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EXHIBIT 4.2
BURR-BROWN CORPORATION
1993 STOCK INCENTIVE PLAN
(As Amended and Restated as of August 24, 2000)
PREAMBLE
The BURR-BROWN CORPORATION previously adopted the Burr-Brown Research
Corporation Incentive Stock Plan of 1981("Original Plan"), which was amended and
restated on several dates (most recently March 4, 1997) as the Burr-Brown
Corporation 1993 Stock Incentive Plan ("1993 Plan"). This amendment and
restatement of the 1993 Plan is effective as of August 24, 2000 ("Effective
Date") in connection with the acquisition of the Burr-Brown Corporation by Texas
Instruments Incorporated ("Parent") and shall apply to all outstanding Option
Grants and Stock Issuances subject to the 1993 Plan.
ARTICLE ONE
GENERAL
1. Definitions. As used herein, the following terms have the meanings
hereinafter set forth unless the context clearly indicates to the contrary:
1.1 "Board" shall mean the Board of Directors of Parent.
1.2 "Change in Control" shall mean a change in ownership or control of
the Company effected through either of the following transactions:
1.2.1 any person or related group of persons (other than the
Company or a person that directly or indirectly controls, is controlled
by, or is under common control with, the Company) directly or
indirectly acquires beneficial ownership (within the meaning of Rule
13d-3 of the Securities Exchange Act of 1934, as amended) of securities
possessing more than fifty percent (50%) of the total combined voting
power of the Company's outstanding securities pursuant to a tender or
exchange offer made directly to the Company's stockholders; or
1.2.2 there is a change in the composition of the Board over a
period of twenty-four (24) consecutive months or less such that a
majority of the Board members (rounded up to the next whole number)
ceases, by reason of one or more proxy contests for the election of
Board members, to be comprised of individuals who either (A) have been
Board members continuously since the beginning of such period or (B)
have been elected or nominated for election as Board members during
such period by at least a majority of the Board members described in
clause (A) who were still in office at the time such election or
nomination was approved by the Board.
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1.3 "Code" shall mean the Internal Revenue Code of 1986.
1.4 "Committee" shall mean a Committee of the Board designated by the
Board to administer the Plan. Unless otherwise determined by the Board, the
Committee shall be the Compensation Committee of the Board.
1.5 "Company" shall mean Texas Instruments Tucson Corporation (formerly
known as Burr-Brown Corporation).
1.6 "Corporate Transaction" shall mean any of the following
stockholder-approved transactions to which the Company is a party:
1.6.1 a merger, consolidation or other reorganization in which
the Company is not the surviving entity, except for a transaction the
principal purpose of which is to change the state in which the Company
is incorporated,
1.6.2 the sale, transfer or other disposition of all or
substantially all of the assets of the Company in complete liquidation
or dissolution of the Company, or
1.6.3 any reverse merger in which the Company is the surviving
entity but in which securities possessing more than fifty percent (50%)
of the total combined voting power of the Company's outstanding
securities are transferred to a person or persons different from those
who held such securities immediately prior to such merger.
1.7 "Fair Market Value" shall mean, with respect to Stock, the closing
price per share of Stock on the last preceding date to the date in question or,
if there is no such price, then the Fair Market Value shall be the closing price
on the last preceding date for which such price exists. With respect to property
other than Stock, the fair market value of such property shall be determined by
such methods or procedures as shall be established from time to time by the
Committee.
1.8 "Hostile Take-Over" shall mean a change in ownership of the Company
in which any person or related group of persons (other than the Company or a
person that directly or indirectly controls, is controlled by, or is under
common control with, the Company) directly or indirectly acquires beneficial
ownership (within the meaning of Rule 13d-3 of the Securities Exchange Act of
1934, as amended) of securities possessing more than fifty percent (50%) of the
total combined voting power of the Company's outstanding securities pursuant to
a tender or exchange offer made directly to the Company's stockholders which the
Board does not recommend such stockholders to accept.
1.9 "Option" shall mean an option to purchase Stock granted pursuant to
the provisions of the Discretionary Option Grant or Automatic Option Grant
Program.
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1.10 "Optionee" shall mean any person to whom an Option is granted
pursuant to the Discretionary Option Grant or Automatic Option Grant Program.
1.11 "Original Plan" shall mean the Burr-Brown Research Corporation
Incentive Stock Plan of 1981, as amended and restated in 1983.
1.12 "Participant" shall mean an employee or consultant to whom Stock
is issued pursuant to the provisions of the Stock Issuance Program.
1.13 "Plan" shall mean the Burr-Brown Corporation 1993 Stock Incentive
Plan, as amended and restated as of the Effective Date, and thereafter as
amended from time to time.
1.14 "Service" shall mean the performance of services on a periodic
basis to the Company (or any Subsidiary corporation or Parent) in the capacity
of an employee, a non-employee member of the board of directors or an
independent consultant or advisor, except to the extent otherwise specifically
provided in the applicable Option or Stock issuance agreement executed pursuant
to the provisions of the Plan.
1.15 "Stock" shall mean the Common Stock of the Parent.
1.16 "Subsidiary" or "Subsidiaries" shall mean any corporation, the
majority of the outstanding capital stock of which is owned, directly or
indirectly, by the Company.
1.17 "Take-Over Price" shall mean the greater of (a) the Fair Market
Value per share of Stock subject to an outstanding Option on the date that
Option is surrendered to the Company in connection with a Hostile Take-Over or
(b) the highest reported price per share of such Stock paid by the tender
offeror in effecting such Hostile Take-Over. However, if the surrendered Option
is an incentive stock option under Federal tax laws, the Take-Over Price shall
not exceed the clause (a) price per share.
2. Purpose. This Plan is intended to benefit the Company by (i)
providing an incentive to and encouraging Stock ownership by key employees
(including officers), non-employee members of the Board and consultants of the
Company and its Subsidiaries; (ii) providing such key employees, non-employee
Board members and consultants the opportunity to acquire a proprietary interest
or to increase their proprietary interest in the Company's success; and (iii)
encouraging such individuals to remain in the Service of the Company or its
Subsidiaries.
3. Structure of the Plan.
3.1 Stock Programs. The Plan shall be divided into three (3) separate
components:
- The Discretionary Option Grant Program, under which eligible
individuals may, at the discretion of the
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Committee, be granted Options to purchase shares of Stock in accordance
with the provisions of Article Two.
- The Stock Issuance Program, under which eligible individuals
may be issued shares of Stock directly, either through the immediate
purchase of such shares at a price not less than their Fair Market Value at
the time of issuance or as a bonus tied to the performance of services or
the Company's attainment of financial objectives, without any cash payment
required of the recipient.
- The Automatic Option Grant Program, under which each
non-employee Board member shall automatically receive special Option grants
at periodic intervals in accordance with the provisions of Article Four.
3.2 General Provisions. Unless the context clearly indicates otherwise,
the provisions of Articles One and Five shall apply to the Discretionary Option
Grant, Stock Issuance and Automatic Option Grant Programs and shall accordingly
govern the interests of all individuals under the Plan.
4. Administration.
(a) The Plan shall be administered by the Committee. The Committee
shall be appointed by the Board and shall consist of not less than three
directors. The Board may designate one or more directors as alternate members of
the Committee who may replace any absent or disqualified member at any meeting
of the Committee. No member or alternate member of the Committee shall be
eligible, while a member or alternate member, for participation in the Plan. A
director may serve as a member or alternate member of the Committee only during
periods in which a director is an "outside director" as described in Section
162(m) of the Code. The Committee may issue rules and regulations for
administration of the Plan. It shall meet at such times and places as it may
determine. A majority of the members of the Committee shall constitute a quorum.
Subject to the terms of the Plan and applicable law, the Committee shall have
full power and authority to: (i) determine whether, to what extent, and under
what circumstances Options may be settled or exercised in cash, Shares, other
securities, other options, or other property, or canceled, forfeited or
suspended, and the method or methods by which Options may be settled, exercised,
canceled, forfeited or suspended; (ii) determine whether, to what extent, and
under what circumstances cash, stock, other securities, other options, other
property, and other amounts payable with respect to an award under the Plan
shall be deferred either automatically or at the election of the holder thereof
or of the Committee; (iii) interpret and administer the Plan and any instrument
or agreement relating to, or Option or Stock issuance made under, the Plan; (vi)
establish, amend, suspend or waive such rules and regulations and appoint such
agents as it shall deem appropriate for the proper administration of the Plan;
(v) determine whether and to what extent Options or Stock Issuances should
comply or continue to comply with any requirement of statute or regulation; and
(vi) make any other determination and take any
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other action that the Committee deems necessary or desirable for the
administration of the Plan.
(b) No member of the Board and no member of the Committee shall be
liable for any action or determination made in good faith with respect to the
Discretionary Option Grant or Stock Issuance Program under its jurisdiction or
any Option grant or Stock issuance under it.
(c) All decisions of the Committee shall be final, conclusive and
binding upon all parties, including the Company, the stockholders and the
Participants.
5. Option Grants and Stock Issuances.
5.1 Notwithstanding any other provision in the Plan to the contrary, no
further Option Grants or Stock Issuances shall be made after the Effective Date.
6. Stock.
6.1 Stock Available. The Stock to be issued under this Plan may be
either authorized but unissued shares or shares issued and thereafter reacquired
by the Company. The aggregate number of shares of Stock which may be issued
pursuant to this Plan shall not exceed at any time 3,402,048 shares,* subject to
adjustment from time to time as provided in paragraph 6.3 below.
6.2 In no event may the aggregate number of shares of Stock for which
any one individual participating in the Plan may be granted Options and direct
Stock issuances exceed 1,170,000 shares in the aggregate over the term of the
Plan. For purposes of such limitation, no Option grants or direct Stock
issuances made prior to January 1, 1994 shall be taken into account.
6.3 If any change is made to the securities issuable under the Plan
(whether by reason of merger, consolidation, reorganization, recapitalization,
Stock dividend, Stock split, combination of shares, exchange of shares or other
change in capitalization) then, subject to the provisions of Section 2 of
Article Two, Section 2 of Article Three and Section 3 of Article Four, the
Committee may make appropriate adjustments in the maximum number and/or kind of
securities issuable under the Plan, the maximum number and/or kind of securities
for which Option grants and direct Stock issuances may be made to any one
participant in the aggregate after December 31, 1993 and the number and/or kind
of securities for which automatic Option grants are to be subsequently made to
newly-elected and continuing non-employee Board members under the Automatic
Option Grant Program in order to reflect the effect of such change upon the
Company's capital structure, and may make appropriate adjustments to the number
and/or kind of securities and Option price of the securities subject to each
outstanding Option to prevent the dilution of benefits thereunder. The
adjustments determined by the Committee shall be final, binding and conclusive.
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6.4 Restrictions. Shares issued under the Discretionary Option Grant or
Stock Issuance Program may be subject to such restrictions on transfer,
repurchase rights or other restrictions as shall be determined by the Committee.
7. Term of Plan.
7.1 The Discretionary Option Grant and Stock Issuance Programs under
the Plan were adopted by the Board on February 11, 1994, and the date of such
adoption accordingly constitutes the effective date for those two programs and
the Plan. The Automatic Option Grant Program under the Plan was adopted by the
Board on February 11, 1994 and became effective upon approval by the
stockholders at the 1994 Annual Meeting held on April 22, 1994. The date of such
stockholder approval accordingly constitutes the effective date of the Automatic
Option Grant Program. No further Option Grants or Stock Issuances shall be made
under the Discretionary Option Grant, Stock Issuance and Automatic Option Grant
Programs from and after the Effective Date.
7.2 Amendment. The Plan is amended and restated by the Board of
Directors of the Company as of the Effective Date and shall apply to all
outstanding Option Grants and Stock Issuances under the March 4, 1997
restatement of the Plan and to the fullest extent permitted to all other Option
Grants and Stock Issuances.
Except to the extent prohibited by applicable law and unless otherwise
expressly provided in an agreement pertaining to the applicable Option Grant or
Stock Issuance or in the Plan, the Board may amend, alter, suspend, discontinue,
or terminate the Plan or any portion thereof at any time; provided, however,
that no such amendment, alteration, suspension, discontinuation or termination
shall be made without (i) stockholder approval is such approval is necessary to
comply with any tax or regulatory requirement for which or with which the Board
deems it necessary or desirable to qualify or comply or (ii) the consent of the
affected Participant, if such action would adversely affect the rights of such
Participant under any outstanding Option Grant or Stock Issuance.
Notwithstanding anything to the contrary herein, the Committee may amend the
Plan in such manner as may be necessary to enable the Plan to achieve its stated
purposes in any jurisdiction outside the United States in a tax-efficient manner
and in compliance with local rules and regulations.
The Committee may waive any conditions or rights under, amend any terms
of, or amend, alter, suspend, discontinue or terminate, any Options theretofore
granted, prospectively or retroactively, without the consent of any relevant
Participant or holder or beneficiary of any Options; provided, however, that no
such action shall impair the rights of any affected Participant or holder or
beneficiary under any Options theretofore granted under the Plan; and provided
further that, except as provided in Section 6.3, no such action shall reduce the
exercise price of any Option established at the time of grant thereof.
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The Committee shall be authorized to make adjustments in the terms and
conditions of, and the criteria included in, Option or Stock Issuances in
recognition of unusual or non-recurring events (including, without limitation,
the events described in Section 6.3 affecting the Company, or the financial
statements of the Company) or of changes in applicable laws, regulations or
accounting principles, whenever the Committee determines that such adjustments
are appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan. The Committee
may correct any defect, supply any omission, or reconcile any inconsistency in
the Plan or any Option or Stock Issuances in the manner and to the extent it
shall deem desirable to carry the Plan into effect.
7.3 Term of Plan. Unless sooner terminated in accordance with Section 2
of Article Two, Section 2 of Article Three, Section 3 of Article Four or by the
Board, the Plan shall terminate on the earlier of:
(i) February 10, 2004; or
(ii) the date on which all shares available for issuance under
the Plan shall have been issued or their availability cancelled pursuant to
the surrender of Options granted hereunder.
If the date of termination is determined under (i) above, then Options and
unvested Stock issuances outstanding on such date shall continue to have force
and effect in accordance with the provisions of the instruments evidencing such
Options and Stock issuances.
ARTICLE TWO
DISCRETIONARY OPTION GRANT PROGRAM
1. Terms and Conditions of Options. Options granted pursuant to this
Discretionary Option Grant Program shall be authorized by the Committee and may
be either Incentive Options or Nonstatutory Options. The granted Options shall
be evidenced by instruments in such form and including such terms and conditions
as the Committee shall from time to time approve; provided, however, that each
such instrument shall comply with the following terms and conditions:
1.1 Option Price.
1.1.1 The Option price per share shall be fixed by the Committee,
but in no event shall the Option price per share be less than the Fair
Market Value of a share of the option Stock on the date of the Option
grant.
1.1.2 Subject to the provisions of Section 1 of Article Five, the
Option price shall become immediately due and payable upon exercise of the
Option and shall be payable in one of the alternative forms specified
below:
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1.1.2.1 Full payment in United States dollars in cash or cash
equivalents;
1.1.2.2 Full payment in shares of Stock valued at Fair Market
Value on the date the Option is exercised and held for the requisite period
necessary to avoid a charge to the Company's earnings for financial
reporting purposes;
1.1.2.3 A combination of shares of Stock valued at Fair Market
Value on the date the Option is exercised and held for the requisite period
necessary to avoid a charge to the Company's earnings for financial
reporting purposes, and cash or cash equivalents, equal in the aggregate to
the Option price;
1.1.2.4 Full payment through a broker-dealer sale and remittance
procedure pursuant to which the Optionee (i) shall provide irrevocable
instructions to a designated brokerage firm to effect the immediate sale of
the purchased shares and remit to the Company, out of the sale proceeds
available on the settlement date, sufficient funds to cover the aggregate
Option price payable for the purchased shares plus all applicable Federal,
state and local income and employment taxes required to be withheld by the
Company in connection with such purchase and (ii) shall provide directives
to the Company to deliver the certificates for the purchased shares
directly to such brokerage firm in order to complete the sale transaction;
or
1.1.2.5 Such other lawful consideration as the Committee shall
determine.
1.2 Manner of Exercise of Options. Each Option granted under the
Discretionary Option Grant Program shall be exercisable at such time or times
and during such period as shall be determined by the Committee and set forth in
the instrument evidencing such Option. However, no Option may be exercised after
the expiration of ten (10) years from the date such Option is granted. During
the lifetime of the Optionee, Incentive Options shall be exercisable only by the
Optionee and shall not be assignable or transferable by the Optionee other than
a transfer of the Option by will or by the laws of descent and distribution
following the Optionee's death. However, Nonstatutory Options may, in connection
with the Optionee's estate plan, be assigned in whole or in part during the
Optionee's lifetime to one or more members of the Optionee's immediate family or
to a trust established exclusively for one or more such family members. The
assigned portion may only be exercised by the person or persons who acquire a
proprietary interest in the option pursuant to the assignment. The terms
applicable to the assigned portion shall be the same as those in effect for the
option immediately prior to such assignment and shall be set forth in such
documents issued to the assignee as the Committee may deem appropriate. Options
may be exercised by written notice to the Company in such terms as the Committee
shall specify.
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1.3 Stockholder Rights. An Option holder shall have none of the rights
of a stockholder with respect to any shares issuable under the Plan until such
individual shall have been issued a stock certificate for the shares.
1.4 Dollar Limitation. The aggregate Fair Market Value (determined as
of the respective date or dates of grant) of the Stock for which one or more
Options granted to any employee under this Plan (or any other option plan of the
Company or its parent or Subsidiary corporations) may for the first time become
exercisable as incentive stock options under the Federal tax laws during any one
calendar year shall not exceed the sum of One Hundred Thousand Dollars
($100,000). To the extent the employee holds two (2) or more such Options which
become exercisable for the first time in the same calendar year, the foregoing
limitation on the exercisability of such Options as incentive stock options
under the Federal tax laws shall be applied on the basis of the order in which
such Options are granted. Should the number of shares of Stock for which any
Incentive Option first becomes exercisable in any calendar year exceed the
applicable One Hundred Thousand Dollar ($100,000) limitation, then the Option
may nevertheless be exercised in that calendar year for the excess number of
shares as a nonstatutory option under the Federal tax laws.
1.5 Termination of Service.
1.5.1 Except to the extent otherwise provided in paragraph 1.5.4
below, the following provisions shall govern the exercise period applicable
to any outstanding Options under this Discretionary Option Grant Program
held by the Optionee at the time of cessation of Service or death.
- Should the Optionee cease to remain in Service for any reason
other than death or permanent disability, then the period during which each
outstanding Option held by such Optionee is to remain exercisable shall be
limited to the three-month period following the date of such cessation of
Service. However, the Committee shall have the discretion to provide for a
longer post-Service exercise period (not to exceed the expiration date of
the maximum Option term) in the event the Optionee ceases Service by reason
of retirement at or after attainments of age sixty-five (65).
- In the event such Service terminates by reason of permanent
disability (as defined in Code Section 22 (e) (3)) or should the Optionee
die while holding one or more outstanding Options, then the period during
which each such Option is to remain exercisable shall be limited to the
twelve (12)-month period following the date of the Optionee's cessation of
Service or death unless the Committee determines in writing otherwise.
During the limited exercise period following the Optionee's death, the
Option may be exercised by the personal
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representative of the Optionee's estate or by the person or persons to
whom the Option is transferred pursuant to the Optionee's will or in
accordance with the laws of descent and distribution.
- Under no circumstances, however, shall any such Option be
exercisable after the specified expiration date of the Option term.
1.5.2 During the post-Service exercise period, the Option may not
be exercised for more than the number of shares of Stock in which the
Optionee is vested at the time of cessation of Service. Upon the expiration
of such post-Service exercise period or (if earlier) upon the expiration of
the Option term, the Option shall terminate and cease to be outstanding for
any vested shares for which the Option has not been exercised. However,
each Option shall immediately terminate and cease to be outstanding, at the
time of the Optionee's cessation of Service, with respect to any option
shares for which such Option is not otherwise at that time exercisable or
in which the Optionee is not otherwise at that time vested.
1.5.3 Should (i) the Optionee's Service be terminated for
misconduct (including, but not limited to, any act of dishonesty, willful
misconduct, fraud or embezzlement) or (ii) the Optionee make any
unauthorized use or disclosure of confidential information or trade secrets
of the Company or its Subsidiaries, then in any such event all outstanding
Options held by the Optionee under this Discretionary Option Grant Program
shall terminate immediately and cease to be outstanding.
1.5.4 The Committee shall have full power and authority to extend
the period of time for which the Option is to remain exercisable following
the Optionee's cessation of Service or death from the limited post-Service
exercise period specified in the instrument evidencing such grant to such
greater period of time as the Committee shall deem appropriate under the
circumstances. In no event, however, shall such Option be exercisable after
the specified expiration date of the Option term.
1.5.5 The Committee shall have complete discretion, exercisable
either at the time the Option is granted or at any time the Option remains
outstanding, to permit one or more Options granted under this Discretionary
Option Grant Program to be exercised not only for the number of shares for
which each such Option is exercisable at the time of the Optionee's
cessation of Service but also for one or more subsequent installments of
purchasable shares for which the Option would otherwise have become
exercisable had such cessation of Service not occurred.
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2. Corporate Transactions/Changes in Control.
2.1 Option Acceleration. Each Option which is outstanding under this
Discretionary Option Grant Program at the time of a Corporate Transaction shall
automatically accelerate so that each such Option shall, immediately prior to
the specified effective date for such Corporate Transaction, become fully
exercisable with respect to the total number of shares of Stock at the time
subject to such Option and may be exercised for all or any portion of such
shares. However, an outstanding Option under this Discretionary Option Grant
Program shall not so accelerate if and to the extent: (i) such Option is, in
connection with the Corporate Transaction, either to be assumed by the successor
corporation or parent thereof or to be replaced with a comparable option to
purchase shares of the capital stock of the successor corporation or parent
thereof, (ii) such Option is to be replaced with a cash incentive program of the
successor corporation which preserves the option spread existing at the time of
the Corporate Transaction and provides for subsequent payout in accordance with
the same vesting schedule applicable to such Option, or (iii) the acceleration
of such Option is subject to other limitations imposed by the Committee at the
time of the Option grant. The determination of option comparability under clause
(i) above shall be made by the Committee and its determination shall be final,
binding and conclusive. The Committee shall also have full power and authority
to grant Options under the Plan which are to automatically accelerate in whole
or in part upon the termination of the Optionee's Service following a Corporate
Transaction in which those Options are assumed or replaced.
2.2 Termination of Options. Immediately following the consummation of
the Corporate Transaction, all outstanding Options under this Discretionary
Option Grant Program shall terminate and cease to be outstanding, except to the
extent assumed by the successor corporation or its parent company.
2.3 Option Adjustments. Each outstanding Option under this
Discretionary Option Grant Program which is assumed in connection with the
Corporate Transaction or is otherwise to continue in effect shall be
appropriately adjusted, immediately after such Corporate Transaction, to apply
and pertain to the number and kind of securities which would have been issued to
the Option holder, in consummation of such Corporate Transaction, had such
person exercised the Option immediately prior to such Corporate Transaction.
Appropriate adjustments shall also be made to the Option price payable per
share, provided the aggregate Option price payable for such securities shall
remain the same. In addition, the class and kind of securities available for
issuance under the Plan on both an aggregate and per participant basis following
the consummation of the Corporate Transaction shall be appropriately adjusted.
2.4 Change in Control. The Committee shall have the discretionary
authority, exercisable either at the time the Option is granted or at any time
while the Option remains outstanding, to provide for the automatic acceleration
of one or more outstanding Options under this Discretionary Option Grant Program
upon the occurrence of a Change in Control. The Committee shall also have full
power and authority to condition any such Option acceleration upon the
subsequent termination of the Optionee's Service within a specified period
following the Change in Control.
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2.5 Option Continuation. Any Options accelerated in connection with the
Change in Control shall remain fully exercisable until the expiration or sooner
termination of the Option term or the surrender of such Option in accordance
with Section 4 of this Article Two.
2.6 ISO Limitation. The exercisability as incentive stock options under
the Federal tax laws of any Options accelerated under this Section 2 in
connection with a Corporate Transaction or Change in Control shall remain
subject to the dollar limitation of paragraph 1.4 of this Article Two.
2.7 Right to Modify Corporate Structure. The grant of Options under
this Plan shall in no way effect the right of the Company to adjust, reclassify,
reorganize, or otherwise change its capital or business structure or to merge,
consolidate, dissolve, liquidate, sell or transfer all or any part of its
business or assets.
3. Cancellation and New Grant of Options. The Committee shall have the
authority to effect, at any time and from time to time, with the consent of the
affected Option holders, the cancellation of any or all outstanding Options
under this Discretionary Option Grant Program and to grant in substitution
therefor new Options under the Plan covering the same or different number and
kind of shares of Stock but having an Option price per share not less than the
Fair Market Value of the option Stock on the new grant date.
4. Surrender of Options for Cash or Stock.
4.1 Surrender Right. One or more Optionees may be granted the right,
exercisable upon such terms and conditions as the Committee may establish, to
surrender all or part of an unexercised Option under this Discretionary Option
Grant Program in exchange for a distribution from the Company in an amount equal
to the excess of (i) the Fair Market Value (on the Option surrender date) of the
number of shares in which the Optionee is at the time vested under the
surrendered Option (or surrendered portion thereof) over (ii) the aggregate
Option price payable for such vested shares.
4.2 Approval. No such Option surrender shall be effective unless it is
approved by the Committee. If the surrender is so approved, then the
distribution to which the Optionee shall accordingly become entitled under this
Section 4 may be made in shares of Stock valued at Fair Market Value on the
Option surrender date, in cash or partly in shares and partly in cash, as the
Committee shall in its sole discretion deem appropriate.
4.3 Limited Rights. One or more officers of the Company subject to the
short-swing profit restrictions of the Federal securities laws may, in the
Committee's sole discretion, be granted limited stock appreciation rights in
tandem with their outstanding Options under this Discretionary Option Grant
Program. Upon the occurrence of a Hostile Take-Over, each such officer holding
one or more Options with such a limited stock appreciation right shall have the
unconditional right (exercisable for a thirty (30)-day period following such
Hostile Take-Over) to surrender each such Option
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to the Company, to the extent the Option is at the time exercisable for vested
shares of Stock. In return for the surrendered Option, the officer shall be
entitled to a cash distribution from the Company in an amount equal to the
excess of (i) the Take-Over Price of the shares of Stock which are at the time
vested under each surrendered Option (or surrendered portion) over (ii) the
aggregate Option price payable for such vested shares. Such cash distribution
shall be paid within five (5) days following the Option surrender date. The
Committee shall pre-approve, at the time the limited right is granted, the
subsequent exercise of that right in accordance with the terms of the grant and
provisions of this paragraph 4.3 of Article Two. No additional approval of the
Committee or the Board shall be required at the time of the actual Option
surrender and cash distribution. The balance of the Option (if any) shall
continue in full force and effect in accordance with the instrument evidencing
such grant.
ARTICLE THREE
STOCK ISSUANCE PROGRAM
1. Terms and Conditions of Direct Stock Issuances. Notwithstanding any
other provision in the Plan to the contrary, no further Stock Issuances shall be
made after the Effective Date. Stock may be issued under this Stock Issuance
Program, either through direct and immediate purchases without any intervening
Option grants or as unvested shares issued upon the exercise of immediately
exercisable Options granted under Article Two. The issued shares shall be
evidenced by a Stock Issuance Agreement ("Issuance Agreement") that complies
with the following terms and conditions:
1.1 Consideration.
1.1.1 Stock drawn from the Company's authorized but unissued
shares of Stock ("Newly Issued Shares") shall be issued for one or more of
the following items of consideration which the Committee may deem
appropriate in each individual instance:
(i) cash or cash equivalents (such as a personal check or bank
draft) paid the Company;
(ii) a promissory note payable to the Company's order in one or
more installments, which may be subject to cancellation in whole or in part
upon terms and conditions established by the Committee; or
(iii) past services rendered to the Company or any Subsidiary.
1.1.2 Newly Issued Shares must be issued for consideration with a
value not less than one-hundred percent (100%) of the Fair Market Value of
such shares at the time of issuance.
1.1.3 Shares of Stock reacquired by the Company and held as
treasury shares ("Treasury Shares") may be issued for such
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consideration (including one or more of the items of consideration
specified in paragraph 1.1.1. of this Article Three) as the Committee may
deem appropriate. Treasury Shares may, in lieu of any cash consideration,
be issued subject to such vesting requirements tied to the Participant's
period of future Service or the Company's attainment of specified
performance objectives as the Committee may establish at the time of
issuance.
1.2 Vesting Provisions.
1.2.1 The issued Stock may, in the absolute discretion of the
Committee, be fully and immediately vested upon issuance or may vest in one
or more installments over the Participant's period of Service. The elements
of the vesting schedule applicable to any unvested shares of Stock, namely:
(i) the Service period to be completed by the Participant or the
performance objectives to be achieved by the Company,
(ii) the number of installments in which the shares are to vest,
(iii) the interval or intervals (if any) which are to lapse
between installments, and
(iv) the effect which death, disability or other event designated
by the Committee is to have upon the vesting schedule,
shall be determined by the Committee and incorporated into the Issuance
Agreement executed by the Company and the Participant at the time such unvested
shares are issued.
1.3 Stockholder Rights. The Participant shall have full stockholder
rights with respect to any shares of Stock issued to him or her under this Stock
Issuance Program, whether or not his or her interest in those shares is vested.
Accordingly, the Participant shall have the right to vote such shares and to
receive any regular cash dividends paid on such shares. Any new, additional or
different shares of Stock or other property (including money paid other than as
a regular cash dividend) which the Participant may have the right to receive
with respect to his or her unvested shares by reason of any Stock dividend,
Stock split, reclassification of Stock or other similar change in the Company's
capital structure or by reason of any Corporate Transaction shall be issued,
subject to (i) the same vesting requirements applicable to his or her unvested
shares and (ii) such escrow arrangements as the Committee shall deem
appropriate.
1.4 Termination of Service.
1.4.1 Should the Participant cease to remain in Service while
holding one or more unvested shares of Stock, then those shares
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shall be immediately surrendered to the Company for cancellation, and the
Participant shall have no further stockholder rights with respect to those
shares. To the extent the surrendered shares were previously issued to the
Participant for consideration paid in cash or cash equivalent (including
the Participant's purchase-money promissory note), the Company shall repay
to the Participant the cash consideration paid for the surrendered shares
and shall cancel the unpaid principal balance of any outstanding
purchase-money note of the Participant attributable to such surrendered
shares. The surrendered shares may, at the Committee's discretion, be
retained by the Company as Treasury Shares or may be retired to authorized
but unissued share status.
1.4.2 The Committee may in its discretion elect to waive the
surrender and cancellation of one or more unvested shares of Stock (or
other assets attributable thereto) which would otherwise occur upon the
non-completion of the vesting schedule applicable to such shares. Such
waiver shall result in the immediate vesting of the Participant's interest
in the shares of Stock as to which the waiver applies. Such waiver may be
effected at any time, whether before or after the Participant's cessation
of Service or the attainment or non-attainment of the applicable
performance objectives.
2. Corporate Transactions/Changes in Control.
2.1 All unvested shares of Stock outstanding under this Stock Issuance
Program shall immediately vest in full upon the occurrence of a Corporate
Transaction, except to the extent the Committee imposes limitations in the
Issuance Agreement which preclude such accelerated vesting in whole or in part.
2.2 The Committee shall have the discretionary authority, exercisable
either at the time the unvested shares are issued or at any time while those
shares remain outstanding, to provide for the immediate and automatic vesting of
one or more unvested shares of Stock outstanding under this Stock Issuance
Program at the time of a Change in Control. The Committee shall also have full
power and authority to condition any such accelerated vesting upon the
subsequent termination of the Participant's Service within a specified period
following the Change in Control.
3. Transfer Restrictions/Share Escrow.
3.1 Unvested shares may, in the Committee's discretion, be held in
escrow by the Company until the Participant's interest in such shares vests or
may be issued directly to the Participant with restrictive legends on the
certificates evidencing such unvested shares.
3.2 The Participant shall have no right to transfer any unvested shares
of Stock issued to him or her under this Stock Issuance Program. For purposes of
this restriction, the term "transfer" shall include (without limitation) any
sale, pledge,
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assignment, encumbrance, gift or other disposition of such shares,
whether voluntary or involuntary. Upon any such attempted transfer, the unvested
shares shall immediately be cancelled, and neither the Participant nor the
proposed transferee shall have any rights with respect to those shares. However,
the Participant shall have the right to make a gift of unvested shares acquired
under this Stock Issuance Program to his or her spouse or issue, including
adopted children, or to a trust established for such spouse or issue, provided
the donee of such shares delivers to the Company a written agreement to be bound
by all the provisions of the Plan and the Issuance Agreement applicable to the
gifted shares.
ARTICLE FOUR
AUTOMATIC OPTION GRANT PROGRAM
1. Eligibility.
As of the Effective Date, the Automatic Option Grant Program is
terminated and no further option grants shall be made after such date.
2. Terms and Conditions of Automatic Option Grants.
2.1 Grant Dates. Prior to the Effective Date, option grants were made
under this Article Four on the dates specified below:
2.1.1 Each individual who was serving as an Eligible Director on
the date of the 1994 Annual Stockholders Meeting was automatically granted,
on such date, a Nonstatutory Option to purchase 15,000 shares of Stock upon
the terms and conditions of this Article Four.
2.1.2 Each individual who first became an Eligible Director on or
after the date of the 1994 Annual Meeting and before March 4, 1997, whether
through election by the Company's stockholders or appointment by the Board,
was automatically granted, at the time of such initial election or
appointment, a Nonstatutory Option to purchase 15,000 shares of Stock upon
the terms and conditions of this Article Four.
2.1.3 Each individual who first becomes an Eligible Director on
or after March 4, 1997, whether through election by the Company's
stockholders or appointment by the Board, shall automatically be granted,
at the time of such initial election or appointment, a Nonstatutory Option
to purchase 8,000 shares of Stock* upon the terms and conditions of this
Article Four.
2.1.4 An Eligible Director serving as a non-employee Board member
on March 4, 1997 shall, at each Annual Stockholders Meeting at which he or
she is to continue to serve as a non-employee Board member, beginning with
the Annual Stockholders Meeting held in the calendar year in which the last
installment of the shares of Stock
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subject to his or her initial 15,000-share automatic Option grant under
paragraph 2.1.1 or 2.1.2 vests, automatically be granted a Non-Statutory
Option to purchase an additional 2,667 shares of Stock.
2.1.5 An Eligible Director who first joins the Board as a
non-employee Board member at any time after March 4, 1997 shall, at each
Annual Stockholders Meeting at which he or she is to continue to serve as a
non-employee Board member, beginning with the Annual Stockholders Meeting
held in the calendar year in which the third installment of the shares of
Stock subject to his or her initial 8,000-share automatic Option grant
under paragraph 2.1.3 vests, automatically be granted a Non-Statutory
Option to purchase an additional 2,667 shares of Stock.
2.1.6 There shall be no limit on the number of such 2,667-share**
Option grants which any one Eligible Director may receive over his or her
period of continued Board service.
2.2 Adjustments. The number of shares for which the automatic Option grants
are to be made to Eligible Directors shall be subject to periodic adjustment
pursuant to the applicable provisions of paragraph 6.3 of Article One.
2.3 Option Price. The Option price per share of Stock of each automatic
Option grant made under this Article Four shall be equal to one hundred percent
(100%) of the Fair Market Value per share of Stock on the automatic grant date.
2.4 Option Term. Each automatic Option grant under this Article Four shall
have a maximum term of ten (10) years measured from the automatic grant date.
2.5 Exercisability/Vesting. Each automatic Option grant shall be
immediately exercisable for any or all of the option shares. However, any shares
purchased under the Option shall be subject to repurchase by the Company, at the
Option price paid per share, upon the Optionee's cessation of Board service
prior to vesting in those shares in accordance with the schedule below:
2.5.1 Each initial automatic Option grant made pursuant to
paragraph 2.1.1, 2.1.2 or 2.1.3 of this Article Four in effect prior to the
Effective Date shall vest, and the Company's repurchase right shall lapse,
in a series of five (5) successive equal annual installments over the
Optionee's period of continued Service as a Board member, with the first
such installment to vest upon Optionee's completion of one (1) year of
Board service measured from the automatic grant date.
2.5.2 Each annual Automatic Option grant made pursuant to
paragraph 2.1.4 or 2.1.5 of Article Four in effect prior to the Effective
Date shall vest, and the Company's repurchase right shall lapse, in a
series of five (5) successive equal annual installments over the Optionee's
period
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of continued Service as a Board member, with the first such installment to
vest upon Optionee's completion of one (1) year of Board service measured
from the automatic grant date.
2.5.3 Vesting of the option shares granted under this Article
Four shall be subject to the acceleration provisions of Section 3 of this
Article Four. No Option grant made under this Automatic Option Grant
Program on or after March 4, 1997 shall vest on an accelerated basis upon
the Optionee's cessation of Board service by reason of death or permanent
disability. Accordingly, no additional option shares shall vest after the
Optionee's cessation of Board service.
2.6 Payment. The Option price shall be payable in one of the alternative
forms specified in paragraph 1.1.2 of Article Two. To the extent the Option is
exercised for any unvested shares, the Optionee must execute and deliver to the
Company a Stock issuance agreement for those unvested shares which provides the
Company with the right to repurchase, at the Option price paid per share, any
unvested shares held by the Optionee at the time of cessation of Board service
and which precludes the sale, transfer or other disposition of any shares
purchased under the Option, to the extent those shares are subject to the
Company's repurchase right.
2.7 Limited Transferability. An automatic Option grant may, in connection
with the Optionee's estate plan, be assigned in whole or in part during the
Optionee's lifetime to one or more members of the Optionee's immediate family or
to a trust established exclusively for one or more such family members. The
assigned portion may only be exercised by the persons or persons who acquire a
proprietary interest in the option pursuant to the assignment. The terms
applicable to the assigned portion shall be the same as those in effect for the
option immediately prior to such assignment and shall be set forth in such
documents issued to the assignee as the Committee may deem appropriate.
2.8 Termination of Board Service.
2.8.1 Should the Optionee cease service as a Board member for any
reason other than death or permanent disability, while holding any
automatic Option grant under this Article Four, then such individual shall
have a six (6)-month period following the date of such cessation of Board
service in which to exercise that Option for any or all of the option
shares in which the Optionee is vested at the time of such cessation of
Board service.
2.8.2 Should the Optionee die while in Board service or within
six (6) months after cessation of Board service, then any automatic Option
grant held by the Optionee at the time of death may subsequently be
exercised, for any or all of the option shares in which the Optionee is
vested at the time of his or her cessation of Board service (less any
option shares subsequently purchased by the Optionee prior to death), by
the
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personal representative of the Optionee's estate or by the person or
persons to whom the Option is transferred pursuant to the Optionee's will
or in accordance with the laws of descent and distribution. The right to
exercise each such Option shall lapse upon the expiration of the twelve
(12)-month period measured from the date of the Optionee's death.
2.8.3 Should the Optionee become permanently disabled (as defined
in Code Section 22(e)(3)) and cease to serve as a Board member by reason of
such disability, then the Optionee shall have a twelve (12)-month period
following such cessation of Board service in which to exercise his or her
outstanding automatic Option grants for any or all of the option shares in
which the Optionee is vested at the time of his or her cessation of Board
service.
2.8.4 Upon the Optionee's cessation of Board service for any
reason, his or her outstanding automatic Option grants shall immediately
terminate and cease to remain outstanding with respect to any option shares
in which the Optionee is not otherwise at that time vested under those
Options.
2.8.5 In no event shall any automatic Option grant under this
Article Four remain exercisable after the expiration date of the ten
(10)-year Option term. Upon the expiration of the applicable post-Service
exercise period under paragraphs 2.8.1 through 2.8.3 above or (if earlier)
upon the expiration of the ten (10)-year Option term, the automatic Option
grant shall terminate and cease to remain outstanding for any option shares
in which the Optionee was vested at the time of his or her cessation of
Board Service but for which such Option was not otherwise exercised.
2.9 Stockholder Rights. The holder of an automatic Option grant under
this Article Four shall have none of the rights of a stockholder with respect to
any shares subject to that Option until such individual shall have exercised the
Option and paid the Option price for the purchased shares.
2.10 Remaining Terms. The remaining terms and conditions of each
automatic Option grant shall be as set forth in the form Automatic Stock Option
Agreement attached as Exhibit A to the Plan.
3. Corporate Transactions/Changes in Control/Hostile Take-Overs.
3.1 In the event of any Corporate Transaction, the shares of Stock at
the time subject to each outstanding Option under this Article Four but not
otherwise vested shall automatically vest in full, and the Company's repurchase
right with respect to those shares shall terminate, so that each such Option
shall, immediately prior to the specified effective date for the Corporate
Transaction, become fully exercisable for all of the shares of Stock at the time
subject to that Option and may be exercised for all or any portion of such
shares as fully vested shares of Stock. Immediately following the
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consummation of the Corporate Transaction, all automatic Option grants under
this Article Four shall terminate and cease to remain outstanding.
3.2 In connection with any Change in Control, the shares of Stock at
the time subject to each outstanding Option under this Article Four but not
otherwise vested shall automatically vest in full, and the Company's repurchase
right with respect to those shares shall terminate, so that each such Option
shall, immediately prior to the occurrence of such Change in Control, become
fully exercisable for all of the shares of Stock at the time subject to that
Option and may be exercised for all or any portion of such shares as fully
vested shares of Stock. Each such Option shall remain so exercisable until the
expiration or sooner termination of the Option term.
3.3 Upon the occurrence of a Hostile Take-Over, the Optionee shall have
a thirty (30)-day period in which to surrender to the Company any Option granted
to him or her under this Article Four. The Optionee shall in return be entitled
to a cash distribution from the Company in an amount equal to the excess of (i)
the Take-Over Price of the shares of Stock at the time subject to the
surrendered Option (whether or not the Optionee is otherwise at the time vested
in those shares) over (ii) the aggregate Option price payable for such shares.
Such cash distribution shall be paid within five (5) days following the
surrender of the Option to the Company. Stockholder approval of the March 4,
1997 restatement of the Plan shall constitute preapproval of each option
surrender right subsequently granted under the Automatic Option Grant Program
and the subsequent exercise of that right in accordance with the terms and
provisions of this paragraph 3.3 of Article Three. No additional approval of the
Committee or the Board shall be required in connection with such Option
surrender and cash distribution. The shares of Stock subject to each Option
surrendered in connection with the Hostile Take-Over shall not be available for
subsequent issuance under the Plan.
3.4 The automatic Option grants outstanding under this Article Four
shall in no way affect the right of the Company to adjust, reclassify,
reorganize or otherwise change its capital or business structure or to merge,
consolidate, dissolve, liquidate or sell or transfer all or any part of its
business or assets.
ARTICLE FIVE
MISCELLANEOUS
1. Installment Payments, Loans and Guarantees of Loans.
1.1 The Committee may, in its discretion, assist any Optionee or
Participant (other than an Optionee or Participant who is a non-employee member
of the Board) in the exercise of one or more Options granted to such Optionee or
the purchase of one or more shares of Stock issued to such Participant under the
Plan, including the satisfaction of any Federal, state and local income and
employment tax obligations arising therefrom, by (i) authorizing the extension
of a loan from the Company to such Optionee or Participant, (ii) permitting the
Optionee or Participant to pay the Option price or purchase price for the
purchased Stock in installments over a period of years or (iii) authorizing a
guarantee by the Company of a third-party loan to the Optionee or
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Participant. The terms of any loan, installment method of payment or guarantee
(including the interest rate and terms of repayment) shall be upon such terms as
the Committee specifies in the applicable Option or Issuance Agreement or
otherwise deems appropriate under the circumstances. Loans, installment payments
and guarantees may be granted with or without security or collateral. However,
the maximum credit available to the Optionee or Participant may not exceed the
Option or purchase price of the acquired shares (less the par value of such
shares) plus any Federal, state and local income and employment tax liability
incurred by the Optionee or Participant in connection with the acquisition of
such shares.
1.2 The Committee may, in its absolute discretion, determine that one
or more loans extended under this financial assistance program shall be subject
to forgiveness by the Company in whole or in part upon such terms and conditions
as the Committee may deem appropriate.
2. Amendment of the Plan. The Board shall have complete and exclusive
power and authority to amend or modify the Plan, and the Committee may amend or
modify the terms of any outstanding Options or unvested Stock issuances under
the Plan in any or all aspects whatsoever not inconsistent with the terms of the
Plan. However, no such amendment or modification shall adversely affect rights
and obligations with respect to Options at the time outstanding under the Plan,
nor adversely affect the rights of any Participant with respect to Stock issued
under the Plan prior to such action, unless the Optionee or Participant consents
to such amendment. In addition, certain amendments may require stockholder
approval pursuant to applicable laws or regulations.
3. Use of Proceeds. Any cash proceeds received by the Company from the
sale of shares pursuant to Option grants or direct Stock issuances under the
Plan shall be used for general corporate business.
4. Withholding.
4.1 The Company's obligation to deliver shares of Stock upon the
exercise of Options for such shares or upon the direct issuance or vesting of
such shares under the Plan shall be subject to the satisfaction of all
applicable Federal, state and local income and employment tax withholding
requirements.
4.2 The Committee may, in its discretion and in accordance with the
provisions of this Section 4 and such supplemental rules as the Committee may
from time to time adopt (including applicable safe-harbor provisions of SEC Rule
16b-3), provide any or all holders of Nonstatutory Options (other than the
automatic Option grants made pursuant to Article Four of the Plan) or unvested
shares under the Stock Issuance Program with the right to use shares of Stock in
satisfaction of all or part of the Federal, state and local income and
employment tax liabilities incurred by such holders in connection with the
exercise of their Options or the vesting of their shares (the "Taxes"). Such
right may be provided to any such holder in either or both of the following
formats:
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4.2.1 Stock Withholding. The holder of the Nonstatutory Option or
unvested shares may be provided with the election to have the Company
withhold, from the shares of Stock otherwise issuable upon the exercise of
such Nonstatutory Option or the vesting of such shares, a portion of those
shares with an aggregate Fair Market Value equal to the percentage of the
applicable Taxes (not to exceed one hundred percent (100%)) designated by
the holder.
4.2.2 Stock Delivery. The Committee may, in its discretion,
provide the holder of the Nonstatutory Option or the unvested shares with
the election to deliver to the Company, at the time the Nonstatutory Option
is exercised or the shares vest, one or more shares of Stock already held
by such individual with an aggregate Fair Market Value equal to the
percentage of the Taxes incurred in connection with such Option exercise or
share vesting (not to exceed one hundred percent (100%)) designated by the
holder.
5. Regulatory Approvals. The implementation of the Plan, the granting
of any Option hereunder and the issuance of Stock upon the exercise or surrender
of any such Option or as a direct issuance under the Plan shall be subject to
the Company's procurement of all approvals and permits required by regulatory
authorities having jurisdiction over the Plan, the Options granted under it and
the Stock issued pursuant to it.
6. No Employment Rights. Nothing in the Plan shall confer upon the
Optionee or the Participant any right to continue in the Service of the Company
(or any Subsidiary employing or retaining such Optionee or Participant) for any
period of specific duration or interfere with or otherwise restrict in any way
the rights of the Company (or any such Subsidiary) or of the Optionee or the
Participant, which rights are hereby expressly reserved by each, to terminate
the Service of the Optionee or Participant at any time for any reason
whatsoever, with or without cause.
7. Certain Outstanding Options.
7.1 Each Option granted under the Company's Original Plan or the 1980
Burr-Brown Research Corporation Executive Stock Plan which was outstanding on
the Effective Date of this Plan was incorporated into this Plan and treated as
an outstanding Option under this Plan, but each such Option continues to be
governed solely by the terms and conditions of the instrument evidencing such
grant, and nothing in this Plan shall be deemed to affect or otherwise modify
the rights or obligations of the holders of such Options with respect to their
acquisition of shares of Stock thereunder.
7.2 One or more provisions of this Plan, including the Option/vesting
acceleration provisions applicable in the event of a Corporate Transaction or
Change in Control or the limited surrender rights exercisable in the event of a
Hostile Take-Over, may, in the Committee's discretion, be extended to one or
more Options which were outstanding under the Company's Original Plan or the
1980 Burr-Brown Research
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Corporation Executive Stock Plan on the Effective Date of this Plan but which do
not otherwise provide for such benefits.
IN WITNESS WHEREOF, this Restatement of the BURR-BROWN CORPORATION 1993
STOCK INCENTIVE PLAN is hereby declared effective and is executed as of the
Effective Date on behalf of the Company by its hereunto duly authorized officer.
TEXAS INSTRUMENTS
TUCSON CORPORATION
By: /s/ M. SAMUEL SELF
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Title: Treasurer
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