<PAGE> 1
As filed with the Securities and Exchange Commission on November 24, 1999
Registration No. 333-_____
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933
NATIONAL INSTRUMENTS CORPORATION.
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 74-1871327
(State of Incorporation) (I.R.S. Employer Identification Number)
</TABLE>
11500 NORTH MOPAC EXPRESSWAY
AUSTIN, TEXAS 78759
(Address, including zip code, of Registrant's principal executive offices)
AMENDED AND RESTATED 1994 INCENTIVE PLAN
(Full title of the plan)
JAMES J. TRUCHARD, PHD
PRESIDENT AND CHAIRMAN OF THE BOARD OF DIRECTORS
NATIONAL INSTRUMENTS CORPORATION
11500 NORTH MOPAC EXPRESSWAY
AUSTIN, TEXAS 78759
(512) 338-9119
(Name, address, and telephone number, including area code, of agent for service)
COPY TO:
Kenneth M. Siegel, Esq.
WILSON SONSINI GOODRICH & ROSATI
Professional Corporation
650 Page Mill Road
Palo Alto, CA 94304
(650) 493-9300
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
======================================================================================================
Proposed Maximum Proposed Maximum Amount of
Title of Securities Amount to be Offering Price Aggregate Registration
to be Registered Registered(1) Per Share(2) Offering Price(2) Fee(2)
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value
$0.01 per share.............. 4,725,000 $31.09375 $146,917,969 $40,844
- ------------------------------------------------------------------------------------------------------
</TABLE>
(1) This Registration Statement shall also cover any additional shares of
common stock which become issuable under the plans being registered
pursuant to this Registration Statement by reason of any stock dividend,
stock split, recapitalization or any other similar transaction effected
without the receipt of consideration which results in an increase in the
number of the Registrant's outstanding shares of common stock.
(2) Estimated pursuant to Rule 457(c) under the Securities Act of 1933, as
amended (the "Securities Act") solely for the purpose of calculating the
registration fee based on the average of the high and low prices of the
Company's common stock as reported on Nasdaq on November 23, 1999.
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The contents of the Registrant's Forms S-8 Registration Statement, Registration
No. 33-91608, dated April 25, 1995, relating to the Registrant's 1994 Incentive
Plan are incorporated herein by reference.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 8. EXHIBITS.
<TABLE>
<CAPTION>
NUMBER DOCUMENT
- ------ --------
<S> <C>
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional Corporation,
with respect to the legality of the securities being registered.
10.1 Registrant's Amended and Restated 1994 Incentive Plan.
23.1 Consent of Counsel (contained in Exhibit 5.1).
23.2 Consent of PricewaterhouseCoopers LLP, Independent Accountants.
24.1 Power of Attorney (See page 4 of the Registration Statement).
</TABLE>
[Remainder of Page Intentionally Left Blank]
2
<PAGE> 4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant,
National Instruments Corporation, 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 Austin, State of Texas,
on November 24, 1999.
NATIONAL INSTRUMENTS CORPORATION
By: /s/ JAMES J. TRUCHARD
------------------------------------
Dr. James J. Truchard, President and
Chairman of the Board of Directors
3
<PAGE> 5
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Dr. James J. Truchard and Alexander M.
Davern and each of them, acting individually, as his attorney-in-fact, with full
power of substitution, for him and in any and all capacities, to sign any and
all amendments to this Registration Statement on this Form S-8 (including
post-effective amendments or any abbreviated registrations statement and any
amendments thereto filed pursuant to Rule 462(b) increasing the number of
securities for which registration is sought) and to file the same, with all
exhibits thereto and other documents in connection there with, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
each of said attorneys-in-fact, or his substitute or substitutes, may do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/ JAMES J. TRUCHARD Chairman of the Board and President November 24, 1999
- --------------------------- (Principal Executive Officer)
Dr. James J. Truchard
/s/ ALEXANDER M. DAVERN Chief Financial Officer and Treasurer November 24, 1999
- --------------------------- (Principal Financial and Accounting
Alexander M. Davern Officer)
/s/ JEFFREY L. KODOSKY Director November 24, 1999
- ---------------------------
Jeffrey L. Kodosky
/s/ WILLIAM C. NOWLIN, JR. Director November 24, 1999
- ---------------------------
William C. Nowlin, Jr.
/s/ BEN G. STREETMAN Director November 24, 1999
- ---------------------------
Ben G. Streetman
/s/ L. WAYNE ASHBY Director November 24, 1999
- ---------------------------
L. Wayne Ashby
/s/ DONALD M. CARLTON Director November 24, 1999
- ---------------------------
Donald M. Carlton
/s/ R. GARY DANIELS Director November 24, 1999
- ---------------------------
R. Gary Daniels
</TABLE>
4
<PAGE> 6
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
NUMBER DOCUMENT
- ------ --------
<S> <C>
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional Corporation,
with respect to the legality of the securities being registered.
10.1 Registrant's Amended and Restated 1994 Incentive Plan.
23.1 Consent of Counsel (contained in Exhibit 5.1).
23.2 Consent of PricewaterhouseCoopers LLP, Independent Accountants.
24.1 Power of Attorney (See page 4 of the Registration Statement).
</TABLE>
5
<PAGE> 1
Exhibit 5.1
November 24, 1999
National Instruments Corporation
11500 North MoPac Expressway
Austin, Texas 78759
RE: REGISTRATION STATEMENT ON FORM S-8
Ladies and Gentlemen:
We have examined the Registration Statement on Form S-8 (the "Registration
Statement") to be filed by you with the Securities and Exchange Commission on or
about November 24, 1999 (the "Registration Statement") in connection with the
registration under the Securities Act of 1933, as amended (the "Securities
Act"), of 4,725,000 additional shares of your Common Stock reserved for issuance
under your Amended and Restated 1994 Incentive Plan (the "Plan"). As your legal
counsel, we have examined the proceedings taken and are familiar with the
proceedings proposed to be taken by you in connection with the sale and issuance
of the Common Stock under the Plan.
It is our opinion that, when issued and sold in the manner referred to in
the Plan and pursuant to the agreements which accompany the Plan, the Common
Stock issued and sold thereby will be legally and validly issued, fully paid and
nonassesable.
We consent to the use of this opinion as an exhibit to the Registration
Statement and further consent to the use of our name wherever appearing in the
Registration Statement, including any Prospectuses constituting a part thereof,
and any amendments thereto. This opinion may be incorporated by reference in any
abbreviated registration statement filed pursuant to Item E under the general
instructions to Form S-8 under the Securities Act of 1933 with respect to the
Registration Statement.
Very truly yours,
WILSON SONSINI GOODRICH & ROSATI
Professional Corporation
/s/ WILSON SONSINI GOODRICH & ROSATI
1
<PAGE> 1
Exhibit 10.1
NATIONAL INSTRUMENTS CORPORATION
AMENDED AND RESTATED
1994 INCENTIVE PLAN
(as last amended on March 24, 1999)
SCOPE AND PURPOSE OF PLAN
National Instruments Corporation, a Delaware corporation (the
"Corporation"), has adopted this 1994 Incentive Plan (the "Plan") to provide for
the granting of:
(a) Incentive Options (hereafter defined) to certain Key Employees
(hereafter defined);
(b) Nonstatutory Options (hereafter defined) to certain Key Employees,
Non-Employee Directors (hereafter defined) and other persons;
(c) Restricted Stock Awards (hereafter defined) to certain Key Employees
and other persons; and
(d) Stock Appreciation Rights (hereafter defined) to certain Key Employees
and other persons.
The purpose of the Plan is to provide an incentive for Key Employees and
directors of the Corporation and its Subsidiaries (hereafter defined) to aid the
Corporation in attracting able persons to enter the service of the Corporation
and its Subsidiaries, to extend to them the opportunity to acquire a proprietary
interest in the Corporation so that they will apply their best efforts for the
benefit of the Corporation, and to remain in the service of the Corporation or
its Subsidiaries.
SECTION 1. DEFINITIONS
1.1 "Acquiring Person" means any Person, the Corporation, any Subsidiary
of the Corporation, any employee benefit plan of the Corporation or of a
Subsidiary of the Corporation or of a corporation owned directly or indirectly
by the stockholders of the Corporation in substantially the same proportions as
their ownership of Stock of the Corporation, or any trustee or other fiduciary
holding securities under an employee benefit plan of the Corporation or of a
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Subsidiary of the Corporation or of a corporation owned directly or indirectly
by the stockholders of the Corporation in substantially the same proportions as
their ownership of Stock of the Corporation.
1.2 "Affiliate" means (a) any Person who is directly or indirectly the
beneficial owner of at least 10% of the voting power of the Voting Securities or
(b) any Person controlling, controlled by, or under common control with the
Corporation or any Person contemplated in clause (a) of this Subsection 1.2.
1.3 "Applicable Laws" means the requirements relating to the
administration of stock option plans under U.S. state corporate laws, U.S.
federal and state securities laws, the Code, any stock exchange or quotation
system on which the Common Stock is listed or quoted and the applicable laws of
any foreign country or jurisdiction where Options are, or will be, granted under
the Plan.
1.4 "Award" means the grant of any form of Option, Restricted Stock Award,
or Stock Appreciation Right under the Plan, whether granted individually, in
combination, or in tandem, to a Holder pursuant to the terms, conditions, and
limitations that the Committee may establish in order to fulfill the objectives
of the Plan.
1.5 "Award Agreement" means the written agreement between the Corporation
and a Holder evidencing the terms, conditions, and limitations of the Award
granted to that Holder.
1.6 "Board of Directors" means the board of directors of the Corporation.
1.7 "Business Day" means any day that is a market trading day for the
National Association of Securities Dealers, Inc. Automated Quotation ("NASDAQ")
National Market System.
1.8 "Change in Control" means the event that is deemed to have occurred
if:
(a) any Acquiring Person is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Corporation representing fifty percent or more of the combined
voting power of the then outstanding Voting Securities of the Corporation; or
(b) members of the Incumbent Board cease for any reason to constitute
at least a majority of the Board of Directors; or
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(c) a public announcement is made of a tender or exchange offer by
any Acquiring Person for fifty percent or more of the outstanding Voting
Securities of the Corporation, and the Board of Directors approves or fails to
oppose that tender or exchange offer in its statements in Schedule 14D-9 under
the Exchange Act; or
(d) the stockholders of the Corporation approve a merger or
consolidation of the Corporation with any other corporation or partnership (or,
if no such approval is required, the consummation of such a merger or
consolidation of the Corporation), other than a merger or consolidation that
would result in the ownership of Voting Securities of the Corporation
outstanding immediately before the consummation thereof continuing to represent
(either by remaining outstanding or by being converted into Voting Securities of
the surviving entity or of a parent of the surviving entity) a majority of the
combined voting power of the Voting Securities of the surviving entity (or its
parent) outstanding immediately after that merger or consolidation; or
(e) the stockholders of the Corporation approve a plan of complete
liquidation of the Corporation or an agreement for the sale or disposition by
the Corporation of all or substantially all the Corporation's assets (or, if no
such approval is required, the consummation of such a liquidation, sale, or
disposition in one transaction or series of related transactions) other than a
liquidation, sale, or disposition of all or substantially all the Corporation's
assets in one transaction or a series of related transactions to a corporation
owned directly or indirectly by the stockholders of the Corporation in
substantially the same proportions as their ownership of Stock of the
Corporation.
Notwithstanding the foregoing, the merger of the Corporation's predecessor
with and into the Corporation in June 1994 shall not constitute a Change in
Control.
1.9 "Code" means the Internal Revenue Code of 1986, as amended.
1.10 "Committee" means the Committee designated by the Board of Directors
to administer this Plan as described under Section 3.
1.11 "Convertible Securities" means evidences of indebtedness, shares of
capital stock, or other securities that are convertible into or exchangeable for
shares of Stock, either immediately or upon the arrival of a specified date or
the happening of a specified event.
1.12 "Corporation" has the meaning given to it in the second paragraph
under "Scope and Purpose of Plan."
1.13 "Date of Grant" has the meaning given it in Subsection 4.3.
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1.14 "Disability" has the meaning given it in Subsection 10.3.
1.15 "Disinterested Person" has the meaning given it in Rule
16b-3(c)(2)(i).
1.16 "Earnings" for any Fiscal Year shall mean the operating income of the
Corporation on a consolidated basis before taxes, interest, foreign currency
exchange gains or losses, other gains or losses and other extraordinary items
for such Fiscal Year. By way of example, Earnings for the Fiscal Year ended
December 31, 1993 were $17,300,000.
1.17 "Earnings Attainment" for any Fiscal Year means a fraction, the
numerator of which shall be the percentage which Earnings constitutes of Net
Sales for such Fiscal Year, and the denominator of which shall be 18%. In the
event that there shall be no Earnings for such Fiscal Year, the Earnings
Attainment for such Fiscal Year shall be zero. Notwithstanding the foregoing,
the Earnings Attainment for any Fiscal Year shall not exceed one. By way of
example, the Earnings Attainment for the Fiscal Year ended December 31, 1993 was
91/100.
1.18 "Effective Date" means May 9, 1994.
1.19 "Eligible Individuals" means (a) Key Employees, (b) Non-Employee
Directors, and (c) any other Person that the Committee designates as eligible
for an Award (other than for Incentive Options) because the Person performs, or
has performed, valuable services for the Corporation or any of its Subsidiaries
(other than services in connection with the offer or sale of securities in a
capital-raising transaction) and the Committee determines that the Person has a
direct and significant effect on the financial development of the Corporation or
any of its Subsidiaries.
1.20 "Employee" means any employee of the Corporation or of any of its
Subsidiaries, including officers and directors of the Corporation who are also
employees of the Corporation or of any of its Subsidiaries.
1.21 "Exchange Act" means the Securities Exchange Act of 1934 and the rules
and regulations promulgated thereunder, or any successor law, as it may be
amended from time to time.
1.22 "Exercise Notice" has the meaning given it in Subsection 5.5.
1.23 "Exercise Price" has the meaning given it in Subsection 5.4.
1.24 "Fair Market Value" means, for a particular day:
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(a) If shares of Stock of the same class are listed or admitted to
unlisted trading privileges on any national or regional securities exchange at
the date of determining the Fair Market Value, then the last reported sale
price, regular way, on the composite tape of that exchange on the last Business
Day before the date in question or, if no such sale takes place on that Business
Day, the average of the closing bid and asked prices, regular way, in either
case as reported in the principal consolidated transaction reporting system with
respect to securities listed or admitted to unlisted trading privileges on that
securities exchange; or
(b) If shares of Stock of the same class are not listed or admitted
to unlisted trading privileges as provided in Subsection 1.23(a) and sales
prices for shares of Stock of the same class in the over-the-counter market are
reported by the NASDAQ National Market System (or such other system then in use)
at the date of determining the Fair Market Value, then the last reported sales
price so reported on the last Business Day before the date in question or, if no
such sale takes place on that Business Day, the average of the high bid and low
asked prices so reported; or
(c) If shares of Stock of the same class are not listed or admitted
to unlisted trading privileges as provided in Subsection 1.23(a) and sales
prices for shares of Stock of the same class are not reported by the NASDAQ
National Market System (or a similar system then in use) as provided in
Subsection 1.23(b), and if bid and asked prices for shares of Stock of the same
class in the over-the-counter market are reported by NASDAQ (or, if not so
reported, by the National Quotation Bureau Incorporated) at the date of
determining the Fair Market Value, then the average of the high bid and low
asked prices on the last Business Day before the date in question; or
(d) If shares of Stock of the same class are not listed or admitted
to unlisted trading privileges as provided in Subsection 1.23(a) and sales
prices or bid and asked prices therefor are not reported by NASDAQ (or the
National Quotation Bureau Incorporated) as provided in Subsection 1.23(b) or
Subsection 1.23(c) at the date of determining the Fair Market Value, then the
value determined in good faith by the Committee, which determination shall be
conclusive for all purposes; or
(e) If shares of Stock of the same class are listed or admitted to
unlisted trading privileges as provided in Subsection 1.23(a) or sales prices or
bid and asked prices therefor are reported by NASDAQ (or the National Quotation
Bureau Incorporated) as provided in Subsection 1.23(b) or Subsection 1.23(c) at
the date of determining the Fair Market Value, but the volume of trading is so
low that the Board of Directors determines in good faith that such prices are
not indicative of the fair value of the Stock, then the value determined in
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good faith by the Committee, which determination shall be conclusive for all
purposes notwithstanding the provisions of Subsections 1.23(a), (b), or (c).
For purposes of valuing Incentive Options, the Fair Market Value of Stock
shall be determined without regard to any restriction other than one that, by
its terms, will never lapse. For purposes of the redemption provided for in
Subsection 9.3(d)(v), Fair Market Value shall have the meaning and shall be
determined as set forth above; provided, however, that the Committee, with
respect to any such redemption, shall have the right to determine that the Fair
Market Value for purposes of the redemption should be an amount measured by the
value of the shares of Stock, other securities, cash, or property otherwise
being received by holders of shares of Stock in connection with the
Restructuring and upon that determination the Committee shall have the power and
authority to determine Fair Market Value for purposes of the redemption based
upon the value of such shares of stock, other securities, cash, or property. Any
such determination by the Committee, as evidenced by a resolution of the
Committee, shall be conclusive for all purposes.
1.25 "Fiscal Year" means the fiscal year of the Corporation ending on
December 31 of each year.
1.26 "Holder" means an Eligible Individual to whom an outstanding Award has
been granted.
1.27 "Incumbent Board" means the individuals who, as of the Effective Date,
constitute the Board of Directors and any other individual who becomes a
director of the Corporation after that date and whose election or appointment by
the Board of Directors or nomination for election by the Corporation's
stockholders was approved by a vote of at least a majority of the directors then
comprising the Incumbent Board.
1.28 "Incentive Option" means an incentive stock option as defined under
Section 422 of the Code and regulations thereunder.
1.29 "Key Employee" means any Employee whom the Committee identifies as
having a direct and significant effect on the performance of the Corporation or
any of its Subsidiaries.
1.30 "Net Sales" for any Fiscal Year shall mean the net sales of the
Corporation on a consolidated basis for such Fiscal Year. By way of example, the
Net Sales for the Fiscal Years ended December 31, 1992 and 1993, respectively,
were $82,826,000 and $105,528,000.
1.31 "Non-Employee Director" means a director of the Corporation who while
a director is not an Employee.
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1.32 "Nonstatutory Option" means a stock option that does not satisfy the
requirements of Section 422 of the Code or that is designated at the Date of
Grant or in the applicable Award Agreement to be an option other than an
Incentive Option.
1.33 "Non-Surviving Event" means an event of Restructuring as described in
either Subsection 1.39(b) or Subsection 1.39(c).
1.34 "Normal Retirement" means the separation of the Holder from employment
with the Corporation and its Subsidiaries with the right to receive an immediate
benefit under a retirement plan approved by the Corporation. If no such plan
exists, Normal Retirement shall mean separation of the Holder from employment
with the Corporation and its Subsidiaries at age 62 or later.
1.35 "Option" means either an Incentive Option or a Nonstatutory Option, or
both.
1.36 "Option Exchange Program" means a program whereby outstanding Options
are surrendered in exchange for Options with a lower exercise price.
1.37 "Person" means any person or entity of any nature whatsoever,
specifically including (but not limited to) an individual, a firm, a company, a
corporation, a partnership, a trust, or other entity. A Person, together with
that Person's affiliates and associates (as "affiliate" and "associate" are
defined in Rule 12b-2 under the Exchange Act for purposes of this definition
only), and any Persons acting as a partnership, limited partnership, joint
venture, association, syndicate, or other group (whether or not formally
organized), or otherwise acting jointly or in concert or in a coordinated or
consciously parallel manner (whether or not pursuant to any express agreement),
for the purpose of acquiring, holding, voting, or disposing of securities of the
Corporation with that Person, shall be deemed a single "Person."
1.38 "Plan" means the Corporation's 1994 Incentive Plan, as it may be
amended from time to time.
1.39 "Restricted Stock" means Stock that is nontransferable or subject to
substantial risk of forfeiture until specific conditions are met.
1.40 "Restricted Stock Award" means the grant or purchase, on the terms and
conditions of Section 7 or that the Committee otherwise determines, of
Restricted Stock.
1.41 "Restructuring" means the occurrence of any one or more of the
following:
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(a) The merger or consolidation of the Corporation with any
Person, whether effected as a single transaction or a series of related
transactions, with the Corporation remaining the continuing or surviving entity
of that merger or consolidation and the Stock remaining outstanding and not
changed into or exchanged for stock or other securities of any other Person or
of the Corporation, cash, or other property;
(b) The merger or consolidation of the Corporation with any
Person, whether effected as a single transaction or a series of related
transactions, with (i) the Corporation not being the continuing or surviving
entity of that merger or consolidation or (ii) the Corporation remaining the
continuing or surviving entity of that merger or consolidation but all or a part
of the outstanding shares of Stock are changed into or exchanged for stock or
other securities of any other Person or the Corporation, cash, or other
property; or
(c) The transfer, directly or indirectly, of all or
substantially all of the assets of the Corporation (whether by sale, merger,
consolidation, liquidation, or otherwise) to any Person, whether effected as a
single transaction or a series of related transactions.
1.42 "Rule 16b-3" means Rule 16b-3 under Section 16(b) of the Exchange Act
as adopted in Exchange Act Release No. 34-29131 (April 26, 1991), or any
successor rule, as it may be amended from time to time.
1.43 "Sales Attainment" for any Fiscal Year means a fraction, the numerator
of which shall equal the percentage increase in Net Sales for such Fiscal Year
over the Net Sales for the immediately preceding Fiscal Year, and the
denominator of which shall be 40%. In the event that there shall be no increase
in the Net Sales for such Fiscal Year from that of the immediately preceding
Fiscal Year, the Sales Attainment for such Fiscal Year shall be zero.
Notwithstanding the foregoing, in no event shall the Sales Attainment for any
Fiscal Year exceed one. By way of example, the Sales Attainment for the Fiscal
Year ended December 31, 1993 was 69/100.
1.44 "Securities Act" means the Securities Act of 1933 and the rules and
regulations promulgated thereunder, or any successor law, as it may be amended
from time to time.
1.45 "Stock" means the common stock, par value $.01 per share, of the
Corporation or any other securities that are substituted for the Stock as
provided in Section 9.
1.46 "Stock Appreciation Right" means the right to receive an amount equal
to the excess of the Fair Market Value of a share of Stock (as determined on the
date of exercise) over, as appropriate, the Exercise Price of a related Option
or the Fair Market Value of the Stock on the Date of Grant of the Stock
Appreciation Right.
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1.47 "Subsidiary" means, with respect to any Person, any corporation, or
other entity of which a majority of the Voting Securities is owned, directly or
indirectly, by that Person.
1.48 "Total Shares" has the meaning given it in Subsection 9.2.
1.49 "Voting Securities" means any securities that are entitled to vote
generally in the election of directors, in the admission of general partners or
in the selection of any other similar governing body.
SECTION 2. SHARES OF STOCK SUBJECT TO THE PLAN
2.1 Maximum Number of Shares. Subject to the provisions of Subsection 2.2
and Section 9, the aggregate number of shares of Stock that may be issued or
transferred pursuant to Awards under the Plan shall be 4,800,000 shares.
2.2 Limitation of Shares. For purposes of the limitations specified in
Subsection 2.1, the following principles shall apply:
(a) the following shall count against and decrease the number of
shares of Stock that may be issued for purposes of Subsection 2.1: (i) shares of
Stock subject to outstanding Options, outstanding shares of Restricted Stock,
and shares subject to outstanding Stock Appreciation Rights granted independent
of Options (based on a good faith estimate by the Corporation or the Committee
of the maximum number of shares for which the Stock Appreciation Right may be
settled (assuming payment in full in shares of Stock)), and (ii) in the case of
Options granted in tandem with Stock Appreciation Rights, the greater of the
number of shares of Stock that would be counted if one or the other alone was
outstanding (determined as described in clause (i) above);
(b) the following shall be added back to the number of shares of
Stock that may be issued for purposes of Subsection 2.1: (i) shares of Stock
with respect to which Options, Stock Appreciation Rights granted independent of
Options, or Restricted Stock Awards expire, are cancelled, or otherwise
terminate without being exercised, converted, or vested, as applicable, and (ii)
in the case of Options granted in tandem with Stock Appreciation Rights, shares
of Stock as to which an Option has been surrendered in connection with the
exercise of a related ("tandem") Stock Appreciation Right, to the extent the
number surrendered exceeds the number issued upon exercise of the Stock
Appreciation Right;
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(c) shares of Stock subject to Stock Appreciation Rights granted
independent of Options (calculated as provided in clause (a) above) that are
exercised and paid in cash shall be added back to the number of shares of Stock
that may be issued for purposes of Subsection 2.1;
(d) shares of Stock that are transferred by a Holder of an Award (or
withheld by the Corporation) as full or partial payment to the Corporation of
the purchase price of shares of Stock subject to an Option or the Corporation's
or any Subsidiary's tax withholding obligations shall not be added back to the
number of shares of Stock that may be issued for purposes of Subsection 2.1 and
shall not again be subject to Awards; and
(e) if the number of shares of Stock counted against the number of
shares that may be issued for purposes of Subsection 2.1 is based upon an
estimate made by the Corporation or the Committee as provided in clause (a)
above and the actual number of shares of Stock issued pursuant to the applicable
Award is greater or less than the estimated number, then, upon such issuance,
the number of shares of Stock that may be issued pursuant to Subsection 2.1
shall be further reduced by the excess issuance or increased by the shortfall,
as applicable.
2.3 Description of Shares. The shares to be delivered under the Plan shall
be made available from (a) authorized but unissued shares of Stock, (b) Stock
held in the treasury of the Corporation, or (c) previously issued shares of
Stock reacquired by the Corporation, including shares purchased on the open
market, in each situation as the Board of Directors or the Committee may
determine from time to time at its sole option.
2.4 Registration and Listing of Shares. From time to time, the Board of
Directors and appropriate officers of the Corporation shall and are authorized
to take whatever actions are necessary to file required documents with
governmental authorities, stock exchanges, and other appropriate Persons to make
shares of Stock available for issuance pursuant to the exercise of Awards.
SECTION 3. ADMINISTRATION OF THE PLAN
3.1 Committee.
(a) Procedure.
(i) Multiple Administrative Bodies. The Plan may be
administered by different Committees with respect to different groups
of Eligible Individuals.
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(ii) Section 162(m). To the extent that the Administrator
determines it to be desirable to qualify Awards granted hereunder as
"performance-based compensation" within the meaning of Section 162(m)
of the Code, the Plan shall be administered by a Committee of two or
more "outside directors" within the meaning of Section 162(m) of the
Code.
(iii) Rule 16b-3. To the extent desirable to qualify transactions
hereunder as exempt under Rule 16b-3, the transactions contemplated
hereunder shall be structured to satisfy the requirements for
exemption under Rule 16b-3.
(iv) Other Administration. Other than as provided above, the
Plan shall be administered by (A) the Board or (B) a Committee, which
committee shall be constituted to satisfy Applicable Laws.
(b) Powers of the Administrator. Subject to the provisions of the
Plan, and in the case of a Committee, subject to the specific duties delegated
by the Board to such Committee, the Administrator shall have the authority, in
its discretion:
(i) to determine the Fair Market Value;
(ii) to select the Eligible Individuals to whom Awards may be
granted hereunder;
(iii) to determine the number of shares of Common Stock to be
covered by each Award granted hereunder;
(iv) to approve forms of agreement for use under the Plan;
(v) to determine the terms and conditions, not inconsistent
with the terms of the Plan, of any Award granted hereunder. Such terms
and conditions include, but are not limited to, the exercise price,
the time or times when Awards may be exercised (which may be based on
performance criteria), any vesting acceleration or waiver of
forfeiture restrictions, and any restriction or limitation regarding
any Award of the shares of Common Stock relating thereto, based in
each case on such factors as the Administrator, in its sole
discretion, shall determine;
(vi) to reduce the exercise price of any Option to the then
current Fair Market Value if the Fair Market Value of the Common Stock
covered by such Option shall have declined since the date the Option
was granted;
(vii) to institute an Option Exchange Program;
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(viii) to construe and interpret the terms of the Plan and Awards
granted pursuant to the Plan;
(ix) to prescribe, amend and rescind rules and regulations
relating to the Plan, including rules and regulations relating to
sub-plans established for the purpose of qualifying for preferred tax
treatment under foreign tax laws;
(x) to modify or amend each Award (subject to Section 11.2 of
the Plan), including the discretionary authority to extend the
post-termination exercisability period of Options longer than is
otherwise provided for in the Plan;
(xi) to allow Award recipients to satisfy withholding tax
obligations by electing to have the Company withhold from the Shares
to be issued upon exercise of an Award that number of Shares having a
Fair Market Value equal to the amount required to be withheld. The
Fair Market Value of the Shares to be withheld shall be determined on
the date that the amount of tax to be withheld is to be determined.
All elections by an Award recipient to have Shares withheld for this
purpose shall be made in such form and under such conditions as the
Administrator may deem necessary or advisable;
(xii) to authorize any person to execute on behalf of the
Company any instrument required to effect the grant of an Award
previously granted by the Administrator;
(xiii) to make all other determinations deemed necessary or
advisable for administering the Plan.
(c) Effect of Administrator's Decision. The Administrator's
decisions, determinations and interpretations shall be final and binding on all
Award recipients and any other holders of Awards.
3.2 Duration, Removal, Etc. The members of the Committee shall serve at
the discretion of the Board of Directors, which shall have the power, at any
time and from time to time, to remove members from or add members to the
Committee. Removal from the Committee may be with or without cause. Any
individual serving as a member of the Committee shall have the right to resign
from membership in the Committee by at least three days' written notice to the
Board of Directors. The Board of Directors, and not the remaining members of the
Committee, shall have the power and authority to fill all vacancies on the
Committee. The Board of Directors
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shall promptly fill any vacancy that causes the number of members of the
Committee to be below two or any other number that Applicable Laws may require
from time to time.
3.3 Meetings and Actions of Committee. The Board of Directors shall
designate which of the Committee members shall be the chairman of the Committee.
If the Board of Directors fails to designate a Committee chairman, the members
of the Committee shall elect one of the Committee members as chairman, who shall
act as chairman until he ceases to be a member of the Committee or until the
Board of Directors elects a new chairman. The Committee shall hold its meetings
at those times and places as the chairman of the Committee may determine. At all
meetings of the Committee, a quorum for the transaction of business shall be
required and a quorum shall be deemed present if at least a majority of the
members of the Committee are present. At any meeting of the Committee, each
member shall have one vote. All decisions and determinations of the Committee
shall be made by the majority vote or majority decision of all of its members
present at a meeting at which a quorum is present; provided, however, that any
decision or determination reduced to writing and signed by all of the members of
the Committee shall be as fully effective as if it had been made at a meeting
that was duly called and held. The Committee may make any rules and regulations
for the conduct of its business that are not inconsistent with the provisions of
the Plan, the Articles or Certificate of Incorporation of the Corporation, and
the by-laws of the Corporation, as the Committee may deem advisable.
3.4 Committee's Powers. Subject to the express provisions of the Plan, the
Committee shall have the authority, in its sole and absolute discretion, to (a)
adopt, amend, and rescind administrative and interpretive rules and regulations
relating to the Plan; (b) determine the Eligible Individuals to whom, and the
time or times at which, Awards shall be granted; (c) determine the amount of
cash and the number of shares of Stock, Stock Appreciation Rights, or Restricted
Stock Awards, or any combination thereof, that shall be the subject of each
Award; (d) determine the terms and provisions of each Award Agreement (which
need not be identical), including provisions defining or otherwise relating to
(i) the term and the period or periods and extent of exercisability of the
Options, (ii) the extent to which the transferability of shares of Stock issued
or transferred pursuant to any Award is restricted, (iii) the effect of
termination of employment of the Holder on the Award, and (iv) the effect of
approved leaves of absence (consistent with any applicable regulations of the
Internal Revenue Service); (e) accelerate the time of exercisability of any
Option that has been granted; (f) construe the respective Award Agreements and
the Plan; (g) make determinations of the Fair Market Value of the Stock pursuant
to the Plan; (h) delegate its duties under the Plan to such agents as it may
appoint from time to time, provided that the Committee may not delegate its
duties with respect to making Awards to, or otherwise with respect to Awards
granted to, Eligible Individuals who are subject to Section 16(b) of the
Exchange Act; and (i) make all other determinations, perform all other acts, and
exercise all other powers and authority
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necessary or advisable for administering the Plan, including the delegation of
those ministerial acts and responsibilities as the Committee deems appropriate.
The Committee may correct any defect, supply any omission, or reconcile any
inconsistency in the Plan, in any Award, or in any Award Agreement in the manner
and to the extent it deems necessary or desirable to carry the Plan into effect,
and the Committee shall be the sole and final judge of that necessity or
desirability. The determinations of the Committee on the matters referred to in
this Subsection 3.4 shall be final and conclusive.
SECTION 4. ELIGIBILITY AND PARTICIPATION
4.1 Eligible Individuals. Awards may be granted pursuant to the Plan only
to persons who are Eligible Individuals at the time of the grant thereof.
4.2 Grant of Awards. Subject to the express provisions of the Plan, the
Committee shall determine which Eligible Individuals shall be granted Awards
from time to time. In making grants, the Committee shall take into consideration
the contribution the potential Holder has made or may make to the success of the
Corporation or its Subsidiaries and such other considerations as the Board of
Directors may from time to time specify. The Committee shall also determine the
number of shares subject to each of the Awards and shall authorize and cause the
Corporation to grant Awards in accordance with those determinations.
4.3 Date of Grant. The date on which the Committee completes all action
resolving to offer an Award to an individual, including the specification of the
number of shares of Stock to be subject to the Award, shall be the date on which
the Award covered by an Award Agreement is granted (the "Date of Grant"), even
though certain terms of the Award Agreement may not be determined at that time
and even though the Award Agreement may not be executed until a later time. In
no event shall a Holder gain any rights in addition to those specified by the
Committee in its grant, regardless of the time that may pass between the grant
of the Award and the actual execution of the Award Agreement by the Corporation
and the Holder.
4.4 Award Agreements. Each Award granted under the Plan shall be evidenced
by an Award Agreement that is executed by the Corporation and the Eligible
Individual to whom the Award is granted and incorporating those terms that the
Committee shall deem necessary or desirable. More than one Award may be granted
under the Plan to the same Eligible Individual and be outstanding concurrently.
In the event an Eligible Individual is granted both one or more Incentive
Options and one or more Nonstatutory Options, those grants shall be evidenced by
separate Award Agreements, one for each of the Incentive Option grants and one
for each of the Nonstatutory Option grants.
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4.5 Limitation for Incentive Options. Notwithstanding any provision
contained herein to the contrary, (a) a person shall not be eligible to receive
an Incentive Option unless he is an Employee of the Corporation or a corporate
Subsidiary (but not a partnership Subsidiary) and (b) a person shall not be
eligible to receive an Incentive Option if, immediately before the time the
Option is granted, that person owns (within the meaning of Sections 422 and
424(d) of the Code) stock possessing more than ten percent of the total combined
voting power or value of all classes of outstanding stock of the Corporation or
a Subsidiary. Nevertheless, Subsection 4.5(b) shall not apply if, at the time
the Incentive Option is granted, the Exercise Price of the Incentive Option is
at least one hundred ten percent of Fair Market Value and the Incentive Option
is not, by its terms, exercisable after the expiration of five years from the
Date of Grant. An Employee shall not cease to be an Employee in the case of (i)
any leave of absence approved by the Company or (ii) transfers between locations
of the Company or between the Company, its Parent, any Subsidiary, or any
successor. For purposes of Incentive Stock Options, no such leave may exceed
ninety days, unless reemployment upon expiration of such leave is guaranteed by
statute or contract. If reemployment upon expiration of a leave of absence
approved by the Company is not so guaranteed, on the 181st day of such leave any
Incentive Stock Option held by the Optionee shall cease to be treated as an
Incentive Stock Option and shall be treated for tax purposes as a Nonstatutory
Stock Option. Neither service as a Director nor payment of a director's fee by
the Company shall be sufficient to constitute "employment" by the Company.
4.6 No Right to Award. The adoption of the Plan shall not be deemed to
give any Person a right to be granted an Award.
4.7 Internal Revenue Code Section 162(m) Limitations. The following
limitations shall apply to grants of Options to Employees:
(a) No Employee shall be granted, in any fiscal year of the
Corporation, Options covering more than one hundred thousand (100,000) Shares.
(b) In connection with his or her initial employment, an Employee may
be granted Options to purchase up to three hundred thousand (300,000) Shares
which shall not count against the limit set forth in Subsection 4.7(a) above.
(c) The foregoing limitations shall be adjusted proportionately in
connection with any change in the Corporation's capitalization as described in
Subsections 9.1(a) and (b).
(d) If an Option is canceled in the same fiscal year of the
Corporation in which it was granted (other than in connection with a transaction
described in Section 9), the canceled Option will be counted against the limit
set forth in Subsection 4.7(a). For this purpose,
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if the exercise price of an Option is reduced, the transaction will be treated
as a cancellation of the Option and the grant of a new Option.
SECTION 5. TERMS AND CONDITIONS OF OPTIONS
All Options granted under the Plan shall comply with, and the related Award
Agreements shall be deemed to include and be subject to, the terms and
conditions set forth in this Section 5 (to the extent each term and condition
applies to the form of Option) and also to the terms and conditions set forth in
Sections 9 and 10; provided, however, that the Committee may authorize an Award
Agreement that expressly contains terms and provisions that differ from the
terms and provisions set forth in Subsections 9.2, 9.3, and 9.4 and any of the
terms and provisions of Section 10 (other than Subsections 10.8 and 10.9).
5.1 Number of Shares. Each Award Agreement shall state the total number of
shares of Stock to which it relates.
5.2 Vesting. Each Award Agreement shall state the time or periods in
which, or the conditions upon satisfaction of which, the right to exercise the
Option or a portion thereof shall vest and the number of shares of Stock for
which the right to exercise the Option shall vest at each such time, period, or
fulfillment of condition; provided, that one-sixtieth of the Shares initially
subject to each Option granted to a Non-Employee Director (rounded up or down to
the nearest share) shall vest on the last day of each month during the sixty
month period commencing in the month during which such Option was granted;
provided that the Optionee continues to serve as a Director on such dates. The
term of each Option granted to a Non-Employee director shall be ten years.
5.3 Expiration of Options. No Option shall be exercised after the
expiration of a period of ten years commencing on the Date of Grant of the
Option; provided, however, that any portion of a Nonstatutory Option that
pursuant to the terms of the Award Agreement under which such Nonstatutory
Option is granted shall not become exercisable until the date which is the tenth
anniversary of the Date of Grant of such Nonstatutory Option may be exercisable
for a period of 30 days following the date on which such portion becomes
exercisable.
5.4 Exercise Price. Each Award Agreement shall state the exercise price
per share of Stock (the "Exercise Price"); provided, however, that (i) the
exercise price per share of Stock subject to an Incentive Option shall not be
less than the greater of (a) the par value per share of the Stock or (b) 100% of
the Fair Market Value per share of the Stock on the Date of Grant of the Option,
and (ii) the exercise price per share of Stock subject to an option intended to
qualify as "performance-based compensation" within the meaning of Section 162(m)
of the Code shall not be
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less than 100% of the Fair Market Value per share of the Stock on the Date of
Grant of the Option.
5.5 Method of Exercise. The Option shall be exercisable only by written
notice of exercise (the "Exercise Notice") delivered to the Corporation during
the term of the Option, which notice shall (a) state the number of shares of
Stock with respect to which the Option is being exercised, (b) be signed by the
Holder of the Option or, if the Holder is dead or becomes affected by a
Disability, by the person authorized to exercise the Option pursuant to
Subsections 10.2 and 10.3, (c) be accompanied by the Exercise Price (as
specified in the Award Agreement and under Section 5.7 hereof) for all shares of
Stock for which the Option is being exercised, and (d) include such other
information, instruments, and documents as may be required to satisfy any other
condition to exercise contained in the Award Agreement. The Option shall not be
deemed to have been exercised unless all of the requirements of the preceding
provisions of this Subsection 5.5 have been satisfied.
5.6 Incentive Option Exercises. Except as otherwise provided in Subsection
10.3, during the Holder's lifetime, only the Holder may exercise an Incentive
Option.
5.7 Medium and Time of Payment. The Exercise Price of an Option shall be
payable in full upon the exercise of the Option (a) in cash or by an equivalent
means acceptable to the Committee, (b) on the Committee's prior consent, with
shares of Stock owned by the Holder (including shares received upon exercise of
the Option or restricted shares already held by the Holder) and having a Fair
Market Value at least equal to the aggregate Exercise Price payable in
connection with such exercise, (c) by delivery of a properly executed Exercise
Notice together with such other documentation as the Corporation and the broker,
if applicable, shall require to effect an exercise of the Option and delivery to
the Corporation of the sale or loan proceeds required to pay the Exercise Price,
or (d) by any combination of clauses (a), (b) and (c). If the Committee elects
to accept shares of Stock in payment of all or any portion of the Exercise
Price, then (for purposes of payment of the Exercise Price) those shares of
Stock shall be deemed to have a cash value equal to their aggregate Fair Market
Value determined as of the date the certificate for such shares is delivered to
the Corporation. If the Committee elects to accept shares of restricted Stock in
payment of all or any portion of the Exercise Price, then an equal number of
shares issued pursuant to the exercise shall be restricted on the same terms and
for the restriction period remaining on the shares used for payment.
5.8 Payment of Taxes. The Committee may, in its discretion, require a
Holder to pay to the Corporation (or the Corporation's Subsidiary if the Holder
is an employee of a Subsidiary of the Corporation), at the time of the exercise
of an Option or thereafter, the amount that the Committee deems necessary to
satisfy the Corporation's or its Subsidiary's current or future obligation to
withhold federal, state, or local income or other taxes that the Holder incurs
by
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exercising an Option. In connection with the exercise of an Option requiring tax
withholding, a Holder may (a) direct the Corporation to withhold from the shares
of Stock to be issued to the Holder the number of shares necessary to satisfy
the Corporation's obligation to withhold taxes, that determination to be based
on the shares' Fair Market Value as of the date of exercise; (b) deliver to the
Corporation sufficient shares of Stock (based upon the Fair Market Value as of
the date of such delivery) to satisfy the Corporation's tax withholding
obligations, which tax withholding obligation is based on the shares' Fair
Market Value as of the later of the date of exercise or the date as of which the
shares of Stock issued in connection with such exercise become includible in the
income of the Holder; or (c) deliver sufficient cash to the Corporation to
satisfy its tax withholding obligations. Holders who elect to use such a stock
withholding feature must make the election at the time and in the manner that
the Committee prescribes. The Committee may, at its sole option, deny any
Holder's request to satisfy withholding obligations through Stock instead of
cash. In the event the Committee subsequently determines that the aggregate Fair
Market Value (as determined above) of any shares of Stock withheld or delivered
as payment of any tax withholding obligation is insufficient to discharge that
tax withholding obligation, then the Holder shall pay to the Corporation,
immediately upon the Committee's request, the amount of that deficiency in the
form of payment requested by the Committee.
5.9 Limitation on Aggregate Value of Shares That May Become First
Exercisable During Any Calendar Year Under an Incentive Option. Except as is
otherwise provided in Subsection 9.3, with respect to any Incentive Option
granted under this Plan, the aggregate Fair Market Value of shares of Stock
subject to an Incentive Option and the aggregate Fair Market Value of shares of
Stock or stock of any Subsidiary (or a predecessor of the Corporation or a
Subsidiary) subject to any other incentive stock option (within the meaning of
Section 422 of the Code) of the Corporation or its Subsidiaries (or a
predecessor corporation of any such corporation) that first become purchasable
by a Holder in any calendar year may not (with respect to that Holder) exceed
$100,000, or such other amount as may be prescribed under Section 422 of the
Code or applicable regulations or rulings from time to time. As used in the
previous sentence, Fair Market Value shall be determined as of the Date of Grant
of the Incentive Option. For purposes of this Subsection 5.9, "predecessor
corporation" means (a) a corporation that was a party to a transaction described
in Section 424(a) of the Code (or which would be so described if a substitution
or assumption under that Section had been effected) with the Corporation, (b) a
corporation which, at the time the new incentive stock option (within the
meaning of Section 422 of the Code) is granted, is a Subsidiary of the
Corporation or a predecessor corporation of any such corporations, or (c) a
predecessor corporation of any such corporations. Failure to comply with this
provision shall not impair the enforceability or exercisability of any Option,
but shall cause the excess amount of shares to be reclassified in accordance
with the Code.
5.10 No Fractional Shares. The Corporation shall not in any case be
required to sell, issue, or deliver a fractional share with respect to any
Option. In lieu of the issuance of any
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fractional share of Stock, the Corporation shall pay to the Holder an amount in
cash equal to the same fraction (as the fractional Stock) of the Fair Market
Value of a share of Stock determined as of the date of the applicable Exercise
Notice.
5.11 Modification, Extension, and Renewal of Options. Subject to the terms
and conditions of and within the limitations of the Plan, and any consent
required by the last sentence of this Subsection 5.11, the Committee may (a)
modify, extend, or renew outstanding Options granted under the Plan, (b) accept
the surrender of Options outstanding hereunder (to the extent not previously
exercised) and authorize the granting of new Options in substitution for
outstanding Options (to the extent not previously exercised), and (c) amend the
terms of an Incentive Option at any time to include provisions that have the
effect of changing the Incentive Option to a Nonstatutory Option. Nevertheless,
without the consent of the Holder, the Committee may not modify any outstanding
Options so as to specify a higher or lower Exercise Price or accept the
surrender of outstanding Incentive Options and authorize the granting of new
Options in substitution therefor specifying a higher or lower Exercise Price. In
addition, no modification of an Option granted hereunder shall, without the
consent of the Holder, alter or impair any rights or obligations under any
Option theretofore granted to such Holder under the Plan except, with respect to
Incentive Options, as may be necessary to satisfy the requirements of Section
422 of the Code or as permitted in clause (c) of this Subsection 5.11.
5.12 Other Agreement Provisions. The Award Agreements authorized under the
Plan shall contain such provisions in addition to those required by the Plan
(including without limitation restrictions or the removal of restrictions upon
the exercise of the Option and the retention or transfer of shares thereby
acquired) as the Committee may deem advisable. Each Award Agreement shall
identify the Option evidenced thereby as an Incentive Option or Nonstatutory
Option, as the case may be. Each Award Agreement relating to an Incentive Option
granted hereunder shall contain such limitations and restrictions upon the
exercise of the Incentive Option to which it relates as shall be necessary for
the Incentive Option to which such Award Agreement relates to constitute an
incentive stock option, as defined in Section 422 of the Code.
SECTION 6. STOCK APPRECIATION RIGHTS
All Stock Appreciation Rights granted under the Plan shall comply with, and
the related Award Agreements shall be deemed to include and be subject to, the
terms and conditions set forth in this Section 6 (to the extent each term and
condition applies to the form of Stock Appreciation Right) and also the terms
and conditions set forth in Sections 9 and 10; provided, however, that the
Committee may authorize an Award Agreement related to a Stock Appreciation Right
that expressly contains terms and provisions that differ from the terms and
provisions set
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forth in Subsections 9.2, 9.3, and 9.4 and any of the terms and provisions of
Section 10 (other than Subsection 10.9).
6.1 Form of Right. A Stock Appreciation Right may be granted to an
Eligible Individual (a) in connection with an Option, either at the time of
grant or at any time during the term of the Option, or (b) independent of an
Option.
6.2 Rights Related to Options. A Stock Appreciation Right granted in
tandem with an Option shall require the Holder, upon exercise of the Stock
Appreciation Right, to surrender the related Option. Upon such exercise, the
Optionee shall receive payment of an amount computed pursuant to Subsection
6.2(b). The related Option shall then cease to be exercisable to the extent
surrendered. Stock Appreciation Rights granted in tandem with an Option shall be
subject to the terms of the Award Agreement governing the Option, which shall
comply with the following provisions in addition to those applicable to Options:
(a) Exercise and Transfer. Subject to Subsection 10.8, a Stock
Appreciation Right granted in tandem with an Option shall be exercisable only at
such time or times and only to the extent that the related Option is exercisable
and shall not be transferable except to the extent that the related Option is
transferable.
(b) Value of Right. Upon the exercise of a Stock Appreciation Right
granted in tandem with an Option, the Holder shall be entitled to receive
payment from the Corporation of an amount determined by Multiplying:
(i) The difference obtained by subtracting the Exercise Price of
a share of Stock specified in the related Option from the Fair Market
Value of a share of Stock on the date of exercise of the Stock
Appreciation Right, by
(ii) The number of shares as to which that Stock Appreciation
Right has been exercised.
6.3 Right Without Option. A Stock Appreciation Right granted independent
of an Option shall be exercisable as determined by the Committee and set forth
in the Award Agreement governing the Stock Appreciation Right, which Award
Agreement shall comply with the following provisions:
(a) Number of Shares. Each Award Agreement shall state the total
number of shares of Stock to which the Stock Appreciation Right relates.
(b) Vesting. Each Award Agreement shall state the time or periods in
which the right to exercise the Stock Appreciation Right or a portion thereof
shall vest and the
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number of shares of Stock for which the right to exercise the Stock Appreciation
Right shall vest at each such time or period.
(c) Expiration of Rights. Each Award Agreement shall state the date
at which the Stock Appreciation Rights shall expire if not previously exercised.
(d) Value of Right. Each Stock Appreciation Right shall entitle the
Holder, upon exercise thereof, to receive payment of an amount determined by
multiplying:
(i) The difference obtained by subtracting the Fair Market Value
of a share of Stock on the Date of Grant of the Stock Appreciation
Right from the Fair Market Value of a share of Stock on the date of
exercise of that Stock Appreciation Right, by
(ii) The number of shares as to which the Stock Appreciation
Right has been exercised.
6.4 Limitations on Rights. Notwithstanding Subsections 6.2(b) and 6.3(d),
the Committee may limit the amount payable upon exercise of a Stock Appreciation
Right. Any such limitation must be determined as of the Date of Grant and be
noted on the Award Agreement evidencing the Holder's Stock Appreciation Right.
6.5 Payment of Rights. Payment of the amount determined under Subsection
6.2(b) or 6.3(d) and Subsection 6.4 may be made, in the sole discretion of the
Committee unless specifically provided otherwise in the Award Agreement, solely
in whole shares of Stock valued at Fair Market Value on the date of exercise of
the Stock Appreciation Right, solely in cash, or in a combination of cash and
whole shares of Stock. If the Committee decides to make full payment in shares
of Stock and the amount payable results in a fractional share, payment for the
fractional share shall be made in cash.
6.6 Payment of Taxes. The Committee may, in its discretion, require a
Holder to pay to the Corporation (or the Corporation's Subsidiary if the Holder
is an employee of a Subsidiary of the Corporation), at the time of the exercise
of a Stock Appreciation Right or thereafter, the amount that the Committee deems
necessary to satisfy the Corporation's or its Subsidiary's current or future
obligation to withhold federal, state, or local income or other taxes that the
Holder incurs by exercising a Stock Appreciation Right. In connection with the
exercise of a Stock Appreciation Right requiring tax withholding, a Holder may
(a) direct the Corporation to withhold from the shares of Stock to be issued to
the Holder the number of shares necessary to satisfy the Corporation's
obligation to withhold taxes, that determination to be based on the shares' Fair
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Market Value as of the date of exercise; (b) deliver to the Corporation
sufficient shares of Stock (based upon the Fair Market Value as of the date of
such delivery) to satisfy the Corporation's tax withholding obligations, which
tax withholding obligation is based on the shares' Fair Market Value as of the
later of the date of exercise or the date of which the shares of Stock issued in
connection with such exercise become includible in the income of the Holder; or
(c) deliver sufficient cash to the Corporation to satisfy its tax withholding
obligations. Holders who elect to have Stock withheld pursuant to (a) or (b)
above must make the election at the time and in the manner that the Committee
prescribes. The Committee may, in its sole discretion, deny any Holder's request
to satisfy withholding obligations through Stock instead of cash. In the event
the Committee subsequently determines that the aggregate Fair Market Value (as
determined above) of any shares of Stock withheld or delivered as payment of any
tax withholding obligation is insufficient to discharge that tax withholding
obligation, then the Holder shall pay to the Corporation, immediately upon the
Committee's request, the amount of that deficiency in the form of payment
requested by the Commission.
6.7 Other Agreement Provisions. The Award Agreements authorized relating
to Stock Appreciation Rights shall contain such provisions in addition to those
required by the Plan (including without limitation restrictions or the removal
of restrictions upon the exercise of the Stock Appreciation Right and the
retention or transfer of shares thereby acquired) as the Committee may deem
advisable.
SECTION 7. RESTRICTED STOCK AWARDS
All Restricted Stock Awards granted under the Plan shall comply with and be
subject to, and the related Award Agreements shall be deemed to include, the
terms and conditions set forth in this Section 7 and also to the terms and
conditions set forth in Sections 9 and 10; provided, however, that the Committee
may authorize an Award Agreement related to a Restricted Stock Award that
expressly contains terms and provisions that differ from the terms and
provisions set forth in Subsections 9.2, 9.3, and 9.4 and the terms and
provisions set forth in Section 10 (other than Subsections 10.8 and 10.9).
7.1 Restrictions. All shares of Restricted Stock Awards granted or sold
pursuant to the Plan shall be subject to the following conditions:
(a) Transferability. The shares may not be sold, transferred, or
otherwise alienated or hypothecated until the restrictions are removed or
expire.
(b) Conditions to Removal of Restrictions. Conditions to removal or
expiration of the restrictions may include, but are not required to be limited
to, continuing
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employment or service as a director, officer, or Key Employee or achievement of
performance objectives described in the Award Agreement.
(c) Legend. Each certificate representing Restricted Stock Awards
granted pursuant to the Plan shall bear a legend making appropriate reference to
the restrictions imposed.
(d) Possession. The Committee may require the Corporation to retain
physical custody of the certificates representing Restricted Stock Awards during
the restriction period and may require the Holder of the Award to execute stock
powers in blank for those certificates and deliver those stock powers to the
Corporation, or the Committee may require the Holder to enter into an escrow
agreement providing that the certificates representing Restricted Stock Awards
granted or sold pursuant to the Plan shall remain in the physical custody of an
escrow holder until all restrictions are removed or expire.
(e) Other Conditions. The Committee may impose other conditions on
any shares granted or sold as Restricted Stock Awards pursuant to the Plan as it
may deem advisable, including without limitation (i) restrictions under the
Securities Act or Exchange Act, (ii) the requirements of any securities exchange
upon which the shares or shares of the same class are then listed, and (iii) any
state securities law applicable to the shares.
7.2 Expiration of Restrictions. The restrictions imposed in Subsection 7.1
on Restricted Stock Awards shall lapse as determined by the Committee and set
forth in the applicable Award Agreement, and the Corporation shall promptly
deliver to the Holder of the Restricted Stock Award a certificate representing
the number of shares for which restrictions have lapsed, free of any restrictive
legend relating to the lapsed restrictions. Each Restricted Stock Award may have
a different restriction period as determined by the Committee in its sole
discretion. The Committee may, in its discretion, prospectively reduce the
restriction period applicable to a particular Restricted Stock Award.
7.3 Rights as Stockholder. Subject to the provisions of Subsections 7.1
and 10.9, the Committee may, in its discretion, determine what rights, if any,
the Holder shall have with respect to the Restricted Stock Awards granted or
sold, including the right to vote the shares and receive all dividends and other
distributions paid or made with respect thereto.
7.4 Payment of Taxes. The Committee may, in its discretion, require a
Holder to pay to the Corporation (or the Corporation's Subsidiary if the Holder
is an employee of a Subsidiary of the Corporation) the amount that the Committee
deems necessary to satisfy the Corporation's or its Subsidiary's current or
future obligation to withhold federal, state, or local income or other taxes
that the Holder incurs by reason of the Restricted Stock Award. The Holder may
(a) direct the
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Corporation to withhold from the shares of Stock to be issued to the Holder the
number of shares necessary to satisfy the Corporation's obligation to withhold
taxes, that determination to be based on the shares' Fair Market Value as of the
date on which tax withholding is to be made; (b) deliver to the Corporation
sufficient shares of Stock (based upon the Fair Market Value as of the date of
such delivery) to satisfy the Corporation's tax withholding obligations, which
tax withholding obligation is based on the shares' Fair Market Value as of the
later of the date of issuance or the date as of which the shares of Stock issued
become includible in the income of the Holder; or (c) deliver sufficient cash to
the Corporation to satisfy its tax withholding obligations. Holders who elect to
have Stock withheld pursuant to (a) or (b) above must make the election at the
time and in the manner that the Committee prescribes. The Committee may, in its
sole discretion, deny any Holder's request to satisfy withholding obligations
through Stock instead of cash. In the event the Committee subsequently
determines that the aggregate Fair Market Value (as determined above) of any
shares of Stock withheld or delivered as payment of any tax withholding
obligation is insufficient to discharge that tax withholding obligation, then
the Holder shall pay to the Corporation, immediately upon the Committee's
request, the amount of that deficiency.
7.5 Other Agreement Provisions. The Award Agreements relating to
Restricted Stock Awards shall contain such provisions in addition to those
required by the Plan as the Committee may deem advisable.
SECTION 8. [Intentionally Omitted]
SECTION 9. ADJUSTMENT PROVISIONS
9.1 Adjustment of Awards and Authorized Stock. The terms of an Award and
the number of shares of Stock authorized pursuant to Subsection 2.1 for issuance
under the Plan shall be subject to adjustment from time to time, in accordance
with the following provisions, provided, however, that the terms of such
Subsection 2.1 already reflect the adjustment which would be required as a
result of the five-for-one stock dividend effected in January 1995 and, as a
consequence, no adjustment pursuant to this Section 9 as a result of such
dividend shall be required:
(a) If at any time, or from time to time, the Corporation shall
subdivide as a whole (by reclassification, by a Stock split, by the issuance of
a distribution on Stock payable in Stock, or otherwise) the number of shares of
Stock then outstanding into a greater number of shares of Stock, then (i) the
maximum number of shares of Stock available for the Plan as provided in
Subsection 2.1 shall be increased proportionately, and the kind of shares or
other securities available for the Plan shall be appropriately adjusted, (ii)
the number of shares of Stock (or other kind of shares or securities) that may
be acquired under any Award shall be increased proportionately, and (iii) the
price (including
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Exercise Price) for each share of Stock (or other kind of shares or securities)
subject to then outstanding Awards shall be reduced proportionately, without
changing the aggregate purchase price or value as to which outstanding Awards
remain exercisable or subject to restrictions.
(b) If at any time, or from time to time, the Corporation shall
consolidate as a whole (by reclassification, reverse Stock split, or otherwise)
the number of shares of Stock then outstanding into a lesser number of shares of
Stock, then (i) the maximum number of shares of Stock available for the Plan as
provided in Subsection 2.1 shall be decreased proportionately, and the kind of
shares or other securities available for the Plan shall be appropriately
adjusted, (ii) the number of shares of Stock (or other kind of shares or
securities) that may be acquired under any Award shall be decreased
proportionately, and (iii) the price (including Exercise Price) for each share
of Stock (or other kind of shares or securities) subject to then outstanding
Awards shall be increased proportionately, without changing the aggregate
purchase price or value as to which outstanding Awards remain exercisable or
subject to restrictions.
(c) Whenever the number of shares of Stock subject to outstanding
Awards and the price for each share of Stock subject to outstanding Awards are
required to be adjusted as provided in this Subsection 9.1, the Committee shall
promptly prepare a notice setting forth, in reasonable detail, the event
requiring adjustment, the amount of the adjustment, the method by which such
adjustment was calculated, and the change in price and the number of shares of
Stock, other securities, cash, or property purchasable subject to each Award
after giving effect to the adjustments. The Committee shall promptly give each
Holder such a notice.
(d) Adjustments under Subsections 9.1(a) and (b) shall be made by the
Committee, and its determination as to what adjustments shall be made and the
extent thereof shall be final, binding, and conclusive. No fractional interest
shall be issued under the Plan on account of any such adjustments.
9.2 Changes in Control. Upon the occurrence of a Change in Control (a) all
outstanding Stock Appreciation Rights and Options shall immediately become fully
vested and exercisable in full, including that portion of any Stock Appreciation
Right or Option that pursuant to the terms and provisions of the applicable
Award Agreement had not yet become exercisable (the total number of shares of
Stock as to which a Stock Appreciation Right or Option is exercisable upon the
occurrence of a change in Control is referred to herein as the "Total Shares");
and (b) the restriction period of any Restricted Stock Award shall immediately
be accelerated and the restrictions shall expire. Any Option Agreement may (but
need not) provide that, the Holder of such Option shall immediately be granted
corresponding Stock Appreciation Rights upon the
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occurrence of a Change in Control. If a Change in Control involves a
Restructuring or occurs in connection with a series of related transactions
involving a Restructuring and if such Restructuring is in the form of a
Non-Surviving Event and as a part of such Restructuring shares of Stock, other
securities, cash, or property shall be issuable or deliverable in exchange for
Stock, then the Holder of an Award shall be entitled to purchase or receive (in
lieu of the Total Shares that the Holder would otherwise be entitled to purchase
or receive), as appropriate for the form of Award, the number of shares of
Stock, other securities, cash, or property to which that number of Total Shares
would have been entitled in connection with such Restructuring (and, for
Options, at an aggregate exercise price equal to the Exercise Price that would
have been payable if that number of Total Shares had been purchased on the
exercise of the Option immediately before the consummation of the
Restructuring). Nothing in this Subsection 9.2 shall impose on a Holder the
obligation to exercise any Award immediately before or upon the Change of
Control, or cause Holder to forfeit the right to exercise the Award during the
remainder of the original term of the Award because of a Change in Control.
9.3 Restructuring Without Change in Control. In the event a Restructuring
shall occur at any time while there is any outstanding Award hereunder and that
Restructuring does not occur in connection with a Change in Control or a series
of related transactions involving a Change in Control, then:
(a) no outstanding Option or Stock Appreciation Right shall
immediately become fully vested and exercisable in full merely because of the
occurrence of the Restructuring;
(b) no Holder of an Option shall automatically be granted
corresponding Stock Appreciation Rights;
(c) the restriction period of any Restricted Stock Award shall not
immediately be accelerated and the restrictions expire merely because of the
occurrence of the Restructuring; and
(d) at the option of the Committee, the Committee may (but shall not
be required to) cause the Corporation to take any one or more of the following
actions:
(i) accelerate in whole or in part the time of the vesting and
exercisability of any one or more of the outstanding Stock
Appreciation Rights and Options so as to provide that those Stock
Appreciation Rights and Options shall be exercisable before, upon, or
after the consummation of the Restructuring;
(ii) grant each Holder of an Option corresponding Stock
Appreciation Rights;
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(iii) accelerate in whole or in part the expiration of some or
all of the restrictions on any Restricted Stock Award;
(iv) if the Restructuring is in the form of a Non-Surviving
Event, cause the surviving entity to assume in whole or in part any
one or more of the outstanding Awards upon such terms and provisions
as the Committee deems desirable; or
(v) redeem in whole or in part any one or more of the
outstanding Awards (whether or not then exercisable) in consideration
of a cash payment, as such payment may be reduced for tax withholding
obligations as contemplated in Subsections 5.8, 6.6, or 7.4, as
applicable, in an amount equal to:
(A) for Options and Stock Appreciation Rights granted in
connection with Options, the excess of (1) the Fair Market Value,
determined as of the date immediately preceding the consummation
of the Restructuring, of the aggregate number of shares of Stock
subject to the Award and as to which the Award is being redeemed
over (2) the Exercise Price for that number of shares of Stock;
(B) for Stock Appreciation Rights not granted in connection
with an Option, the excess of (1) the Fair Market Value,
determined as of the date immediately preceding the consummation
of the Restructuring, of the aggregate number of shares of Stock
subject to the Award and as to which the Award is being redeemed
over (2) the Fair Market Value of that number of shares of Stock
on the Date of Grant; and
(C) for Restricted Stock Awards, the Fair Market Value,
determined as of the date immediately preceding the consummation
of the Restructuring, of the aggregate number of shares of Stock
subject to the Award and as to which the Award is being redeemed.
The Corporation shall promptly notify each Holder of any election or action
taken by the Corporation under this Subsection 9.3. In the event of any election
or action taken by the Corporation pursuant to this Subsection 9.3 that requires
the amendment or cancellation of any Award Agreement as may be specified in any
notice to the Holder thereof, that Holder shall promptly deliver that Award
Agreement to the Corporation in order for that amendment or cancellation to be
implemented by the Corporation and the Committee. The failure of the Holder to
deliver any such Award Agreement to the Corporation as provided in the preceding
sentence shall not in any manner affect the validity or enforceability of any
action taken by the Corporation
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and the Committee under this Subsection 9.3, including without limitation any
redemption of an Award as of the consummation of a Restructuring. Any cash
payment to be made by the Corporation pursuant to this Subsection 9.3 in
connection with the redemption of any outstanding Awards shall be paid to the
Holder thereof currently with the delivery to the Corporation of the Award
Agreement evidencing that Award; provided, however, that any such redemption
shall be effective upon the consummation of the Restructuring notwithstanding
that the payment of the redemption price may occur subsequent to the
consummation. If all or any portion of an outstanding Award is to be exercised
or accelerated upon or after the consummation of a Restructuring that does not
occur in connection with a Change in Control and is in the form of a
Non-Surviving Event, and as a part of that Restructuring shares of stock, other
securities, cash, or property shall be issuable or deliverable in exchange for
Stock, then the Holder of the Award shall thereafter be entitled to purchase or
receive (in lieu of the number of shares of Stock that the Holder would
otherwise be entitled to purchase or receive) the number of shares of Stock,
other securities, cash, or property to which such number of shares of Stock
would have been entitled in connection with the Restructuring (and, for Options,
upon payment of the aggregate exercise price equal to the Exercise Price that
would have been payable if that number of Total Shares had been purchased on the
exercise of the Option immediately before the consummation of the Restructuring)
and such Award shall be subject to adjustments that shall be as nearly
equivalent as may be practical to the adjustments provided for in this Section
9.
9.4 Notice of Restructuring. The Corporation shall attempt to keep all
Holders informed with respect to any Restructuring or of any potential
Restructuring to the same extent that the Corporation's stockholders are
informed by the Corporation of any such event or potential event.
SECTION 10. ADDITIONAL PROVISIONS
10.1 Termination of Status. If a Holder's employment, Non-Employee Director
or consulting relationship with the Corporation or any of its Subsidiaries is
terminated for any reason other than (a) that Holder's death or (b) that
Holder's Disability (hereafter defined), then any and all Awards held by such
Holder as of the date of the termination that are not yet exercisable (or for
which restrictions have not lapsed) shall become null and void as of the date of
such termination; provided, however, that the portion, if any, of such Awards
that are exercisable as of the date of termination shall be exercisable for a
period of the lesser of (a) the remainder of the term of the Award or (b) the
date which is set forth in the Award (but in no event more than 90 days after
the date of termination with respect to any Incentive Option). Any portion of an
Award not exercised upon the expiration of the lesser of the period specified
above shall be null and void unless the Holder dies during such period, in which
case the provisions of Subsection 10.2 shall govern. For purposes of this Plan,
a Holder's employment, Non-Employee Director or consulting relationship shall
not be deemed terminated as a result of a change in the Holder's status from
that of
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employee, Non-Employee Director or consultant to that of any other of such
relationships with the Corporation or any of its Subsidiaries, and any Awards
outstanding at the time of any such change of status shall continue to remain in
full force and effect.
10.2 Death. Upon the death of a Holder, any and all Awards held by the
Holder that are not yet exercisable (or for which restrictions have not lapsed)
as of the date of the Holder's death shall become exercisable in full and any
restrictions shall immediately lapse as of the date of death; provided, however,
that the Awards held by the Holder as of the date of death shall be exercisable
by that Holder's legal representatives, heirs, legatees, or distributees for a
period of 6 months or such longer period as required by any Applicable Law
following the date of the Holder's death. Any portion of an Award not exercised
upon the expiration of such period shall be null and void. Except as expressly
provided in this Subsection 10.2, no Award held by a Holder shall be exercisable
after the death of that Holder.
10.3 Disability. If a Holder's employment, Non-Employee Director or
consulting relationship is terminated by reason of the Holder's Disability, then
the portion, if any, of any and all Awards held by the Holder not yet
exercisable (or for which restrictions have not lapsed) as of the date of that
termination for Disability shall become exercisable in full and any restrictions
shall immediately lapse as of the date of termination; provided, however, that
the Awards held by the Holder as of the date of that termination shall be
exercisable by the Holder, his guardian or his legal representative for a period
of 6 months or such longer period as required by any Applicable Law following
the date of such termination. Any portion of an Award not exercised upon the
expiration of such period shall be null and void unless the Holder dies during
such period, in which event the provisions of Subsection 10.2 shall govern.
"Disability" shall have the meaning given it in the employment agreement of the
Holder; provided, however, that if that Holder has no employment agreement,
"Disability" shall mean, as determined by the Board of Directors in the sole
discretion exercised in good faith of the Board of Directors, a physical or
mental impairment of sufficient severity that either the Holder is unable to
continue performing the duties he performed before such impairment or the
Holder's condition entitles him to disability benefits under any insurance or
employee benefit plan of the Corporation or its Subsidiaries and that impairment
or condition is cited by the Corporation as the reason for termination of the
Holder's employment, Non-Employee Director or consulting relationship.
10.4 Leave of Absence. With respect to an Award, a Holder shall not cease
to be an Employee in the case of (i) any leave of absence approved by the
Company or (ii) transfers between locations of the Company or between the
Company, its Parent, any Subsidiary, or any successor, for any or all purposes
of the Plan and the Award Agreement of such Holder.
10.5 Transferability of Awards. In addition to such other terms and
conditions as may be included in a particular Award Agreement, an Award
requiring exercise shall be exercisable
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during a Holder's lifetime only by that Holder or by that Holder's guardian or
legal representative. An Award requiring exercise shall not be transferrable
other than by will or the laws of descent and distribution.
10.6 Forfeiture and Restrictions on Transfer. Each Award Agreement may
contain or otherwise provide for conditions giving rise to the forfeiture of the
Stock acquired pursuant to an Award or otherwise and may also provide for those
restrictions on the transferability of shares of the Stock acquired pursuant to
an Award or otherwise that the Committee in its sole and absolute discretion may
deem proper or advisable. The conditions giving rise to forfeiture may include,
but need not be limited to, the requirement that the Holder render substantial
services to the Corporation or its Subsidiaries for a specified period of time.
The restrictions on transferability may include, but need not be limited to,
options and rights of first refusal in favor of the Corporation and stockholders
of the Corporation other than the Holder of such shares of Stock who is a party
to the particular Award Agreement or a subsequent holder of the shares of Stock
who is bound by that Award Agreement.
10.7 Delivery of Certificates of Stock. Subject to Subsection 10.8, the
Corporation shall promptly issue and deliver a certificate representing the
number of shares of Stock as to which (a) an Option has been exercised after the
Corporation receives an Exercise Notice and upon receipt by the Corporation of
the Exercise Price and any tax withholding as may be requested, (b) a Stock
Appreciation Right has been exercised (to the extent the Committee determines to
pay such Stock Appreciation Right in shares of Stock pursuant to Subsection 6.5)
and upon receipt by the Corporation of any tax withholding as may be requested,
and (c) restrictions have lapsed with respect to a Restricted Stock Award and
upon receipt by the Corporation of any tax withholding as may be requested. The
value of the shares of Stock or cash transferable because of an Award under the
Plan shall not bear any interest owing to the passage of time, except as may be
otherwise provided in an Award Agreement. If a Holder is entitled to receive
certificates representing Stock received for more than one form of Award under
the Plan, separate Stock certificates shall be issued with respect to Incentive
Options and Nonstatutory Options.
10.8 Conditions to Delivery of Stock. Nothing herein or in any Award
granted hereunder or any Award Agreement shall require the Corporation to issue
any shares with respect to any Award if that issuance would, in the opinion of
counsel for the Corporation, constitute a violation of the Securities Act or any
similar or superseding statute or statutes, any other applicable statute or
regulation, or the rules of any applicable securities exchange or securities
association, as then in effect. At the time of any exercise of an Option or
Stock Appreciation Right, or at the time of any grant of a Restricted Stock
Award, the Corporation may, as a condition precedent to the exercise of such
Option or Stock Appreciation Right or vesting of any Restricted Stock Award,
require from the Holder of the Award (or in the event of his death, his legal
representatives, heirs, legatees, or distributees) such written representations,
if any,
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concerning the Holder's intentions with regard to the retention or disposition
of the shares of Stock being acquired pursuant to the Award and such written
covenants and agreements, if any, as to the manner of disposal of such shares
as, in the opinion of counsel to the Corporation, may be necessary to ensure
that any disposition by that Holder (or in the event of the Holder's death, his
legal representatives, heirs, legatees, or distributees) will not involve a
violation of the Securities Act or any similar or superseding statute or
statutes, any other applicable state or federal statute or regulation, or any
rule of any applicable securities exchange or securities association, as then in
effect.
10.9 [Intentionally Omitted]
10.10 Securities Act Legend. Certificates for shares of Stock, when issued,
may have the following legend, or statements of other applicable restrictions
(including, without limitation, restrictions required under any Federal, state
or foreign law), endorsed thereon and may not be immediately transferable:
THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS. THE SHARES MAY NOT BE OFFERED FOR SALE, SOLD, PLEDGED,
TRANSFERRED, OR OTHERWISE DISPOSED OF UNTIL THE HOLDER HEREOF PROVIDES
EVIDENCE SATISFACTORY TO THE ISSUER (WHICH, IN THE DISCRETION OF THE
ISSUER, MAY INCLUDE AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER) THAT
SUCH OFFER, SALE, PLEDGE, TRANSFER, OR OTHER DISPOSITION WILL NOT VIOLATE
APPLICABLE FEDERAL OR STATE LAWS.
This legend shall not be required for shares of Stock issued pursuant to an
effective registration statement under the Securities Act.
10.11 Legend for Restrictions on Transfer. Each certificate representing
shares issued to a Holder pursuant to an Award granted under the Plan shall, if
such shares are subject to any transfer restriction, including a right of first
refusal, provided for under this Plan or an Award Agreement, bear a legend that
complies with applicable law with respect to the restrictions on transferability
contained in this Subsection 10.11, such as:
THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
RESTRICTIONS ON TRANSFERABILITY IMPOSED BY THAT CERTAIN INSTRUMENT ENTITLED
"NATIONAL INSTRUMENTS CORPORATION 1994 INCENTIVE PLAN" AS ADOPTED BY
NATIONAL
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<PAGE> 32
INSTRUMENTS CORPORATION (THE "CORPORATION"), ON MAY 10, 1994, AND AN
AGREEMENT THEREUNDER BETWEEN THE CORPORATION AND THE INITIAL HOLDER THEREOF
DATED _______________, 199_, AND MAY NOT BE TRANSFERRED, SOLD, OR OTHERWISE
DISPOSED OF EXCEPT AS THEREIN PROVIDED. THE CORPORATION WILL FURNISH A COPY
OF SUCH INSTRUMENT AND AGREEMENT TO THE RECORD HOLDER OF THIS CERTIFICATE
WITHOUT CHARGE ON REQUEST TO THE CORPORATION AT ITS PRINCIPAL PLACE OF
BUSINESS OR REGISTERED OFFICE.
10.12 Rights as a Stockholder. A Holder shall have no right as a
stockholder with respect to any shares covered by his Award until a certificate
representing those shares is issued in his name. No adjustment shall be made for
dividends (ordinary or extraordinary, whether in cash or other property) or
distributions or other rights for which the record date is before the date that
certificate is issued, except as contemplated by Section 9 hereof. Nevertheless,
dividends, dividend equivalent rights and voting rights may be extended to and
made part of any Award denominated in Stock or units of Stock, subject to such
terms, conditions and restrictions as the Committee may establish. The Committee
may also establish rules and procedures for the crediting of interest on
deferred cash payments and dividend equivalents for deferred payment denominated
in Stock or units of Stock.
10.13 Furnish Information. Each Holder shall furnish to the Corporation all
information requested by the Corporation to enable it to comply with any
reporting or other requirement imposed upon the Corporation by or under any
applicable statute or regulation.
10.14 Obligation to Exercise. The granting of an Award hereunder shall
impose no obligation upon the Holder to exercise the same or any part thereof.
10.15 Adjustments to Awards. Subject to the general limitations set forth
in Sections 5, 6, and 9, the Committee may make any adjustment in the Exercise
Price of, the number of shares subject to, or the terms of a Nonstatutory Option
or Stock Appreciation Right by canceling an outstanding Nonstatutory Option or
Stock Appreciation Right and regranting a Nonstatutory Option or Stock
Appreciation Right. Such adjustment shall be made by amending, substituting, or
regranting an outstanding Nonstatutory Option or Stock Appreciation Right. Such
amendment, substitution, or regrant may result in terms and conditions that
differ from the terms and conditions of the original Nonstatutory Option or
Stock Appreciation Right. The Committee may not, however, impair the rights of
any Holder of previously granted Nonstatutory Options or Stock Appreciation
Rights without that Holder's consent. If such action is effected by amendment,
such amendment shall be deemed effective as of the Date of Grant of the amended
Award.
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10.16 Remedies. The Corporation shall be entitled to recover from a Holder
reasonable attorneys' fees incurred in connection with the enforcement of the
terms and provisions of the Plan and any Award Agreement whether by an action to
enforce specific performance or for damages for its breach or otherwise.
10.17 Information Confidential. As partial consideration for the granting
of each Award hereunder, the Holder shall agree with the Corporation that he
will keep confidential all information and knowledge that he has relating to the
manner and amount of his participation in the Plan; provided, however, that such
information may be disclosed as required by law and may be given in confidence
to the Holder's spouse, tax or financial advisors, or to a financial institution
to the extent that such information is necessary to secure a loan. In the event
any breach of this promise comes to the attention of the Committee, it shall
take into consideration that breach in determining whether to recommend the
grant of any future Award to that Holder, as a factor mitigating against the
advisability of granting any such future Award to that Person.
10.18 Consideration. No Option or Stock Appreciation Right shall be
exercisable and no restriction on any Restricted Stock Award shall lapse with
respect to a Holder unless and until the Holder thereof shall have paid cash or
property to, or performed services for, the Corporation or any of its
Subsidiaries that the Committee believes is equal to or greater in value than
the par value of the Stock subject to such Award.
SECTION 11. DURATION AND AMENDMENT OF PLAN
11.1 Duration. No Awards may be granted hereunder after the date that is
ten years from the earlier of (a) the date the Plan is adopted by the Board of
Directors and (b) the date the Plan is approved by the stockholders of the
Corporation.
11.2 Amendment. The Board of Directors may, insofar as permitted by law,
with respect to any shares which, at the time, are not subject to Awards,
suspend or discontinue the Plan or revise or amend it in any respect whatsoever
and may amend any provision of the Plan or any Award Agreement to make the Plan
or the Award Agreement, or both, comply with Section 16(b) of the Exchange Act
and the exemptions from that Section in the regulations thereunder. The Board of
Directors may also amend, modify, suspend, or terminate the Plan for the purpose
of meeting or addressing any changes in other legal requirements applicable to
the Corporation or the Plan or for any other purpose permitted by law. The Plan
may not be amended without the consent of the holders of a majority of the
shares of Stock then outstanding to (a) increase materially the aggregate number
of shares of Stock that may be issued under the Plan (except for adjustments
pursuant to Section 9 hereof), (b) increase materially the benefits accruing to
Eligible
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Individuals under the Plan, or (c) modify materially the requirements about
eligibility for participation in the Plan; provided, however, that such
amendments may be made without the consent of stockholders of the Corporation if
changes occur in law or other legal requirements that would permit such changes.
SECTION 12. GENERAL
12.1 Application of Funds. The proceeds received by the Corporation from
the sale of shares pursuant to Awards may be used for any general corporate
purpose.
12.2 Right of the Corporation and Subsidiaries to Terminate Employment.
Nothing contained in the Plan, or in any Award Agreement, shall confer upon any
Holder the right to continue in the employ of the Corporation or any Subsidiary
or interfere in any way with the rights of the Corporation or any Subsidiary to
terminate the Holder's employment at any time.
12.3 No Liability for Good Faith Determinations. Neither the members of the
Board of Directors nor any member of the Committee shall be liable for any act,
omission or determination taken or made in good faith with respect to the Plan
or any Award granted under it; and members of the Board of Directors and the
Committee shall be entitled to indemnification and reimbursement by the
Corporation in respect of any claim, loss, damage, or expense (including
attorneys' fees, the costs of settling any suit, provided such settlement is
approved by independent legal counsel selected by the Corporation, and amounts
paid in satisfaction of a judgment, except a judgment based on a finding of bad
faith) arising therefrom to the full extent permitted by law and under any
directors' and officers' liability or similar insurance coverage that may from
time to time be in effect. This right to indemnification shall be in addition
to, and not a limitation on, any other indemnification rights any member of the
Board of Directors or the Committee may have.
12.4 Other Benefits. Participation in the Plan shall not preclude the
Holder from eligibility in any other stock or stock option plan of the
Corporation or any Subsidiary or any old age benefit, insurance, pension, profit
sharing retirement, bonus, or other extra compensation plans that the
Corporation or any Subsidiary has adopted, or may, at any time, adopt for the
benefit of its Employees. Neither the adoption of the Plan by the Board of
Directors nor the submission of the Plan to the stockholders of the Corporation
for approval shall be construed as creating any limitations on the power of the
Board of Directors to adopt such other incentive arrangements as it may deem
desirable, including, without limitation, the granting of stock options and the
awarding of stock and cash otherwise than under the Plan and such arrangements
may be either generally applicable or applicable only in specific cases.
12.5 Exclusion From Pension and Profit-Sharing Compensation. By acceptance
of an Award (regardless of form), as applicable, each Holder shall be deemed to
have agreed that the
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Award is special incentive compensation that will not be taken into account in
any manner as salary, compensation, or bonus in determining the amount of any
payment under any pension, retirement, or other employee benefit plan of the
Corporation or any Subsidiary, unless any pension, retirement, or other employee
benefit plan of the Corporation or Subsidiary expressly provides that such Award
shall be so considered for purposes of determining the amount of any payment
under any such plan. In addition, each beneficiary of a deceased Holder shall be
deemed to have agreed that the Award will not affect the amount of any life
insurance coverage, if any, provided by the Corporation or a Subsidiary on the
life of the Holder that is payable to the beneficiary under any life insurance
plan covering employees of the Corporation or any Subsidiary.
12.6 Execution of Receipts and Releases. Any payment of cash or any
issuance or transfer of shares of Stock to the Holder, or to his legal
representative, heir, legatee, or distributee, in accordance with the provisions
hereof, shall, to the extent thereof, be in full satisfaction of all claims of
such persons hereunder. The Committee may require any Holder, legal
representative, heir, legatee, or distributee, as a condition precedent to such
payment, to execute a release and receipt therefor in such form as it shall
determine.
12.7 Unfunded Plan. Insofar as it provides for Awards of cash and Stock,
the Plan shall be unfunded. Although bookkeeping accounts may be established
with respect to Holders who are entitled to cash, Stock, or rights thereto under
the Plan, any such accounts shall be used merely as a bookkeeping convenience.
The Corporation shall not be required to segregate any assets that may at any
time be represented by cash, Stock, or rights thereto, nor shall the Plan be
construed as providing for such segregation, nor shall the Corporation nor the
Board of Directors nor the Committee be deemed to be a trustee of any cash,
Stock, or rights thereto to be granted under the Plan. Any liability of the
Corporation to any Holder with respect to a grant of cash, Stock, or rights
thereto under the Plan shall be based solely upon any contractual obligations
that may be created by the Plan and any Award Agreement; no such obligation of
the Corporation shall be deemed to be secured by any pledge or other encumbrance
on any property of the Corporation. Neither the Corporation nor the Board of
Directors nor the Committee shall be required to give any security or bond for
the performance of any obligation that may be created by the Plan.
12.8 No Guarantee of Interests. Neither the Committee nor the Corporation
guarantees the Stock of the Corporation from loss or depreciation.
12.9 Payment of Expenses. All expenses incident to the administration,
termination, or protection of the Plan, including, but not limited to, legal and
accounting fees, shall be paid by the Corporation or its Subsidiaries; provided,
however, the Corporation or a Subsidiary may recover any and all damages, fees,
expenses, and costs arising out of any actions taken by the Corporation to
enforce its right to purchase Stock under this Plan.
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12.10 Corporation Records. Records of the Corporation or its Subsidiaries
regarding the Holder's period of employment, termination of employment and the
reason therefor, leaves of absence, re-employment, and other matters shall be
conclusive for all purposes hereunder, unless determined by the Committee to be
incorrect.
12.11 Information. The Corporation and its Subsidiaries shall, upon request
or as may be specifically required hereunder, furnish or cause to be furnished
all of the information or documentation which is necessary or required by the
Committee to perform its duties and functions under the Plan.
12.12 No Liability of Corporation. The Corporation assumes no obligation or
responsibility to the Holder or his legal representatives, heirs, legatees, or
distributees for any act of, or failure to act on the part of, the Committee.
12.13 Corporation Action. Any action required of the Corporation shall be
by resolution of its Board of Directors or by a person authorized to act by
resolution of the Board of Directors.
12.14 Severability. In the event that any provision of this Plan, or the
application hereof to any Person or circumstance, is held by a court of
competent jurisdiction to be invalid, illegal, or unenforceable in any respect
under present or future laws effective during the effective term of any such
provision, such invalid, illegal, or unenforceable provision shall be fully
severable; and this Plan shall then be construed and enforced as if such
invalid, illegal, or unenforceable provision had not been contained in this
Plan; and the remaining provisions of this Plan shall remain in full force and
effect and shall not be affected by the illegal, invalid, or unenforceable
provision or by its severance from this Plan. Furthermore, in lieu of each such
illegal, invalid, or unenforceable provision, there shall be added automatically
as part of this Plan a provision as similar in terms to such illegal, invalid,
or unenforceable provision as may be possible and be legal, valid, and
enforceable. If any of the terms or provisions of this Plan conflict with the
requirements of Section 422 of the Code (with respect to Incentive Options),
then those conflicting terms or provisions shall be deemed inoperative to the
extent they so conflict with the requirements of Section 422 of the Code and, in
lieu of such conflicting provision, there shall be added automatically as part
of this Plan a provision as similar in terms to such conflicting provision as
may be possible and not conflict with the requirements of Section 422 of the
Code. With respect to Incentive Options, if this Plan does not contain any
provision required to be included herein under Section 422 of the Code, that
provision shall be deemed to be incorporated herein with the same force and
effect as if that provision had been set out at length herein; provided,
however, that, to the extent any Option that is intended to qualify as an
Incentive Option cannot so qualify, that Option (to that extent) shall be deemed
a Nonstatutory Option for all purposes of the Plan.
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12.15 Notices. Whenever any notice is required or permitted hereunder, such
notice must be in writing and personally delivered or sent by mail. Any notice
required or permitted to be delivered hereunder shall be deemed to be delivered
on the date on which it is actually received by the Corporation addressed to the
attention of the Corporate Secretary at the Corporation's office as specified in
the applicable Award Agreement. The Corporation or a Holder may change, at any
time and from time to time, by written notice to the other, the address which it
or he had previously specified for receiving notices. Until changed in
accordance herewith, the Corporation and each Holder shall specify as its and
his address for receiving notices the address set forth in the Award Agreement
pertaining to the shares to which such notice relates. Any person entitled to
notice hereunder may waive such notice.
12.16 Successors. The Plan shall be binding upon the Holder, his legal
representatives, heirs, legatees, and distributees, upon the Corporation, its
successors and assigns and upon the Committee and its successors.
12.17 Headings. The titles and headings of Sections and Subsections are
included for convenience of reference only and are not to be considered in
construction of the provisions hereof.
12.18 Governing Law. All questions arising with respect to the provisions
of the Plan shall be determined by application of the laws of the State of
Delaware, without giving effect to any conflict of law provisions thereof,
except to the extent Delaware law is preempted by federal law. Questions arising
with respect to the provisions of an Award Agreement that are matters of
contract law shall be governed by the laws of the state specified in the Award
Agreement, except to the extent that Delaware corporate law conflicts with the
contract law of such state, in which event Delaware corporate law shall govern
irrespective of any conflict of law laws. The obligation of the Corporation to
sell and deliver Stock hereunder is subject to applicable federal, state and
foreign laws and to the approval of any governmental authority required in
connection with the authorization, issuance, sale, or delivery of such Stock.
12.19 Word Usage. Words used in the masculine shall apply to the feminine
where applicable, and wherever the context of this Plan dictates, the plural
shall be read as the singular and the singular as the plural.
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TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
SCOPE AND PURPOSE OF PLAN........................................................1
SECTION 1. DEFINITIONS..........................................................1
SECTION 2. SHARES OF STOCK SUBJECT TO THE PLAN..................................9
2.1 Maximum Number of Shares...........................................9
2.2 Limitation of Shares...............................................9
2.3 Description of Shares.............................................10
2.4 Registration and Listing of Shares................................10
SECTION 3. ADMINISTRATION OF THE PLAN..........................................10
3.1 Committee.........................................................10
3.2 Duration, Removal, Etc............................................12
3.3 Meetings and Actions of Committee.................................13
3.4 Committee's Powers................................................13
SECTION 4. ELIGIBILITY AND PARTICIPATION.......................................14
4.1 Eligible Individuals..............................................14
4.2 Grant of Awards...................................................14
4.3 Date of Grant.....................................................14
4.4 Award Agreements..................................................14
4.5 Limitation for Incentive Options..................................15
4.6 No Right to Award.................................................15
4.7 Internal Revenue Code Section 162(m) Limitations..................15
SECTION 5. TERMS AND CONDITIONS OF OPTIONS.....................................16
5.1 Number of Shares..................................................16
5.2 Vesting...........................................................16
5.3 Expiration of Options.............................................16
5.4 Exercise Price....................................................16
5.5 Method of Exercise................................................17
5.6 Incentive Option Exercises........................................17
</TABLE>
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<TABLE>
<S> <C>
5.7 Medium and Time of Payment........................................17
5.8 Payment of Taxes..................................................17
5.9 Limitation on Aggregate Value of Shares That May Become First
Exercisable During Any Calendar Year Under an Incentive Option....18
5.10 No Fractional Shares..............................................18
5.11 Modification, Extension, and Renewal of Options...................19
5.12 Other Agreement Provisions........................................19
SECTION 6. STOCK APPRECIATION RIGHTS...........................................19
6.1 Form of Right.....................................................20
6.2 Rights Related to Options.........................................20
6.3 Right Without Option..............................................20
6.4 Limitations on Rights.............................................21
6.5 Payment of Rights.................................................21
6.6 Payment of Taxes..................................................21
6.7 Other Agreement Provisions........................................22
SECTION 7. RESTRICTED STOCK AWARDS.............................................22
7.1 Restrictions......................................................22
7.2 Expiration of Restrictions........................................23
7.3 Rights as Stockholder.............................................23
7.4 Payment of Taxes..................................................23
7.5 Other Agreement Provisions........................................24
SECTION 8. [Intentionally Omitted].............................................24
SECTION 9. ADJUSTMENT PROVISIONS...............................................24
9.1 Adjustment of Awards and Authorized Stock.........................24
9.2 Changes in Control................................................25
9.3 Restructuring Without Change in Control...........................26
9.4 Notice of Restructuring...........................................28
SECTION 10. ADDITIONAL PROVISIONS..............................................28
10.1 Termination of Status.............................................28
10.2 Death.............................................................29
10.3 Disability........................................................29
10.4 Leave of Absence..................................................29
10.5 Transferability of Awards.........................................29
</TABLE>
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<TABLE>
<S> <C>
10.6 Forfeiture and Restrictions on Transfer...........................30
10.7 Delivery of Certificates of Stock.................................30
10.8 Conditions to Delivery of Stock...................................30
10.9 [Intentionally Omitted]...........................................31
10.10 Securities Act Legend.............................................31
10.11 Legend for Restrictions on Transfer...............................31
10.12 Rights as a Stockholder...........................................32
10.13 Furnish Information...............................................32
10.14 Obligation to Exercise............................................32
10.15 Adjustments to Awards.............................................32
10.16 Remedies..........................................................33
10.17 Information Confidential..........................................33
10.18 Consideration.....................................................33
SECTION 11. DURATION AND AMENDMENT OF PLAN.....................................33
11.1 Duration..........................................................33
11.2 Amendment.........................................................33
SECTION 12. GENERAL............................................................34
12.1 Application of Funds..............................................34
12.2 Right of the Corporation and Subsidiaries to Terminate
Employment........................................................34
12.3 No Liability for Good Faith Determinations........................34
12.4 Other Benefits....................................................34
12.5 Exclusion From Pension and Profit-Sharing Compensation............34
12.6 Execution of Receipts and Releases................................35
12.7 Unfunded Plan.....................................................35
12.8 No Guarantee of Interests.........................................35
12.9 Payment of Expenses...............................................35
12.10 Corporation Records...............................................36
12.11 Information.......................................................36
12.12 No Liability of Corporation.......................................36
12.13 Corporation Action................................................36
12.14 Severability......................................................36
12.15 Notices...........................................................37
12.16 Successors........................................................37
12.17 Headings..........................................................37
12.18 Governing Law.....................................................37
</TABLE>
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<TABLE>
<S> <C>
12.19 Word Usage........................................................37
</TABLE>
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NATIONAL INSTRUMENTS CORPORATION
AMENDED AND RESTATED
1994 INCENTIVE PLAN
1
<PAGE> 1
Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 of National Instruments Corporation of our
report dated January 22, 1999 relating to the financial statements, which
appears in the Annual Report to Shareholders, which is incorporated in the
Annual Report on Form 10-K.
/s/ PricewaterhouseCoopers LLP
- ------------------------------
PricewaterhouseCoopers LLP
Austin, Texas
November 24, 1999
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