may issue share right awards
under the Stock Issuance Program which shall entitle the recipient to receive a
specified number of shares of Common Stock upon the attainment of one or more
performance goals established by the Plan Administrator. Upon the attainment of
such performance goals, fully-vested shares of Common Stock shall be issued in
satisfaction of those share right awards.
9.
<PAGE>
2. Any new, substituted or additional securities or other
property (including money paid other than as a regular cash dividend) which the
Participant may have the right to receive with respect to his or her unvested
shares of Common Stock by reason of any stock dividend, stock split,
recapitalization, combination of shares, exchange of shares or other change
affecting the outstanding Common Stock as a class without the Corporation's
receipt of consideration shall be issued subject to (i) the same vesting
requirements applicable to the Participant's unvested shares of Common Stock and
(ii) such escrow arrangements as the Plan Administrator shall deem appropriate.
3. The Participant shall have full stockholder rights with
respect to any shares of Common Stock issued to the Participant under the Stock
Issuance Program, whether or not the Participant's interest in those shares is
vested. Accordingly, the Participant shall have the right to vote such shares
and to receive any regular cash dividends paid on such shares.
4. Should the Participant cease to remain in Service while
holding one or more unvested shares of Common Stock issued under the Stock
Issuance Program or should the performance objectives not be attained with
respect to one or more such unvested shares of Common Stock, then those shares
shall be immediately surrendered to the Corporation for cancellation, and the
Participant shall have no further stockholder rights with respect to those
shares. To the extent the surrendered shares were previously issued to the
Participant for cash consideration, the Corporation shall repay that
consideration to the Participant at the time the shares are surrendered.
5. The Plan Administrator may in its discretion waive the
surrender and cancellation of one or more unvested shares of Common Stock (or
other assets attributable thereto) which would otherwise occur upon the
cessation of the Participant's Service or the non-attainment of the
performance objectives applicable to those shares. Such waiver shall result
in the immediate vesting of the Participant's interest in the shares of
Common Stock as to which the waiver applies. Such waiver may be effected at
any time, whether before or after the Participant's cessation of Service or
the attainment or non-attainment of the applicable performance objectives.
6. Outstanding share right awards under the Stock Issuance
Program shall automatically terminate, and no shares of Common Stock shall
actually be issued in satisfaction of those awards, if the performance goals
established for such awards are not attained. The Plan Administrator, however,
shall have the discretionary authority to issue shares of Common Stock under one
or more outstanding share right awards as to which the designated performance
goals have not been attained.
10.
<PAGE>
II. CORPORATE TRANSACTION/CHANGE IN CONTROL
A. In the event of any Corporate Transaction, all of the
Corporation's outstanding repurchase rights under the Stock Issuance Program
shall terminate automatically and all the shares of Common Stock subject to
those terminated rights shall immediately vest in full, except to the extent (i)
those repurchase rights are to be assigned to the successor corporation (or
parent thereof) in connection with such Corporate Transaction or (ii) the Plan
Administrator imposes other limitations in the Issuance Agreement which preclude
such accelerated vesting in whole or in part.
B. The Plan Administrator shall have the discretionary authority,
exercisable either at the time the unvested shares are issued or any time while
the Corporation's repurchase rights remain outstanding under the Stock Issuance
Program, to provide that those rights shall automatically terminate in whole or
in part, and the shares of Common Stock subject to those terminated rights shall
immediately vest, upon the Participant's termination of Service within a
designated period following the effective date of any Corporate Transaction in
which those repurchase rights are assigned to the successor corporation (or
parent thereof).
C. The Plan Administrator shall have the discretionary authority,
exercisable either at the time the unvested shares are issued or any time while
the Corporation's repurchase rights remain outstanding under the Stock Issuance
Program, to provide that those rights shall automatically terminate in whole or
in part, and the shares of Common Stock subject to those terminated rights shall
immediately vest, upon the occurrence of a Change in Control. Alternatively,
the Plan Administrator may condition such accelerated vesting upon the
Participant's termination of Service within a designated period following the
effective date of any Change in Control.
III. SHARE ESCROW/LEGENDS
Unvested shares may, in the Plan Administrator's discretion, be held
in escrow by the Corporation until the Participant's interest in such shares
vests or may be issued directly to the Participant with restrictive legends on
the certificates evidencing those unvested shares.
11.
<PAGE>
ARTICLE FOUR
MISCELLANEOUS
-------------
I. EFFECTIVE DATE AND TERM OF PLAN
A. This Plan became effective upon approval by the Board on October
20, 1998 and shall not be subject to stockholder approval.
B. The Plan shall terminate upon the EARLIER of (i) October 19,
2008 or (ii) the date on which all shares available for issuance under the Plan
shall have been issued as fully-vested shares pursuant to option exercises or
direct stock issuances under the Plan or (iii) the termination of all
outstanding options in connection with a Corporate Transaction. If the date of
termination is determined under clause (i) above, then all option grants or
unvested stock issuances outstanding on such date shall thereafter continue to
have force and effect in accordance with the provisions of the instruments
evidencing those grants or issuances.
II. AMENDMENT OF THE PLAN
The Board has complete and exclusive power and authority to amend or
modify the Plan in any or all respects whatsoever. However, no such amendment
or modification shall adversely affect rights and obligations with respect to
stock options or unvested stock issuances at the time outstanding under the
Plan, unless the affected Optionees or Participants consent to such amendment.
III. USE OF PROCEEDS
Any cash proceeds received by the Corporation from the sale of shares
pursuant to option grants or direct stock issuances under the Plan shall be used
for general corporate purposes.
IV. REGULATORY APPROVALS
A. The implementation of the Plan, the granting of any option under
the Plan, and the issuance of Common Stock either upon the exercise of the stock
options granted hereunder or pursuant to the Stock Issuance Program shall be
subject to the Corporation's procurement of all approvals and permits required
by regulatory authorities having jurisdiction over the Plan, the stock options
granted under it and the Common Stock issued pursuant to it.
12.
<PAGE>
B. No shares of Common Stock or other assets shall be issued or
delivered under this Plan unless and until there shall have been compliance with
all applicable requirements of Federal and state securities laws, including the
filing and effectiveness of the Form S-8 registration statement for the shares
of Common Stock issuable under the Plan, and all applicable listing requirements
of any stock exchange (or the Nasdaq National Market, if applicable) on which
the Common Stock is then listed for trading.
V. TAX WITHHOLDING
The Corporation's obligation to deliver shares of Common Stock upon
the exercise of stock options for such shares or the direct issuance or vesting
of such shares under the Plan shall be subject to the satisfaction of all
applicable federal, state and local income and employment tax withholding
requirements.
VI. NO EMPLOYMENT/SERVICE RIGHTS
Neither the action of the Corporation in establishing the Plan, nor
any action taken by the Plan Administrator hereunder, nor any provision of the
Plan shall be construed so as to grant any individual the right to remain in
Service for any period of specific duration, and the Corporation (or any Parent
or Subsidiary employing such individual) may terminate such individual's Service
at any time and for any reason, with or without cause.
VII. MISCELLANEOUS PROVISIONS
A. The right to acquire Common Stock or other assets under the Plan
may not be assigned, encumbered or otherwise transferred by any Optionee or
Participant, except as expressly provided herein.
B The provisions of the Plan relating to the exercise of options
and the vesting of shares shall be governed by the laws of the State of
California, as such laws are applied to contracts entered into and performed in
such state.
C. The provisions of the Plan shall insure to the benefit of, and
shall be binding upon, the Corporation and its successors and assigns, whether
by Corporate Transaction or otherwise, and the Participants and Optionees and
the legal representatives, heirs or legatees of their respective estates.
13.
<PAGE>
APPENDIX
--------
The following definitions shall be in effect under the Plan:
A. BOARD shall mean the Corporation's Board of Directors.
B. CHANGE IN CONTROL shall mean a change in ownership or control of the
Corporation effected through either of the following transactions:
(i) the acquisition, directly or indirectly by any person or
related group of persons (other than the Corporation or a person that
directly or indirectly controls, is controlled by, or is under common
control with, the Corporation), of beneficial ownership (within the meaning
of Rule 13d-3 of the 1934 Act) of securities possessing more than fifty
percent (50%) of the total combined voting power of the Corporation's
outstanding securities pursuant to a tender or exchange offer made directly
to the Corporation's stockholders, or
(ii) a change in the composition of the Board over a period of
thirty-six (36) consecutive months or less such that a majority of the
Board members ceases, by reason of one or more contested elections for
Board membership, to be comprised of individuals who either (A) have been
Board members continuously since the beginning of such period or (B) have
been elected or nominated for election as Board members during such period
by at least a majority of the Board members described in clause (A) who
were still in office at the time the Board approved such election or
nomination.
C. CODE shall mean the Internal Revenue Code of 1986, as amended.
D. COMMON STOCK shall mean the Corporation's common stock.
E. CORPORATE TRANSACTION shall mean any of the following
stockholder-approved transactions to which the Corporation is a party:
(i) a merger or consolidation in which the Corporation is not
the surviving entity, except for a transaction the principal purpose of
which is to change the State in which the Corporation is incorporated,
(ii) the sale, transfer or other disposition of all or
substantially all of the assets of the Corporation in complete
liquidation or dissolution of the Corporation, or
A-1
<PAGE>
(iii) any reverse merger in which the Corporation is the
surviving entity but in which securities possessing more than fifty
percent (50%) of the total combined voting power of the Corporation's
outstanding securities are transferred to person or persons different
from the persons holding those securities immediately prior to such
merger.
F. CORPORATION shall mean Ultratech Stepper, Inc., a Delaware
corporation, and its successors.
G. EMPLOYEE shall mean an individual who is in the employ of the
Corporation (or any Parent or Subsidiary), subject to the control and direction
of the employer entity as to both the work to be performed and the manner and
method of performance.
H. EXERCISE DATE shall mean the date on which the Corporation shall have
received written notice of the option exercise.
I. FAIR MARKET VALUE per share of Common Stock on any relevant date shall
be determined in accordance with the following provisions:
- If the Common Stock is at the time traded on the Nasdaq National
Market, then the Fair Market Value shall be the closing selling price per
share of Common Stock on the date in question, as such price is reported on
the Nasdaq National Market. If there is no closing selling price for the
Common Stock on the date in question, then the Fair Market Value shall be
the closing selling price on the last preceding date for which such
quotation exists.
- If the Common Stock is at the time listed on any Stock Exchange,
then the Fair Market Value shall be the closing selling price per share of
Common Stock on the date in question on that Stock Exchange determined by
the Plan Administrator to be the primary market for the Common Stock, as
such price is officially quoted in the composite tape of transactions on
such exchange. If there is no closing selling price for the Common Stock
on the date in question, then the Fair Market Value shall be the closing
selling price on the last preceding date for which such quotation exists.
J. MISCONDUCT shall mean the commission of any act of fraud, embezzlement
or dishonesty by the Optionee or Participant, any unauthorized use or disclosure
by such person of confidential information or trade secrets of the Corporation
(or any Parent or Subsidiary), or any other intentional misconduct by such
person adversely affecting the business or affairs of the Corporation (or any
Parent or Subsidiary) in a material manner. The foregoing definition shall not
be deemed to be inclusive of all the acts or omissions which the Corporation (or
any Parent or Subsidiary) may consider as grounds for the dismissal or discharge
of any Optionee, Participant or other person in the Service of the Corporation
(or any Parent or Subsidiary).
A-2
<PAGE>
K. 1934 ACT shall mean the Securities Exchange Act of 1934, as amended.
L. NON-STATUTORY OPTION shall mean an option not intended to satisfy the
requirements of Code Section 422.
M. OPTION GRANT PROGRAM shall mean the option grant program in effect
under the Plan.
N. OPTIONEE shall mean any person to whom an option is granted under the
Plan.
O. PARENT shall mean any corporation (other than the Corporation) in an
unbroken chain of corporations ending with the Corporation, provided each
corporation in the unbroken chain (other than the Corporation) owns, at the time
of the determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
P. PARTICIPANT shall mean any person who is issued shares of Common Stock
under the Stock Issuance Program.
Q. PERMANENT DISABILITY OR PERMANENTLY DISABLED shall mean the inability
of an individual to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment expected to result in death
or to be of continuous duration of twelve (12) months or more.
R. PLAN shall mean the Corporation's Supplemental Stock Option/Stock
Issuance Plan, as set forth in this document.
S. PLAN ADMINISTRATOR shall mean the committee comprised of one or more
Board members appointed by the Board to administer the Plan.
T. SERVICE shall mean the provision of services on a periodic basis to
the Corporation (or any Parent or Subsidiary) in the capacity of an Employee or
an independent consultant or advisor, except to the extent otherwise
specifically provided in the applicable stock option agreement.
U. STOCK EXCHANGE shall mean either the American Stock Exchange or the
New York Stock Exchange.
V. STOCK ISSUANCE AGREEMENT shall mean the agreement entered into by the
Corporation and the Participant at the time of issuance of shares of Common
Stock under the Stock Issuance Program.
W. STOCK ISSUANCE PROGRAM shall mean the stock issuance program in effect
under the Plan.
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X. SUBSIDIARY shall mean any corporation (other than the Corporation) in
an unbroken chain of corporations beginning with the Corporation, provided each
corporation (other than the last corporation) in the unbroken chain owns, at the
time of the determination, stock possessing fifty percent (50%) or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain.
A-4
<PAGE>
Exhibit 99.11
ULTRATECH STEPPER, INC.
NOTICE OF GRANT OF STOCK OPTION
Notice is hereby given of the following option grant (the "Option")
to purchase shares of the Common Stock of Ultratech Stepper, Inc. (the
"Corporation"):
OPTIONEE:___________________________________________________________
GRANT DATE: _________________________, 199___
VESTING COMMENCEMENT DATE: _______________________, 199___
OPTION PRICE: $ _________________ per share
NUMBER OF OPTION SHARES: ___________________ shares of Common Stock
EXPIRATION DATE: ______________________, 200___
TYPE OF OPTION: Non-Statutory Stock Option
EXERCISE SCHEDULE: The Option shall become exercisable for
twenty-four percent (24%) of the Option Shares upon the Optionee's
completion of one year of Service (as defined in the attached Stock
Option Agreement) measured from the Vesting Commencement Date and
shall become exercisable for the balance of the Option Shares in a
series of thirty-eight (38) successive equal monthly installments
upon the Optionee's completion of each additional month of Service
over the thirty-eight (38)-month period measured from the first
anniversary of the Vesting Commencement Date. In no event shall the
Option become exercisable for any additional Option Shares
following the Optionee's cessation of Service.
Optionee understands and agrees that the Option is granted subject
to and in accordance with the terms of the Ultratech Stepper, Inc.
Supplemental Stock Option/ Stock Issuance Plan (the "Plan"). Optionee
further agrees to be bound by the terms of the Plan and the terms of the
Option as set forth in the Stock Option Agreement attached hereto as EXHIBIT
A. A copy of the official Plan Prospectus is attached hereto as EXHIBIT B.
A copy of the actual plan document is available upon request made to the
Corporate Secretary at the Corporation's principal offices.
AT WILL EMPLOYMENT. Nothing in this Notice or in the attached
Stock Option Agreement or in the Plan shall confer upon Optionee any right to
continue in Service for any period of specific duration or interfere with or
otherwise restrict in any way the rights of the Corporation (or any Parent or
Subsidiary employing or retaining Optionee) or of Optionee, which rights are
hereby expressly reserved by each, to terminate Optionee's Service at any
time for any reason, with or without cause.
<PAGE>
DEFINITIONS. All capitalized terms in this Notice shall have the
meaning assigned to them in this Notice or in the attached Stock Option
Agreement.
DATED:________________________, 199____
ULTRATECH STEPPER, INC.
By:_______________________________
Title:____________________________
__________________________________
OPTIONEE
Address: _________________________
__________________________________
ATTACHMENTS
EXHIBIT A - STOCK OPTION AGREEMENT
EXHIBIT B - PLAN SUMMARY AND PROSPECTUS
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EXHIBIT A
STOCK OPTION AGREEMENT
<PAGE>
EXHIBIT B
PLAN SUMMARY AND PROSPECTUS
<PAGE>
Exhibit 99.12
ULTRATECH STEPPER, INC.
STOCK OPTION AGREEMENT
WITNESSETH:
RECITALS
A. The Corporation's Board of Directors (the "Board") has adopted
the Corporation's 1998 Supplemental Stock Option/Stock Issuance Plan (the
"Plan") for the purpose of attracting and retaining the services of employees
who are not officers of the Corporation, employees with the title of Vice
President, General Manager, or members of the Board.
B. Optionee is an individual who is to render valuable services to
the Corporation or one or more parent or subsidiary corporations, and this
Agreement is executed pursuant to, and is intended to carry out the purposes of,
the Plan in connection with the Corporation's grant of a stock option to
Optionee.
NOW, THEREFORE, it is hereby agreed as follows:
1. GRANT OF OPTION. Subject to and upon the terms and conditions
set forth in this Agreement, the Corporation hereby grants to Optionee, as of
the grant date (the "Date of Grant") specified in the accompanying Notice of
Grant of Stock Option (the "Grant Notice"), a stock option to purchase up to
that number of shares of the Corporation's Common Stock (the "Option Shares") as
is specified in the Grant Notice. The Option Shares shall be purchasable from
time to time during the option term at the option price per share (the "Option
Price") specified in the Grant Notice.
2. OPTION TERM. This option shall expire at the close of business
on the expiration date (the "Expiration Date") specified in the Grant Notice,
unless sooner terminated in accordance with Paragraph 5 or 6.
3. LIMITED TRANSFERABILITY. This option may, in connection with
the Optionee's estate plan, be assigned in whole or in part during the
Optionee's lifetime to one or more members of the Optionee's immediate family or
to a trust established exclusively for one or more such family members. The
assigned portion may only be exercised by the person or persons who acquire a
proprietary interest in this option pursuant to the assignment. Should the
Optionee while holding this option, then this option shall be transferred in
accordance with the Optionee's will or the laws of descent and distribution.
4. DATES OF EXERCISE. This option shall become exercisable for
the Option Shares in accordance with the installment exercise schedule specified
in the Grant Notice. As the option becomes exercisable for one or more
installments, those installments shall accumulate, and the option shall remain
exercisable for the accumulated installments until the Expiration Date or sooner
termination of the option term under Paragraph 5 or Paragraph 6 of this
Agreement. In no event shall this option become exercisable for any additional
Option Shares following Optionee's cessation of Service.
<PAGE>
5. CESSATION OF SERVICE. The option term specified in Paragraph 2
shall terminate (and this option shall cease to be outstanding) prior to the
Expiration Date in accordance with the following provisions:
(i) This option shall immediately terminate and cease to be
outstanding for any Option Shares for which this option is not exercisable
at the time of Optionee's cessation of Service.
(ii) Should Optionee cease Service for any reason other than
death or permanent disability while holding this option, then Optionee
shall have a three (3)-month period measured from the date of such
cessation of Service in which to exercise this option for any or all of the
Option Shares for which this option is exercisable at the time of such
cessation of Service. In no event, however, may this option be exercised
at any time after the specified Expiration Date of the option term. Upon
the expiration of such three (3)-month period or (if earlier) upon the
specified Expiration Date of the option term, this option shall terminate
and cease to be outstanding.
(iii) Should Optionee die while in Service or within the three
(3)-month period following his or her cessation of Service and hold this
option at the time of his or her death, then the personal representative of
Optionee's estate or the person or persons to whom this option is
transferred pursuant to Optionee's will or in accordance with the laws of
descent and distribution shall have the right to exercise the option for
any or all of the Option Shares for which this option is exercisable at the
time of Optionee's cessation of Service, less any Option Shares
subsequently purchased by Optionee prior to death. Such right shall lapse,
and this option shall terminate and cease to remain outstanding, upon the
EARLIER of (A) the expiration of the twelve (12)-month period measured from
the date of Optionee's death or (B) the Expiration Date.
(iv) Should Optionee become permanently disabled while
holding this option and cease Service by reason of such disability, then
Optionee shall have a twelve (12) month period commencing with the date of
such cessation of Service in which to exercise this option for any or all
of the Option Shares for which this option is exercisable at the time of
such cessation of Service. In no event, however, may this option be
exercised at any time after the specified Expiration Date of the option
term. Upon the expiration of such limited period of exercisability or (if
earlier) upon the Expiration Date, this option shall terminate and cease to
be outstanding.
(v) Should (A) Optionee's Service be terminated for
misconduct (including, but not limited to, any act of dishonesty, willful
misconduct, fraud or embezzlement) or (B) Optionee make any unauthorized
use or disclosure of confidential information or trade secrets of the
Corporation or any parent or subsidiary, then in any such event this option
shall terminate immediately and cease to be outstanding.
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<PAGE>
(vi) During the limited period of post-Service exercisability
applicable pursuant to subparagraphs (ii) through (iv) above, this option
may not be exercised in the aggregate for more than the number of Option
Shares (if any) for which this option is, at the time of the Optionee's
cessation of Service, exercisable in accordance with either the normal
exercise provisions specified in the Grant Notice or the special
acceleration provisions of Paragraph 6 of this Agreement.
(vii) For purposes of this Agreement, the following
definitional provisions shall be in effect:
A. Optionee shall be deemed to remain in SERVICE for so
long as such individual renders services on a periodic basis to the
Corporation (or any parent or subsidiary) in the capacity of an Employee or
an independent consultant or advisor.
B. Optionee shall be considered to be an EMPLOYEE
for so long as such individual remains in the employ of the
Corporation or any parent or subsidiary, subject to the control and
direction of the employer entity not only as to the work to be
performed but also as to the manner and method of performance.
C. Optionee shall be deemed to be PERMANENTLY
DISABLED and to have incurred a PERMANENT DISABILITY if Optionee is
unable to engage in any substantial gainful activity by reason of any
medically-determinable physical or mental impairment expected to
result in death or to be of continuous duration of twelve (12) months
or more.
D. A corporation shall be considered to be a
SUBSIDIARY of the Corporation if it is a member of an unbroken chain
of corporations beginning with the Corporation, provided each such
corporation in the chain (other than the last corporation) owns, at
the time of determination, stock possessing fifty percent (50%) or
more of the total combined voting power of all classes of stock in one
of the other corporations in such chain.
E. A corporation shall be considered to be a PARENT
of the Corporation if it is a member of an unbroken chain ending with
the Corporation, provided each such corporation in the chain (other
than the Corporation) owns, at the time of determination, stock
possessing fifty percent (50%) or more of the total combined voting
power of all classes of stock in one of the other corporations in such
chain.
6. CORPORATE TRANSACTION.
A. In the event of any of the following stockholder-approved
transactions to which the Corporation is a party (a "Corporate Transaction"):
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<PAGE>
(i) a merger or consolidation in which the Corporation is
not the surviving entity, except for a transaction the principal purpose of
which is to change the State in which the Corporation is incorporated,
(ii) the sale, transfer or other disposition of all or
substantially all of the assets of the Corporation in complete liquidation
or dissolution of the Corporation, or
(iii) any reverse merger in which the Corporation is the
surviving entity but in which securities possessing more than fifty percent
(50%) of the total combined voting power of the Corporation's outstanding
securities are transferred to a person or persons different from the
persons holding those securities immediately prior to such merger,
this option, to the extent outstanding at such time but not
otherwise fully exercisable, shall automatically accelerate so that such
option shall, immediately prior to the specified effective date for the
Corporate Transaction, become exercisable for all the Option Shares at the
time subject to such option and may be exercised for all or any portion of
such shares as fully-vested shares. No such acceleration of this option,
however, shall occur if and to the extent: (i) this option is, in connection
with the Corporate Transaction, to be assumed by the successor corporation or
parent thereof or replaced with a comparable option to purchase shares of the
capital stock of the successor corporation or parent thereof or (ii) such
option is to be replaced with a cash incentive program of the successor
corporation which preserves the option spread existing at the time of the
Corporate Transaction on the Option Shares for which the option is not
otherwise at that time exercisable (the excess of the Fair Market Value of
those Option Shares over the aggregate Option Price payable for such shares)
and provides for subsequent pay-out in accordance with the same vesting
schedule in effect for the Option Shares pursuant to the option exercise
schedule set forth in the Grant Notice. The determination of option
comparability under clause (i) shall be made by the Plan Administrator, and
such determination shall be final, binding and conclusive.
B. This option, to the extent not previously exercised, shall
terminate upon the consummation of such Corporate Transaction and cease to be
outstanding, except to the extent expressly assumed by the successor corporation
or parent thereof.
C. This Agreement shall not in any way affect the right of the
Corporation to adjust, reclassify, reorganize or otherwise make changes in its
capital or business structure or to merge, consolidate, dissolve, liquidate or
sell or transfer all or any part of its business or assets.
7. ADJUSTMENT IN OPTION SHARES.
A. In the event any change is made to the Common Stock issuable
under the Plan by reason of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares or other change affecting the
outstanding Common Stock as a class effected without the Corporation's receipt
of consideration, the Plan Administrator shall make appropriate
4
<PAGE>
adjustments to (i) the number and/or class of securities subject to this option
and (ii) the Option Price payable per share in order to prevent any dilution or
enlargement of benefits hereunder. Such adjustments shall be final, binding and
conclusive.
B. If this option is to be assumed in connection with any
Corporate Transaction under Paragraph 6 or is otherwise to continue outstanding,
then this option shall, immediately after such Corporate Transaction, be
appropriately adjusted to apply and pertain to the number and class of
securities which would have been issued to Optionee in the consummation of such
Corporate Transaction had the option been exercised immediately prior to such
Corporate Transaction. Appropriate adjustments shall also be made to the Option
Price payable per share, PROVIDED the aggregate Option Price payable hereunder
shall remain the same.
8. PRIVILEGE OF STOCK OWNERSHIP. The holder of this option shall
not have any of the rights of a stockholder with respect to the Option Shares
until such individual shall have exercised the option, paid the Option Price for
the purchased shares and become the holder of record of those shares.
9. MANNER OF EXERCISING OPTION.
A. In order to exercise this option with respect to any or all of
the Option Shares for which this option is at the time exercisable, Optionee (or
in the case of exercise after Optionee's death, Optionee's executor,
administrator, heir or legatee, as the case may be) must take the following
actions:
(i) Deliver to the Corporate Secretary of the Corporation an
executed notice of exercise in substantially the form of Exhibit I to this
Agreement (the "Exercise Notice") in which there is specified the number of
Option Shares to be purchased under the exercised option.
(ii) Pay the aggregate Option Price for the purchased shares
through one or more of the following alternatives:
- full payment in cash or by check payable to the
Corporation;
- full payment in shares of Common Stock held for the
requisite period necessary to avoid a charge to the Corporation's earnings
for financial reporting purposes and valued at Fair Market Value on the
Exercise Date (as such term is defined below); or
- full payment effected through a broker-dealer sale and
remittance procedure pursuant to which Optionee shall provide irrevocable
instructions to (I) a Corporation-designated brokerage firm to effect the
immediate sale of the purchased shares and remit to the Corporation, out of
the sale proceeds available on the settlement date, sufficient funds to
cover the aggregate Option Price payable for the purchased shares plus all
applicable
5
<PAGE>
Federal, State and local income taxes and employment taxes required to be
withheld in connection with such purchase and (II) to the Corporation to
deliver the certificates for the purchased shares directly to such
brokerage firm in order to complete the sale transaction.
(iii) Furnish to the Corporation appropriate documentation
that the person or persons exercising the option (if other than Optionee)
have the right to exercise this option.
B. For purposes of this Agreement, the Exercise Date shall be the
date on which the executed Exercise Notice shall have been delivered to the
Corporation. Except to the extent the sale and remittance procedure specified
above is utilized in connection with the option exercise, payment of the Option
Price for the purchased shares must accompany such Exercise Notice. For all
valuation purposes under this Agreement, the Fair Market Value per share of
Common Stock on any relevant date shall be the closing selling price per share
of Common Stock on the date in question, as such price is reported by the
National Association of Securities Dealers on the Nasdaq National Market. If
there is no such reported price on the date in question, then the Fair Market
Value shall be the closing selling price on the last preceding date for which
such quotation exists.
C. As soon as practical after receipt of the Exercise Notice, the
Corporation shall mail or deliver to or on behalf of Optionee (or any other
person or persons exercising this option in accordance herewith) a certificate
or certificates representing the purchased shares.
D. In no event may this option be exercised for any fractional
shares.
10. GOVERNING LAW. The interpretation, performance, and
enforcement of this Agreement shall be governed by the laws of the State of
California without resort to that State's conflict-of-laws rules.
11. COMPLIANCE WITH LAWS AND REGULATIONS. The exercise of this
option and the issuance of the Option Shares upon such exercise shall be subject
to compliance by the Corporation and Optionee with all applicable requirements
of law relating thereto and with all applicable regulations of any stock
exchange on which shares of the Corporation's Common Stock may be listed at the
time of such exercise and issuance.
12. SUCCESSORS AND ASSIGNS. Except to the extent otherwise
provided in Paragraph 3 or 6, the provisions of this Agreement shall inure to
the benefit of, and be binding upon, the successors, administrators, heirs and
legal representatives of Optionee and the successors and assigns of the
Corporation.
13. LIABILITY OF CORPORATION. The inability of the Corporation to
obtain approval from any regulatory body having authority deemed by the
Corporation to be necessary to the lawful issuance and sale of any Common Stock
pursuant to this option shall relieve the Corporation of any liability with
respect to the non-issuance or sale of the Common Stock as to which such
approval shall not have been obtained. The Corporation however, shall use its
best efforts to obtain all such approvals.
6
<PAGE>
14. AT WILL EMPLOYMENT. Nothing in this Agreement or in the Plan
shall confer upon Optionee any right to continue in the Service of the
Corporation (or any parent or subsidiary employing or retaining Optionee) for
any period of specific duration or interfere with or otherwise restrict in any
way the rights of the Corporation (or any such parent or subsidiary) or
Optionee, which rights are hereby expressly reserved by each party, to terminate
Optionee's Service at any time for any reason whatsoever, with or without cause.
15. NOTICES. Any notice required to be given or delivered to the
Corporation under the terms of this Agreement shall be in writing and addressed
to the Corporation in care of the Corporate Secretary at the Corporation's
principal offices at 3050 Zanker Road, San Jose, CA 95134. Any notice required
to be given or delivered to Optionee shall be in writing and addressed to
Optionee at the address indicated on the Grant Notice. All notices shall be
deemed to have been given or delivered upon personal delivery or upon deposit in
the U.S. mail, by registered or certified mail, postage prepaid and properly
addressed to the party to be notified.
16. CONSTRUCTION. This Agreement and the option evidenced hereby
are made and granted pursuant to the Plan and are in all respects limited by and
subject to the express terms and provisions of the Plan. All decisions of the
Plan Administrator with respect to any question or issue arising under the Plan
or this Agreement shall be conclusive and binding on all persons having an
interest in this option.
17. TAX WITHHOLDING. Optionee shall make appropriate arrangements
with the Corporation or any parent or subsidiary employing Optionee for the
satisfaction of all Federal, State and local income and employment withholding
taxes applicable to such exercise.
18. LEAVE OF ABSENCE. The following provisions shall apply upon
the Optionee's commencement of an approved leave of absence:
(i) The exercise schedule in effect under the Grant Notice
shall be frozen as of the first day of the authorized leave, and this option
shall not become exercisable for any additional installments of the Option
Shares during the period Optionee remains on such leave.
(ii) Should Optionee resume active Employee status within
thirty (30) days after the start date of the authorized leave, then Optionee
shall, for purposes of the exercise schedule set forth in the Grant Notice,
receive Service credit for the entire period of such leave. If Optionee does
not resume active Employee status within such thirty (30)-day period, then no
Service credit shall be given for the period of such leave.
(iii) In no event shall this option become exercisable for any
additional Option Shares or otherwise continue to remain outstanding if Optionee
does not resume Employee status prior to the Expiration Date of the option term.
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<PAGE>
EXHIBIT I
NOTICE OF EXERCISE OF STOCK OPTION
I hereby notify Ultratech Stepper, Inc. (the "Corporation") that I
elect to purchase ______________ shares of the Corporation's Common Stock (the
"Purchased Shares") at the option exercise price of $_____________ per share
(the "Option Price") pursuant to that certain option (the "Option") granted to
me under the Corporation's 1998 Supplemental Stock Option/Stock Issuance Plan on
______________________, 199 .
Concurrently with the delivery of this Exercise Notice to the
Corporate Secretary of the Corporation, I shall hereby pay to the Corporation
the Option Price for the Purchased Shares in accordance with the provisions of
my agreement with the Corporation evidencing the Option and shall deliver
whatever additional documents may be required by such agreement as a condition
for exercise. Alternatively, I may utilize the special broker-dealer sale and
remittance procedure specified in my agreement to effect the payment of the
Option Price for the Purchased Shares.
_______________, 199__
Date
_________________________________
Optionee
Address: _________________________________
_________________________________
Print name in exact manner
it is to appear on the
stock certificate: _________________________________
Address to which certificate
is to be sent, if different
from address above: _________________________________
_________________________________
Social Security Number: _________________________________
Employee Number: _________________________________
<PAGE>
Exhibit 99.13
ULTRATECH STEPPER, INC.
EMPLOYEE STOCK PURCHASE PLAN
(AS AMENDED AND RESTATED EFFECTIVE AS OF MARCH 16, 1999)
I. PURPOSE OF THE PLAN
This Employee Stock Purchase Plan is intended to promote the interests
of Ultratech Stepper, Inc. by providing eligible employees with the opportunity
to acquire a proprietary interest in the Corporation through participation in a
payroll-deduction based employee stock purchase plan designed to qualify under
Section 423 of the Code.
Capitalized terms herein shall have the meanings assigned to such
terms in the attached Appendix.
II. ADMINISTRATION OF THE PLAN
The Compensation Committee of the Board in its capacity as Plan
Administrator shall have full authority to interpret and construe any provision
of the Plan and to adopt such rules and regulations for proper administration of
the Plan as it may deem necessary or appropriate. Decisions of the Plan
Administrator shall be final and binding on all parties having an interest in
the Plan.
III. STOCK SUBJECT TO PLAN
A. The stock purchasable under the Plan shall be shares of
authorized but unissued or reacquired Common Stock, including shares of
Common Stock purchased on the open market. The maximum number of shares of
Common Stock which may be issued over the term of the Plan shall not exceed
700,000 shares. Such authorized share reserve is comprised of (i) the
initial 200,000(1) shares authorized by the Board and approved by the
Corporation's stockholders prior to the Plan Effective Date, and (ii) a
further increase of 500,000 shares of Common Stock authorized by the Board on
March 16, 1999. The 500,000-share increase shall be subject to stockholder
approval at the 1999 Annual Meeting and shall, if so approved, become
effective with the offering period commencing August 2, 1999.
- --------------
(1) As adjusted to reflect the 2:1 stock split the Corporation
effected May 10, 1995.
<PAGE>
B. Should any change be made to the Common Stock by reason of any
stock split, stock dividend, recapitalization, combination of shares, exchange
of shares or other change affecting the outstanding Common Stock as a class
without the Corporation's receipt of consideration, appropriate adjustments
shall be made to (i) the maximum number and class of securities issuable under
the Plan, (ii) the maximum number and class of securities purchasable per
Participant on any one Purchase Date, (iii) the maximum number and class of
securities purchasable in the aggregate by all Participants on any one Purchase
Date and (iv) the number and class of securities and the price per share in
effect under each outstanding purchase right in order to prevent the dilution or
enlargement of benefits thereunder.
IV. OFFERING PERIODS
A. Shares of Common Stock shall be offered for purchase under the
Plan through a series of successive offering periods until such time as (i) the
maximum number of shares of Common Stock available for issuance under the Plan
shall have been purchased or (ii) the Plan shall have been sooner terminated.
B. Each offering period shall be of such duration (not to exceed
twelve (12) months) as determined by the Plan Administrator prior to the start
date. The initial offering period shall commence on the Effective Date and
terminate on the last business day in July 1996. The next offering period shall
commence on the first business day in August 1996, and subsequent offering
periods shall commence as designated by the Plan Administrator.
C. Under no circumstances shall any offering period commence under
the Plan, nor shall any shares of Common Stock be issued hereunder, until such
time as (i) the Plan shall have been approved by the Corporation's stockholders
and (ii) the Corporation shall have complied with all applicable requirements of
the Securities Act, all applicable listing requirements of any stock exchange
(or the Nasdaq National Market if applicable) on which shares of the Common
Stock are listed for trading and all other applicable statutory and regulatory
requirements.
V. ELIGIBILITY
A. Each Eligible Employee shall be eligible to enter an offering
period under the Plan on the start date of that offering period or on any other
Quarterly Entry Date within that offering period, provided he or she remains an
Eligible Employee. The date on which such individual actually enters the
offering period shall be designated his or her Entry Date for purposes of that
offering period.
B. To participate in the Plan for a particular offering period, the
Eligible Employee must complete the enrollment forms prescribed by the Plan
Administrator (including a stock purchase agreement and a payroll deduction
authorization form) and file such forms with the Plan Administrator (or its
designate) on or before his or her scheduled Entry Date.
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VI. PAYROLL DEDUCTIONS
A. The payroll deduction authorized by the Participant for purposes
of acquiring shares of Common Stock under the Plan may be any multiple of one
percent (1%) of the Base Salary paid to the Participant during his or her period
of participation within the offering period, up to a maximum of ten percent
(10%). The deduction rate so authorized shall continue in effect for such
period of participation, except to the extent such rate is changed in accordance
with the following guidelines:
(i) The Participant may, at any time during the offering
period, reduce his or her rate of payroll deduction to become effective as
soon as possible after filing the appropriate form with the Plan
Administrator. The Participant may not, however, effect more than one (1)
such reduction per quarter.
(ii) The Participant may, prior to any Quarterly Entry Date
within the offering period, increase the rate of his or her payroll
deduction by filing the appropriate form with the Plan Administrator. The
new rate (which may not exceed ten percent (10%)) shall become effective as
of the first Quarterly Entry Date following the filing of such form.
B. Payroll deductions shall begin on the first pay day following the
Participant's Entry Date into the offering period and shall (unless sooner
terminated by the Participant) continue through the pay day ending with or
immediately prior to the last day of that offering period. The amounts so
collected shall be credited to the Participant's book account under the Plan,
but no interest shall be paid on the balance from time to time outstanding in
such account. The amounts collected from the Participant shall not be held in
any segregated account or trust fund and may be commingled with the general
assets of the Corporation and used for general corporate purposes.
C. Payroll deductions shall automatically cease upon the termination
of the Participant's purchase right in accordance with the provisions of the
Plan.
D. The Participant's acquisition of Common Stock under the Plan on
any Purchase Date shall neither limit nor require the Participant's acquisition
of Common Stock on any subsequent Purchase Date.
VII. PURCHASE RIGHTS
A. GRANT OF PURCHASE RIGHT. A Participant shall be granted a
separate purchase right for each offering period in which he or she
participates. The purchase right shall be granted on the Participant's Entry
Date into the offering period and shall provide the Participant with the right
to purchase shares of Common Stock upon the terms set forth below. The
Participant shall execute a stock purchase agreement embodying such terms and
such other provisions (not inconsistent with the Plan) as the Plan Administrator
may deem advisable.
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Under no circumstances shall purchase rights be granted under the Plan
to any Eligible Employee if such individual would, immediately after the grant,
own (within the meaning of Code Section 424(d)) or hold outstanding options or
other rights to purchase, stock possessing five percent (5%) or more of the
total combined voting power or value of all classes of stock of the Corporation
or any Corporate Affiliate.
B. EXERCISE OF THE PURCHASE RIGHT. Each purchase right shall be
automatically exercised on the Purchase Date in effect for the offering period
for which such right has been granted, and shares of Common Stock shall
accordingly be purchased on behalf of each Participant (other than any
Participant whose payroll deductions have previously been refunded in accordance
with the Termination of Purchase Right provisions below) on such Purchase Date.
The purchase shall be effected by applying the Participant's payroll deductions
for the offering period ending on such Purchase Date to the purchase of whole
shares of Common Stock (subject to the limitation on the maximum number of
shares purchasable per Participant) at the purchase price in effect for the
Participant for that Purchase Date.
C. PURCHASE PRICE. The purchase price per share at which Common
Stock will be purchased on the Participant's behalf on the Purchase Date in
effect for the offering period shall be equal to eighty-five percent (85%) of
the LOWER of (i) the Fair Market Value per share of Common Stock on the
Participant's Entry Date into that offering period or (ii) the Fair Market Value
per share of Common Stock on that Purchase Date. However, for each Participant
whose Entry Date is other than the start date of the offering period, the clause
(i) amount shall in no event be less than the Fair Market Value per share of
Common Stock on the start date of that offering period.
D. NUMBER OF PURCHASABLE SHARES. The number of shares of Common
Stock purchasable by a Participant on the Purchase Date in effect for the
offering period shall be the number of whole shares obtained by dividing the
amount collected from the Participant through payroll deductions during the
offering period ending with that Purchase Date by the purchase price in effect
for the Participant for that Purchase Date. However, the maximum number of
shares of Common Stock purchasable per Participant on any such Purchase Date
shall not exceed 2,000 shares, subject to periodic adjustments in the event of
certain changes in the Corporation's capitalization. In addition, the maximum
aggregate number of shares of Common Stock purchasable by all Participants on
any one Purchase Date shall not exceed one hundred fifty thousand (150,000)
shares, subject to periodic adjustments subject to periodic adjustments in the
event of certain changes in the Corporations capitalization. However, the Plan
Administrator shall have the discretionary authority, exercisable prior to the
start of any offering period under the Plan, to increase or decrease the
limitations to be in effect for the number of shares purchasable per Participant
and in the aggregate by all Participants on each Purchase Date during that
offering period.
E. EXCESS PAYROLL DEDUCTIONS. Any payroll deductions not applied
to the purchase of shares of Common Stock on any Purchase Date because they are
not sufficient to purchase a whole share of Common Stock or because they would
result in the purchase of shares in excess of the maximum number of shares
purchasable by the Participant on that Purchase Date shall be promptly refunded.
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F. TERMINATION OF PURCHASE RIGHT. The following provisions shall
govern the termination of outstanding purchase rights:
(i) A Participant may, at any time prior to the Purchase Date
in effect for the offering period, terminate his or her outstanding
purchase right by filing the appropriate form with the Plan Administrator
(or its designate), and no further payroll deductions shall be collected
from the Participant with respect to the terminated purchase right. Any
payroll deductions collected during the offering period shall, at the
Participant's election, be immediately refunded or held for the purchase of
shares on the Purchase Date in effect for that offering period. If no such
election is made at the time such purchase right is terminated, then the
payroll deductions collected with respect to the terminated right shall be
refunded as soon as possible.
(ii) The termination of such purchase right shall be
irrevocable, and the Participant may not subsequently rejoin the offering
period for which the terminated purchase right was granted. In order to
resume participation in any subsequent offering period, such individual
must re-enroll in the Plan (by making a timely filing of the prescribed
enrollment forms) on or before the date his or her scheduled Entry Date
into that offering period.
(iii) Should the Participant cease to remain an Eligible
Employee for any reason (including death, disability or change in status)
while his or her purchase right remains outstanding, then that purchase
right shall immediately terminate, and all of the Participant's payroll
deductions for the offering period shall be immediately refunded. However,
should the Participant cease to remain in active service by reason of an
approved unpaid leave of absence, then the Participant shall have the
election, exercisable up until the Purchase Date in effect for the offering
period in which such leave commences, to (a) withdraw all the funds in the
Participant's payroll account at the time of the commencement of such leave
or (b) have such funds held for the purchase of shares on such Purchase
Date. In no event, however, shall any further payroll deductions be added
to the Participant's account during the unpaid leave. Upon the
Participant's return to active service, his or her payroll deductions under
the Plan shall automatically resume at the rate in effect at the time the
leave began, provided the Participant returns to service prior to the
expiration date of the offering period in which such leave began.
G. CORPORATE TRANSACTION. Each outstanding purchase right shall
automatically be exercised, immediately prior to the effective date of any
Corporate Transaction, by applying the payroll deductions of each Participant
for the offering period in which such Corporate Transaction occurs to the
purchase of whole shares of Common Stock at a purchase price per share equal to
eighty-five percent (85%) of the LOWER of (i) the Fair Market Value per share of
Common Stock on the Participant's Entry Date into that offering period or (ii)
the Fair Market Value per share of Common Stock immediately prior to the
effective date of such
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Corporate Transaction. However, the clause (i) amount above shall not, for any
Participant whose Entry Date for the offering period is other than the start
date of that offering period, be less than the Fair Market Value per share of
Common Stock on such start date, and the applicable limitations on the number of
shares purchasable per Participant and in the aggregate by all Participants
shall continue to apply to any such purchase.
The Corporation shall use its best efforts to provide at least ten
(10)-days prior written notice of the occurrence of any Corporate Transaction,
and Participants shall, following the receipt of such notice, have the right to
terminate their outstanding purchase rights prior to the effective date of the
Corporate Transaction.
H. PRORATION OF PURCHASE RIGHTS. Should the total number of shares
of Common Stock which are to be purchased pursuant to outstanding purchase
rights on any particular date exceed the number of shares then available for
issuance under the Plan, the Plan Administrator shall make a pro-rata allocation
of the available shares on a uniform and nondiscriminatory basis, and the
payroll deductions of each Participant, to the extent in excess of the aggregate
purchase price payable for the Common Stock pro-rated to such individual, shall
be refunded.
I. ASSIGNABILITY. The purchase right shall be exercisable only by
the Participant and shall not be assignable or transferable by the Participant.
J. STOCKHOLDER RIGHTS. A Participant shall have no stockholder
rights with respect to the shares subject to his or her outstanding purchase
right until the shares are purchased on the Participant's behalf in accordance
with the provisions of the Plan and the Participant has become a holder of
record of the purchased shares.
VIII. ACCRUAL LIMITATIONS
A. No Participant shall be entitled to accrue rights to acquire
Common Stock pursuant to any purchase right outstanding under this Plan if and
to the extent such accrual, when aggregated with (i) rights to purchase Common
Stock accrued under any other purchase right granted under this Plan and (ii)
similar rights accrued under other employee stock purchase plans (within the
meaning of Code Section 423) of the Corporation or any Corporate Affiliate,
would otherwise permit such Participant to purchase more than Twenty-Five
Thousand Dollars ($25,000) worth of stock of the Corporation or any Corporate
Affiliate (determined on the basis of the Fair Market Value of such stock on the
date or dates such rights are granted) for each calendar year such rights are at
any time outstanding.
B. For purposes of applying such accrual limitations, the following
provisions shall be in effect:
- The right to acquire Common Stock under each outstanding
purchase right shall accrue on the Purchase Date in effect for the offering
period for which such right is granted.
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- No right to acquire Common Stock under any outstanding
purchase right shall accrue to the extent the Participant has already accrued in
the same calendar year the right to acquire Common Stock under one (1) or more
other purchase rights at a rate equal to Twenty-Five Thousand Dollars ($25,000)
worth of Common Stock (determined on the basis of the Fair Market Value of such
stock on the date or dates of grant) for each calendar year such rights were at
any time outstanding.
C. If by reason of such accrual limitations, any purchase right of a
Participant does not accrue for a particular offering period, then the payroll
deductions which the Participant made during that offering period with respect
to such purchase right shall be promptly refunded.
D. In the event there is any conflict between the provisions of this
Article and one or more provisions of the Plan or any instrument issued
thereunder, the provisions of this Article shall be controlling.
IX. EFFECTIVE DATE AND TERM OF THE PLAN
A. The Plan was adopted by the Board on March 16, 1995 and was
subsequently approved by the Corporation's stockholders at the 1995 Annual
Meeting. The Plan became effective on the Effective Date and was subsequently
amended effective as of February 1, 1996 to include as Participating
Corporations the following Corporate Affiliates; Ultratech Stepper UK, Ltd.,
Ultratech K.K. and Ultratech Stepper International, Inc. On February 3, 1997
UltraBeam Lithography, Inc. was named a Participating Corporation and effective
August 1, 1997, Ultratech Stepper (Thailand) Company, Ltd. was named a
Participating Corporation.
B. Unless sooner terminated by the Board, the Plan shall terminate
upon the EARLIEST of (i) the last business day in July 2005, (ii) the date on
which all shares available for issuance under the Plan shall have been sold
pursuant to purchase rights exercised under the Plan or (iii) the date on which
all purchase rights are exercised in connection with a Corporate Transaction.
No further purchase rights shall be granted or exercised, and no further payroll
deductions shall be collected, under the Plan following its termination.
C. The Plan was amended and restated by the Board, effective March
16, 1999 to effect the following revisions: (i) increase the maximum number of
shares of Common Stock authorized for issuance over the term of the Plan by an
additional 500,000 shares to 700,000 shares and (ii) limit the maximum number of
shares of Common Stock purchasable in the aggregate by all Participants on any
one Purchase Date to 150,000 shares. The amendment will become effective with
the offering period commencing August 2, 1999, provided the 500,000-share
increase is approved by the Corporation's stockholders at the 1999 Annual
Meeting.
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X. AMENDMENT OF THE PLAN
The Board may alter, amend, suspend or discontinue the Plan at any
time to become effective immediately following the close of any offering
period. However, the Board may not, without the approval of the Corporation's
stockholders, (i) increase the number of shares of Common Stock issuable
under the Plan or purchasable per Participant on any Purchase Date, except
for permissible adjustments in the event of certain changes in the
Corporation's capitalization, (ii) alter the purchase price formula so as to
reduce the purchase price payable for the shares of Common Stock purchasable
under the Plan, or (iii) modify the requirements for eligibility to
participate in the Plan.
XI. GENERAL PROVISIONS
A. All costs and expenses incurred in the administration of the Plan
shall be paid by the Corporation.
B. Nothing in the Plan shall confer upon the Participant any right
to continue in the employ of the Corporation or any Corporate Affiliate for any
period of specific duration or interfere with or otherwise restrict in any way
the rights of the Corporation (or any Corporate Affiliate employing such person)
or of the Participant, which rights are hereby expressly reserved by each, to
terminate such person's employment at any time for any reason, with or without
cause.
C. The provisions of the Plan shall be governed by the laws of the
State of California without resort to that State's conflict-of-laws rules.
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SCHEDULE A
CORPORATIONS PARTICIPATING IN
EMPLOYEE STOCK PURCHASE PLAN
AS OF FEBRUARY 1, 1996
Ultratech Stepper, Inc.
Ultratech Stepper UK, Ltd.
Ultratech K.K.
Ultratech Stepper International, Inc.
Ultratech Lithography, Inc.
Ultratech Stepper (Thailand) Company, Ltd.
<PAGE>
APPENDIX
The following definitions shall be in effect under the Plan:
A. BOARD shall mean the Corporation's Board of Directors.
B. BASE SALARY shall mean the regular base salary paid to a
Participant by one or more Participating Companies during such individual's
period of participation in the Plan, plus any pre-tax contributions made by the
Participant to any Code Section 401(k) salary deferral plan or any Code Section
125 cafeteria benefit program now or hereafter established by the Corporation or
any Corporate Affiliate. The following items of compensation shall not be
included in Base Salary: (i) all overtime payments, bonuses, commissions (other
than those functioning as base salary equivalents), profit-sharing distributions
and other incentive-type payments and (ii) any and all contributions (other than
Code Section 401(k) or Code Section 125 contributions) made on the Participant's
behalf by the Corporation or any Corporate Affiliate under any employee benefit
or welfare plan now or hereafter established.
C. CODE shall mean the Internal Revenue Code of 1986, as amended.
D. COMMON STOCK shall mean the Corporation's common stock.
E. CORPORATE AFFILIATE shall mean any parent or subsidiary
corporation of the Corporation (as determined in accordance with Code Section
424), whether now existing or subsequently established.
F. CORPORATE TRANSACTION shall mean either of the following
stockholder-approved transactions to which the Corporation is a party:
(i) a merger or consolidation in which securities possessing
more than fifty percent (50%) of the total combined voting power of the
Corporation's outstanding securities are transferred to a person or persons
different from the persons holding those securities immediately prior to
such transaction, or
(ii) the sale, transfer or other disposition of all or
substantially all of the assets of the Corporation in complete liquidation
or dissolution of the Corporation.
G. CORPORATION shall mean Ultratech Stepper, Inc., a Delaware
corporation, and any corporate successor to all or substantially all of the
assets or voting stock of Ultratech Stepper, Inc., which shall by appropriate
action adopt the Plan.
H. EFFECTIVE DATE shall mean the first business day in August
1995. Any Corporate Affiliate which becomes a Participating Corporation after
such Effective Date shall designate a subsequent Effective Date with respect
to its employee-Participants.
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I. ELIGIBLE EMPLOYEE shall mean any person who is engaged, on a
regularly-scheduled basis of more than twenty (20) hours per week for more
than five (5) months per calendar year, in the rendition of personal services
to any Participating Corporation as an employee for earnings considered wages
under Code Section 3401(a).
J. ENTRY DATE shall mean the date an Eligible Employee first
commences participation in the offering period in effect under the Plan. The
earliest Entry Date under the Plan shall be the Effective Date.
K. FAIR MARKET VALUE per share of Common Stock on any relevant
date shall be determined in accordance with the following provisions:
(i) If the Common Stock is at the time traded on the Nasdaq
National Market, then the Fair Market Value shall be the closing selling
price per share of Common Stock on the date in question, as such price is
reported by the National Association of Securities Dealers on the Nasdaq
National Market. If there is no closing selling price for the Common Stock
on the date in question, then the Fair Market Value shall be the closing
selling price on the last preceding date for which such quotation exists.
(ii) If the Common Stock is at the time listed on any Stock
Exchange, then the Fair Market Value shall be the closing selling price per
share of Common Stock on the date in question on the Stock Exchange
determined by the Plan Administrator to be the primary market for the
Common Stock, as such price is officially quoted in the composite tape of
transactions on such exchange. If there is no closing selling price for
the Common Stock on the date in question, then the Fair Market Value shall
be the closing selling price on the last preceding date for which such
quotation exists.
L. PARTICIPANT shall mean any Eligible Employee of a
Participating Corporation who is actively participating in the Plan.
M. PARTICIPATING CORPORATION shall mean the Corporation and such
Corporate Affiliate or Affiliates as may be authorized from time to time by
the Board to extend the benefits of the Plan to their Eligible Employees.
The Participating Corporations in the Plan as of February 1, 1996 are listed
in attached Schedule A.
N. PLAN shall mean the Corporation's Employee Stock Purchase
Plan, as set forth in this document.
O. PLAN ADMINISTRATOR shall mean the Compensation Committee of
the Board in its capacity as administrator of the Plan.
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P. PURCHASE DATE shall mean the last business day of each
offering period on which shares of Common Stock shall be purchased on behalf
of the Participants in that offering period. The initial Purchase Date shall
be July 31, 1996.
Q. QUARTERLY ENTRY DATE shall mean any of the following dates on
which an Eligible Employee may commence participation in the offering period
in effect under the Plan: the first business day in February, May, August and
November each year. The earliest Quarterly Entry Date under the Plan shall
be the Effective Date.
R. SECURITIES ACT shall mean the Securities Act of 1933, as
amended.
S. STOCK EXCHANGE shall mean either the American Stock Exchange
or the New York Stock Exchange.
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