Exhibit 10.1

 

 

NATIONAL SEMICONDUCTOR CORPORATION

 

STOCK OPTION PLAN

(as amended effective February 26, 2007)

 

1.

TITLE OF PLAN

 

The title of this Plan is the National Semiconductor Corporation Stock Option
Plan, hereinafter referred to as the "Plan", and formerly known as the National
Semiconductor Corporation 1977 Stock Option Plan.

 

2.

PURPOSE

 

The Plan is intended to align the interests of eligible key employees of
National Semiconductor Corporation (hereinafter called the "Corporation") and
its subsidiaries (as hereinafter defined) with the interests of the stockholders
of the Corporation and to provide incentives for such employees to exert maximum
efforts for the success of the Corporation. By extending to key employees the
opportunity to acquire proprietary interests in the Corporation and to
participate in its success, the Plan may be expected to benefit the Corporation
and its stockholders by making it possible for the Corporation to attract and
retain the best available talent and by rewarding key management and technical
personnel for their part in increasing the value of the Corporation's shares. It
is further intended that options granted pursuant to this Plan may be incentive
stock options under Section 422A of the Internal Revenue Code of 1986, as
amended (the "Code"), or may be options which are not incentive stock options
(hereinafter called "non-qualified stock options").

 

3.

STOCK SUBJECT TO THE PLAN

 

There will be reserved for issue upon the exercise of options granted under the
Plan 78,709,858 shares of the Corporation's $.50 par value Common Stock, subject
to adjustment as provided in Paragraph 8, which may be unissued shares,
reacquired shares, or shares bought on the market. If any option which shall
have been granted shall expire or terminate for any reason without having been
exercised in full, the unpurchased shares shall again become available for the
purposes of the Plan (unless the Plan shall have been terminated).

 

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4.     ADMINISTRATION

 

(a)    The Plan shall be administered by a committee of the Board of Directors
of the Corporation (the "Committee") which shall be appointed by a majority of
the whole Board. The Committee shall be constituted to permit the Plan to comply
with (i) Rule 16b-3 promulgated under the Securities Exchange Act of 1934
("Exchange Act") and any successor rule and (ii) IRS regulations issued under
Section 162(m) of the Code, and shall initially consist of not less than three
members of the Board, all of whom are ineligible for benefits under the Plan and
none of whom has been so eligible for at least one year prior to serving on such
Committee.

 

(b)    The Committee shall have the plenary power, subject to and within the
limits of the express provisions of the Plan:

 

(i)   To determine from time to time which of the eligible persons shall be
granted options under the Plan; the time or times (during the term of the
option) within which all or portions of each option may be exercised and the
number of shares for which an option or options shall be granted to each of
them. Notwithstanding the foregoing, no person may be granted more than 500,000
options during any one fiscal year of the Corporation.

 

(ii)  To construe and interpret the Plan and options granted under it, and to
establish, amend, and revoke rules and regulations for its administration. The
Committee, in the exercise of this power, shall generally determine all
questions of policy and expediency that may arise, may correct any defect, or
supply any omission or reconcile any inconsistency in the Plan or in any option
agreement in a manner and to the extent it shall deem necessary or expedient to
make the Plan fully effective.

 

(iii)     To prescribe the terms and provisions of each option granted (which
need not be identical).

 

(iv)  To determine whether options granted shall be incentive stock options or
non-qualified stock options.

 

(v)   To determine whether options granted shall be transferable without
consideration to immediate family members or family trusts for the benefit of
the optionee's immediate family members. As used herein, "immediate family"
means parents, spouses and children.

 

(c)     The Committee shall not have the authority to grant new options in
exchange for the cancellation of stock options previously granted under the Plan
or under any other stock option plan of the Corporation. Once granted, the
exercise price of any options granted under this Plan may not be revised or
repriced at any time, except as provided in Section 8.

 

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5.

ELIGIBILITY

 

Options may be granted only to regular salaried officers and key employees of
the Corporation and its subsidiaries. The term "subsidiary" corporation shall
mean any corporation in which the Corporation controls, directly or indirectly,
fifty percent (50%) or more of the combined voting power of all classes of
stock. A director of the Corporation shall not be eligible for the benefits of
the Plan unless such person also is a regular salaried employee of the
Corporation and/or of any subsidiary.

 

6.

TERMS OF OPTION AND OPTION AGREEMENTS

 

Each option shall be evidenced by a Stock Option Agreement which may expressly
identify the options as incentive stock options or as non-qualified stock
options, and be in such form and contain such provisions as the Committee shall
from time to time deem appropriate; provided, however, that the grant of a
non-qualified option pursuant to this Plan shall in no way be construed to be an
alternative to the right of an employee to purchase stock pursuant to any
incentive stock option heretofore or hereafter granted to an employee pursuant
to any stock option plans now in existence or hereafter adopted by the
Corporation. The terms of the option agreements need not be identical, but each
option agreement shall include, by appropriate language, or be subject to, the
substance of all of the applicable following provisions:

 

(a)    The exercise price of each option granted shall be the closing price of
the Common Stock on the New York Stock Exchange on the date of grant. If there
shall be no trading on such date, then the date of grant shall be the next date
on which there is trading on the New York Stock Exchange and the exercise price
shall be determined accordingly.

 

(b)    The maximum term of any stock option shall be six years and one day from
the date it was granted.

 

(c)    Except as provided in Paragraph 10 hereof, an option may not be exercised
to any extent, either by the person to whom it was granted or by the grantee's
transferee, or by any person after the grantee's death, unless the person to
whom the option was granted has remained in the continuous employ of the
Corporation, or of a subsidiary, for not less than six months from the date when
the option was granted. Otherwise, each option shall be exercisable as
determined by the Committee.

 

 

(d)    The Corporation, during the terms of options granted under the Plan, at
all times will keep available the number of shares of stock required to satisfy
such options.

 

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(e)    The Corporation will seek to obtain from each regulatory commission or
agency having jurisdiction such authority as may be required to issue and sell
shares of stock to satisfy such options. Inability of the Corporation to obtain
from any such regulatory commission or agency authority which counsel for the
Corporation deems necessary for the lawful issuance and sale of its stock to
satisfy such options shall relieve the Corporation from any liability for
failure to issue and sell stock to satisfy such options pending the time when
such authority is obtained or is obtainable.

 

(f)    Neither a person to whom an option is granted nor his or her transferee,
legal representative, heir, legatee, or distributee, shall be deemed to be the
holder of, or to have any of the rights of a holder with respect to, any shares
subject to such option unless and until he or she has exercised his or her
option pursuant to the terms thereof.

 

(g)    In order to be exempt under Section 16 of the Exchange Act, the option
may not be transferable except by will or by the laws of descent or
distribution, and during the lifetime of the person to whom the option is
granted he or she alone may exercise it.

 

(h)    An option shall terminate and may not be exercised if the person to whom
it is granted ceases to be continuously employed by the Corporation, or by a
subsidiary of the Corporation, except (subject nevertheless to the last sentence
of this subparagraph (h)): (1) if the grantee's continuous employment is
terminated for any reason other than (i) retirement, (ii) permanent disability,
or (iii) death, the grantee or the grantee's transferee may exercise the option
to the extent that the grantee was entitled to exercise such option at the date
of such termination at any time within a period of three (3) months following
the date of such termination, or if the grantee shall die within the period of
three (3) months following the date of such termination without having exercised
such option, the option may be exercised within a period of one year following
the grantee's death by the grantee's transferee or the person or persons to whom
the grantee's rights under the option pass by will or by the laws of descent or
distribution but only to the extent exercisable at the date of such termination;
(2) if the grantee's continuous employment is terminated by (i) retirement, (ii)
permanent disability, or (iii) death, the option may be exercised in accordance
with its terms and conditions at any time within a period of five (5) years
following the date of such termination by the grantee or the grantee's
transferee, or in the event of the grantee's death, by the persons to whom the
grantee's rights under the option shall pass by will or by the laws of descent
or distribution; (3) if the grantee's continuous employment is terminated and
within a period of ninety (90) days thereafter the grantee is recalled to the
active payroll, the Committee may reinstate any portion of the option previously
granted but not

 

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exercised. Nothing contained in this subparagraph (h) is intended to extend the
stated term of the option and in no event may an option be exercised by anyone
after the expiration of its stated term.

 

(i)    Option agreements evidencing incentive stock options shall contain such
terms and provisions as may be necessary to render them incentive stock options
pursuant to Section 422A of the Code and the Income Tax Regulation thereunder,
as the same or any successor statute or regulations may at the time be in
effect.

 

(j)    Nothing in this Plan or in any option granted hereunder shall confer on
any optionee any right to continue in the employ of the Corporation or any of
its subsidiaries, or to interfere in any way with the right of the Corporation
or any of its subsidiaries to terminate his or her employment at any time.

 

7.

TIME OF GRANTING OPTION

 

The Committee shall determine the date on which options are granted under the
Plan. All options granted must be approved at a meeting of the Committee by a
majority of the members of the Committee. The Committee may delegate to one or
more executive officers of the Corporation the authority to perform the
Committee’s duties under Paragraph 4(b)(i) and this Paragraph 7, subject to
terms and conditions established by the Committee and the limits and express
provisions of the Plan.

 

8.

ADJUSTMENT IN NUMBER OF SHARES AND IN OPTION PRICE

 

In the event there is any change in the shares of the Corporation through the
declaration of stock dividends or a stock split-up, or through recapitalization
resulting in share split-ups, or combinations or exchanges of shares, or
otherwise, the number of shares available for option, as well as the shares
subject to any option and the option price thereof, shall be appropriately
adjusted by the Committee.

 

9.

PAYMENT OF PURCHASE PRICE AND WITHHOLDING TAXES

 

(a)    The purchase price for all shares purchased pursuant to options exercised
must be either paid in full in cash, or paid in full, with the consent of the
Committee, in Common Stock of the Corporation that has been held by the optionee
at least six (6) months or a combination of cash and Common Stock. Common Stock
tendered in full or partial payment of the purchase price shall be valued on the
date of exercise at the opening price of the Common Stock on the New York Stock
Exchange on the exercise date, or if there shall be no trading on such date,
then on the first previous date on which there was such trading.

 

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(b)    The Committee may permit the payment of all or part of the applicable
required withholding taxes due upon exercise of an option by the withholding of
shares otherwise issuable upon exercise of the option. Option shares withheld in
payment of such taxes shall be valued on the date of exercise at the opening
price of the Common Stock on the New York Stock Exchange on the exercise date,
or if there shall be no trading on such date, on the first previous date on
which there was trading.

 

10.

CHANGE IN CONTROL

 

In the event of a Change-of-Control (as defined in the attached Exhibit A) of
the Corporation, any options granted hereunder which are outstanding as of the
date such Change-of-Control is determined to have occurred, and which are not
then exercisable and vested, shall become fully exercisable and vested to the
full extent of the original grant.

 

11.

AMENDMENT, SUSPENSION, OR TERMINATION OF THE PLAN

 

(a)    The Board may amend, modify, suspend or terminate the Plan for the
purpose of meeting or addressing any changes in legal requirements or for any
other purpose permitted by law. The Board will seek stockholder approval of an
amendment if determined to be required by or advisable under regulations of the
Securities and Exchange Commission or the Internal Revenue Service, the rules of
any stock exchange on which the Corporation's stock is listed, or other
applicable law or regulation.

 

(b)    The Plan shall continue in effect until all shares available for issuance
under the Plan have been issued. An option may not be granted while the Plan is
suspended or after it is terminated.

 

(c)    The rights and obligations under any options granted while the Plan is in
effect shall not be altered or impaired by amendment, suspension or termination
of the Plan, except with the consent of the person to whom the option was
granted or the grantee's transferee or to whom rights under an option shall have
passed by will or by the laws of descent and distribution.

 

12.

EFFECTIVE DATE

 

The Plan, as amended and restated, became effective on April 22, 1994 and was
approved by the stockholders of the Corporation within twelve (12) months after
said date.

 

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EXHIBIT A

 

 

A “change of control” means:

 

(a)   The acquisition by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Exchange Act (a "Person") of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act)
of 20% or more of either (x) the then outstanding shares of common stock of the
Corporation (the "Outstanding Corporation Common Stock") or (y) the combined
voting power of the then outstanding voting securities of the Corporation
entitled to vote generally in the election of directors (the "Outstanding
Corporation Voting Securities"); provided, however, that for purposes of this
subsection (a), the following acquisitions shall not be deemed to result in a
change of control: (i)any acquisition directly from the Corporation, (ii) any
acquisition by the Corporation, (iii) any acquisition by any employee benefit
plan (or related trust) sponsored or maintained by the Corporation or any
corporation controlled by the Corporation or (iv) any acquisition by any
corporation pursuant to a transaction that complies with clauses (i), (ii) and
(iii) of subsection (c) below; or

 

(b)   individuals who, as of the date hereof, constitute the Board of Directors
of the Corporation (the "Incumbent Board") cease for any reason to constitute at
least a majority of the Board; provided, however, that any individual becoming a
director subsequent to the date hereof whose election, or nomination for
election by the Corporation's shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board; or

 

(c)   the approval by the shareholders of the Corporation of a reorganization,
merger or consolidation or sale or other disposition of all or substantially all
of the assets of the Corporation or the acquisition of assets of another
corporation ("Business Combination") or, if consummation of such Business
Combination is subject, at the time of such approval by shareholders, to the
consent of any government or governmental agency, the obtaining of such consent
(either explicitly or implicitly by consummation) unless, following such
Business Combination, (i) all or substantially all of the individuals and
entities who were the beneficial owners of the Outstanding Corporation Common
Stock and Outstanding Corporation Voting Securities immediately prior to such
Business Combination

 

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beneficially own, directly or indirectly, more than 60% of, respectively, the
then outstanding shares of common stock and the combined voting power of the
then outstanding voting securities entitled to vote generally in the election of
directors, as the case may be, of the corporation resulting from such Business
Combination (including, without limitation, a corporation that as a result of
such transaction owns the Corporation or all or substantially all of the
Corporation's assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership, immediately prior to such
Business Combination of the Outstanding Corporation Common Stock and Outstanding
Corporation Voting Securities, as the case may be, (ii) no Person (excluding any
corporation resulting from such Business Combination or any employee benefit
plan (or related trust) of the Corporation or any corporation resulting from
such Business Combination) beneficially owns, directly or indirectly, 20% or
more of, respectively, the then outstanding shares of common stock of the
corporation resulting from such Business Combination or the combined voting
power of the then outstanding voting securities of such corporation except to
the extent that such ownership existed prior to the Business Combination and
(iii) at least a majority of the members of the board of directors of the
corporation resulting from such Business Combination were members of the
Incumbent Board at the time of the execution of the initial agreement, or of the
action of the Board, providing for such Business Combination; or

 

(d)   approval by the shareholders of the Corporation of a complete liquidation
or dissolution of the Corporation.

 

 

 

 

 

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