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Exhibit 10.2
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 otherwise 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
(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,
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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
option. 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.
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
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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 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
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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 l4a-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 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."
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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 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
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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
Approved by the Stockholders
on March 14, 1995
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1st Amendment to 1994 Director Option Plan
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The 1994 Director Option Plan of Analog Devices, Inc. is amended to permit
deferral of gain on option exercise by adding a new Subsection (j) to Section 5
which shall read as follows:
"(j) A director may elect, at the discretion of, and in accordance
with rules to be established by the Board, to defer receipt of any shares
of Common Stock issuable upon the exercise of an option, provided that such
election is irrevocable and made at least that number of days prior to the
exercise of the option that shall be determined by the Board or the
Committee. The director's account under the Analog Devices, Inc. Deferred
Compensation Plan shall be credited with a number of stock units equal to
the number of shares so deferred."
The following amendment to the 1994 Director Option Plan, pursuant to
Section 11 thereof, was adopted by the Board of Directors of Analog Devices,
Inc. on December 3, 1996.
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