EXHIBIT 10.3
ANALOG DEVICES BV (IRELAND) EMPLOYEE STOCK OPTION PROGRAM
1. DEFINITIONS
1.1. In these Rules the following words and expressions shall have the
following meanings :
"Act" the Taxes Consolidation Act, 1997,
"Adoption Date" the date on which the Scheme is adopted by
the Board,
"Analog Devices, Inc. the stock option plan adopted by the board
1998 Stock Option Plan of directors of Analog Devices, Inc. and
approved by the stockholders of Analog
Devices, Inc. on 15th January, 1998 and 10th
March, 1998 respectively,
"Base Pay" the remuneration of an Eligible Employee for
a Year of Assessment including shift
differentials, paid holidays and sick leave
but excluding overtime and any other
fluctuating emoluments,
"Board" the Board of Directors of the Company or,
except in Rule 10.4, a duly constituted
committee thereof,
"Company" Analog Devices BV
"Control" has the meaning assigned to it in section
432 of the Act,
"Date of Grant" the date on which an Option is granted,
"Date of Exercise" the date on which an Option is exercised,
"Directors" the directors for the time being of the
Company,
"Eligible Employee" every person, subject to Rule 6, who on the
Date of Grant and on the Date of Exercise;
(a) is an employee of the Company or a
Participating Company, or
(b) is a full-time director of the Company
or a Participating Company and
(c) is chargeable to tax under Schedule E in
respect of that employment,
PROVIDED that no person shall be an Eligible
Employee if that person is ineligible to
participate in the Scheme by virtue of
paragraph 7, Schedule 12C, to the Act,
"Market Value" the composite closing price of the common
stock of Analog Devices, Inc. on the New
York Stock Exchange as reported in The Wall
Street Journal on the Date of Grant",
"Key Director" a full-time director of the Company whose
specialist skills, qualifications and
relevant experience are vital to the future
success of the Company and is so certified
to the Revenue Commissioners by the Company,
"Key Employee" an employee of the Company whose specialist
skills, qualifications and relevant
experience are vital to the future success
of the Company and is so certified to the
Revenue Commissioners by the Company,
"Option" a right to acquire Shares granted in
accordance with the Rules of the Scheme,
"Option" a document evidencing the option in such
Agreement" form as the Board shall determine and which
has been agreed in writing with the Revenue
Commissioners,
"Option Holder" an individual to whom an Option has been
granted (including where the context
permits, the legal personal representatives
of a deceased Option Holder),
"Participating Company" Any Irish resident company under the Control
of Analog Devices BV,
"Rules" the rules of the Scheme as amended from time
to time,
"the Scheme" means the Analog Devices BV (Ireland)
Employee Stock Option Program constituted
and governed by these Rules as from time to
time amended,
"Shares" fully paid up shares of common stock
$.016-2/3 par value of Analog Devices Inc.
which comply with the provisions of
paragraphs 11 to 16, of Schedule 12C, to the
Act,
"Subscription Price" the price at which each Share subject to an
Option may be acquired on the exercise of
that Option, being, subject to Rule 5.1, the
Market Value of a Share, on the day that the
Option was granted,
"Vesting Date" the second anniversary of the Date of Grant
"Year of Assessment" has the meaning assigned to it by section 2
of the Act.
1.2. Words importing the singular shall include the plural, and vice versa, and
words importing the masculine shall include the feminine.
1.3. Any reference to any statute (or a particular Part, Chapter or Section
thereof) shall mean and include any statutory modification or re-enactment
thereof for the time being in force, and any regulations made thereunder.
2. THE SCHEME
2.1 This Scheme is subject to the rules of the Analog Devices, Inc. 1998 Stock
Option Plan and is a sub-scheme of the Analog Devices, Inc. 1998 Stock
Option Plan.
2.2 In the event of any difference between the rules of the Analog Devices,
Inc. 1998 Stock Option Plan and the Rules of the Scheme, the Rules of the
Scheme shall prevail.
3. GRANT OF OPTIONS
3.1. The Board may, at any time following the Adoption Date, grant Options to
each Eligible Employee to purchase Shares at the Subscription Price.
3.2. Subject to Rules 3.2.1, 3.2.2, 3.2.3, 3.3, 3.4, and 4, the form manner and
timing of the grant of Options, any terms and conditions attaching to the
grant of Options and the basis on which the number of Shares over which an
individual shall be granted an Option shall be at the absolute discretion
of the Board,
PROVIDED that not less than 70% of the total number of Shares over which
Options are granted by the Board in any Year of Assessment shall be
granted to Eligible Employees (excluding Key Directors and Key Employees).
3.2.1. The form, manner and timing, any terms and conditions and the
basis on which the number of Shares over which any individual
shall be granted an Option shall be the same for all Eligible
Employees, (excluding, at the discretion of the Board, Key
Directors and Key Employees).
3.2.2. The basis upon which the number of Shares over which Eligible
Employees are granted Options (excluding, at the discretion of the
Board, Key Directors and Key Employees) shall be determined in
accordance with Rule 4 below.
3.2.3. Key Directors and Key Employees who are granted Options pursuant
to Rule 3.3 shall not be granted Options pursuant to this Rule
3.2.
3.3. A maximum amount not exceeding 30% of the total number of Shares in
respect of which Options have been granted to all Eligible Employees (including
Key Directors and Key Employees) participating in the Scheme shall be available
for grant by the Board to Key Directors and Key Employees in any Year of
Assessment.
3.4. As soon as possible after Options have been granted the Board shall issue
an Option Agreement in respect of each Option.
3.5. No Option may be transferred, assigned or charged, and any purported
transfer, assignment or charge shall cause the Option to lapse forthwith. Each
Option Agreement shall carry a statement to this effect.
4. CALCULATION OF ENTITLEMENT
4.1. Subject to Rule 3.2.1 the number of Shares over which an Option is granted
to each Eligible Employee on each Date of Grant shall be such an amount as the
Board shall determine, expressed as 10% of Base Pay converted to US dollars at
the exchange rate prevailing at the Date of Grant, divided by the Market Value
of a Share on the Date of Grant.
Provided that if an Eligible Employee's Base Pay converted to U.S.
dollars at the exchange rate prevailing at the Date of Grant exceeds
US$250,000 the number of Shares over which an Option is granted to
such Eligible Employee on the Date of Grant shall be expressed as
10% of US$250,000, divided by the Market Value of a Share on the
Date of Grant.
5. STOCK SPLITS ETC.
5.1 In the event of any stock split, reverse stock split, stock dividend,
recapitalisation, combination of shares, reclassification of shares,
spin-off or other similar change in capitalization or event, or any
distribution to holders of Shares other than a normal cash dividend, then
the number and class of Shares and the Subscription Price of a Share
subject to an Option shall be appropriately adjusted by the Company to the
extent the Board shall determine, in good faith, is appropriate and
necessary
Provided that no such adjustment to the Subscription Price shall be made
without the prior written approval of the Revenue Commissioners and
Provided also that following such adjustment the Shares shall continue to
satisfy the conditions specified in paragraphs 12 to 16 inclusive,
Schedule 12C, to the Act.
5.2 Except on the occurrence of an event listed at Rule 5.1 no adjustment
shall be made to the Subscription Price of a Share subject to an Option.
6. EXERCISE OF OPTIONS
6.1. Subject to Rules 6.3, 6.4, 6.5 and 6.6, any Option which has not lapsed
may be exercised in whole or in part at any time following the earliest of
the following events;
i. the Vesting Date
ii. the death of the Option Holder.
6.2. Subject to Rules 6.3, 6.4, 6.5 and 6.6, an Option shall lapse on the
earliest of the following events;
i. the tenth anniversary of the Date of Grant
ii. the first anniversary of the Option Holder's death
6.3 If the Company or a Participating Company terminates the employment of an
Eligible Employee for cause all his Options shall lapse on termination.
6.4 If an Eligible Employee leaves the employment of the Company or a
Participating Company of his own accord then:
i. any Options which cannot be exercised due to the provisions of Rule 6.1
shall lapse, and
ii. all or any part of any Options capable of exercise in accordance with Rule
6.1 on the last day of his employment with the Company or a Participating
Company may be exercised within 90 days of such date.
6.5 If an Eligible Employee leaves the employment of the Company or a
Participating Company due to disability or retirement, then all Options
which on the last day of his employment are incapable of exercise due to
Rule 6.1 shall continue to be exercisable in accordance with the Rules. An
Employee is disabled if he is unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental
impairment which can be expected to result in death or which has lasted or
can be expected to last for a continuous period of not less than 12
months. An individual shall not be considered to be disabled unless he
furnishes proof of the existence thereof in the form of a doctor's
certification. An Eligible Employee has retired if he terminates
employment voluntarily after having (i) attained age 62, (ii) completed
ten years of service and (iii) prior to termination of employment had
completed an orderly transition of his duties and responsibilities. An
Eligible Employee has completed 10 years of service if his total period of
service with the Company, including service with any Participating Company
and service before the Company was acquired by Analog Devices, Inc.,
equals or exceeds 10 years. Periods when the Eligible Employee is absent
from service due to illness, holiday, approved leave of absence or other
similar reason shall be treated as periods of service. Service need not be
continuous; periods of service shall be aggregated.
6.6 If an Eligible Employee leaves the employment of the Company or a
Participating Company due to redundancy, then all Options which on the
last day of his employment are incapable of exercise due to Rule 6.1 shall
continue to be exercisable in accordance with the Rules, provided that any
such Option must be exercised with
90 days of its Vesting Date. Any Option not exercised within the 90 day
period aforesaid shall lapse.
7. TAKE-OVERS
7.1. If a company (in this Rule referred to as "the Acquiring Company") -
obtains Control of Analog Devices Inc. as a result of making a general
offer to;
(i) acquire the whole of the issued ordinary share capital of Analog
Devices Inc. which is made on condition such that if it is satisfied
the person making the offer will have Control of Analog Devices,
Inc., or
(ii) acquire all the shares in Analog Devices, Inc. which are of the
same class as the scheme Shares
the Option Holder may with the agreement of the Acquiring Company within the
"appropriate period" referred to in Rule 7.2 release each Subsisting Option
("the Old Option") in consideration of the grant of a new option ("the New
Option") which satisfies the conditions that it
i. is over shares in the Acquiring Company or some other company falling
within sub-paragraphs (b) or (c) of paragraph 12, Schedule 12C, to the
Act, which satisfy the conditions specified in paragraphs 12 to 16
inclusive, Schedule 12C, to the Act;
ii. is a right to acquire such number of such Shares as has on acquisition of
the New Option an aggregate Market Value equal to the aggregate Market
Value of the Shares subject to the Old Option on its release;
iii. has a Subscription Price per share such that the aggregate price payable
on the complete exercise equals the aggregate price which would have been
payable on complete exercise of the Old Option; and
iv. is otherwise identical in terms to the Old Option.
7.2. The "appropriate period" referred to in Rule 7.1 is 6 months beginning
with the time when the person making the offer has obtained Control of Analog
Devices, Inc. and any condition subject to which the offer is made is satisfied;
7.3. Where an Option Holder is granted a New Option for release of his Old
Option in accordance with Rule 7.1 then;
(i) the New Option shall be treated as having been acquired at the same time as
the Old Option and be exercisable in the same manner as the Old Option,
(ii) the New Option shall be subject to the provisions of the Scheme as it had
effect in relation to the Old Option immediately before the release, and
(iii) with effect from the release of the Old Option and the grant of the New
Option, the provisions of Rules 6,7,8, and 10 shall, in relation to the New
Option be construed as if references to Analog Devices Inc. and to the Shares
were references to the Acquiring Company or, as the case may be, to the other
company to whose shares the New Options relate, and to the shares in that other
company, but references to Participating Company shall continue to be construed
as if references to the Company were references to Analog Devices BV.
7.4. For the purposes of this Rule 7 a person shall be deemed to have obtained
Control of Analog Devices Inc. if he and others acting in concert with him have
together obtained Control of it.
7.5. The exercise of an Option pursuant to the preceding provisions of this
Rule 7 shall be subject to the provisions of Rule 8 below.
8. MANNER OF EXERCISE OF OPTIONS
8.1. No Option shall be exercised by an individual at any time when he is, or
by the personal representatives of an individual who at the date of his death
was, precluded by paragraph 7, of Schedule 12C, to the Act from participating in
the Scheme.
8.2. Subject to Rule 5.1 no Option shall be exercised at any time when the
shares which may be thereby acquired are not Shares as defined in Rule 1.1.
8.3 An Option shall be exercised by the Option Holder, or as the case may be,
his personal representatives, by
i. by delivering to the Company a written notice of exercise, e-mail or other
form of notice approved by the Board and accompanied by the appropriate
payment.
8.4. Shares shall be allotted and issued or transferred pursuant to a notice of
exercise within thirty days of the date of exercise. Save for any rights
determined by reference to a date preceding the date of allotment, such Shares
shall rank pari passu with the other Shares of the same class in issue at that
date of allotment.
8.5. When an Option is exercised only in part, the balance shall remain
exercisable on the same terms as originally applied to the whole Option and the
terms of the Option Agreement issued with respect to the whole Option shall
continue to apply to the unexercised balance. A new Option Agreement shall not
be issued.
9. SALE OF SHARES
9.1. Where an Option Holder disposes of any of the Shares acquired by him on
the exercise of an Option granted under the Scheme within a period of three
years from the Date of Grant he must notify the Company of any such disposal.
10. ADMINISTRATION AND AMENDMENT
10.1. The Scheme shall be administered by the Board whose decision on all
disputes shall be final.
10.2. The Company may from time to time by resolution of the Board amend these
Rules provided that;
i. no amendment shall materially affect an Option Holder as regards an Option
granted prior to the amendment being made,
ii. no amendment shall be made which would make the terms on which Options may
be granted materially more generous without the prior approval of the Company in
general meeting,
iii. no amendment shall be made without the prior written approval of the
Revenue Commissioners.
10.3. The costs of establishing and operating the Scheme shall be borne by the
Company.
10.4. The Board may establish a committee consisting of not less than three
Board members to whom any or all of its powers in relation to the Scheme may be
delegated.
10.5 The Board may at any time dissolve the committee, alter its constitution
or direct the manner in which it shall act.
10.6. Any notice or other communication under or in connection with the Scheme
may be given by the Company either personally or by post and to the Company
either personally or by post to the secretary. Items sent by post shall be
pre-paid and shall be deemed to have been received seventy two hours after
posting.
10.7. The Company shall at all times ensure that there are available sufficient
authorised and unissued Shares to satisfy the exercise to the full extent still
possible of all Options which have neither lapsed nor been fully exercised,
taking account of any other obligations of the Company to issue unissued Shares.
11. GENERAL
11.1 These Rules shall be governed by and construed in accordance with the laws
of Ireland.
11.2 The Options granted hereunder are not intended to be Incentive Stock
Options within the meaning of Section 422 of The US Internal Revenue Code of
1986.
11.3 No Option may be granted under the Scheme after January 14, 2008, but
Options previously granted may extend beyond that date.
11.4 These Rules shall not apply to any option granted under any other plan,
scheme or similar arrangement.
ANALOG DEVICES, INC.
FIRST AMENDMENT TO
1998 ANALOG DEVICES BV (IRELAND) EMPLOYEE STOCK OPTION PROGRAM
The Analog Devices BV (Ireland) Employee Stock Option Program (the
"Plan"), pursuant to Rule 10.2 thereof, is hereby amended as follows retroactive
to June 1, 2001:
1. That Rule 8.3(ii) of the Plan be and hereby is deleted in its
entirety.
2. That Rule 8.4 of the Plan be and hereby is amended to read as
follows:
8.4. Shares shall be allotted and issued or transferred pursuant to
a notice of exercise within thirty days of the date of
exercise. Save for any rights determined by reference to a
date preceding the date of allotment, such Shares shall rank
pari passu with the other Shares of the same class in issue at
that date of allotment.
Approved by the Board of Directors on September 5, 2001.