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EXHIBIT 10.12
MAXIM INTEGRATED PRODUCTS, INC.
1987 SUPPLEMENTAL STOCK OPTION PLAN
Adopted June 2, 1987
As amended by the Board of Directors on August 26, 1987
Approved by Shareholders October 19, 1987
As further amended on January 29 and August 23, 1988
Approved by Stockholders on October 26, 1988
As further amended on August 24, 1988
Approved by Stockholders on November 3, 1989
As further amended on August 9, 1990
Approved by Stockholders on October 26, 1990
As further amended on May 8, 1991
Approved by Stockholders on November 7, 1991
As further amended on August 13, 1992
Approved by Stockholders on November 5, 1992
As further amended on August 25, 1993
Approved by Stockholders on November 5, 1993
As further amended on February 17, 1994,
March 23, 1994, April 21, 1994 and May 12, 1994
Approved by Stockholders on November 10, 1994
As further amended on August 10, 1995
Approved by Stockholders on November 16, 1995
As further amended on May 14, 1998
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1. PURPOSE
(a) The purpose of the Plan is to provide a means by which employees of
Maxim Integrated Products, Inc., a Delaware corporation (the "Company"), and its
Affiliates, as defined in subparagraph 1(b), may be given an opportunity to
purchase stock of the Company.
(b) The word "Affiliate" as used in the Plan means any parent
corporation or subsidiary corporation of the Company as those terms are defined
in Sections 424(e) and (f), respectively, of the Internal Revenue Code of 1986,
as amended from time to time (the "Code").
(c) The Company, by means of the Plan, seeks to retain the services of
persons now employed by the Company, to secure and retain the services of
persons capable of filling such positions and to provide incentives for such
persons to exert maximum efforts for the success of the Company.
(d) The Company intends that the options issued under the Plan not be
incentive stock options as that term is used in Section 422 of the Code.
2. ADMINISTRATION
(a) The Plan shall be administered by the Board of Directors (the
"Board") of the Company unless and until the Board delegates administration to a
committee, as provided in subparagraph 2(c). Whether or not the Board has
delegated administration, the Board shall have the final power to determine all
questions of policy and expediency that may arise in the administration of the
Plan.
(b) The Board shall have the power, subject to, and within the
limitations of, the express provisions of the Plan:
(1) To determine from time to time which of the persons
eligible under the Plan shall be granted options; when and how the option shall
be granted; the provisions of each option granted (which need not be identical),
including the time or times during the term of each option within which all or
portions of such option may be exercised; and the number of shares for which an
option shall be granted to each such person.
(2) To construe and interpret the Plan and options granted
under it, and to establish, amend and revoke rules and regulations for its
administration. The Board, in the exercise of this power, may correct any
defect, omission or inconsistency in the Plan or in any option agreement, in a
manner and to the extent it shall deem necessary or expedient to make the Plan
fully effective.
(3) To amend the Plan as provided in paragraph 10.
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(4) Generally, to exercise such powers and to perform such
acts as the Board deems necessary or expedient to promote the best interests of
the Company.
(c) The Board may delegate administration of the Plan to a committee
composed of not fewer than three (3) persons (who may, but need not, be members
of the Board) (the "Committee"), all of the members of which Committee shall be
disinterested persons, if required and as defined by the provisions of
subparagraph 2(d), and may also be, in the discretion of the Board, outside
directors, as defined by the provisions of subparagraph 2(f). If administration
is delegated to a Committee, the Committee shall have, in connection with the
administration of the Plan to the extent permitted by law, the powers
theretofore possessed by the Board, subject, however, to such resolutions, not
inconsistent with the provisions of the Plan, as may be adopted from time to
time by the Board. The Board may abolish the Committee at any time and revest in
the Board the administration of the Plan. Notwithstanding anything in this
paragraph 2 to the contrary, the Board or the Committee may delegate to a
committee of one or more members of the Board the authority to grant options to
eligible persons who (1) are not then subject to Section 16 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and/or (2) are either (i)
not then covered employees (as defined by the provisions of subparagraph 2(e))
and are not expected to be covered employees at the time of recognition of
income resulting from such option, or (ii) not persons with respect to whom the
Company wishes to comply with Section 162(m) of the Code.
(d) The term "disinterested person," as used in this Plan, shall mean
an administrator of the Plan, whether a member of the Board or of any Committee
to which responsibility for administration of the Plan has been delegated
pursuant to subparagraph 2(c), meets the definition of a "disinterested person"
set forth in Securities and Exchange Commission ("SEC") Rule 16b-3 or any
successor to such Rule.
(e) The term "covered employee," as used in this Plan, means the Chief
Executive Officer and the four (4) other highest compensated officers of the
Company.
(f) The term "outside director," as used in this Plan, means a director
who either (i) is not a current employee of the Company or an "affiliated
corporation" (as defined in the Treasury regulations promulgated under Section
162(m) of the Code), is not a former employee of the Company or an affiliated
corporation receiving compensation for prior services (other than benefits under
a tax qualified pension plan), was not an officer of the Company or an
affiliated corporation at any time, and is not currently receiving compensation
for personal services in any capacity other than as a director, or (ii) is
otherwise considered an "outside director" for purposes of Section 162(m) of the
Code.
(g) Any requirement that an administrator of the Plan be a
"disinterested person" shall not apply if the Board or the Committee expressly
declares that such requirement shall not apply.
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3. SHARES SUBJECT TO THE PLAN
(a) Subject to the provisions of paragraph 9 relating to adjustments
upon changes in stock, the stock that may be sold pursuant to options granted
under the Plan shall not exceed in the aggregate ninety-one million one hundred
and twenty thousand (91,120,000) shares [adjusted to reflect all stock dividends
through December 5, 1997] of the Company's common stock; provided, however, that
such aggregate number of shares shall be reduced to reflect the number of shares
of the Company's common stock which has been sold under, or may be sold pursuant
to outstanding options granted under, the Company's Incentive Stock Option Plan,
1987 Employee Stock Participation Plan and Supplemental Nonemployee Stock Option
Plan to the same extent as if such sales had been made or options had been
granted pursuant to this Plan. If any option granted under this Plan shall for
any reason expire or otherwise terminate without having been exercised in full,
the stock not purchased under such option shall again become available for this
Plan.
(b) The stock subject to the Plan may be unissued shares or reacquired
shares, bought on the market or otherwise.
(c) There is no maximum limit on the aggregate fair market value of the
stock for which any eligible person may be granted options under the Plan in any
calendar year.
4. ELIGIBILITY
(a) Options may be granted only to employees (including officers) of
the Company or its Affiliates. A director of the Company shall not be eligible
for the benefits of the Plan unless such director is also an employee (including
an officer) of the Company or any Affiliate.
(b) A director shall in no event be eligible for the benefits of the
Plan unless and until such director is expressly declared eligible to
participate in the Plan by action of the Board or the Committee, and only if, at
any time discretion is exercised by the Board in the selection of a director as
a person to whom options may be granted, or in the determination of the number
or maximum number of shares which may be covered by options granted to a
director, a majority of the Board and a majority of the directors acting in such
matter are disinterested persons, as defined in subparagraph 2(d). The Board
shall otherwise comply with the requirements of Rule 16b-3 promulgated under the
Exchange Act, as from time to time in effect.
(c) No person shall be eligible for the grant of an option under the
Plan if, at the time of grant, such person owns (or is deemed to own pursuant to
Section 424(d) of the Code) stock possessing more then ten percent (10%) of the
total combined voting power of all classes of stock of the Company or of any of
its Affiliates unless the option price is at least one hundred ten
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percent (110%) of the fair market value of such stock at the date of grant and
the term of the option does not exceed five (5) years from the date of grant.
(d) Subject to the provisions of paragraph 9 relating to adjustments
upon changes in stock, no person shall be eligible to be granted options
covering more than six million thousand (6,000,000) shares (adjusted to reflect
all stock dividends through December 5, 1997) of the Company's common stock in
any calendar year.
5. OPTION PROVISIONS
Each option shall be in such form and shall contain such terms and
conditions as the Board or the Committee shall deem appropriate. The provisions
of separate options need not be identical, but each option shall include
(through incorporation of provisions hereof by reference in the option or
otherwise) the substance of each of the following provisions:
(a) The term of any option shall not be greater than ten (10) years
from the date it was granted.
(b) The exercise price of each option shall be not less than
eighty-five percent (85%) of the fair market value of the stock subject to the
option on the date the option is granted; provided, however, that no option may
be granted at less than one hundred percent (100%) of the fair market value
except as follows: (1) Any grant at less than one hundred percent (100%) of fair
market value requires the approval of the Committee; (2) the Committee shall not
grant such option unless it records in the minutes of its meeting or action by
written consent its good faith determination that the following conditions have
been satisfied: grants of this nature are to be made only infrequently and only
where good business reasons outweigh a normal presumption in favor of grants at
one hundred percent (100%) of fair market value; and (3) the total number of
shares of stock subject to grant at less than one hundred percent (100%) of the
fair market value shall not exceed five percent (5%) of the Total Shares Subject
to the Plan. The Total Shares Subject to the Plan shall mean the aggregate
number of shares initially reserved for issuance under the Plan plus all
increases in shares reserved for issuance after the initial reservation.
(c) The purchase price of stock acquired pursuant to an option shall be
paid, to the extent permitted by applicable statutes and regulations, either (i)
in cash at the time the option is exercised, or (ii) at the discretion of the
Board or the Committee, either at the time of grant or exercise of the option
(A) by delivery to the Company of other common stock of the Company, (B)
according to a deferred payment or other arrangement (which may include, without
limiting the generality of the foregoing, the use of other common stock of the
Company) with the person to whom the option is granted or to whom the option is
transferred pursuant to subparagraph 5(d), or (C) in any other form of legal
consideration that may be acceptable to the Board or the Committee.
Deferred payment arrangements may be interest free or may provide for
interest at any rate deemed appropriate by the Board or the Committee.
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(d) Except as may be permitted by the Board or the Committee either in
individual cases or by general rule or policy, an option shall not be
transferable except by will or by the laws of descent and distribution, and
shall be exercisable during the lifetime of the person to whom the option is
granted only by such person or his guardian or legal representative.
(e) The total number of shares of stock subject to an option may, but
need not, be allotted in periodic installments (which may, but need not, be
equal). From time to time during each of such installment periods, the option
may be exercised with respect to some or all of the shares allotted to that
period, and/or with respect to some or all of the shares allotted to any prior
period as to which the option was not fully exercised. During the remainder of
the term of the option (if its term extends beyond the end of the installment
periods), the option may be exercised from time to time with respect to any
shares then remaining subject to the option. The provisions of this subparagraph
5(e) are subject to any option provisions governing the minimum number of shares
as to which an option may be exercised.
(f) The Company may require any optionee, or any person to whom an
option is transferred under subparagraph 5(d), as a condition of exercising any
such option: (1) to give written assurances satisfactory to the Company as to
the optionee's knowledge and experience in financial and business matters and/or
to employ a purchaser representative reasonably satisfactory to the Company who
is knowledgeable and experienced in financial and business matters that he or
she is capable of evaluating, alone or together with the purchaser
representative, the merits and risks of exercising the option; and (2) to give
written assurances satisfactory to the Company stating that such person is
acquiring the stock subject to the option for such person's own account and not
with a view to or for sale in connection with any distribution of the stock.
These requirements, and any assurances given pursuant to such requirements,
shall be inoperative if (i) the issuance of the shares upon the exercise of the
option has been registered under a then currently effective registration
statement under the Securities Act of 1933, as amended (the "Securities Act"),
or (ii), as to any particular requirement, a determination is made by counsel
for the Company that such requirement need not be met in the circumstances under
the then applicable securities laws.
(g) An option shall terminate three (3) months after termination of the
optionee's employment with the Company or an Affiliate, unless (i) the
termination of employment of the optionee is due to such person's permanent and
total disability, within the meaning of Section 422(c)(6) of the Code, in which
case the option may, but need not, provide that it may be exercised at any time
within one (1) year following such termination of employment; or (ii) the
optionee dies while in the employ of the Company or an Affiliate, or within not
more than three (3) months after termination of such employment, in which case
the option may, but need not, provide that it may be exercised at any time
within eighteen (18) months following the death of the optionee by the person or
persons to whom the optionee's rights under such option pass by will or by the
laws of descent and distribution; or (iii) the option
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by its terms specifies either (a) that it shall terminate sooner than three (3)
months after termination of the optionee's employment, or (b) that it may be
exercised more than three (3) months after termination of the optionee's
employment with the Company or an Affiliate. This subparagraph 5(g) shall not be
construed to extend the term of any option or to permit anyone to exercise the
option after expiration of its term, nor shall it be construed to increase the
number of shares as to which any option is exercisable from the amount
exercisable on the date of termination of the optionee's employment.
(h) The option may, but need not, include a provision whereby the
optionee may elect at any time during the term of his or her employment with the
Company or any Affiliate to exercise the option as to any part or all of the
shares subject to the option prior to the stated vesting date of the option or
of any installment or installments specified in the option. Any shares so
purchased from any unvested installment or option may be subject to a repurchase
right in favor of the Company or to any other restriction the Board or the
Committee determines to be appropriate.
(i) In connection with each option granted pursuant to this Plan, at
any time when the Company could have any withholding obligation (whether for
Federal, state, local or foreign income, disability, Medicare, employment or
other taxes or otherwise) as a result of exercise of an option, the lapse of any
substantial risk of forfeiture to which the shares are subject at the time of
exercise, or the disposition of shares acquired upon such exercise, the Company
shall have no obligation to permit exercise of such option or to issue any
shares upon exercise of the option unless and until either the exercise of the
option is accompanied by sufficient payment, as determined by the Company in its
absolute discretion, to meet those withholding obligations on such exercise,
lapse or disposition or other arrangements are made that are satisfactory to the
Company in its absolute discretion to provide otherwise for such payment. The
Company shall have no liability to any optionee or transferee for exercising the
foregoing right not to permit exercise or issue shares.
6. COVENANTS OF THE COMPANY
(a) During the terms of the options granted under the Plan, the Company
shall keep available at all times the number of shares of stock required to
satisfy such options.
(b) The Company shall seek to obtain from each regulatory commission or
agency having jurisdiction over the Plan such authority as may be required to
issue and sell shares of stock upon exercise of the options granted under the
Plan; provided, however, that this undertaking shall not require the Company to
register under the Securities Act either the Plan, any option granted under the
Plan or any stock issued or issuable pursuant to any such option. If, after
reasonable efforts, the Company is unable to obtain from any such regulatory
commission or agency the authority that counsel for the Company deems necessary
for the lawful issuance and sale of stock under the Plan, the Company shall be
relieved from any liability for failure to
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issue and sell stock upon exercise of such options unless and until such
authority is obtained.
7. USE OF PROCEEDS FROM STOCK
Proceeds from the sale of stock pursuant to options granted under the
Plan shall constitute general funds of the Company.
8. MISCELLANEOUS
(a) The Board or the Committee shall have the power to accelerate the
time during which an option may be exercised or the time during which an option
or any portion thereof will vest pursuant to subparagraph 5(e), notwithstanding
the provisions in the option stating the time during which it may be exercised
or the time during which it will vest.
(b) Neither an optionee nor any person to whom an option is transferred
under subparagraph 5(d) shall be deemed to be the holder of, or to have any of
the rights of a holder with respect to, any shares subject to such option unless
and until such person has satisfied all requirements for exercise of the option
pursuant to its terms.
(c) Throughout the term of any option granted pursuant to the Plan, the
Company shall make available to the holder of such option, not later than one
hundred twenty (120) days after the close of each of the Company's fiscal years
during the option term, upon request, such financial and other information
regarding the Company as comprises the annual report to the shareholders of the
Company provided for in the bylaws of the Company.
(d) Nothing in the Plan or any instrument executed or option granted
pursuant thereto shall confer upon any eligible person or optionee any right to
continue in the employ of the Company or any Affiliate or shall affect the right
of the Company or any Affiliate to terminate the employment of any eligible
person or optionee with or without cause.
(e) Outstanding options may be Repriced (as defined below) only subject
to the following conditions: (1) Repricing may be approved as to a number of
shares subject to outstanding options equal to not more than five percent (5%)
of the Total Shares Subject to the Plan (defined below) in any twelve (12) month
period; (2) Repricing requires the approval of a majority of the Board or the
Committee; and (3) the Board or the Committee shall not Reprice options unless
it records in the minutes of its meeting or action by written consent its good
faith determination that the following conditions have been satisfied: Repricing
is to occur only infrequently and the determination to approve Repricing derives
principally from conditions other than poor operating performance by the
Company. To "Reprice" for purposes of this Plan shall mean to amend an
outstanding option to reduce its exercise price or to issue a new option with a
lower exercise price to replace an outstanding option with a higher exercise
price, in either case
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without a material adverse (to the optionee) change in the other terms of the
outstanding option. The Total Shares Subject to the Plan shall mean the
aggregate number of shares initially reserved for issuance under the Plan plus
all increases in shares reserved for issuance after the initial reservation.
9. ADJUSTMENTS UPON CHANGES IN STOCK
(a) If any change is made in the stock subject to the Plan, or subject
to any option granted under the Plan (through merger, consolidation,
reorganization, recapitalization, stock dividend, dividend in property other
than cash, stock split, liquidating dividend, combination of shares, exchange of
shares, change in corporate structure or otherwise), the Plan and outstanding
options will be appropriately adjusted in the class(es) and maximum number of
shares subject to the Plan and the class(es) and number of shares and price per
share of stock subject to outstanding options.
(b) In the event of: (1) a dissolution or liquidation of the Company;
(2) a merger or consolidation in which the Company is not the surviving
corporation; (3) a reverse merger in which the Company is the surviving
corporation but the shares of the Company's common stock outstanding immediately
preceding the merger are converted by virtue of the merger into other property,
whether in the form of securities, cash or otherwise; or (4) any other capital
reorganization in which more than fifty percent (50%) of the shares of the
Company entitled to vote are exchanged, then, at the sole discretion of the
Board and to the extent permitted by applicable law: (i) any surviving
corporation shall assume any options outstanding under the Plan or shall
substitute similar options for those outstanding under the Plan, or (ii) the
time during which such options may be exercised shall be accelerated and the
option terminated if not exercised prior to such event, or (iii) such options
shall continue in full force and effect.
10. AMENDMENT OF THE PLAN
(a) The Board at any time, and from time to time, may amend the Plan.
However, except as provided in paragraph 9 relating to adjustments upon changes
in stock, no amendment shall be effective unless approved by the vote of a
majority of the shares of the Company represented and voting at a duly held
meeting within twelve (12) months before or after the adoption of the amendment,
where the amendment will:
(i) Increase the number of shares reserved for options under
the Plan;
(ii) Materially modify the requirements as to eligibility for
participation in the Plan; or
(iii) Materially increase the benefits accruing to
participants under the Plan except to the extent permitted by Rule 16b-3
promulgated under the Exchange Act, as those rules are in effect at the time the
amendment is adopted by the Board.
(b) The Board may in its sole discretion submit any other amendment to
the
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Plan for stockholder approval, including, but not limited to, amendments to
the Plan intended to satisfy the requirements of Section 162(m) of the Code and
the regulations promulgated thereunder regarding the exclusion of
performance-based compensation from the limit on corporate deductibility of
compensation paid to certain executive officers.
(c) Rights and obligations under any option granted before amendment of
the Plan shall not be altered or impaired by any amendment of the Plan, except
with the consent of the person to whom the option was granted.
11. TERMINATION OR SUSPENSION OF THE PLAN
(a) The Board may suspend or terminate the Plan at any time. Unless
sooner terminated, the Plan shall terminate ten (10) years from the date the
Plan is adopted by the Board or approved by the stockholders of the Company,
whichever is earlier. No options may be granted under the Plan while the Plan is
suspended or after it is terminated.
(b) Rights and obligations under any option granted while the Plan is
in effect shall not be altered or impaired by suspension or termination of the
Plan, except with the consent of the person to whom the option was granted.
12. EFFECTIVE DATE OF PLAN
The Plan as amended and restated herein shall become effective as
determined by the Board, but no options granted after the date of this amendment
and restatement of the Plan shall be exercised unless and until this amended and
restated Plan has been approved by the vote or written consent of the holders of
a majority of the outstanding shares of the Company entitled to vote, and, if
required, an appropriate permit has been issued by the Commissioner of
Corporations of the State of California.
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