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EXHIBIT 4.12
LAM RESEARCH CORPORATION
1999 STOCK OPTION PLAN
AMENDED AND RESTATED EFFECTIVE OCTOBER 21, 1999
SECTION 1 PURPOSE OF PLAN
This 1999 Stock Option Plan (the "Plan") is adopted as of November 5,
1998 (the "Effective Date"). The purpose of the Plan is to enable Lam Research
Corporation, a Delaware corporation (the "Company"), to attract and retain
highly qualified personnel who will contribute to the Company's success by their
ability, ingenuity and industry by allowing eligible individuals to acquire or
increase proprietary interests in the Company as an incentive to remain in the
service of the Company.
SECTION 2 DEFINITIONS
For purposes of the Plan, the following terms shall be defined as set
forth below:
(a) "Administrator" means the Board, or if and to the extent
the Board does not administer the Plan, the Committee appointed by the
Board to administer the Plan.
(b) "Board" means the Board of Directors of the Company.
(c) "Code" means the Internal Revenue Code of 1986, as amended
from time to time, or any successor thereto.
(d) "Committee" means the Stock Committee of the Board or any
Committee the Board may subsequently appoint to administer the Plan. If
at any time or to any extent the Board shall not administer the Plan,
then the functions of the Board or Administrator specified in the Plan
shall be exercised by the Committee.
(e) "Designated Subsidiaries" means the Subsidiaries that have
been designated by the Board or Administrator from time to time in its
sole discretion, whose Employees are thereon eligible to participate in
this Plan.
(f) "Date of Grant" means the date on which the award of a
Stock Option is effective.
(g) "Disability" means the inability of a Participant to
perform substantially his or her duties and responsibilities to the
Company by reason of a physical or mental disability or infirmity (i)
for a continuous period of six months, or (ii) at such earlier time as
the Participant submits medical evidence satisfactory to the
Administrator that he or she has a physical or mental disability or
infirmity which will likely prevent him or her from returning to the
performance of his or her work duties for six months or longer. The
date of such Disability shall be the date of interruption of or
separation from employment with the Company due to such Disability or
the day on which the Participant submits such satisfactory medical
evidence establishing such Disability, as the case may be.
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(h) "Employee" means any person who is customarily and
continuously employed for at least 20 hours per week by the Company or
one of its Designated Subsidiaries. Unless the Administrator makes a
contrary determination, the Employees of the Company shall, for all
purposes of this Plan, be those individuals who satisfy the customary
employment criteria set forth above and are carried as employees by the
Company or a Designated Subsidiary for regular payroll purposes;
provided however, that an Employee's continuous employment shall not be
considered interrupted in the case of a leave of absence agreed to in
writing by the Company, where such leave is for a period of not more
than 90 days or where re-employment upon the expiration of any such
leave is guaranteed by contract or statute.
(i) "Fair Market Value" means, as of any given date, with
respect to any Stock Option award granted hereunder, and at the
discretion of the Administrator, any of the following: (i) if the Stock
is publicly traded, the closing sale price of the Stock on such date as
reported in the Wall Street Journal, or the average of the closing
price of the Stock on each day on which the Stock was traded over a
period of up to twenty trading days immediately prior to such date,
(ii) the fair market value of the Stock as determined in accordance
with a method prescribed in the agreement evidencing any award
hereunder, or (iii) the fair market value of the Stock as otherwise
determined by the Administrator in the good faith exercise of its
discretion.
(j) "Parent Corporation" means any corporation (other the
Company) in an unbroken chain of corporations ending with the Company,
if each of the corporations in the chain (other than the Company) owns
stock possessing 50% or more of the combined voting power of all
classes of stock in one of the other corporations in the chain.
(k) "Participant" means any Employee determined to be eligible
to be awarded Stock Options under this Plan.
(l) "Stock" means the common stock, par value $0.001 per share
(the "Common Stock"), of the Company.
(m) "Stock Option" means any option to purchase shares of
Stock granted pursuant to this Plan. Each Stock Option shall be a
non-qualified stock option which, as of the time such Stock Option is
granted, shall not be treated as an Incentive Stock Option within the
meaning of Section 422 of the Code.
(n) "Subsidiary" means any corporation (other than the
Company) in an unbroken chain of corporations beginning with the
Company, if each of the corporations (other than the last corporation)
in the unbroken chain owns stock possessing 50% or more of the total
combined voting power of all classes of stock in one of the other
corporations in the chain.
SECTION 3 ADMINISTRATION OF PLAN
The Administrator shall have full authority (subject to the provisions
of this Plan) to establish such rules and regulations as it deems appropriate
for the proper administration of this Plan, and to make such determinations and
interpretations concerning this Plan and Stock Options awarded under this Plan
as it deems necessary or advisable.
In particular, the Administrator shall have the authority, consistent
with the terms of the Plan:
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(a) to select those Employees who shall be Participants;
(b) to determine whether and to what extent Stock Options are
to be awarded hereunder to Participants;
(c) to determine the number of shares of Stock to be covered
by each such Stock Option awarded hereunder, including the maximum term
for which a Stock Option is to be outstanding;
(d) to determine the terms and conditions of any Stock Option
awarded hereunder; and
(e) to determine the terms and conditions which shall govern
all written instruments evidencing the Stock Options awarded to
Participants.
The Administrator shall have the authority, in its discretion, to adopt, alter
and repeal such administrative rules, guidelines and practices governing the
Plan as it shall from time to time deem advisable; to interpret the terms and
provisions of the Plan and any Stock Option awarded under the Plan (and any
agreements relating thereto); and otherwise to supervise the administration of
the Plan. All decisions made by the Administrator pursuant to the
administration, interpretation and execution of the Plan shall be final and
binding on all persons, including the Company and the Participants.
SECTION 4 STOCK SUBJECT TO PLAN
The total number of shares of Stock reserved and available for issuance
under the Plan shall be four million (4,000,000), subject to adjustment from
time to time in accordance with this Section, or as provided by amendment of the
Board. The shares may be authorized but unissued shares of Common Stock or
reacquired shares of Common Stock, including shares repurchased by the Company
on the open market or in private purchases.
To the extent that (i) a Stock Option expires or is otherwise terminated
without being exercised, or (ii) any shares of Stock awarded hereunder are
forfeited, such shares shall again be available for issuance in connection with
future awards under the Plan. If any shares of Stock have been pledged as
collateral for indebtedness incurred by a Participant in connection with the
exercise of a Stock Option, and such shares are returned to the Company in
satisfaction of such indebtedness, such shares shall again be available for
issuance in connection with future awards under the Plan.
In the event of any merger, reorganization, consolidation,
recapitalization, stock dividend or other change in corporate structure of the
Company affecting the Stock, a substitution or adjustment shall be made in (i)
the aggregate number of shares reserved for issuance under the Plan, and/or (ii)
the kind, number and class of shares and option price of shares subject to
outstanding Stock Options granted under the Plan, as may be determined by the
Administrator, in its sole discretion. Such other substitutions or adjustments
shall be made as may be determined by the Administrator, in its sole discretion.
In connection with any event described in this paragraph, the Administrator may
provide, in its discretion, for the cancellation of any outstanding grants and
payment in cash or other property therefor. The adjustments determined by the
Administrator shall be final, binding, and conclusive.
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SECTION 5 ELIGIBILITY
Unless otherwise designated by the Administrator, Participants eligible
to be awarded Stock Options under the Plan include Employees whose services
contribute to the management, growth or financial success of the Company (or a
Parent Corporation or a Subsidiary), or consultants, advisors or independent
contractors who provide valuable services to the Company (or a Parent
Corporation or a Subsidiary). Any Member of the Board or member of the Company's
senior management (which specifically includes, but is not limited to, all
"officers" of the Company, as that term is intended under Rule 16(b) of the
Securities Exchange Act of 1934, as amended ("Rule 16(b)")), and any principal
stockholder otherwise an eligible Employee, consultant, advisor or independent
contractor of the Company, is not eligible to be awarded Stock Options under
this Plan.
SECTION 6 DISCRETIONARY GRANTS OF STOCK OPTIONS
Any Stock Option granted under the Plan shall be in such form as the
Administrator may from time to time approve, and the provisions of Stock Option
awards need not be the same with respect to each optionee. Recipients of Stock
Options shall enter into an option agreement with the Company, in such form as
the Administrator shall determine, which agreement shall set forth, among other
things, the exercise price of the option, the term of the option and provisions
regarding exercisability of the option awarded thereunder. More than one option
may be awarded to the same optionee and be outstanding concurrently hereunder.
Stock Options awarded under the Plan shall be subject to the following
terms and conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Administrator shall deem
desirable:
(a) Option Price. The option price per share of Stock
purchasable under a Stock Option shall be determined by the
Administrator in its sole discretion as of the Date of Grant but shall
not be less than 100% of the Fair Market Value of the Stock on such
date.
(b) Option Term. The term of each Stock Option shall be fixed
by the Administrator, but no Stock Option shall be exercisable more
than ten years after the date such Stock Option is granted.
(c) Exercisability. Stock Options shall be exercisable at such
time or times and subject to such terms and conditions as shall be
determined by the Administrator at or after grant. The Administrator
may provide, in its discretion, that any Stock Option shall be
exercisable only in installments, and the Administrator may waive such
installment exercise provisions at any time in whole or in part based
on such factors as the Administrator may determine, in its sole
discretion, including, but not limited to, in connection with any
"change in control" of the Company, as defined in any stock option
agreement or otherwise.
(d) Method of Exercise. Subject to Section 6(c), above, Stock
Options may be exercised in whole or in part at any time during the
option period, by giving written notice of exercise to the Company
specifying the number of shares to be purchased, accompanied by payment
in full of the option exercise price, as provided below or as otherwise
determined by the Administrator. As determined by the Administrator, in
its sole discretion, payment in whole or
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in part may also be made by means of any cashless exercise procedure
approved by the Administrator. An optionee shall generally have the
rights to dividends and any other rights of a stockholder with respect
to the Stock subject to the Stock Option, including the right to vote
any such Stock, only after the optionee has given written notice of
exercise, has paid in full for such shares, and, if requested, has
given the representation described in paragraph (a) of Section 9,
below. The option exercise price shall be immediately due upon exercise
of the Stock Option and shall be payable in one or a combination of the
following forms:
(i) cash or check payable to the Company drawn on
good and sufficient funds;
(ii) shares of Common Stock held by the optionee
for the period necessary to avoid a charge to
the Company's earnings for financial reporting
purposes and valued at Fair Market Value on
the exercise date; or
(iii) a broker-dealer sale-and-remittance procedure
pursuant to which the optionee shall provide
irrevocable written instructions (x) to a
designated brokerage firm to effect the
immediate sale of the option shares and remit
to the Company, from the sale proceeds
available on the settlement date, sufficient
funds to cover the aggregate option exercise
price, plus all income and employment taxes
required to be withheld by the Company in
connection with the exercise and (y) to the
Company to deliver the certificates for the
purchased shares directly to the brokerage
firm to complete the transaction.
(e) Re-Pricing of Options. The Administrator may require the
voluntary surrender of all or a portion of any Stock Option granted
under the Plan as a condition precedent to the award of a new Stock
Option. Subject to the provisions of the Plan, such new Stock Option
shall be exercisable at the price, during such period and on such other
terms and conditions as are specified by the Administrator at the time
the new Stock Option is granted. Upon their surrender, Stock Options
shall be canceled and the shares previously subject to such canceled
Stock Options shall again be available for awards of Stock Options and
other awards hereunder.
(f) Loans. The Company may make loans available to Stock
Option holders in connection with the exercise of outstanding options
granted under the Plan, as the Administrator, in its discretion, may
determine. Such loans shall (i) be evidenced by promissory notes
entered into by the Stock Option holders in favor of the Company, (ii)
be subject to the terms and conditions set forth in this Section and
such other terms and conditions, not inconsistent with the Plan, as the
Administrator shall determine, (iii) bear interest, if any, at such
rate as the Administrator shall determine, and (iv) be subject to Board
approval (or to approval by the Administrator to the extent the Board
may delegate such authority). In no event may the principal amount of
any such loan exceed the sum of (x) the exercise price less the par
value (if any) of the shares of Stock covered by the Stock Option, or
portion thereof, exercised by the holder, and (y) any Federal, state,
and local income tax attributable to such exercise. The initial term of
the loan, the schedule of payments of principal and interest under the
loan, the extent to which the loan is to be with or without recourse
against the holder with respect to principal or interest and the
conditions upon which the loan will become payable in the event of the
holder's termination of employment shall be determined by the
Administrator. Unless the Administrator
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determines otherwise, when a loan is made, shares of Stock having a
Fair Market Value at least equal to the principal amount of the loan
shall be pledged by the holder to the Company as security for payment
of the unpaid balance of the loan, and such pledge shall be evidenced
by a pledge agreement, the terms of which shall be determined by the
Administrator, in its discretion; provided, however, that each loan
shall comply with all applicable laws, regulations and rules of the
Board of Governors of the Federal Reserve System and any other
governmental agency having jurisdiction.
(g) Non-Transferability of Options. Unless otherwise provided
herein or as otherwise determined by the Administrator, no Stock Option
shall be transferable by the optionee, and all Stock Options shall be
exercisable, during the optionee's lifetime, only by the optionee.
(h) Termination of Employment or Service. If an optionee's
employment with or service as an Employee, consultant, advisor or
independent contractor to the Company terminates by reason of death,
Disability or for any other reason, the Stock Option may thereafter be
exercised as provided below, or as otherwise provided in the applicable
award agreement or determined by the Administrator.
If an optionee's employment with or service to the Company is
terminated:
(i) for or without cause (and whether termination
is voluntary or involuntary), each
then-outstanding unexercised Stock Option
vested and held by the optionee as of the
termination date shall expire within thirty
(30) days of such termination;
(ii) by reason of Disability, each then-outstanding
unexercised Stock Option vested and held by
the optionee as of the termination date shall
expire within six (6) months of such
termination date; and
(iii) by reason of the optionee's death during
employment, or if the optionee dies during the
three (3) month period after termination of
his or her employment (or such other shorter
period of time as may be determined by the
Administrator), where such termination is
other than for cause or by reason of
Disability, each then-outstanding unexercised
Stock Option vested and held by the optionee
as of the termination date shall expire within
six (6) months of such termination date. After
the optionee's death, the Stock Option may be
exercised by the personal representative of
the optionee's estate or by the person(s) to
whom the option is transferred pursuant to the
optionee's will or in accordance with the laws
of descent and distribution.
Following termination of the optionee's employment or service, a Stock
Option shall not be exercisable to any greater extent than on the
termination date; provided, however, that the Administrator shall have
complete discretion, at any time while the Stock Option remains
outstanding, to permit the Stock Option to be exercised, not only with
respect to the number of shares for which the Stock Option is
exercisable at the time of the termination, but also with
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respect to one or more subsequent installments of purchasable shares
for which the Stock Option would otherwise have become exercisable had
termination not occurred.
SECTION 7 AMENDMENT AND TERMINATION OF PLAN
The Board may amend, alter or discontinue the Plan, but no amendment,
alteration, or discontinuation shall be made that would impair the rights of a
Participant under any Stock Option theretofore awarded without such
Participant's consent. The Administrator may amend the terms of any Stock Option
theretofore awarded, prospectively or retroactively, but, as herein provided, no
such amendment shall impair the rights of any Participant without his or her
consent.
SECTION 8 GENERAL PROVISIONS
(a) The Administrator may require each person purchasing
shares pursuant to the exercise of a Stock Option to represent to and
agree with the Company in writing that such person is acquiring the
shares without a view to distribution thereof. The certificates for
such shares may include any legend which the Administrator deems
appropriate to reflect any restrictions on transfer.
(b) All certificates for shares of Stock delivered under the
Plan shall be subject to such stock-transfer orders and other
restrictions as the Administrator may deem advisable under the rules,
regulations, and other requirements of the Securities and Exchange
Commission ("SEC"), any stock exchange upon which the Stock is then
listed, and any applicable Federal or state securities law, and the
Administrator may cause a legend or legends to be placed on any such
certificates to make appropriate reference to such restrictions.
(c) Nothing contained in the Plan shall prevent the Board from
adopting other or additional compensation arrangements, subject to
stockholder approval if such approval is required; and such
arrangements may be either generally applicable or applicable only in
specific cases.
(d) Each Participant shall, no later than the date as of which
the value of a stock option exercise first becomes includable in the
gross income of the Participant for Federal income tax purposes, pay to
the Company, or make arrangements satisfactory to the Administrator
regarding payment of, any Federal, state, or local taxes of any kind
required by law (as determined by the Administrator, in its sole
discretion) to be withheld with respect to the award. The obligations
of the Company under the Plan shall be conditional on the making of
such payments or arrangements, and the Company shall, to the extent
permitted by law, have the right to deduct any such taxes from any
payment of any kind otherwise due to the Participant.
SECTION 9 NON-LIABILITY
No member of the Board or the Administrator, nor any officer or
employee of the Company acting on behalf of the Board or the Administrator,
shall be personally liable for any action, determination, or interpretation
taken or made in good faith with respect to the Plan, and all members of the
Board or the Administrator and each and any officer or employee of the Company
acting on their behalf shall, to the extent permitted by law, be fully
indemnified and protected by the Company in respect of any such action,
determination or interpretation.
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SECTION 10 TERM OF PLAN
No Stock Option award shall be awarded pursuant to the Plan on or after
the tenth anniversary of the Effective Date, but awards theretofore awarded may
extend and be exercisable beyond that date.
SECTION 11 CORPORATE TRANSACTIONS/CHANGES OF CONTROL
(a) In the event of any of the following stockholder-approved
transactions (a "Corporate Transaction"):
(i) a merger or consolidation in which the Company
is not the surviving entity, except for a
transaction whose principal purpose is to
change the State of the Company's
incorporation,
(ii) the sale, transfer, or other disposition of
all or substantially all of the assets of the
Company in liquidation or dissolution, or
(iii) any "reverse" merger in which the Company is
the surviving entity but in which securities
possessing more than 50% of the total combined
voting power of the Company's outstanding
securities are transferred to holders other
than those who owned such voting power
immediately before the merger,
then immediately before the effective date of the Corporate
Transaction, each Stock Option granted under this Plan shall become
fully exercisable ("accelerate") with respect to the total number of
shares of Common Stock then subject to the Stock Option. However, a
Stock Option shall not accelerate if and to the extent: (i) the Stock
Option is, in connection with the Corporate Transaction, either to be
assumed by the successor corporation or parent thereof or to be
replaced by an option on equivalent terms to purchase shares of the
capital stock of the successor corporation or parent thereof, or (ii)
acceleration of the Stock Option is subject to other limitations
imposed by the Administrator at the Date of Grant. The determination of
equivalence under clause (i) above shall be made by the Administrator
and shall be final, binding, and conclusive as to all parties.
(b) Upon consummation of the Corporate Transaction, all Stock
Options granted under this Plan shall terminate and cease to be
outstanding, except to the extent assumed by the successor (or
surviving) corporation or its parent company.
(c) Each Stock Option granted under this Plan that is replaced
by an equivalent option in a Corporate Transaction or that otherwise
continues in effect shall be appropriately adjusted, immediately after
the Corporate Transaction, to apply to the number and class of
securities that would have been issued in the Corporate Transaction to
an actual holder of the number of shares of Common Stock that were
subject to the Stock Option immediately before the Corporate
Transaction. Appropriate adjustment shall also be made to the Option
Price payable per share; provided that the aggregate Option Price
payable for such securities shall remain the same. In addition, the
class and number of securities available for issuance under this Plan
following the consummation of the Corporate Transaction shall be
appropriately adjusted.
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(d) The Administrator shall have full discretionary authority,
exercisable either in advance of, or at the time of, a Change in
Control, to provide for the automatic acceleration of Stock Options
granted under this Plan upon the occurrence of the Change in Control.
The Administrator shall also have full discretionary authority to
condition any such acceleration upon the subsequent termination of the
optionee's service to the Company (or a parent or subsidiary) within a
specified period after the Change in Control. Any Stock Option
accelerated in connection with the Change in Control shall remain fully
exercisable until the expiration of the option term. For all purposes
of this Plan, a Change in Control shall mean a change in control of the
Company of a nature that would be required to be reported in response
to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
whether or not the Company is then subject to such reporting
requirement, other than a Corporate Transaction; provided that, without
limitation, a Change in Control shall be deemed to have occurred if:
(i) any individual, partnership, firm,
corporation, association, trust,
unincorporated organization or other entity,
or any syndicate or group deemed to be a
"person" under Section 14(d) (2) of the
Exchange Act, is or becomes the "beneficial
owner" (as defined in Rule 13d-3 of the
General Rules and Regulations under the
Exchange Act), directly or indirectly, of
securities of the Company representing 40% or
more of the combined voting power of the
Company's then-outstanding securities entitled
to vote in the election of directors of the
Company, pursuant to a tender or exchange
offer that the Board does not recommend that
the Company's stockholders accept; or
(ii) during any period of two consecutive years,
individuals who at the beginning of such
period constituted the Board and any new
members of the Board, whose election by the
Board or nomination for election by the
Company's stockholders was approved by a vote
of at least three-quarters of the directors
then in office who either were directors at
the beginning of the period or whose election
or nomination for election was previously so
approved, cease for any reason to constitute a
majority thereof.
(e) The grant of Stock Options under this Plan shall not
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.
SECTION 12 MISCELLANEOUS
(a) Use of Proceeds. Any cash proceeds received by the Company
from the sale of shares pursuant to Stock Options granted under this
Plan may be used for general corporate purposes.
(b) Regulatory Approvals. The implementation of this Plan, the
awarding of any Stock Option hereunder, and the issuance of Stock upon
the exercise or surrender of any such
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Stock Option shall be subject to and conditional upon the procurement
by the Company of all approvals and permits required by regulatory
authorities having jurisdiction over this Plan, Stock Options granted
under it, and Stock issued pursuant to it.
(c) Securities Laws. No shares of Common Stock or other assets
shall be issued or delivered under this Plan unless and until there
shall have been compliance with all applicable requirements of federal
and state securities laws, including the filing and effectiveness of a
Form S-8 registration statement for the shares of Common Stock issuable
under this Plan, and all applicable listing requirements of any
securities exchange on which stock of the same class is then listed.
(d) No Employment Rights. Neither the action of the Company in
establishing this Plan, nor any action taken by the Administrator
hereunder, nor any provision of this Plan, shall be construed so as to
grant or offer any individual the right to remain in the employ or
service of the Company (or any parent or subsidiary corporation) for
any period, and the Company (or any parent or subsidiary corporation
retaining the services of such individual) may terminate such
individual's employment or service at any time and for any reason, with
or without cause.
(e) Assignment. Except as otherwise provided in this Plan, the
right to acquire Common Stock or other assets under this Plan may not
be assigned, encumbered, or otherwise transferred by any optionee.
(f) Governing Law. The provisions of this Plan shall be
governed by the laws of the State of California, as such laws are
applied to contracts entered into and performed in that State. The
provisions of this Plan shall inure to the benefit of, and be binding
upon, the Company and its successors or assigns, and the optionees, the
legal representatives of their respective estates, their respective
heirs or legatees, and their permitted assignees.
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