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Exhibit 4.4
APPLIED SCIENCE AND TECHNOLOGY, INC.
1994 FORMULA STOCK OPTION PLAN
ARTICLE I
PURPOSE OF THE PLAN
The purpose of this Plan is to encourage and enable non-employee Directors
who are in a position to make significant contributions to the success of
APPLIED SCIENCE AND TECHNOLOGY, INC. and of its affiliated corporations upon
whose judgment, initiative and efforts the Corporation depends for the
successful conduct of its business, to acquire a closer identification of their
interests with those of the Corporation by providing them with opportunities to
purchase stock in the Corporation pursuant to options granted hereunder, thereby
stimulating their efforts on behalf of the Corporation and strengthening their
desire to remain involved with the Corporation. Any non-employee Director
designated to participate in the Plan is referred to as a "Participant."
ARTICLE II
DEFINITIONS
2.1 "Affiliated Corporation" means any stock corporation of which a
majority of the voting common or capital stock is owned directly or indirectly
by the Corporation.
2.2 "Award" means an Option granted under Article V.
2.3 "Board" means the Board of Directors of the Corporation or, if one or
more has been appointed, a Committee of the Board of Directors of the
Corporation.
2.4 "Code" means the Internal Revenue Code of 1986, as amended from time
to time.
2.5 "Committee" means a Committee of not less than two members of the
Board appointed by the Board to administer the Plan.
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2.6 "Corporation" means APPLIED SCIENCE AND TECHNOLOGY, INC., a Delaware
corporation.
2.7 "Non-Employee" means any person who is not a regular full-time or
part-time employee of the Corporation or an Affiliated Corporation on or after
November 17, 1994.
2.8 "Non-Qualified Option" means any option not intended to qualify as an
Incentive Stock Option.
2.9 "Option" means a Non-Qualified Option granted by the Board under
Article V of this Plan in the form of a right to purchase Stock evidenced by an
instrument containing such provisions as the Board may establish.
2.10 "Participant" means a person who is to receive an award under the
Plan.
2.11 "Plan" means this 1994 Formula Stock Option Plan.
2.12 "Reporting Person" means a person subject to Section 16 of the
Securities Exchange Act of 1934 or any successor provision.
2.13 "Restricted Period" means the period of time selected by the Committee
during which an award may be forfeited by the person.
2.14 "Stock" means the Common Stock, $.01 par value, of the Corporation or
any successor, including any adjustments in the event of changes in capital
structure of the type described in Article IX.
ARTICLE III
ADMINISTRATION OF THE PLAN
3.1 ADMINISTRATION BY BOARD. This Plan may be administered by the Board of
Directors or by a committee of the Board of Directors of the Corporation
constituted to permit the Plan to comply with Rule 16b-3 promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). If a committee
administers this Plan, the Board may, from time
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to time, increase the size of the Committee or committees and appoint additional
members thereto, remove members (with or without cause) and appoint new members
in substitution therefor, fill vacancies however caused, or remove all members
of the Committee or committees and thereafter directly administer the Plan. No
member of the Board or a committee shall be liable for any action or
determination made in good faith with respect to the Plan or any options granted
hereunder. Subject to Article X and to the extent such actions are consistent
with the exemptions provided under Rule 16b-3 promulgated under the Exchange
Act, any committee appointed by the Board hereunder also shall have the
authority, both generally and in particular instances, to waive compliance by a
director with any obligation to be performed by him or her under the Plan and to
waive any condition, restriction or provision imposed under the Plan. Such
determinations and actions of the committee, and all other determinations and
actions of the committee made or taken under authority granted by any provision
of the Plan, will be conclusive and binding on all parties.
3.2 POWERS. The Board of Directors and/or any committee appointed by the
Board shall have full and final authority to operate, manage and administer the
Plan on behalf of the Corporation. This authority includes, but is not limited
to:
(a) The power to grant Awards conditionally or unconditionally,
(b) The power to prescribe the form or forms of any instruments evidencing
Awards granted under this Plan,
(c) The power to interpret the Plan, and to adopt, amend and rescind rules
and regulations for the administration of the Plan,
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(d) The power to delegate responsibility for Plan operation, management
and administration on such terms, consistent with the Plan, as the
Board may establish,
(e) The power to delegate to other persons the responsibility of
performing ministerial acts in furtherance of the Plan's purpose,
(f) The power to engage the services of persons, companies, or
organizations in furtherance of the Plan's purpose, including but not
limited to, banks, insurance companies, brokerage firms and
consultants, and
(g) To interpret the Plan and to decide any questions and settle all
controversies and disputes that may arise in connection with the Plan.
ARTICLE IV
ELIGIBILITY
4.1 ELIGIBLE PERSONS. All non-employee Directors are eligible to be
granted Non-Qualified Option Awards under this Plan provided the person has not
irrevocably elected to be ineligible to participate in the Plan and provided the
person is not a holder of more than 5% of the outstanding shares of stock of the
Company or a person who is in control of such holder.
ARTICLE V
STOCK OPTION AWARDS
5.1 NUMBER OF SHARES. Subject to the provisions of Article IX of this Plan,
the aggregate number of shares of Stock for which Options may be granted under
this Plan shall not exceed One Hundred Thousand (100,000) shares. Options shall
be granted under this Plan, without approval or discretion on the part of the
Board, to non-employee Directors as follows: beginning on November 18, 1994, and
annually thereafter on the business day immediately
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following the Corporation's annual meeting of stockholders, options shall be
granted under the Formula plan, without approval or discretion on the part of
the Board, to non-employee Directors as follows: Each non-employee Director who
is a Director on such date will receive options to purchase four thousand
(4,000) shares of stock, per year at the Annual Meeting each year. One thousand
(1,000) shares will vest immediately and one thousand (1,000) will vest per
quarter thereafter, subject to continued service as a Director of the
Corporation. The exercise price of such options will be the fair market value of
the shares of stock on the date of the grant, said options will continue to vest
and be exercisable subject to the Director's continued service as a Director of
the Corporation on such dates.
The shares to be delivered upon exercise of Options under this Plan shall
be made available, at the sole discretion of the Board, either from authorized
but unissued shares or from previously issued and reacquired shares of Stock
held by the Corporation as treasury shares, including shares purchased in the
open market. No fractional shares of Stock will be delivered under the Plan.
Stock issuable upon exercise of an option granted under the Plan may be
subject to such restrictions on transfer or repurchase rights as shall be
determined by the Board of Directors.
5.2 EFFECT OF EXPIRATION, TERMINATION OR SURRENDER. If an Option under
this Plan shall expire or terminate unexercised as to any shares covered
thereby, or shall cease for any reason to be exercisable in whole or in part, or
if the Company shall reacquire any unvested shares issued pursuant to Options
under the Plan, such shares shall thereafter be available for the granting of
other Options under this Plan.
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5.3 TERM OF OPTIONS. Each Option granted hereunder shall be for a term of
ten (10) years from the date of granting thereof. Each Option shall be subject
to earlier termination as provided in Sections 6.3 and 6.4.
5.4 FAIR MARKET VALUE. If, at the time an Option is granted under the
Plan, the Corporation's Stock is publicly traded, "fair market value" shall be
determined as of the last business day for which the prices or quotes discussed
in this sentence are available prior to the date such Option is granted and
shall mean (i) the average (on that date) of the high and low prices of the
Stock on the principal national securities exchange on which the Stock is
traded, if the Stock is then traded on a national securities exchange; or (ii)
the last reported sale price (on that date) of the Stock on the NASDAQ-NMS, if
the Stock is not then traded on a national securities exchange; or (iii) the
closing bid price (or average of bid prices) last quoted (on that date) by an
established quotation service for over-the-counter securities, if the Stock is
not reported on the NASDAQ-NMS. However, if the Stock is not publicly traded at
the time an Option is granted under the Plan, "fair market value" shall be
deemed to be the fair value of the Stock as determined by the Board after taking
into consideration all factors which it deems appropriate, including, without
limitation, recent sale and offer prices of the Stock in private transactions
negotiated at arm's length.
5.5 NON-TRANSFERABILITY OF OPTIONS. No Option granted under this Plan
shall be transferable by the grantee otherwise than by will or the laws of
descent and distribution, and such Option may be exercised during the grantee's
lifetime only by the grantee.
5.6 FOREIGN NATIONALS. Awards may be granted to Participants who are
foreign nationals or employed outside the United States on such terms and
conditions different from
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those specified in the Plan as the Committee considers necessary or advisable to
achieve the purposes of the Plan or comply with applicable laws.
ARTICLE VI
EXERCISE OF OPTION
6.1 EXERCISE. Each Option granted under this Plan shall be exercisable on
such date or dates and during such period and for such number of shares as shall
be determined pursuant to the provisions of the instrument evidencing such
Option. The Board shall have the right to accelerate the date of exercise of any
option.
6.2 NOTICE OF EXERCISE. A person electing to exercise an Option shall give
written notice to the Corporation of such election and of the number of shares
he or she has elected to purchase and shall at the time of exercise tender the
full purchase price of the shares he or she has elected to purchase. The
purchase price can be paid partly or completely in shares of the Corporation's
stock valued at Fair Market Value as defined in Section 5.4 hereof, or by any
such other lawful consideration as the Board may determine. Until such person
has been issued a certificate or certificates for the shares so purchased and
has fully paid the purchase price for such shares, he or she shall possess no
rights of a record holder with respect to any of such shares. If the Corporation
elects to receive payment for such shares by means of a promissory note, such
note, if issued to an officer, director or holder of 5% or more of the Company's
outstanding Common Stock, shall provide for payment of interest at a rate no
less than the interest rate then payable by the Company to its principal
commercial lender, or if the Company has no loan outstanding to a commercial
lender, then the interest rate payable shall equal the prevailing prime rate of
interest then charged by commercial banks headquartered in Minnesota (as
determined by the Board of Directors in its reasonable discretion) plus two
percent. An
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optionholder shall not have the rights of a stockholder with regard to awards
under the Plan except as to Stock actually received by him or her under the
Plan.
6.3 OPTION UNAFFECTED BY CERTAIN CHANGES. A Director's term shall be
considered as continuing uninterrupted during any bona fide leave of absence
(such as those attributable to illness, military obligations or governmental
service) provided that the period of such leave does not exceed 90 days or, if
longer, any period during which such optionee's right to reemployment is
guaranteed by statute. A bona fide leave of absence with the written approval of
the Board shall not be considered an interruption of service under the Plan.
If the optionee shall cease to be a Director for any reason other than
death, such Option shall thereafter be exercisable only to the extent of the
purchase rights, if any, which have accrued as of the date of such cessation;
provided that upon any such cessation of service, such remaining rights to
purchase shall in any event terminate upon the expiration of the original term
of the Option.
6.4 DEATH OF OPTIONEE. Should an optionee die while in possession of the
legal right to exercise an Option or Options under this Plan, such persons as
shall have acquired, by will or by the laws of descent and distribution, the
right to exercise any Options theretofore granted, may, unless otherwise
provided by the Board in any instrument evidencing any Option, exercise such
Options until the expiration of the original term of the Options, provided,
further, that any such exercise shall be limited to the purchase rights that
have accrued as of the date when the optionee ceased to be a Director whether by
death or otherwise.
ARTICLE VII
REPORTING PERSON LIMITATIONS
To the extent required to qualify for the exemption provided by Rule 16b-3
under the Securities Exchange Act of 1934, and any successor provision, at least
six months must elapse
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from the date of acquisition of an Option by a Reporting Person to the date of
disposition of such Option (other than upon exercise) or its underlying Common
Stock.
ARTICLE VIII
TERMS AND CONDITIONS OF OPTIONS
Options shall be evidenced by instruments (which need not be identical) in
such forms as the Board may from time to time approve. Such instruments shall
conform to the terms and conditions set forth in Articles V and VI hereof and
may contain such other provisions as the Board deems advisable that are not
inconsistent with the Plan, including restrictions applicable to shares of Stock
issuable upon exercise of Options. In granting any Non-Qualified Option, the
Board may specify that such Non-Qualified Option shall be subject to such other
termination and cancellation provisions as the Board may determine. The Board
may from time to time confer authority and responsibility on one or more of its
own members and/or one or more officers of the Corporation to execute and
deliver such instruments. The proper officers of the Corporation are authorized
and directed to take any and all action necessary or advisable from time to time
to carry out the terms of such instruments.
ARTICLE IX
BENEFIT PLANS
Awards under the Plan are not discretionary. Awards may not be used in
determining the amount of compensation for any purpose under the benefit plans
of the Corporation, or an Affiliated Corporation, except as the Board may from
time to time expressly provide. Neither the Plan, an Option or any instrument
evidencing an Option confers upon any Participant any right to continue as a
Director of, or consultant or advisor to, the Company or an Affiliated
Corporation. Except as specifically provided by the Board in any particular
case, the loss of existing or potential profits granted under this Plan shall
not constitute an element of damages in
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the event of termination of the relationship of a Participant even if the
termination is in violation of an obligation of the Corporation to the
Participant by contract or otherwise.
ARTICLE X
AMENDMENT, SUSPENSION OR TERMINATION OF THE PLAN
The Board may suspend the Plan or any part thereof at any time or may
terminate the Plan in its entirety. Awards shall not be granted after Plan
termination. The Plan may not be amended more than once every six months, unless
such changes are necessary to comport with changes in the Code, the Employee
Retirement Income Security Act, or the Rules thereunder. Subject to the
foregoing, the Board may also amend the Plan from time to time, except that
amendments that affect the following subjects must be approved by stockholders
of the Corporation:
(a) Except as provided in Article XI relative to capital changes, the
number of shares as to which Options may be granted pursuant to
Article V;
(b) The maximum term of Options granted;
(c) The minimum price at which Options may be granted;
(d) The term of the Plan; and
(e) The requirements as to eligibility for participation in the Plan.
Awards granted prior to suspension or termination of the Plan may not be
cancelled solely because of such suspension or termination, except with the
consent of the grantee of the Award.
ARTICLE XI
CHANGES IN CAPITAL STRUCTURE
The instruments evidencing Options granted hereunder shall be subject to
adjustment in the event of changes in the outstanding Stock of the Corporation
by reason of stock dividends,
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Stock splits, recapitalizations, reorganizations, mergers, consolidations,
combinations, exchanges or other relevant changes in capitalization occurring
after the date of an Award to the same extent as would affect an actual share of
Stock issued and outstanding on the effective date of such change. Such
adjustment to outstanding Options shall be made without change in the total
price applicable to the unexercised portion of such options, and a corresponding
adjustment in the applicable option price per share shall be made. In the event
of any such change, the aggregate number and classes of shares for which Options
may thereafter be granted under Section 5.1 of this Plan may be appropriately
adjusted as determined by the Board so as to reflect such change.
In the event of the proposed dissolution or liquidation of the Corporation,
each Option will terminate immediately prior to the consummation of such
proposed action or at such other time and subject to such other conditions as
the Board shall determine.
Except as expressly provided herein, no issuance by the Corporation of
shares of stock of any class, or securities convertible into shares of stock of
any class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares subject to Options. No adjustments
shall be made for dividends paid in cash or in property other than securities of
the Corporation.
No fractional shares shall be issued under the Plan and the optionee shall
receive from the Corporation cash in lieu of such fractional shares.
ARTICLE XII
EFFECTIVE DATE AND TERM OF THE PLAN
The Plan shall become effective on November 17, 1994. The Plan shall
continue until such time as it may be terminated by action of the Board or the
Committee; provided, however,
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that no Options may be granted under this Plan on or after the tenth anniversary
of the effective date hereof.
ARTICLE XIII
APPLICATION OF FUNDS
The proceeds received by the Corporation from the sale of shares pursuant
to Options granted under the Plan shall be used for general corporate purposes.
ARTICLE XIV
GOVERNMENTAL REGULATIONS
The Corporation's obligation to sell and deliver shares of Stock under this
Plan is subject to the approval of any governmental authority required in
connection with the authorization, issuance or sale of such shares.
ARTICLE XV
WITHHOLDING OF ADDITIONAL INCOME TAXES
Upon the exercise of a Non-Qualified Option the Corporation, in accordance
with Section 3402(a) of the Code, may require the optionee to pay additional
withholding taxes in respect of the amount that is considered compensation
includible in such person's gross income. The Board in its discretion may
condition the exercise of an Option on the payment of such additional
withholding taxes.
ARTICLE XVI
CONDITIONS ON DELIVERY OF STOCK
The Company shall not be obligated to deliver any shares of Stock pursuant
to options granted under the Plan until, (a) in the opinion of the Company's
counsel, all applicable federal and state laws and regulations have been
complied with, and (b) all other legal matters in connection with the issuance
and delivery of such shares have been approved by the Company's
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counsel. If the sale of Stock has not been registered under the Securities Act
of 1933, as amended, the Company may require, as a condition to exercise of the
option, such representations or agreements as counsel for the Company may
consider appropriate to avoid violation of such Act and may require that the
certificates evidencing such Stock bear an appropriate legend restricting
transfer.
ARTICLE XVII
GOVERNING LAW; CONSTRUCTION
The validity and construction of the Plan and the instruments evidencing
Options shall be governed by the internal laws of the Sate of Delaware (without
regard to the conflict of law principles thereof). In construing this Plan, the
singular shall include the plural and the masculine gender shall include the
feminine and neuter, unless the context otherwise requires.
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