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Exhibit 10-8
ANALOG DEVICES, INC.
1994 DIRECTOR OPTION PLAN
1. PURPOSE
The purpose of this 1994 Director Option Plan (the "Plan") of Analog
Devices, Inc. (the "Company") is to encourage ownership in the Company by
outside directors of the Company whose continued services are considered
essential to the Company's future progress and to provide them with a further
incentive to remain as directors of the Company.
2. ADMINISTRATION
The Board of Directors shall supervise and administer the Plan. Grants
of stock options under the Plan and the amount and nature of the awards to be
granted shall be automatic and non- discretionary in accordance with Section 5.
However, all questions of interpretation of the Plan or of any options issued
under it shall be determined by the Board of Directors and such determination
shall be final and binding upon all persons having an interest in the Plan.
3. PARTICIPATION IN THE PLAN
Directors of the Company who are not employees of the Company or any
subsidiary of the Company shall be eligible to participate in the Plan.
4. STOCK SUBJECT TO THE PLAN
(a) The maximum number of shares which may be issued under the Plan
shall be two hundred thousand (200,000) shares of the Company's Common Stock,
par value $.16-2/3 per share ("Common Stock"), subject to adjustment as
provided in Section 9 of the Plan.1
(b) If any outstanding option under the Plan for any reason expires or
is terminated without having been exercised in full, the shares allocable to
the unexercised portion of such option shall again become available for grant
pursuant to the Plan.
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1 The maximum number of shares issuable under the Plan and the references to
the number of shares purchasable upon exercise of options (as set forth
in Section 5) have been adjusted to reflect the 3-for-2 stock split, to be
effected in the form of a 50% stock dividend, approved by the Board of
Directors of the Company on November 29, 1994 and to be distributed on January
4, 1995 to stockholders of record December 12, 1994.
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(c) All options granted under the Plan shall be non-statutory options
not entitled to special tax treatment under Section 422 of the Internal Revenue
Code of 1986, as amended to date and as may be amended from time to time (the
"Code").
5. TERMS, CONDITIONS AND FORM OF OPTIONS
Each option granted under the Plan shall be evidenced by a written
agreement in such form as the Board of Directors shall from time to time
approve, which agreements shall comply with and be subject to the following
terms and conditions:
(a) Automatic Option Grants.
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(i) An option for the purchase of 5,250 shares of Common Stock
shall be granted automatically to each eligible director at the close of
business on the date the Plan is approved by the Board of Directors of the
Company (December 7, 1994), subject to shareholder approval of the Plan at the
1995 Annual Meeting of Stockholders.
(ii) Each eligible director who is first elected or appointed
to serve on the Board after December 7, 1994 shall be granted an option to
purchase 5,250 shares of Common Stock upon such election or appointment.
(iii) Each such eligible director shall be granted an
additional option to purchase 5,250 shares of Common Stock upon each of the
first, second and third "Anniversary Dates" (as defined below) of the initial
option grant to such eligible director; provided that such person is an
eligible director on the applicable Anniversary Date.
(iv) The Anniversary Dates of an eligible director who was a
member of the Board of Directors on December 7, 1994 shall be December 7, 1995
and successive anniversaries thereof. The Anniversary Dates of an eligible
director who is first elected or appointed to the Board of Directors after
December 7, 1994 shall be the date which is twelve (12) months after such
election or appointment and the successive anniversaries thereof.
(b) OPTION EXERCISE PRICE. The option exercise price per share for
each option granted under the Plan shall equal (i) the last reported sales
price per share of the Company's Common Stock, as listed on a nationally
recognized securities exchange, on the date of grant (or, if no such price is
reported on such date, such price as reported on the nearest preceding day); or
(ii) the fair market value of the stock on the date of grant, as determined by
the Board of Directors, if the Common Stock is not publicly traded.
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(c) OPTIONS NON-TRANSFERABLE. Each option granted under the Plan by
its terms shall not be transferable by the optionee other- wise than by will,
or by the laws of descent and distribution, or pursuant to a qualified domestic
relations order (as defined in Section 414(p) of the Code), and shall be
exercised during the lifetime of the optionee only by him. No option or
interest therein may be transferred, assigned, pledged or hypothecated by the
optionee during his lifetime, whether by operation of law or otherwise, or be
made subject to execution, attachment or similar process.
(d) EXERCISE PERIOD. Each option shall vest and be exercisable on a
cumulative basis as to one-third of the shares subject to such option on each
of the first, second and third Anniversary Dates of the grant of such option,
PROVIDED that, subject to the provisions of Sections 5(e) and 5(f), no option
may be exercised more than 90 days after the optionee ceases to serve as a
director of the Company and such option may then only be exercised for the
purchase of such number of shares as were vested and exercisable at the time of
such termination. No option shall be exercisable after the expiration of ten
(10) years from the date of grant or prior to approval of the Plan by the
stockholders of the Company.
(e) EXERCISE PERIOD UPON RETIREMENT. Notwithstanding the provisions
of Section 5(d), in the event an optionee ceases to be a director by reason of
retirement of the optionee as a director at the retirement age determined by
the Company or by reason of the Company's failure to nominate the optionee for
reelection as a director (other than for such director's refusal to serve as a
director), each option then held by such director shall, at the time he or she
ceases to be a director, be exercisable for that number of shares of Common
Stock which equals the sum of (i) the shares which are then vested and
exercisable and (ii) the shares which would otherwise become vested and
exercisable at the next succeeding Anniversary Date.
(f) EXERCISE PERIOD UPON DEATH OR DISABILITY. Notwithstanding the
provisions of Section 5(d), any option granted under the Plan:
(i) may be exercised in full by an optionee who becomes
disabled (within the meaning of Section 22(e)(3) of the Code
or any successor provision thereto) while serving as a
director of the Company; or
(ii) may be exercised
(x) in full upon the death of an
optionee while serving as a director of the
Company, or
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(y) to the extent then exercisable
upon the death of an optionee within 90 days
of ceasing to serve as a director of the
Company,
by the person to whom it is transferred by will, by the laws of descent
and distribution, or by written notice filed pursuant to Section 5(i);
in each such case within the period of one year after the date the optionee
ceases to be such a director by reason of such death or disability; provided,
that no option shall be exercisable after the expiration of ten (10) years from
the date of grant or prior to the approval of the Plan by the stockholders of
the Company.
(g) EXERCISE PROCEDURE. Options may be exercised only by written
notice to the Company at its principal office accompanied by payment of the
full consideration for the shares as to which they are exercised.
(h) PAYMENT OF PURCHASE PRICE. Options granted under the Plan may
provide for the payment of the exercise price (i) by delivery of cash or a
check to the order of the Company in an amount equal to the exercise price of
such options or, (ii) to the extent provided in the applicable option
agreement, by delivery to the Company of shares of Common Stock of the Company
already owned by the optionee having a fair market value equal in amount to the
exercise price of the options being exercised, or (iii) by any combination of
such methods of payment. The fair market value of any shares of the Company's
Common Stock which may be delivered upon exercise of an option shall be
determined by the Board of Directors.
(i) EXERCISE BY REPRESENTATIVE FOLLOWING DEATH OF DIRECTOR. A
director, by written notice to the Company, may designate one or more persons
(and from time to time change such designation) including his legal
representative, who, by reason of his death, shall acquire the right to
exercise all or a portion of the op- tion. If the person or persons so
designated wish to exercise any portion of the option, they must do so within
the term of the option as provided herein. Any exercise by a representative
shall be subject to the provisions of the Plan.
6. ASSIGNMENTS
The rights and benefits under the Plan may not be assigned except for
the designation of a beneficiary as provided in Section 5.
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7. TIME FOR GRANTING OPTIONS
All options for shares subject to the Plan shall be granted, if at all,
not later than ten (10) years after the approval of the Plan by the Company's
stockholders.
8. LIMITATION OF RIGHTS
(a) NO RIGHT TO CONTINUE AS A DIRECTOR. Neither the Plan, nor the
granting of an option nor any other action taken pursuant to the Plan, shall
constitute or be evidence of any agreement or understanding, express or
implied, that the Company will retain a director for any period of time.
(b) NO STOCKHOLDERS' RIGHTS FOR OPTIONS. An optionee shall have no
rights as a stockholder with respect to the shares covered by his options until
the date of the issuance to him of a stock certificate therefor, and no
adjustment will be made for dividends or other rights for which the record date
is prior to the date such certificate is issued.
9. CHANGES IN COMMON STOCK
(a) If (x) the outstanding shares of Common Stock are exchanged for a
different number or kind of shares or other securities of the Company, or (y)
the outstanding shares of Common Stock are increased or decreased as a result
of any recapitalization, reclassification, stock dividend or stock split
(except for the 3-for-2 stock split approved by the Board of Directors on
November 29, 1994, which has been reflected in the Plan as adopted by the Board
of Directors on December 7, 1994), reverse stock split or other similar
transaction, an appropriate and proportionate adjustment shall be made in (i)
the maximum number and kind of shares reserved for issuance under the Plan, and
(ii) the number and kind of shares or other securities subject to then
outstanding options under the Plan and (iii) the price for each share subject
to any then outstanding options under the Plan, without changing the aggregate
purchase price as to which such options remain exercisable. No fractional
shares will be issued under the Plan on account of any such adjustments.
Notwithstanding the foregoing, no adjustment shall be made pursuant to this
Section 9 if such adjustment would cause the Plan to fail to comply with Rule
16b-3 or any successor rule promulgated pursuant to Section 16 of the
Securities Exchange Act of 1934.
(b) If any event occurs that would constitute a "Change of Control"
within the meaning of clause (iii) or (iv) of Section 10 below, the Board of
Directors of the Company, or the board of directors of any corporation assuming
the obligations of the Company, shall, subject to the provisions of Section 10,
as to outstanding options, take one or more of the following actions: (i)
provide that such options shall be assumed, or equivalent
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options shall be substituted, by the acquiring or succeeding corporation (or an
affiliate thereof), (ii) upon written notice to the optionees, provide that all
unexercised options will terminate immediately prior to the consummation
of such transaction unless exercised by the optionee within a specified period
following the date of such notice, or (iii) if, under the terms of a merger
transaction, holders of the Common Stock of the Company will receive upon
consummation thereof a cash payment for each share surrendered in the merger
(the "Merger Price"), make or provide for a cash payment to the optionees equal
to the difference between (A) the Merger Price times the number of shares of
Common Stock subject to such outstanding options (to the extent then
exercisable at prices not in excess of the Merger Price) and (B) the aggregate
exercise price of all such outstanding options in exchange for the termination
of such options.
10. CHANGE IN CONTROL
Notwithstanding any other provision to the contrary in this Plan, in
the event of a Change of Control (as defined below), all options outstanding as
of the date such Change in Control occurs shall become exercisable in full,
whether or not exercisable in accordance with their terms. A "Change in
Control" shall occur or be deemed to have occurred only if any of the following
events occur: (i) any "person," as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended, (other than the
Company, any trustee or other fiduciary holding securities under an employee
benefit plan of the Company, or any corporation owned directly or indirectly by
the stockholders of the Company in substantially the same proportion as their
ownership of stock of the Company) is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Securities Exchange Act of 1934), directly or
indirectly, of securities of the Company representing 50% or more of the
combined voting power of the Company's then outstanding securities; (ii)
individuals who, as of July 1, 1992, constitute the Board of Directors of the
Company (as of the date thereof, the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board, provided that any person becoming
a director subsequent to the date thereof whose election, or nomination for
election by the Company's stockholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board (other than an
election or nomination of an individual whose initial assumption of office is
in connection with an actual or threatened election contest relating to the
election of the directors of the Company, as such terms are used in Rule 14a-11
of Regulation 14A under the Securities Exchange Act of 1934) shall be, for
purposes of this Agreement, considered as though such person were a member of
the Incumbent Board; (iii) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than (A) a
merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either
by remaining outstanding
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or by being converted into voting securities of the surviving entity) more than
50% of the combined voting power of the voting securities of the Company or
such surviving entity outstanding immediately after such merger or
consolidation or (B) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which no "person"
(as hereinabove defined) acquires more than 30% of the combined voting power of
the Company's then outstanding securities; or (iv) the stockholders of the
Company approve a plan of complete liquidation of the Company or an agreement
for the sale or disposition by the Company of all or substantially all of the
Company's assets."
11. AMENDMENT OF THE PLAN
The Board of Directors may suspend or discontinue the Plan or review or
amend it in any respect whatsoever; provided, however, that without approval of
the stockholders of the Company no revision or amendment shall change the
number of shares subject to the Plan (except as provided in Section 9), change
the designation of the class of directors eligible to receive options, or
materially increase the benefits accruing to participants under the Plan. The
Plan may not be amended more than once in any six- month period.
12. WITHHOLDING
The Company shall have the right to deduct from payments of any kind
otherwise due to the optionee any federal, state or local taxes of any kind
required by law to be withheld with respect to any shares issued upon exercise
of options under the Plan.
13. EFFECTIVE DATE AND DURATION OF THE PLAN
(a) EFFECTIVE DATE. The Plan shall become effective when adopted by
the Board of Directors, but no option granted under the Plan shall become
exercisable unless and until the Plan shall have been approved by the Company's
shareholders. If such shareholder approval is not obtained within twelve
months after the date of the Board's adoption of the Plan, all options granted
under the Plan shall terminate and no further options shall be granted under
the Plan. Amendments to the Plan not requiring shareholder approval shall
become effective when adopted by the Board of Directors; amendments requiring
shareholder approval (as provided in Section 11) shall become effective when
adopted by the Board of Directors, but no option granted after the date of such
amendment shall become exercisable (to the extent that such amendment to the
Plan was required to enable the Company to grant such option to a particular
optionee) unless and until such amendment shall have been approved by the
Company's shareholders. If such shareholder approval is not obtained within
twelve months of the Board's adoption of such amendment, any options granted on
or after the date of such amendment shall terminate to the extent that such
amendment to the Plan was required to enable the Company to grant
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such option to a particular optionee. Subject to this limitation, options may
be granted under the Plan at any time after the effective date and before the
date fixed for termination of the Plan.
(b) TERMINATION. Unless sooner terminated in accordance with Section
9, the Plan shall terminate upon the earlier of (i) the close of business on
the day next preceding the fifth anniversary of the date of its approval by the
Company's stockholders, or (ii) the date on which all shares available for
issuance under the Plan shall have been issued pursuant to the exercise or
cancellation of options granted under the Plan. If the date of termination is
determined under (i) above, then options outstanding on such date shall
continue to have force and effect in accordance with the provisions of the
instruments evidencing such options.
14. NOTICE
Any written notice to the Company required by any of the provisions of
the Plan shall be addressed to the Treasurer of the Company and shall become
effective when it is received.
15. COMPLIANCE WITH RULE 16B-3
Transactions under the Plan are intended to comply with all applicable
conditions of Rule 16b-3 or its successor promulgated pursuant to Section 16 of
the Securities Exchange Act of 1934. To the extent any provision of the Plan
or action by the Board of Directors in administering the Plan fails to so
comply, it shall be deemed null and void, to the extent permitted by law and
deemed advisable by the Board of Directors.
16. GOVERNING LAW
The Plan and all determinations made and actions taken pursuant hereto
shall be governed by the laws of the Commonwealth of Massachusetts.
Approved by the Board of Directors
on December 7, 1994
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