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EXHIBIT 10.4
U.S. Plan
TENCOR INSTRUMENTS
1993 EMPLOYEE STOCK PURCHASE PLAN
1. Purpose
This Tencor Instruments 1993 Employee Stock Purchase Plan is
designed to encourage and assist employees of Tencor Instruments and
participating subsidiaries to acquire an equity interest in the Company through
the purchase of shares of Tencor common stock.
2. Definitions
As used herein, the following definitions shall apply:
(a) "Administrator" shall mean the entity, either the
Board or the committee of the Board, responsible for administering this Plan,
as provided in Section 3.
(b) "Board" shall mean the Board of Directors of the
Company, as constituted from time to time.
(c) "Code" shall mean the Internal Revenue Code of 1986,
as amended from time to time, and any successor statute.
(d) "Company" shall mean Tencor and Participating
Subsidiaries.
(e) "Common Stock" shall mean the Common Stock of Tencor.
(f) "Employee" shall mean any individual who is an
employee of the Company or a Participating Subsidiary within the meaning of
Section 3401(c) of the Code and the Treasury Regulations thereunder.
(g) "Enrollment Date" shall have the meaning set forth in
Section 6.
(h) "Fair market value" means as of any given date: (i)
the closing price of the Common Stock on the NASDAQ National Market System as
reported in the Wall Street Journal; or (ii) if the Common Stock is no longer
quoted on the NASDAQ National Market System but is listed on an established
stock exchange or quoted on any other established interdealer quotation system,
the closing price for the Common Stock on such exchange or system, as reported
in the Wall Street Journal; or (iii) in the absence of an established market
for the Common Stock, the fair market value of the Common Stock as determined
by the Administrator in good faith.
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(i) "Participating Subsidiary" shall mean a Subsidiary
which has been designated by the Administrator as covered by the Plan.
(j) "Plan" shall mean this Tencor Instruments 1993
Employee Stock Purchase Plan, as it may be amended from time to time.
(k) "Purchase Date" shall have the meaning set forth in
Section 9(a).
(l) "Section" unless the context clearly indicates
otherwise, shall refer to a Section of this Plan.
(m) "Subsidiary" shall mean a "subsidiary corporation" of
the Company, whether now or hereafter existing, within the meaning of Section
424(f) of the Code, but only for so long as it is a "subsidiary corporation."
(n) "Tencor" shall mean Tencor Instruments, a California
corporation.
(o) "Trading Day" means any day on which regular trading
occurs on any established stock exchange or market system on which the Common
Stock is traded.
3. Administration
(a) Administrator. The Plan shall be administered by the
Board or, upon delegation by the Board, by a committee consisting of not fewer
than two directors (in either case, the "Administrator"). In connection with
the administration of the Plan, the Administrator shall have the powers
possessed by the Board. The Administrator may act only by a majority of its
members. The Administrator may delegate administrative duties to such
employees of the Company as it deems proper, so long as such delegation is not
otherwise prohibited by Rule 16b-3 under the Securities Exchange Act of 1934,
as amended. The Board at any time may terminate the authority delegated to any
committee of the Board pursuant to this Section 3(a) and revest in the Board
the administration of the Plan.
(b) Administrator Determinations Binding. The
Administrator may adopt, alter and repeal administrative rules, guidelines and
practices governing the Plan and the options granted under it as it from time
to time shall deem advisable, may interpret the terms and provisions of the
Plan and the Options granted under it, may correct any defect, omission or
inconsistency in the Plan or in any Option; and may otherwise supervise the
administration of the Plan and the Options granted under it. The Administrator
may establish, under guidelines from
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the Board, limits on the number of shares which may be purchased by each
participant on an annual or other periodic basis or on the number of shares
which may be purchased on any Purchase Date. All decisions made by the
Administrator under the Plan shall be binding on all persons, including the
Company and all participants in the Plan. No member of the Administrator shall
be liable for any action that he or she has in good faith taken or failed to
take with respect to this Plan.
4. Number of Shares
(a) The Company has reserved for sale under the Plan
1,100,000 shares of Common Stock less any shares sold under the Tencor 1993
Foreign Subsidiary Employee Stock Purchase Plan. Shares sold under the Plan
may be newly issued shares or shares reacquired in private transactions or open
market purchases, but all shares sold under the Plan, regardless of source,
shall be counted against the 1,100,000 share limitation.
(b) In the event of any reorganization, recapitalization,
stock split, reverse stock split, stock dividend, combination of shares,
merger, consolidation, offering of rights, or other similar change in the
capital structure of the Company, the Board may make such adjustment, if any,
as it deems appropriate in the number, kind, and purchase price of the shares
available for purchase under the Plan and in the maximum number of shares
subject to any option under the Plan.
5. Eligibility Requirements
(a) Each Employee of the Company, except those described
in the next paragraph, shall become eligible to participate in the Plan in
accordance with Section 6 on the first Enrollment Date on or following
commencement of his or her employment by the Company or following such period
of employment as is designated by the Board from time to time. Participation
in the Plan is entirely voluntary.
(b) The following Employees are not eligible to
participate in the Plan:
(i) Employees who would, immediately upon
enrollment in the Plan, own directly or indirectly, or hold options or rights
to acquire stock possessing, five percent (5%) or more of the total combined
voting power or value of all classes of stock of Tencor or any subsidiary of
Tencor; and
(ii) Employees who are customarily employed by the
Company fewer than 20 hours per week or fewer than five months in any calendar
year.
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6. Enrollment
Any eligible employee may enroll or re-enroll in the Plan each
year as of the close of the first trading day of: (a) the May, August,
November or February immediately following the adoption of the Plan by the
Board of Directors of the Company; (b) the third month following each such
month; and (c) each yearly anniversary of such months or such other days as may
be established by the Board from time to time (the "Enrollment Dates"). In
order to enroll, an eligible employee must complete, sign, and submit to the
Company an enrollment form. Any enrollment form received by the Company by the
15th day of the month preceding an Enrollment Date (or by the Enrollment Date
in the case of employees hired after such 15th day or in the case of the first
Enrollment Date), or such other date established by the Administrator from time
to time, will be effective on that Enrollment Date. In addition, the
Administrator may re-enroll existing participants in the Plan on any Enrollment
Date on which the fair market value of the Common Stock is lower than the fair
market value on such participant's existing Enrollment Date.
7. Grant of Option Enrollment
(a) Enrollment or re-enrollment by a participant in the
Plan on an Enrollment Date will constitute the grant by the Company to the
participant of an option to purchase shares of Common Stock from the Company
under the Plan. Any participant whose option expires and who has not withdrawn
from the Plan will automatically be re-enrolled in the Plan and granted a new
option on the Enrollment Date immediately following the date on which the
option expires.
(b) Except as provided in Section 10, each option granted
under the Plan shall have the following terms:
(i) the option will have a term of not more than
12 months or such shorter option period as may be established by the Board from
time to time (the "Option Period"). Notwithstanding the foregoing, however,
whether or not all shares have been purchased thereunder, the option will
expire on the earlier to occur of: (A) the completion of the purchase of
shares on the last Purchase Date occurring within 12 months after the
Enrollment Date for such option, or such shorter option period as may be
established by the Board before an Enrollment Date for all options to be
granted on such date; or (B) the date on which the employee's participation in
the Plan terminates for any reason;
(ii) payment for shares purchased under the option
will be made only through payroll withholding in accordance with Section 8;
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(iii) purchase of shares upon exercise of the
option will be effected only on the Purchase Dates established in accordance
with Section 9;
(iv) the option, if not altered, amended or
revoked by the Company prior to the relevant Purchase Date, may be accepted
only by (x) there having been withheld from the compensation of the employee in
accordance with the terms of the Plan amounts sufficient to purchase the Common
Stock intended to be purchased under the option, and (y) the employee being
employed by the Company and not having withdrawn from the Plan on the relevant
Purchase Date.
(v) the price per share under the option will be
determined as provided in Section 9;
(vi) the number of shares available for purchase
under an option for each one percent (1%) of compensation designated by an
employee in accordance with Section 8 will, unless otherwise established by the
Board before an Enrollment Date for all options to be granted on such date, be
determined by dividing $25,000 by the fair market value of a share of Common
Stock on the Enrollment Date, dividing the result by the maximum number of
percentage points that an employee may designate under Section 8 at the time
such option is granted, and multiplying the result by the number of calendar
years included in whole or in part in the period from grant to expiration of
the option;
(vii) the option (taken together with all other
options then outstanding under this and all other similar stock purchase or
stock option plans of Tencor and any subsidiary of Tencor, collectively
"Options") will in no event give the participant the right to purchase shares
at a rate per calendar year which accrues in excess of $25,000 of fair market
value of such shares, less the fair market value of any shares accrued and
already purchased during such year under Options which have expired or
terminated, determined at the applicable Enrollment Dates; and
(viii) the option will in all respects be subject to
the terms and conditions of the Plan, as interpreted by the Administrator from
time to time.
8. Payroll and Tax Withholding; Use by Company
(a) Each participant shall elect to have amounts withheld
from his or her compensation paid by the Company during the Option Period, at a
rate equal to any whole percentage up to a maximum of ten percent (10%), or
such lesser percentage as the Board may establish from time to time before an
Enrollment Date.
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Compensation includes regular salary payments, annual and quarterly performance
bonuses, hire-on bonuses, cash recognition awards, commissions, overtime pay,
shift premiums, and elective contributions by the participant to qualified
employee benefit plans, but excludes all other payments including, without
limitation, long-term disability or workers compensation payments, car
allowances, employee referral bonuses, relocation payments, expense
reimbursements (including but not limited to travel, entertainment, and moving
expenses), salary gross-up payments, and non-cash recognition awards. The
participant shall designate a rate of withholding in his or her enrollment form
and may elect to increase or decrease the rate of contribution effective as of
any Enrollment Date, by delivery to the Company, not later than 15 days before
such Enrollment Date, of a written notice indicating the revised withholding
rate; provided, however, that an employee who makes an election not to withdraw
under Section 10 may not change his or her rate of contribution prior to the
Purchase Date for which such election was made.
(b) Payroll withholdings shall be credited to an account
maintained for purposes of the Plan on behalf of each participant, as soon as
administratively feasible after the withholding occurs. The Company shall be
entitled to use the withholdings for any corporate purpose, shall have no
obligation to pay interest on withholdings to any participant, and shall not be
obligated to segregate withholdings.
(c) Upon disposition of shares acquired by exercise of an
option, the participant shall pay, or make provision adequate to the Company
for payment of, all federal, state, and other tax (and similar) withholdings
that the Company determines, in its discretion, are required due to the
disposition, including any such withholding that the Company determines in its
discretion is necessary to allow the Company to claim tax deductions or other
benefits in connection with the disposition. A participant shall make such
similar provisions for payment that the Company determines, in its discretion,
are required due to the exercise of an option, including such provisions as are
necessary to allow the Company to claim tax deductions or other benefits in
connection with the exercise of the option.
9. Purchase of Shares
(a) On the last Trading Day of each month immediately
preceding a month containing an Enrollment Date (other than the first
Enrollment Date), or on such other days as may be established by the Board from
time to time, prior to an Enrollment Date for all options to be granted on an
Enrollment Date (each a "Purchase Date"), the Company shall apply the funds
then credited to each participant's payroll withholdings account to the
purchase of whole shares of Common Stock. The cost to the
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participant for the shares purchased under any option shall be not less than
eighty-five percent (85%) of the lower of:
(i) the fair market value of the Common Stock on
the Enrollment Date for such option; or
(ii) the fair market value of the Common Stock on
the date such option is exercised.
(b) Any funds in an amount less than the cost of one
share of Common Stock left in a participant's payroll withholdings account on a
Purchase Date shall be carried forward in such account for application on the
next Purchase Date.
(c) If at any Purchase Date, the shares available under
the Plan are less than the number all participants would otherwise be entitled
to purchase on such date, purchases shall be reduced proportionately to
eliminate the deficit. If, at any Purchase Date, the shares which may be
purchased by a participant are restricted on account of a limit on the
aggregate shares which may be purchased per employee, purchases under each
option shall be reduced proportionately. Any funds that cannot be applied to
the purchase of shares due to such reductions shall be refunded to participants
as soon as administratively feasible.
(d) Notwithstanding the terms of Section 9(a), no funds
credited to any employee's payroll withholdings account shall be used to
purchase Common Stock on any date prior to the date that the Plan has been
approved by the shareholders of the Company, as noted in Section 21. If such
approval is not forthcoming within one year from the date that the Plan was
approved by the Board of Directors, all amounts withheld shall be distributed
to the participants as soon as administratively feasible.
10. Withdrawal from the Plan
A participant may withdraw from the Plan in full (but not in
part) at any time, effective after written notice thereof is received by the
Company; provided, however, that if on or before any Enrollment Date an
employee elects, in the manner designated by the Administrator, not to withdraw
prior to the Purchase Date which occurs six months after such Enrollment Date,
such election will be binding on the electing employee. Unless the
Administrator elects to permit a withdrawing participant to invest funds
credited to his or her withholding account on the Purchase Date immediately
following notice of withdrawal, all funds credited to a participant's payroll
withholdings account shall be distributed to him or her without interest within
60 days after notice of withdrawal is received by the Company. Any eligible
employee who has withdrawn from the Plan may enroll in
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the Plan again on any subsequent Enrollment Date in accordance with the
provisions of Section 6.
11. Termination of Employment
Participation in the Plan terminates immediately when a
participant ceases to be employed by the Company for any reason whatsoever
(including death or disability) or otherwise becomes ineligible to participate
in the Plan. As soon as administratively feasible after termination, the
Company shall pay to the participant or his or her beneficiary or legal
representative, all amounts credited to the participant's payroll withholdings
account; provided, however, that if a participant ceases to be employed by the
Company because of the commencement of employment with a Subsidiary of the
Company that is not a Participating Subsidiary, funds then credited to such
participant's payroll withholdings account shall be applied to the purchase of
whole shares of Common Stock at the next Purchase Date and any funds remaining
after such purchase shall be paid to the participant.
12. Designation of Beneficiary
(a) Each participant may designate one or more
beneficiaries in the event of death and may, in his or her sole discretion,
change such designation at any time. Any such designation shall be effective
upon receipt in written form by the Company and shall control over any
disposition by will or otherwise.
(b) As soon as administratively feasible after the death
of a participant, amounts credited to his or her account shall be paid in cash
to the designated beneficiaries or, in the absence of a designation, to the
executor, administrator, or other legal representative of the participant's
estate. Such payment shall relieve the Company of further liability with
respect to the Plan on account of the deceased participant. If more than one
beneficiary is designated, each beneficiary shall receive an equal portion of
the account unless the participant has given express contrary written
instructions.
13. Assignment
(a) The rights of a participant under the Plan shall not
be assignable by such participant, by operation of law or otherwise. No
participant may create a lien on any funds, securities, rights, or other
property held by the Company for the account of the participant under the Plan,
except to the extent that there has been a designation of beneficiaries in
accordance with the Plan, and except to the extent permitted by the laws of
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descent and distribution if beneficiaries have not been designated.
(b) A participant's right to purchase shares under the
Plan shall be exercisable only during the participant's lifetime and only by
him or her, except that a participant may direct the Company in the enrollment
form to issue share certificates to the participant and his or her spouse in
community property, to the participant jointly with one or more other persons
with right of survivorship, or to certain forms of trusts approved by the
Administrator.
14. Administrative Assistance
If the Administrator in its discretion so elects, it may
retain a brokerage firm, bank, or other financial institution to assist in the
purchase of shares, delivery of reports, or other administrative aspects of the
Plan. If the Administrator so elects, each participant shall (unless
prohibited by the laws of the nation of his or her employment or residence) be
deemed upon enrollment in the Plan to have authorized the establishment of an
account on his or her behalf at such institution. Shares purchased by a
participant under the Plan shall be held in the account in the name in which
the share certificate would otherwise be issued pursuant to Section 13(b).
15. Costs
All costs and expenses incurred in administering the Plan
shall be paid by the Company, except that any stamp duties or transfer taxes
applicable to participation in the Plan may be charged to the account of such
participant by the Company. Any brokerage fees for the purchase of shares by a
participant shall be paid by the Company, but brokerage fees for the resale of
shares by a participant shall be borne by the participant.
16. Equal Rights and Privileges
All eligible employees shall have equal rights and privileges
with respect to the Plan so that the Plan qualifies as an "employee stock
purchase plan" within the meaning of Section 423 of the Code and the related
Treasury Regulations. Any provision of the Plan which is inconsistent with
Section 423 of the Code shall without further act or amendment by the Company
or the Board be reformed to comply with the requirements of Section 423. This
Section 16 shall take precedence over all other provisions of the Plan.
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17. Applicable Law
The Plan shall be governed by the substantive laws (excluding
the conflict of laws rules) of the State of California.
18. Modification and Termination
(a) The Board may amend, alter, or terminate the Plan at
any time, including amendments to outstanding options. No amendment shall be
effective unless within 12 months after it is adopted by the Board, it is
approved by the holders of a majority of the votes cast at a duly held
shareholders' meeting at which a quorum of the voting power of the Company is
represented in person or by proxy, if such amendment would:
(i) increase the number of shares reserved for
purchase under the Plan; or
(ii) require shareholder approval in order to
comply with SEC Rule 16b-3.
(b) In the event the Plan is terminated, the Board may
elect to terminate all outstanding options either immediately or upon
completion of the purchase of shares on the next Purchase Date, or may elect to
permit options to expire in accordance with their terms (and participation to
continue through such expiration dates). If the options are terminated prior
to expiration, all funds contributed to the Plan that have not been used to
purchase shares shall be returned to the participants as soon as
administratively feasible.
(c) In the event of the sale of all or substantially all
of the assets of Tencor or the Company, or the merger of Tencor or the Company
with or into another corporation, or the dissolution or liquidation of Tencor,
a Purchase Date shall occur on the trading day immediately preceding the date
of such event, unless otherwise provided by the Board in its sole discretion,
including provision for the assumption or substitution of each option under the
Plan by the successor or surviving corporation, or a parent or subsidiary
thereof.
19. Rights as an Employee
Nothing in the Plan shall be construed to give any person the
right to remain in the employ of the Company or to affect the Company's right
to terminate the employment of any person at any time with or without cause.
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20. Rights as a Shareholder; Delivery of Certificates
Unless otherwise determined by the Board, certificates
evidencing shares purchased on any Purchase Date shall be delivered to a
participant only if he or she makes a written request to the Administrator.
Participants shall be treated as the owners of their shares effective as of the
Purchase Date.
21. Board and Shareholder Approval
The Plan was approved by the Board of Directors on May 10,
1993, and by the holders of a majority of the votes cast at a duly held
shareholders' meeting on May 4, 1994, at which a quorum of the voting power of
the Company was represented in person or by proxy. The Plan was amended by the
Board of Directors on March 23, 1995 to increase to 300,000 the number of
shares reserved for sale under the Plan and the Company's 1993 Foreign
Subsidiary Employee Stock Purchase Plan. Such amendment was approved by the
holders of a majority of the votes cast at a duly held shareholders' meeting on
May 15, 1995, at which a quorum of the voting power of Tencor was represented
in person or by proxy. A two-for-one stock split with a record date of May 31,
1995, which increased the number of shares from 300,000 to 600,000, was
approved by the Board of Directors on May 15, 1995. The Plan was amended by
the Board of Directors on February 12, 1996 to increase to 1,100,000 the number
of shares reserved for sale under the Plan and the Company's 1993 Foreign
Subsidiary Employee Stock Purchase Plan. Such amendment was approved by the
holders of a majority of the votes cast at a duly held shareholders' meeting on
May 13, 1996, at which a quorum of the voting power of Tencor was represented
in person or by proxy.
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