EXHIBIT 10.E
ALPHA INDUSTRIES, INC.
1997 NON-QUALIFIED STOCK OPTION PLAN
FOR NON-EMPLOYEE DIRECTORS
1. Purpose. The appropriate purpose of this 1997 Non-Qualified Stock
Option Plan for Non-Employee Directors is to attract and retain the services of
experienced and knowledgeable independent directors of the Corporation for the
benefit of the Corporation and its stockholders and to provide additional
incentives for such independent directors to continue to work for the best
interests of the Corporation and its stockholders through continuing ownership
of its common stock.
2. Definitions. As used herein, each of the following terms has the
indicated meaning:
"Annual Meeting" means the Corporation's annual meeting of stockholders or
special meeting in lieu of annual meeting of stockholders at which one or more
directors are elected.
"Board" means the Board of Directors of the Corporation.
"Corporation" means Alpha Industries, Inc.
"Fair Market Value" means the closing sale price quoted on the American
Stock Exchange or such other national securities exchange or automated quotation
system on which the Shares may be traded or quoted on the date of the granting
of the Option.
"Non-Employee Director" means a person who, as of any applicable date, is
a member of the Board and (i) is not an officer of the Corporation or a
Subsidiary, or otherwise employed by the Corporation or a Subsidiary, (ii) does
not receive compensation, either directly or indirectly, from the Corporation or
a Subsidiary, for services rendered as a consultant or in any capacity other
than as a member of the Board, except for an amount that does not exceed the
dollar amount for which disclosure would be required pursuant to Rule 404(a) of
Regulation S-K ("Regulation S-K") promulgated pursuant to the Securities Act of
1933, as amended, and the Securities Exchange Act of 1934, as amended (the "1934
Act"), (iii) does not possess an interest in any other transaction for which
disclosure would be required pursuant to Rule 404(a) of Regulation S-K, and (iv)
is not engaged in a business relationship for which disclosure would be required
pursuant to Rule 404(b) of Regulation S-K.
"Option" means the contractual right to purchase Shares upon the specific
terms set forth in this Plan.
"Option Exercise Period" means the period commencing one (1) year after
the date of grant of an Option pursuant to this Plan and ending ten years from
the date of grant.
"Plan" means this Alpha Industries, Inc. 1997 Non-Qualified Stock Option
Plan for Non-Employee Directors.
"Shares" means the Common Stock, $.25 par value per share, of the
Corporation.
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"Subsidiary" means any corporation in an unbroken chain of corporations
beginning with the Corporation if, at the time of grant of the Option, each of
the corporations other than the last 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 such chain.
3. Stock Subject to the Plan. The aggregate number of Shares that may be
issued and sold under the Plan shall be 100,000. The Shares to be issued upon
exercise of Options granted under this Plan shall be made available, at the
discretion of the Board, from (i) treasury Shares and Shares reacquired by the
Corporation for such purposes, including Shares purchased in the open market,
(ii) authorized but unissued Shares, and (iii) Shares previously reserved for
issuance upon exercise of Options which have expired or been terminated. If any
Option granted under this Plan shall expire or terminate for any reason without
having been exercised in full, the unpurchased Shares covered thereby shall
become available for grant under additional Options under the Plan so long as it
shall remain in effect.
4. Administration of the Plan. The Plan shall be administered by the
Board. The Board shall have the authority 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 Option issued under the Plan (and any agreement relating thereto)
and to otherwise supervise the administration of the Plan.
5. Eligibility. Options shall be granted only to Non-Employee Directors.
6. Grant of Options.
(a) On the effective date of this Plan, each Non-Employee Director shall
be granted an Option to purchase 15,000 Shares.
(b) Each year, immediately following the Corporation's Annual Meeting,
each then Non-Employee Director shall be granted an Option to purchase 5,000
Shares.
(c) Upon initial election by the stockholders or appointment by the Board
as a Non-Employee Director, immediately following the Annual Meeting at which
such Non-Employee Director is first elected by the stockholders or immediately
following the meeting of the Board at which such Non-Employee Director is
appointed by the Board, each Non-Employee Director shall be granted an Option to
purchase 15,000 Shares.
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7. Terms of Options and Limitations Thereon.
(a) Option Agreement. Each Option granted under this Plan shall be
evidenced by an Option agreement between the Corporation and the Option holder
and shall be upon such terms and conditions, not inconsistent with this Plan, as
the Board may determine.
(b) Price. The price at which any Shares may be purchased pursuant to the
exercise of an Option shall be the greater of the Fair Market Value of the
Shares on the date of grant or par value.
(c) Exercise of Option. Each Option granted under this Plan may be
exercised as follows:
(i) beginning on the first anniversary of the date of grant, for up to 20%
of the Shares covered by the Option; and
(ii) beginning on each anniversary of the date of grant thereafter, for up
to an additional 20% of such Shares for each additional year, until, on the
fifth anniversary of the date of grant, the Option may be exercised as to 100%
of the Shares covered by the Option, until the expiration of the Option Exercise
Period.
Options may be exercised in whole or in part, from time to time, only
during the Option Exercise Period, by the giving of written notice, signed by
the holder of the Option, to the Corporation stating the number of Shares with
respect to which the Option is being exercised, accompanied by full payment for
such Shares pursuant to section 8(a) hereof; provided however, (i) if a person
to whom an Option has been granted ceases to be a Non-Employee Director during
the Option Exercise Period by reason of retirement, death or any reason, other
than termination for cause, such Option shall be exercisable by him or her or by
the executors, administrators, legatees or distributees of his or her estate
until the earlier of (A) the end of the Option Exercise Period or (B) 12 months
following his or her retirement or death or the date on which he or she ceased
to be a Non-Employee Director; and (ii) if a person to whom an Option has been
granted ceases to be a Non-Employee Director of the Corporation by reason of
termination for cause, such Option shall terminate as of the date such person
ceased to be a Non-Employee Director. Termination for cause shall be defined as
termination on account of any act of (i) fraud or intentional misrepresentation,
or (ii) embezzlement, misappropriation or conversion of assets or opportunities
of the Corporation or any Subsidiary.
(d) Non-Assignability. No Option, or right or interest in an Option, shall
be assignable or transferable by the holder, except by will, the laws of descent
and distribution or pursuant to a qualified domestic relations order (as defined
in the Internal Revenue Code of 1986, as amended, or Title I of the Employee
Retirement Income Security Act of 1974, as amended, or the rules thereunder),
and during the lifetime of the holder shall be exercisable only by him or her.
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8. Payment.
(a) The purchase price of Shares upon exercise of an Option shall be paid
by the Option holder in full upon exercise, and may be paid (i) in cash, (ii) by
delivery of Shares valued at Fair Market Value on the date of exercise,
including, to the extent permitted under the Rule 16b-3 as defined in Paragraph
12(c), below, exempting certain transactions from the short swing trading
provisions of Section 16 of the 1934 Act, by way of so-called "cashless
exercise" and the netting of the number of Shares issuable upon exercise against
that number of Shares subject to the Option having an aggregate Fair Market
Value equal to the aggregate exercise price, or (iii) any combination of cash
and Shares, as the Board may determine.
(b) No Shares shall be granted under this Plan or issued or transferred
upon exercise of any Option under this Plan unless and until all legal
requirements applicable to the issuance or transfer of such Shares, and such
other requirements as are consistent with the Plan, have been complied with to
the satisfaction of the Board, including without limitation those described in
Paragraph 12 hereof.
9. Stock Adjustments.
(a) If the Corporation is a party to any merger or consolidation, any
purchase or acquisition of property or stock, or any separation, reorganization
or liquidation, the Board (or, if the Corporation is not the surviving
corporation, the board of directors of the surviving corporation) shall have the
power to make arrangements, which shall be binding upon the holders of unexpired
Options, for the substitution of new options for, or the assumption by another
corporation of, any unexpired Options then outstanding hereunder.
(b) If by reason of recapitalization, reclassification, stock split,
combination of shares, separation (including a spin-off) or dividend on the
stock payable in Shares, the outstanding Shares of the Corporation are increased
or decreased or changed into or exchanged for a different number or kind of
shares or other securities of the Corporation, the Board shall conclusively
determine the appropriate adjustment in the exercise prices of outstanding
Options and in the number and kind of shares as to which outstanding Options
shall be exercisable, in such manner as to result in the Options being
exercisable.
(c) In the event of a transaction of the type described in paragraphs (a)
and (b) above, the total number of Shares on which Options may be granted under
this Plan shall be appropriately adjusted by the Board.
10. Change of Control Provisions.
(a) Notwithstanding any other provision of the Plan to the contrary, in
the event of a Change of Control, any Options outstanding as of the date such
Change of Control is determined to have occurred and not then exercisable shall
become fully exercisable to the full extent of the original grant.
(b) A "Change of Control" shall mean:
(i) there shall have been consummated (a) any consolidation or
merger of the Corporation in which the Corporation is not the continuing or
surviving entity pursuant to which the Shares are converted into cash,
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securities or other property, other than a merger of the Corporation in which
the ownership by the Corporation's stockholders of the securities in the
surviving entity is in the same proportion as the ownership by the Corporation's
stockholders of the stock in the Corporation immediately prior to the merger or
(b) any sale, lease, exchange or other transfer (in one transaction or a series
of related transactions) of all or substantially all of the assets of the
Corporation; or
(ii) the stockholders of the Corporation have approved any plan or
proposal for the liquidation or dissolution of the Corporation; or
(iii) any person (as that term is used in Sections 13(d) and
14(d)(2) of the 1934 Act) has become the beneficial owner (within the meaning of
Rule 13d-3 promulgated under the 1934 Act) of 30% or more of the Corporation's
outstanding Shares; or
(iv) that during any period of two consecutive years, individuals
who, at the beginning of such period, constitute the entire Board shall cease,
for any reason, to constitute a majority thereof, unless the election, or the
nomination for election by the Corporation's stockholders, of each new director
was approved by a vote of at least three-quarters of the directors then still in
office who were directors at the beginning of the period.
11. No Rights Other Than Those Expressly Created. No person affiliated
with the Corporation or any Subsidiary or other person shall have any claim or
right to be granted an Option hereunder. Neither this Plan nor any action taken
hereunder shall be construed as (i) giving any Option holder any right to
continue to be affiliated with the Corporation, (ii) giving any Option holder
any equity or interest of any kind in any assets of the Corporation, or (iii)
creating a trust of any kind or a fiduciary relationship of any kind between the
Corporation and any such person. No Option holder shall have any of the rights
of a stockholder with respect to Shares covered by an Option, until such time as
the Option has been exercised and Shares have been issued to such person.
12. Miscellaneous.
(a) Withholding of Taxes. Pursuant to applicable federal, state,
local or foreign laws, the Corporation may be required to collect income or
other taxes upon the grant of an Option to, or exercise of an Option by, a
holder. The Corporation may require, as a condition to the exercise of an
Option, that the recipient pay the Corporation, at such time as the Board
determines, the amount of any taxes which the Board may determine is required to
be withheld.
(b) Securities Law Compliance. Upon exercise of an Option, the
holder shall be required to make such representations and furnish such
information as may, in the opinion of counsel for the Corporation, be
appropriate to permit the Corporation to issue or transfer the Shares in
compliance with the provisions of applicable federal or state securities laws.
The Corporation, in its discretion, may postpone the issuance and delivery of
Shares, upon any exercise
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of an Option, until completion of such registration or other qualification of
such Shares under any federal or state laws, or stock exchange listing, as the
Corporation may consider appropriate. The Corporation intends to register or
qualify the Shares under federal and state securities laws, but is not obligated
to register or qualify the Shares under such laws and may refuse to issue such
Shares if neither registration nor exemption therefrom is practical. The Board
may require that prior to the issuance or transfer of any Shares upon exercise
of an Option, the recipient enter into a written agreement to comply with any
restrictions on subsequent disposition that the Board or the Corporation deems
necessary or advisable under any applicable federal and state securities laws.
Certificates representing the Shares issued hereunder may contain a legend
reflecting such restrictions.
(c) Compliance with Rule 16b-3. With respect to a person subject to
Section 16 of the 1934 Act, transactions under this Plan are intended to comply
with all applicable conditions of Rule 16b-3 or its successors ("Rule 16b-3")
under the 1934 Act. To the extent any provision of the Plan or action by the
administrators of the Plan fails to so comply, it shall be deemed null and void,
to the extent permitted by law and deemed advisable by the administrators of the
Plan.
(d) Indemnity. The Board shall not be liable for any act, omission,
interpretation, construction or determination made in good faith in connection
with their responsibilities with respect to the Plan, and the Corporation hereby
agrees to indemnify the members of the Board, in respect of any claim, loss,
damage, or expense (including counsel fees) arising from any such act, omission,
interpretation, construction or determination, to the full extent permitted by
law.
(e) Options Not Deemed Incentive Stock Options. Options granted
under the Plan shall not be deemed incentive stock options as that term is
defined in Section 422 of the Internal Revenue Code of 1986, as amended.
13. Effective Date; Amendment; Termination.
(a) The effective date of this Plan shall be the date of the
approval of the Board.
(b) The Board may at any time, and from time to time, amend, suspend
or terminate this Plan in whole or in part, provided, however, that the
provisions of this Plan relating to the amount and price of securities to be
awarded and the timing of such awards may not be amended more than once every
six months, other than to comport with changes in the Internal Revenue Code, the
Employee Retirement Income Security Act, or the rules thereunder. However,
except as provided herein, no amendment, suspension or termination of this Plan
may affect the rights of any person to whom an Option has been granted without
such person's consent.
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(c) This Plan shall terminate five years from its effective date,
and no Option shall be granted under this Plan thereafter, but such termination
shall not affect the validity of Options granted prior to the date of
termination.
Date of Board of Directors Adoption: September 15, 1997
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