Exhibit 10.2

 

 

NATIONAL SEMICONDUCTOR CORPORATION

EXECUTIVE OFFICER STOCK OPTION PLAN

(as amended effective February 26, 2007)

 

 

1.

TITLE OF PLAN

 

The title of this Plan is the National Semiconductor Corporation Executive
Officer Stock Option Plan, hereinafter referred to as the "Plan".

 

2.

PURPOSE

 

The Plan is intended to align the interests of executive officers 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 executive officers to exert
maximum efforts for the success of the Corporation. By extending to executive
officers 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 executive talent and by rewarding them for
their part in increasing the value of the Corporation's shares. It is further
intended that options granted pursuant to this Plan shall only be options which
are not incentive stock options, as that term is defined in Section 422A of the
Internal Revenue Code of 1986, as amended (the "Code"). Such options which may
be granted under this Plan shall be referred to herein as 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 12,000,000 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).

 

 

1

 

--------------------------------------------------------------------------------

Exhibit 10.2

 

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 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.

 

(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
1,000,000 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 transferable without
consideration to immediate family members or family trusts for the benefit of
optionee's immediate family members. As used herein, "immediate family" means
parents, spouses and children.

 

(c)     The Committee may not 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.

 

5.

ELIGIBILITY

 

Options may be granted only to regular salaried employees of the Corporation and
its subsidiaries who are executive officers of the Corporation. 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

 

2

 

--------------------------------------------------------------------------------

power of all classes of stock, and the term "executive officer" means any
officer of the corporation subject to the reporting requirements of Section 16
of the Exchange Act. Directors of the Corporation who are not also officers
shall not be eligible to be granted options under the Plan.

 

6.

TERMS OF OPTION AND OPTION AGREEMENTS

 

Each option shall be evidenced by a Stock Option Agreement which shall be in
such form and contain such provisions as the Committee shall from time to time
deem appropriate; provided, however, that the grant of an option pursuant to
this Plan shall in no way be construed to be an alternative to the right of an
optionee to purchase stock pursuant to any other stock option heretofore or
hereafter granted to an optionee 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.

 

(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

 

3

 

--------------------------------------------------------------------------------

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)    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 (g)): (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 exercised. Nothing contained in this subparagraph (g) 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.

 

(h)    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.

 

 

4

 

--------------------------------------------------------------------------------

Exhibit 10.2

 

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.

 

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
for 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.

 

(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 such date or if
there shall be no trading on the exercise date, then on the first previous date
on which there was such 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.

 

 

5

 

--------------------------------------------------------------------------------

Exhibit 10.2

 

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, 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 became effective on June 22, 2000 and was approved by the stockholders
within twelve (12) months thereafter.

 

6

 

--------------------------------------------------------------------------------

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

 

7

 

--------------------------------------------------------------------------------

Securities immediately prior to such Business Combination 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.

 

 

 

8