ZEBRA TECHNOLOGIES CORPORATION
NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN
Effective February 11, 1997
TABLE OF CONTENTS
Page
ARTICLE I ESTABLISHMENT . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Purpose. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . 1
2.1 "Affiliate". . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.2 "Agreement" or "Option Agreement". . . . . . . . . . . . . . . 1
2.3 "Board of Directors" or "Board". . . . . . . . . . . . . . . . 1
2.4 "Change in Control . . . . . . . . . . . . . . . . . . . . . . 1
2.5 "Code" or "Internal Revenue Code". . . . . . . . . . . . . . . 2
2.6 "Commission" . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.7 "Committee". . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.8 "Common Stock" . . . . . . . . . . . . . . . . . . . . . . . . 2
2.9 "Company". . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.10 "Director" . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.11 "Disability" . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.12 "Effective Date" . . . . . . . . . . . . . . . . . . . . . . . 3
2.13 "Exchange Act" . . . . . . . . . . . . . . . . . . . . . . . . 3
2.14 "Fair Market Value". . . . . . . . . . . . . . . . . . . . . . 3
2.15 "Grant Date" . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.16 "NASDAQ" . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.17 "Option" . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.18 "Option Period". . . . . . . . . . . . . . . . . . . . . . . . 4
2.19 "Option Price" . . . . . . . . . . . . . . . . . . . . . . . . 4
2.20 "Participant". . . . . . . . . . . . . . . . . . . . . . . . . 4
2.21 "Plan" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.22 "Public Offering". . . . . . . . . . . . . . . . . . . . . . . 4
2.23 "Representative" . . . . . . . . . . . . . . . . . . . . . . . 4
2.24 "Rule 16b-3" or "Rule 16a-1(c)(3)" . . . . . . . . . . . . . . 5
2.25 "Securities Act" . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE III ADMINISTRATION . . . . . . . . . . . . . . . . . . . . . 5
3.1 Committee Structure and Authority. . . . . . . . . . . . . . . 5
ARTICLE IV STOCK SUBJECT TO PLAN . . . . . . . . . . . . . . . . . . 6
4.1 Number of Shares . . . . . . . . . . . . . . . . . . . . . . . 6
4.2 Release of Shares. . . . . . . . . . . . . . . . . . . . . . . 6
4.3 Restrictions on Shares . . . . . . . . . . . . . . . . . . . . 6
4.4 Reasonable Efforts To Register . . . . . . . . . . . . . . . . 7
4.5 Adjustments. . . . . . . . . . . . . . . . . . . . . . . . . . 7
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Page
4.6 Limited Transfer During Offering . . . . . . . . . . . . . . . 7
ARTICLE V OPTIONS . . . . . . . . . . . . . . . . . . . . . . . . . 8
5.1 Eligibility. . . . . . . . . . . . . . . . . . . . . . . . . . 8
5.2 Grant and Exercise . . . . . . . . . . . . . . . . . . . . . . 8
5.3 Terms and Conditions . . . . . . . . . . . . . . . . . . . . . 8
5.4 Termination. . . . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE VI MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . 10
6.1 Amendments and Termination . . . . . . . . . . . . . . . . . . 10
6.2 General Provisions . . . . . . . . . . . . . . . . . . . . . . 11
6.3 Special Provisions Regarding a Change in Control . . . . . . . 12
6.4 Delay. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6.5 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6.6 Severability . . . . . . . . . . . . . . . . . . . . . . . . . 13
6.7 Successors and Assigns . . . . . . . . . . . . . . . . . . . . 13
6.8 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . 13
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ZEBRA TECHNOLOGIES CORPORATION
NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN
ARTICLE I
ESTABLISHMENT
1.1 PURPOSE. The Zebra Technologies Corporation Non-employee
Directors' Stock Option Plan ("Plan") is hereby established by Zebra
Technologies Corporation ("Company"), effective February 11, 1997 ("Effective
Date"). The purpose of the Plan is to promote the overall financial
objectives of the Company and its stockholders by motivating directors of the
Company who are not employees, to further align the interests of such
directors with those of the stockholders of the Company and to achieve
long-term growth and performance of the Company. The Plan and the grant of
Options hereunder are expressly conditioned upon the Plan's approval by the
stockholders of the Company to the extent required for an application of Rule
16b-3 of the Securities Exchange Act of 1934, as amended, and if such
approval is not obtained, then the Plan and all Options granted thereunder
shall be null and void AB INITIO.
ARTICLE II
DEFINITIONS
For purposes of the Plan, the following terms are defined as set forth
below:
2.1 "AFFILIATE" means any individual, corporation, partnership, limited
liability company, association, joint-stock company, trust, unincorporated
association or other entity (other than the Company) that directly, or
indirectly through one or more intermediaries, controls, is controlled by, or is
under common control with, the Company, including, without limitation, any
member of an affiliated group of which the Company is a common parent
corporation as provided in Section 1504 of the Code.
2.2 "AGREEMENT" or "OPTION AGREEMENT" means, individually or collectively,
any agreement entered into pursuant to this Plan pursuant to which an Option is
granted to a Participant.
2.3 "BOARD OF DIRECTORS" or "BOARD" means the Board of Directors of the
Company.
2.4 "CHANGE IN CONTROL" shall be deemed to have occurred if (a) any
corporation, person or other entity (other than the Company, a majority-owned
subsidiary of the Company or any of its subsidiaries, an employee benefit
plan (or related trust) sponsored or maintained by the Company, or a
"Permitted Transferee" (as "Permitted Transferee" is defined the Company's
Certificate of Incorporation)), including a "group" as defined in Section
13(d)(3) of the Securities Exchange Act of 1934, as amended, becomes the
beneficial owner of stock representing more than the greater of (i)
twenty-five percent (25%) of the combined voting power of the Company's then
outstanding securities or (ii) the percentage of the combined voting power of
the Company's then outstanding securities which equals (A) ten percent (10%)
plus (B) the percentage of the combined voting power of the Company's
outstanding securities held by such corporation, person or entity on the
Effective Date; (b)(i) the stockholders of the Company approve a definitive
agreement to merge or consolidate the Company with or into another
corporation other than a majority-owned subsidiary of the Company, or to sell
or otherwise dispose of all or substantially all of the Company's assets, and
(ii) the persons who were the members of the Board of Directors of the
Company prior to such approval do not represent a majority of the directors
of the surviving, resulting or acquiring entity or the parent thereof; (c)
the stockholders of the Company approve a plan of liquidation of the Company;
or (d) within any period of 24 consecutive months, persons who were members
of the Board of Directors of the Company immediately prior to such 24-month
period, together with any persons who were first elected as directors (other
than as a result of any settlement of a proxy or consent solicitation contest
or any action taken to avoid such a contest) during such 24-month period by
or upon the recommendation of persons who were members of the Board of
Directors of the Company immediately prior to such 24-month period and who
constituted a majority of the Board of Directors of the Company at the time
of such election, cease to constitute a majority of the Board.
2.5 "CODE" or "INTERNAL REVENUE CODE" means the Internal Revenue Code
of 1986, as amended, Treasury Regulations (including proposed regulations)
thereunder and any subsequent Internal Revenue Code.
2.6 "COMMISSION" means the Securities and Exchange Commission or any
successor agency.
2.7 "COMMITTEE" means the person or persons appointed by the Board of
Directors to administer the Plan, as further described in the Plan.
2.8 "COMMON STOCK" means the shares of the Class A Common Stock, par
value $.01 per share, of the Company, whether presently or hereafter issued,
and any other stock or security resulting from adjustment thereof as
described hereinafter or the common stock of any successor to the Company
which is designated for the purpose of the Plan.
2.9 "COMPANY" means Zebra Technologies Corporation and includes any
successor or assignee corporation or corporations into which the Company may be
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merged, changed or consolidated; any corporation for whose securities the
securities of the Company shall be exchanged; and any assignee of or
successor to substantially all of the assets of the Company.
2.10 "DIRECTOR" means each and any director who serves on the Board and
who is not an officer or employee of the Company or any of its Affiliates.
2.11 "DISABILITY" means a mental or physical illness that renders a
Participant totally and permanently incapable of performing the Participant's
duties for the Company or an Affiliate. Notwithstanding the foregoing, a
Disability shall not qualify under the Plan if it is the result of (i) a
willfully self-inflicted injury or willfully self-induced sickness; or (ii)
an injury or disease contracted, suffered, or incurred, while participating
in a criminal offense. The determination of Disability shall be made by the
Committee. The determination of Disability for purposes of the Plan shall
not be construed to be an admission of disability for any other purpose.
2.12 "EFFECTIVE DATE" means February 11, 1997.
2.13 "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
2.14 "FAIR MARKET VALUE" means the value determined on the basis of the
good faith determination of the Committee, without regard to whether the
Common Stock is restricted or represents a minority interest, pursuant to the
applicable method described below:
(a) if the Common Stock is listed on a national securities exchange
or quoted on NASDAQ, the closing price of the Common Stock on the relevant
date (or, if such date is not a business day or a day on which quotations
are reported, then on the immediately preceding date on which quotations
were reported), as reported by the principal national exchange on which
such shares are traded (in the case of an exchange) or by NASDAQ, as the
case may be;
(b) if the Common Stock is not listed on a national securities
exchange or quoted on NASDAQ, but is actively traded in the over-the-
counter market, the average of the closing bid and asked prices for the
Common Stock on the relevant date (or, if such date is not a business day
or a day on which quotations are reported, then on the immediately
preceding date on which quotations were reported), or the most recent
preceding date for which such quotations are reported; and
(c) if, on the relevant date, the Common Stock is not publicly traded
or reported as described in (a) or (b), the value determined in good faith
by the Committee.
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2.15 "GRANT DATE" means the date as of which an Option is granted
pursuant to the Plan.
2.16 "NASDAQ" means The Nasdaq Stock Market, including the Nasdaq
National Market.
2.17 "OPTION" means the right to purchase the number of shares of Common
Stock specified by the Plan at a price and for a term fixed by the Plan, and
subject to such other limitations and restrictions as the Plan and the
Committee imposes.
2.18 "OPTION PERIOD" means the period during which the Option shall be
exercisable in accordance with the Agreement and Article V.
2.19 "OPTION PRICE" means the price at which the Common Stock may be
purchased under an Option as provided in Section 5.3.
2.20 "PARTICIPANT" means a Director to whom an Option has been granted
under the Plan, and in the event a Representative is appointed for a
Participant or another person becomes a Representative, then the term
"Participant" shall mean such appointed Representative. The term shall also
include a trust for the benefit of the Participant, the Participant's
parents, spouse or descendants; a partnership the interests in which are for
the benefit of the Participant, the Participant's parents, spouse or
descendants; or a custodian under a uniform gifts to minors act or similar
statute for the benefit of the Participant's descendants, to the extent
permitted by the Committee and not inconsistent with an application of Rule
16b-3. Notwithstanding the foregoing, the term "Termination of Directorship"
shall mean the Termination of Directorship of the Director.
2.21 "PLAN" means the Zebra Technologies Corporation Non-employee
Directors' Stock Option Plan, as herein set forth and as may be amended from
time to time.
2.22 "PUBLIC OFFERING" means the initial public offering of shares of
Common Stock under the Securities Act.
2.23 "REPRESENTATIVE" means (a) the person or entity acting as the
executor or administrator of a Participant's estate pursuant to the last will
and testament of a Participant or pursuant to the laws of the jurisdiction in
which the Participant had the Participant's primary residence at the date of
the Participant's death; (b) the person or entity acting as the guardian or
temporary guardian of a Participant; (c) the person or entity which is the
beneficiary of the Participant upon or following the Participant's death; or
(d) any person to whom an Option has been permissibly transferred by the
Committee; provided that only one of the foregoing shall be the
Representative at any point in time as determined under applicable law and
recognized by the Committee.
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2.24 "RULE 16B-3" or "RULE 16A-1(C)(3)" mean Rule 16b-3 and Rule
16a-1(c)(3), as promulgated under the Exchange Act, as amended from time to
time, or any successor thereto, in effect and applicable to the Plan and
Participants.
2.25 "SECURITIES ACT" means the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
In addition, certain other terms used herein have definitions given to
them in the first place in which they are used.
ARTICLE III
ADMINISTRATION
3.1 COMMITTEE STRUCTURE AND AUTHORITY. The Plan shall be administered
by the Committee which, except as provided herein, shall be comprised of one
or more persons. The Committee shall be the Option Committee of the Board of
Directors, unless such committee does not exist or the Board establishes
another committee whose purpose is the administration of the Plan. In the
absence of an appointment, the Board shall be the Committee; provided that
only those members of the Compensation Committee of the Board who participate
in the decision relative to Options under the Plan shall be deemed to be part
of the "Committee" for purposes of the Plan. A majority of the Committee
shall constitute a quorum at any meeting thereof (including telephone
conference) and the acts of a majority of the members present, or acts
approved in writing by a majority of the entire Committee without a meeting,
shall be the acts of the Committee for purposes of the Plan. The Committee
may authorize any one or more of its members or an officer of the Company to
execute and deliver documents on behalf of the Committee. A member of the
Committee shall not exercise any discretion respecting himself or herself
under the Plan. The Board shall have the authority to remove, replace or
fill any vacancy of any member of the Committee upon notice to the Committee
and the affected member. Any member of the Committee may resign upon notice
to the Board. The Committee may allocate among one or more of its members,
or may delegate to one or more of its agents, such duties and
responsibilities as it determines.
The Committee shall have the authority, subject to (i) the terms of the
Plan and (ii) the limitations of Rule 16b-3, 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 to otherwise
supervise the administration of the Plan. The Committee's policies and
procedures may differ with respect to Options granted at different times or
to different Participants.
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Any determination made by the Committee pursuant to the provisions of
the Plan shall be made in its sole discretion. All decisions made by the
Committee pursuant to the provisions of the Plan shall be final and binding
on all persons, including the Company and Participants. Any determination
shall not be subject to DE NOVO review if challenged in court.
ARTICLE IV
STOCK SUBJECT TO PLAN
4.1 NUMBER OF SHARES. Subject to the adjustment under Section 4.5, the
total number of shares of Common Stock reserved and available for issuance
pursuant to Options under the Plan shall be seventy-seven thousand (77,000)
shares of Common Stock authorized for issuance on the Effective Date. Such
shares may consist, in whole or in part, of authorized and unissued shares or
treasury shares.
4.2 RELEASE OF SHARES. The Committee shall have full authority to
determine the number of shares of Common Stock available for Stock Options,
and in its discretion may include (without limitation) as available for
distribution any shares of Common Stock that have ceased to be subject to
Stock Options, any shares of Common Stock subject to any Stock Options that
are forfeited, any Stock Options that otherwise terminate without issuance of
shares of Common Stock being made to the Participant, or any shares (whether
or not restricted) of Common Stock that are received by the Company in
connection with the exercise of a Stock Option, including the satisfaction of
any tax liability or the satisfaction of a tax withholding obligation. If
any shares could not again be available for Options to a particular
Participant under applicable law, such shares shall be available exclusively
for Options to Participants who are not subject to such limitations.
4.3 RESTRICTIONS ON SHARES. Shares of Common Stock issued upon
exercise of an Option shall be subject to the terms and conditions specified
herein and to such other terms, conditions and restrictions as the Committee
in its discretion may determine or provide in the Option Agreement. The
Company shall not be required to issue or deliver any certificates for shares
of Common Stock, cash or other property prior to (i) the listing of such
shares on any stock exchange, NASDAQ or other public market on which the
Common Stock may then be listed (or regularly traded), (ii) the completion of
any registration or qualification of such shares under federal or state law,
or any ruling or regulation of any government body which the Committee
determines to be necessary or advisable, and (iii) the satisfaction of any
applicable withholding obligation in order for the Company or an Affiliate to
obtain a deduction with respect to the exercise of an Option. The Company
may cause any certificate for any share of Common Stock to be delivered to be
properly marked with a legend or other notation reflecting the limitations on
transfer of such Common Stock as
6
provided in the Plan or as the Committee may otherwise require. The
Committee may require any person exercising an Option to make such
representations and furnish such information as it may consider appropriate
in connection with the issuance or delivery of the shares of Common Stock in
compliance with applicable law or otherwise. Fractional shares shall not be
delivered, but shall be rounded to the next lower whole number of shares.
4.4 REASONABLE EFFORTS TO REGISTER. The Company will register under
the Securities Act the Common Stock delivered or deliverable pursuant to
Options on Commission Form S-8 if available to the Company for this purpose
(or any successor or alternate form that is substantially similar to that
form to the extent available to effect such registration), in accordance with
the rules and regulations governing such forms, as soon as such forms are
available for registration to the Company for this purpose. The Company will
use its reasonable efforts to cause the registration statement to become
effective as soon as possible and will file such supplements and amendments
to the registration statement as may be necessary to keep the registration
statement in effect until the earliest of (a) one year following the
expiration of the Option Period of the last Option outstanding, (b) the date
the Company is no longer a reporting company under the Exchange Act and (c)
the date all Participants have disposed of all shares delivered pursuant to
any Option. The Company may delay the foregoing obligation if the Committee
reasonably determines that any such registration would materially and
adversely affect the Company's interests or if there is no material benefit
to Participants.
4.5 ADJUSTMENTS. In the event of a stock dividend, stock split,
combination or exchange of shares, recapitalization or other change in the
capital structure of the Company, corporate separation or division of the
Company (including, but not limited to, a split-up, spin-off, split-off or
distribution to Company stockholders other than a normal cash dividend), sale
by the Company of all or a substantial portion of its assets (measured on
either a stand-alone or consolidated basis), reorganization, rights offering,
a partial or complete liquidation, or any other corporate transaction,
Company stock offering or event involving the Company and having an effect
similar to any of the foregoing, then the Committee shall adjust or
substitute, as the case may be, the number of shares of Common Stock
available for Options under the Plan, the number of shares of Common Stock
covered by outstanding Options, the exercise price per share of outstanding
Options, and any other characteristics or terms of the Options as the
Committee shall deem necessary or appropriate to reflect equitably the
effects of such changes to the Participants; provided, however, that any
fractional shares resulting from such adjustment shall be eliminated by
rounding to the next lower whole number of shares with appropriate payment
for such fractional share as shall reasonably be determined by the Committee.
4.6 LIMITED TRANSFER DURING OFFERING. In the event there is an
effective registration statement under the Securities Act pursuant to which
shares of Common
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Stock shall be offered for sale in an underwritten offering, a Participant
shall not, during the period requested by the underwriters managing the
registered public offering, effect any public sale or distribution of shares
received directly or indirectly pursuant to an exercise of an Option.
ARTICLE V
OPTIONS
5.1 ELIGIBILITY. Each Director shall be granted Options to purchase
shares of Common Stock as provided herein.
5.2 GRANT AND EXERCISE. Each person who is a Director on the effective
date of a Public Offering shall become a Participant and shall be granted an
Option to purchase fifteen thousand (15,000) shares of Common Stock without
further action by the Board or the Committee. Each person who is
subsequently elected as a Director shall become a Participant and shall, on
his date of election and on each anniversary thereof for so long as such
person remains a Director, without further action by the Board or the
Committee, be granted an option to purchase fifteen thousand (15,000) shares
of Common Stock. If the number of shares of Common Stock available to grant
under the Plan on a scheduled date of grant is insufficient to make all
automatic grants required to be made pursuant to the Plan on such date, then
each eligible Director shall receive an Option to purchase a pro rata number
of the remaining shares of Common Stock available under the Plan; provided
further, however, that if such proration results in fractional shares of
Common Stock, then such Option shall be rounded down to the nearest number of
whole shares of Common Stock. If there is no whole number of shares
remaining to be granted, then no grants shall be made under the Plan. Each
Option granted under the Plan shall be evidenced by an Agreement, in a form
approved by the Committee, which shall embody the terms and conditions of
such Option and which shall be subject to the express terms and conditions
set forth in the Plan. Such Agreement shall become effective upon execution
by the Participant.
5.3 TERMS AND CONDITIONS. Options shall be subject to such terms and
conditions as shall be determined by the Committee, including in each case
the following:
(a) OPTION PERIOD. The Option Period of each Option shall be ten (10)
years.
(b) OPTION PRICE. The Option Price per share of the Common Stock
purchasable under an Option shall be the Fair Market Value as of the Grant
Date.
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(c) EXERCISABILITY. Unless an alternative time is specified in an
Agreement, and subject to the provisions of Section 6.3, Options shall become
exercisable in five equal annual installments on the Grant Date and each of
the first four anniversaries thereof. An Option only shall be exercisable
during the Option Period.
(d) METHOD OF EXERCISE. Subject to the provisions of this Article V, a
Participant may exercise Stock Options, in whole or in part, at any time
during the Option Period by the Participant's giving written notice of
exercise on a form provided by the Committee (if available) to the Company
specifying the number of shares of Common Stock subject to the Stock Option
to be purchased. Except when waived by the Committee, such notice shall be
accompanied by payment in full of the purchase price by cash or check or such
other form of payment as the Company may accept. If approved by the
Committee (including approval at the time of exercise), payment in full or in
part may also be made (i) by delivering Common Stock already owned by the
Participant having a total Fair Market Value on the date of such delivery
equal to the Option Price; (ii) by the execution and delivery of a note or
other evidence of indebtedness (and any security agreement thereunder)
satisfactory to the Committee and permitted in accordance with Section
5.3(e); (iii) by authorizing the Company to retain shares of Common Stock
which would otherwise be issuable upon exercise of the Option having a total
Fair Market Value on the date of delivery equal to the Option Price; (iv) by
the delivery of cash or the extension of credit by a broker-dealer to whom
the Participant has submitted a notice of exercise or otherwise indicated an
intent to exercise an Option (in accordance with Part 220, Chapter II, Title
12 of the Code of Federal Regulations, so-called "cashless" exercise); or (v)
by certifying ownership of shares of Common Stock by the Participant to the
satisfaction of the Committee for later delivery to the company as specified
by the committee; or (vi) by any combination of the foregoing or by any other
method permitted by the Committee.
(e) NONTRANSFERABILITY OF OPTIONS. Except as provided herein or in an
Agreement, no Option or interest therein shall be transferable by the
Participant other than by will or by the laws of descent and distribution,
and all Options shall be exercisable during the Participant's lifetime only
by the Participant. If and to the extent transferability is permitted by
Rule 16b-3 and except as otherwise provided herein or by an Agreement, every
Option granted hereunder shall be freely transferable, but only if such
transfer does not result in liability under Section 16 of the Exchange Act to
the Participant or other Participants and is consistent with registration of
the Option and sale of Common Stock on Form S-8 (or a successor form) or the
Committee's waiver of such condition.
5.4 TERMINATION. Unless otherwise provided in an Agreement or
determined by the Committee, if a Participant ceases to be a Director due to
death, any unexpired and unexercised Stock Option held by such Participant
shall thereafter be fully exercisable for a period of ninety (90) days
following the date of the appointment of
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a Representative (or such other period or no period as the Committee may
specify) or until the expiration of the Option Period, whichever period is
the shorter. Unless otherwise provided in an Agreement or determined by the
Committee, if a Participant ceases to be a Director due to a Disability, any
unexpired and unexercised Stock Option held by such Participant shall
thereafter be fully exercisable by the Participant for the period of ninety
(90) days (or such other period or no period as the Committee may specify)
immediately following the date the Participant ceases to be a Director or
until the expiration of the Option Period, whichever period is shorter, and
the Participant's death at any time following the date the Participant ceases
to be a Director due to Disability shall not affect the foregoing.
Unless otherwise provided in an Agreement or determined by the
Committee, if a Participant's directorship is terminated for any reason other
than due to Participant's death or Disability, any Option held by such
Participant shall terminate upon the second anniversary of the date the
Participant first ceased to hold the position of Director. Unless otherwise
provided in an Agreement, the death or Disability of a Participant after a
termination of Directorship otherwise provided herein shall not extend the
exercisability of the time permitted to exercise an Option.
ARTICLE VI
MISCELLANEOUS
6.1 AMENDMENTS AND TERMINATION. The Board may amend, alter or
discontinue the Plan at any time, but no amendment, alteration or
discontinuation shall be made which would impair the rights of a Participant
under a Stock Option theretofore granted, without the Participant's consent,
except such an amendment (a) made to avoid an expense charge to the Company
or an Affiliate, (b) made to cause the Plan to qualify for the exemption
provided by Rule 16b-3, (c) to prevent the Plan from being disqualified from
the exemption provided by Rule 16b-3, or (d) made to permit the Company or an
Affiliate a deduction under the Code. In addition, no such amendment shall
be made without the approval of the Company's stockholders to the extent such
approval is required by law or agreement.
The Committee may amend the Plan at any time subject to the same
limitations (and exceptions to limitations) as applied to the Board and
further subject to any approval or limitations the Board may impose.
The Committee may amend the terms of any Stock Option theretofore
granted, prospectively or retroactively, but no such amendment shall impair
the rights of any Participant without the Participant's consent or reduce an
Option Price, except such an amendment made to cause the Plan or Award to
qualify for the exemption provided by Rule 16b-3, avoid an expense charge to
the Company or an Affiliate or qualify for
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a deduction. The Committee's discretion to amend the Plan or Agreement shall
be limited to the Plan's constituting a plan described in section (c)(2)(ii)
of Rule 16b-3.
Subject to the above provisions, the Board shall have authority to amend
the Plan to take into account changes in law and tax and accounting rules, as
well as other developments, and to grant Awards which qualify for beneficial
treatment under such rules without stockholder approval. Notwithstanding
anything in the Plan to the contrary, if any right under this Plan would
cause a transaction to be ineligible for pooling of interest accounting that
would, but for the right hereunder, be eligible for such accounting
treatment, the Committee may modify or adjust the right so that pooling of
interest accounting is available.
6.2 GENERAL PROVISIONS.
(a) REPRESENTATION. The Committee may require each person purchasing
or receiving shares pursuant to an Option to represent to and agree with the
Company in writing that such person is acquiring the shares without a view to
the distribution thereof in violation of the Securities Act. The
certificates for such shares may include any legend which the Committee deems
appropriate to reflect any restrictions on transfer.
(b) WITHHOLDING. If determined to be required to protect the Company,
no later than the date as of which an amount first becomes includible in the
gross income of the Participant for Federal income tax purposes with respect
to any Option, the Participant shall pay to the Company (or other entity
identified by the Committee), or make arrangements satisfactory to the
Company or other entity identified by the Committee regarding the payment of,
any Federal, state, local or foreign taxes of any kind required by law to be
withheld with respect to such amount. Unless otherwise determined by the
Committee, withholding obligations may be settled with Common Stock,
including Common Stock that is part of the Option that gives rise to the
withholding requirement, provided that any applicable requirements under
Section 16 of the Exchange Act are satisfied. The obligations of the Company
under the Plan shall be conditional on such payment or arrangements, and the
Company and its Affiliates shall, to the extent permitted by law, have the
right to deduct any such taxes from any payment otherwise due to the
Participant.
(c) CONTROLLING LAW. The Plan and all Options made and actions taken
thereunder shall be governed by and construed in accordance with the laws of
the State of Illinois (other than its law respecting choice of law). The
Plan shall be construed to comply with all applicable law, and to avoid
liability to the Company, an Affiliate or a Participant, including, without
limitation, liability under Section 16(b) of the Exchange Act.
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(d) OFFSET. Any amounts owed to the Company or an Affiliate by the
Participant of whatever nature may be offset by the Company from the value of
any shares of Common Stock, cash or other thing of value under the Plan or an
Agreement to be transferred to the Participant, and no shares of Common
Stock, cash or other thing of value under the Plan or an Agreement shall be
transferred unless and until all disputes between the Company and the
Participant have been fully and finally resolved and the Participant has
waived all claims to such against the Company or an Affiliate.
(e) FAIL-SAFE. With respect to persons subject to Section 16 of the
Exchange Act, transactions under this Plan are intended to comply with all
applicable conditions of Rule 16b-3 or Rule 16a-1(c)(3). To the extent any
provision of the Plan or action by the Committee fails to so comply, it shall
be deemed null and void, to the extent permitted by law and deemed advisable
by the Committee. Moreover, in the event the Plan does not include a
provision required by Rule 16b-3 or Rule 16a-1(c)(3) to be stated therein,
such provision (other than one relating to eligibility requirements, or the
price and amount of Options) shall be deemed to be incorporated by reference
into the Plan with respect to Participants subject to Section 16.
6.3 SPECIAL PROVISIONS REGARDING A CHANGE IN CONTROL. Notwithstanding
any other provision of the Plan to the contrary, unless otherwise provided in
an Agreement, in the event of a Change in Control:
(a) Any Stock Options outstanding as of the date of such Change in
Control and not then exercisable shall become fully exercisable to the full
extent of the original grant;
(b) The Committee shall have full discretion, notwithstanding anything
herein or in an Option Agreement to the contrary, to do any or all of the
following with respect to an outstanding Stock Option:
(1) To cause any Stock Option to be cancelled, provided notice
of at least 15 days thereof is provided before the date of
cancellation;
(2) To provide that the securities of another entity be
substituted hereunder for the Common Stock and to make
equitable adjustment with respect thereto;
(3) To grant the Participant by giving notice during a pre-set
period to surrender all or part of a Stock Option to the
Company and to receive cash in an amount equal to the amount
by which the "Change in Control Price" (as defined in
Section 6.3(c)) per share of Common Stock on the date of
such election shall exceed the amount which the
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Participant must pay to exercise the Option per share of
Common Stock under the Option (the "Spread") multiplied by
the number of shares of Common Stock granted under the
Option;
(4) To require the assumption of the obligation of the Company
under the Plan subject to appropriate adjustment; and
(5) To take any other action the Committee determines to take.
(c) For purposes of this Section, "Change in Control Price" means the
higher of (i) the highest reported sales price of a share of Common Stock in
any transaction reported on the principal exchange on which such shares are
listed or on NASDAQ during the sixty (60)-day period prior to and including
the date of a Change in Control, or (ii) if the Change in Control is the
result of a corporate transaction, the highest price per share of Common
Stock paid in such tender or exchange offer or a corporate transaction. To
the extent that the consideration paid in any such transaction described
above consists all or in part of securities or other non-cash consideration,
the value of such securities or other non-cash consideration shall be
determined in the sole discretion of the Committee.
6.4 DELAY. If at the time, the Participant is subject to "short-swing"
liability under Section 16 of the Exchange Act, any time period provided for
under the Plan, to the extent necessary to avoid the imposition of liability,
shall be suspended and delayed during the period the Participant would be
subject to such liability.
6.5 HEADINGS. The headings contained in the Plan are for reference
purposes only and shall not affect the meaning or interpretation of the Plan.
6.6 SEVERABILITY. If any provision of the Plan shall for any reason be
held to be invalid or unenforceable, such invalidity or unenforceability
shall not effect any other provision hereby, and the Plan shall be construed
as if such invalid or unenforceable provision were omitted.
6.7 SUCCESSORS AND ASSIGNS. The Plan shall inure to the benefit of and
be binding upon each successor and assign of the Company. All obligations
imposed upon a Participant, and all rights granted to the Company hereunder,
shall be binding upon the Participant's heirs, legal representatives and
successors.
6.8 ENTIRE AGREEMENT. The Plan and the Agreement constitute the entire
agreement with respect to the subject matter hereof and thereof, provided
that in the event of any inconsistency between the Plan and the Agreement,
the terms and conditions of the Plan shall control.
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Executed on this 11th day of February, 1997.
ZEBRA TECHNOLOGIES CORPORATION
By: /s/ Edward L. Kaplan
-------------------------
Edward L. Kaplan
Chief Executive Officer