THE 1991 MOLEX INCORPORATED INCENTIVE STOCK OPTION PLAN
(As Amended and Restated as of October 23, 1998)
ARTICLE I. GENERAL
1.1 Name of Plan - The name of the plan described in detail herein shall be
The 1991 Molex Incorporated Incentive Stock Option Plan (the "Plan").
1.2 Purpose - The purpose of the Plan is to induce certain designated
employees and the directors to remain in the employ of Molex Incorporated, a
Delaware corporation (the "Company"), and any of its subsidiaries, and to
encourage such employees and directors to secure or increase on reasonable
terms their stock ownership in the Company. The Company believes the Plan will
promote continuity of management and increase incentive and personal interest
in the welfare of the Company by those who are primarily responsible for
shaping, carrying out the long-range plans of the Company and securing its
continued growth and financial success.
It is also the purpose of the Plan (except where otherwise noted) to be
qualified under Section 422(a) of the Internal Revenue Code, as amended.
Thus, all provisions of the Plan shall be interpreted and construed with this
goal in mind.
1.3 Eligibility - The following persons shall be eligible to receive a grant
under the Plan: any director or officer of Molex Incorporated.
ARTICLE II. TERM OF PLAN
2.1 Effective Date - The Plan shall become effective upon adoption by the
Board of Directors of the Company subject to the subsequent approval by the
stockholders of the Company within one (1) year of adoption by the Board of
Directors. If the stockholders do not approve the Plan within one (1) year of
adoption, then this Plan shall cease to exist and all options granted hereunder
shall become void.
2.2 Expiration - This Plan shall expire June 30, 2000 and no option shall be
granted on or after such expiration date. However, expiration of the Plan
shall not affect outstanding unexpired options previously granted.
ARTICLE III. STOCK SUBJECT TO PLAN
3.1 Class of Stock - The stock that shall be subject to option under the Plan
shall be Molex Incorporated Common Stock, par value $.05 per share (the
"Stock").
3.2 Number of Shares - Three million-fifty one thousand-seven hundred-fifty
seven (3,051,757) shares of the Stock shall be reserved for issue upon the
exercise of options granted under the Plan.
3.3 Expired, Forfeited or Canceled Options - If any such options granted under
the Plan shall expire, be forfeited or canceled for any reason without having
been exercised in full, the unexercised shares subject thereto shall again be
available for the purpose of the Plan.
ARTICLE IV. ADMINISTRATION
4.1 Committee - The Plan shall be administered by a committee (the "Committee")
under the terms and conditions and powers set forth herein
4.2 Makeup of the Committee - The Committee shall consist of two or more
members of the Board of Directors of the Company. The Committee shall be the
Compensation Committee of the Board of Directors or any other Board members
appointed by the Board of Directors.
4.3 Action by the Committee - A majority of the members of the Committee shall
constitute a quorum. All determinations of the Committee shall be made by a
majority of its members. Any decision or determination reduced to writing and
signed by a majority of the members of the Committee shall be fully as
effective as if it had been made by a majority vote at a meeting duly called
and held.
4.4 Power to Grant Options - Subject to the express provisions of the Plan,
the Committee shall have complete authority, in its sole discretion, to
determine the employees to whom, and the time or times at which, options shall
be granted, the option periods, the vesting schedule and the number of shares
to be subject to each option, and such other terms and provisions of the option
agreements (which need not be identical). In making such determinations, the
Committee may take into account the nature of the services rendered by the
respective employee, his present and potential contribution to the Company's
success, and such other factors as the Committee in its discretion shall deem
relevant. The Committee shall have no power to grant options to directors or
to set the terms and conditions thereof.
4.5 Grants of Incentive Stock Option and Nonqualified Stock Options - The
Committee shall have complete authority, in its sole discretion, to determine
at the time an option is granted whether such option shall be an incentive
stock option qualified under Section 422 of the Internal Revenue Code, as
amended, ("ISO") or whether such option shall be a nonqualified stock option.
Unless the option agreement says otherwise, all options granted shall be ISOs.
The number of shares for which options may be granted to any one person in any
calendar year shall be limited and cannot exceed the following:
a. Overall Limitation - With respect to any option (whether ISOs or
nonqualified), ten percent (10%) of the number of shares
reserved for the Plan as set forth in paragraph 3.2 (adjusted as
set forth in Article IX) or two hundred-fifty thousand (250,000)
shares (adjusted as set forth in Article IX), whichever is less.
b. Incentive Stock Option - In addition, with respect to ISOs, the
number of shares which are subject to options that are first
exercisable in any given succeeding calendar year shall not have
a fair market value (as determined on the date of grant) that
exceeds:
- One Hundred Thousand Dollars ($100,000)
LESS
- the aggregate fair market value (as determined at the
respective times of their grants) of those shares of all
prior ISOs that are first exercisable in said succeeding
calendar year.
4.6 Automatic Grant of Options to Outside Directors - Notwithstanding
paragraphs 4.4 and 4.5, each director who is not an employee of the Company
shall receive only an automatic nondiscretionary stock option grant on the date
of the Annual Stockholders Meeting every year during the term of the Plan. Any
option granted to a director who is not an employee of the Company shall be a
nonqualified stock option. The amount of shares subject to the options that
will be automatically granted to each outside director or each year shall be
the amount of shares equal to 200 multiplied by the number of years of service
or fraction thereof that does not exceed 3,000 shares and whose fair market
value on the date of grant does not exceed $100,000.00. The amount of shares
shall increase to 500 multiplied by the number of years of service or fraction
thereof that does not exceed 3,000 shares and whose fair market value on the
date of grant does not exceed $100,000.00 if all of the following financial
conditions are met for the fiscal year immediately ended prior to the grant:
a. The Company's net profits (after taxes) are at least ten
percent (10%) of the net sales revenue as reported in the
audited financial statements; and
b. The Company's net sales revenue increase as compared to the
prior year's net sales revenue as reported in the audited
financial statements exceeds one and one-half (1.5) times
the "Worldwide Growth" of the general connector market as
determined by at least one outside independent connector
consultant. If more than one consultant is used, the average
growth shall be the Worldwide Growth. The disinterested
directors shall have the authority to choose the consultant
or consultants.
4.7 Other Powers - Subject to the express provisions of the Plan, the
Committee shall also have complete authority to interpret the Plan, to
prescribe, amend and rescind rules and regulations relating to it, to determine
the terms and provisions of the respective option agreements (which need not be
identical), and to make all other determinations necessary or advisable for the
administration of the Plan.
ARTICLE V. GRANT OF OPTION
5.1 Option Price - The option price shall be the fair market value of the
Stock on the date of granting the option. Notwithstanding, the foregoing, only
in the case of an ISO grant, if an optionee owns more than ten percent (10%) of
the voting power of all classes of the Company's Stock, then the option price
shall be one hundred-ten percent (110%) of the fair market value of the Stock
on the date of granting the option.
5.2 Fair Market Value - For the purposes of this Plan, fair market value shall
be the closing price of the Stock on the date of granting the option as
reported by the Wall Street Journal.
5.3 Evidence of Option - Options granted shall be evidenced by agreements,
warrants, and/or other instruments in such form as the Committee shall deem
advisable and shall contain such terms, provisions and conditions not
inconsistent herewith as may be determined by the Committee.
ARTICLE VI. EXERCISE OF OPTION
6.1 Initial Waiting Period - No option shall be exercisable until at least
one (1) year after the date of grant unless one of the events set forth in
paragraph 6.4 occurs.
6.2 Vesting Periods - After the initial waiting period, an optionee may
exercise his option to the extent that shares covered by said option become
vested. The vesting schedule is as follows:
a. If an option grant is an ISO, or if an option is granted to a
director, the shares covered by such an option shall vest to the
maximum extent of 25% of the total number of shares covered
thereby during each of the succeeding four (4) years, each
commencing with the anniversary of the grant.
b. In all other options not falling within the scope of
subparagraph 6.2a, the shares covered by an option shall vest in
amounts and at times the Committee, in its sole discretion,
shall determine. The Committee shall also specifically have the
power to change the vesting schedule of any previously granted
options to a schedule which is more favorable to the option
holder; provided, however, that no such options shall vest in
amounts greater than, or at times prior to, the amounts and
times such options would have vested if such options were within
the scope of subparagraph 6.2a.
c. Notwithstanding the foregoing, all options must vest one hundred
percent (100%) within ten (10) years from the date of grant.
6.3 Cumulative Rights - The right to exercise any option as set forth in
paragraph 6.2 shall be cumulative. That is, an optionee may exercise in any
given year those unexpired shares he could have exercised in a previous year
but did not.
6.4 Accelerated Vesting - Notwithstanding the foregoing, all options shall
immediately vest and become immediately exercisable for a period of one (1)
year after one of the following events:
a. Death; or
b. Total disablement; or
c. Retirement, if all of the following conditions are met at the
time of termination of employment:
(1) The optionee has reached age 59-1/2; and
(2) The optionee was employed at least fifteen (15)
consecutive years with the Company and/or any of its
subsidiaries; and
(3) The Committee has determined that the reason for
termination is due to retirement; and
(4) The shares subject to the option are intended to be an
ISO. Notwithstanding the foregoing, if the shares subject
to the option are not intended to be an ISO, the
Committee, in its sole discretion, may allow accelerated
vesting to any extent it desires.
6.5 Expiration - No option may be exercised after two (2) years from the date
the option becomes one hundred percent (100%) vested. Notwithstanding the
foregoing, all ISOs must be exercised within one (1) year from the date the
option becomes one hundred percent (100%) vested.
6.6 Form of Exercise - The option may only be exercised according to the terms
and conditions established by the Committee, consistent with the limits set
forth herein, at the time the option is granted. Subject to the foregoing
terms and conditions, an option may be exercised by a written notice delivered
to the Company's principal office of intent to exercise the option with
respect to a specified number of shares of Stock and payment to the Company
of the amount of the option purchase price for the number of shares of Stock
with respect to which the option is then exercised. The payment may be either
in cash or in stock of the Company. If stock is used for payment, such stock
shall be valued at the closing price as reported by the Wall Street Journal on
the date of exercise.
6.7 Rights as a Shareholder - An optionee shall have no rights as a
stockholder with respect to shares covered by his option until the day of
issuance of a stock certificate to him and until after such shares are fully
paid.
ARTICLE VII. TERMINATION OF OPTION
7.1 Every option granted to each optionee under this Plan shall terminate and
expire at the earliest of:
a. the date of expiration set when such option was granted; or
b. one (1) year after one of the events set forth in paragraph 6.4;
or
c. immediately upon termination of employment of the optionee with
the Company (or termination of position as an outside director)
or any of its subsidiaries for any reason except if his
employment is terminated by reason of one of the events set
forth in paragraph 6.4.
ARTICLE VIII. TRANSFERABILITY
8.1 Non-Transferable - Any option granted under the Plan is not transferable
and can be exercised only by the optionee during his life subject to paragraph
8.2 of this Article.
8.2 Death - In the event of the death of an optionee while totally disabled,
retired, or still employed by the Company or a parent or a subsidiary, his
option, to the extent he could have exercised it on the date of his death, may
be exercised by the personal representative of the estate of the optionee
within one (1) year after the date of his death in accordance with the terms
established by the Committee at the time the option was granted, but (as set
forth in Article VII) not later than the expiration date set forth in paragraph
6.5.
ARTICLE IX. ADJUSTMENT OF NUMBER OF SHARES
9.1 Stock Dividends - In the event that a dividend shall be declared upon the
Stock payable in shares of stock of the Company, the number of shares of stock
then subject to any such option and the number of shares reserved for issuance
pursuant to the Plan, but, not yet covered by an option, shall be adjusted by
adding to each such share the number of shares which would be distributable
thereon (or any equivalent value of Stock as determined by the Committee in its
sole discretion) if such share had been outstanding on the date fixed for
determining the stock holders entitled to receive such stock dividend.
9.2 Reorganization - In the event that the outstanding shares of Stock shall
be changed into or exchanged for a different number or kind of shares of stock
or other securities of the Company, or of another corporation, whether through
reorganization, recapitalization, stock split up, combination of shares, merger
or consolidation, then, there shall be substituted for each share of Stock
subject to any such option and for each share of Stock reserved for issuance
pursuant to the Plan, but, not yet covered by an option, the number and kind of
shares of stock or other securities into which each outstanding share of Stock
shall be so changed or for which each such share of Stock shall be exchanged.
9.3 Other Changes - In the event there shall be any change, other than as
specified above in this Article, in the number or kind of outstanding shares
of stock of the Company or of any stock or other securities into which such
stock shall have been changed or for which it shall have been exchanged, then,
if the Committee shall, in its sole discretion, determine that such change
equitably requires an adjustment in the number or kind of shares theretofore
reserved for issuance pursuant to the Plan, but, not yet covered by an option
and of the shares then subject to an option or options, such adjustments shall
be made by the Committee and shall be effective and binding for all purposes of
the Plan and of each stock option agreement. Notwithstanding the foregoing,
with respect to options granted to directors, the Committee shall make those
adjustments under this Article IX only to the extent necessary to preserve the
economic benefit of an unexercised option.
9.4 Adjusted Option Price - In the case of any substitution or adjustment as
provided for in this Article, the option price in each stock option agreement
for each share covered thereby prior to such substitution or adjustment will be
the option price for all shares of Stock or other securities which shall have
been substituted for such share or to which such share shall have been adjusted
pursuant to this Article.
9.5 Fractional Shares - No adjustment or substitutions provided for in this
Article shall require the Company to sell a fractional share, and the total
substitution or adjustment with respect to each stock option agreement
shall be limited accordingly.
ARTICLE X. SECURITIES REGULATION
10.1 Registered Stock - The Company shall not be obligated to sell or issue any
shares under any option granted hereunder unless and until the shares with
respect to which the option is being exercised are effectively registered
or exempt from registration under the Securities Act of 1933 and from any other
federal or state law governing the sale and issuance of such shares or any
securities exchange regulation to which the Company might be subject.
10.2 Unregistered Stock - In the event the shares are not effectively
registered, but, can be issued by virtue of an exemption, the Company may issue
option shares to an optionee if the optionee represents that he is acquiring
such shares as an investment and not with a view to, or for sale in connection
with, the distribution of any such shares. Certificates for shares of Stock
thus issued shall bear an appropriate legend reciting such representation.
ARTICLE XI. MISCELLANEOUS
11.1 No Contract of Employment - A grant or participation under the Plan shall
not be construed as giving an optionee a future right of employment with the
Company. Employment remains at the will of the Company.
11.2 Governing Law - This Plan and all matters relating to the Plan shall be
interpreted and construed under the laws of the State of Illinois.
11.3 Amendment of Plan - The Board of Directors, at its discretion, may amend
the Plan at any time, subject to stockholder approval if required by SEC rules
or the listing requirements of any national securities exchanges or trading
systems on which are listed any of the Company's equity securities.
11.4 Termination of Plan - The Board of Directors may, at its discretion,
terminate the Plan at any time for any reason. Termination of the Plan shall
not affect unexpired outstanding options previously granted.