exv10w4



 





Exhibit
10.4


NOVELLUS SYSTEMS, INC.




AMENDED AND RESTATED 1992 EMPLOYEE STOCK PURCHASE PLAN




(amended and restated February 15, 2007)




     The following constitute the provisions of the Amended and Restated 1992 Employee Stock
Purchase Plan of Novellus Systems, Inc.



     1. Purpose. The purpose of the Plan is to provide employees of the Company and its
Designated Subsidiaries with an opportunity to purchase Common Stock of the Company through
accumulated payroll deductions. It is the intention of the Company to have the Plan qualify as an
“Employee Stock Purchase Plan” under Section 423 of the Internal Revenue Code of 1986, as amended.
The provisions of the Plan shall, accordingly, be construed so as to extend and limit participation
in a manner consistent with the requirements of that section of the Code.



     2. Definitions.



          (a) “Board” shall mean the Board of Directors of the Company.




          (b) “Code” shall mean the Internal Revenue Code of 1986, as amended.




          (c) “Common Stock” shall mean the Common Stock, no par value, of the Company.




          (d) “Company” shall mean Novellus Systems, Inc., a California corporation.




          (e) “Compensation” shall mean all regular straight time gross earnings, exclusive of
payments for overtime, shift premium, incentive compensation, incentive payments, bonuses,
commissions or other compensation.




          (f) “Continuous Status as an Employee” shall mean the absence of any interruption or
termination of service as an Employee. Continuous Status as an Employee shall not be considered
interrupted in the case of a leave of absence agreed to in writing by the Company, provided that
such leave is for a period of not more than three (3) months or reemployment upon the expiration of
such leave is guaranteed by contract or statute. Where the period of leave exceeds three (3)
months and the individual’s right to reemployment is not guaranteed either by statute or by
contract, the employment relationship will be deemed to have terminated on the first day after such
three (3) month leave, for purposes of determining eligibility to participate in the Plan.




          (g) “Designated Subsidiaries” shall mean the Subsidiaries which have been designated
by the Board from time to time in its sole discretion as eligible to participate in the Plan.




          (h) “Employee” shall mean any person, including an officer, who is customarily
employed for at least twenty (20) hours per week and more than five (5) months in a calendar year
by the Company or one of its Designated Subsidiaries.




 









 








          (i) “Exercise Date” shall mean the last day of each offering period of the Plan.




          (j) “Offering Date” shall mean the first day of each offering period of the Plan.




          (k) “Plan” shall mean this 1992 Employee Stock Purchase Plan, as amended and restated.




          (l) “Subsidiary” shall mean a corporation, domestic or foreign, of which not less than
50% of the voting shares are held by the Company or a Subsidiary, whether or not such corporation
now exists or is hereafter organized or acquired by the Company or a Subsidiary.




     3. Eligibility.



          (a) Any person who is an Employee as of the Offering Date of a given offering period shall be
eligible to participate in such offering period under the Plan, subject to the requirements of
paragraph 5(a) and the limitations imposed by Section 423(b) of the Code.




          (b) Any provisions of the Plan to the contrary notwithstanding, no Employee shall be granted
an option under the Plan (i) if, immediately after the grant, such Employee (or any other person
whose stock would be attributed to such Employee pursuant to Section 424(d) of the Code) would own
stock and/or hold outstanding options to purchase stock possessing five percent (5%) or more of the
total combined voting power or value of all classes of stock of the Company or of any subsidiary of
the Company, or (ii) which permits his rights to purchase stock under all employee stock purchase
plans (described in Section 423 of the Code) of the Company and its subsidiaries to accrue at a
rate which exceeds Twenty-five Thousand dollars ($25,000) of fair market value of such stock
(determined at the time such option is granted) for each calendar year in which such option is
outstanding at any time.




     4. Offering Periods. The Plan shall be implemented by overlapping or consecutive
offering periods of no more than six (6) months duration until the Plan is terminated in accordance
with paragraph 19 hereof. The Board of Directors of the Company shall have the power to change the
duration of offering periods with respect to future offerings without shareholder approval if such
change is announced at least fifteen (15) days prior to the scheduled beginning of the first
offering period to be affected.



     5. Participation.



          (a) An eligible Employee may become a participant in the Plan by completing a subscription
agreement authorizing payroll deduction on the form provided by the Company and filing it with the
Company’s Human Resource department during the open enrollment period prior to the applicable
Offering Date, unless a later time for filing the subscription agreement is set by the Board for
all eligible Employees with respect to a given offering.




          (b) Payroll deductions for a participant shall commence on the first payroll following the
Offering Date and shall end on the Exercise Date of the offering to which such

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authorization is
applicable, unless sooner terminated by the participant as provided in paragraph 10.




     6. Payroll Deductions.



          (a) At the time a participant files his subscription agreement, he shall elect to have payroll
deductions made on each payday during the offering period in an amount not exceeding fifteen
percent (15%) of the Compensation which he received on the payday immediately preceding the
Offering Date, and the aggregate of such payroll deductions during the offering period shall not
exceed the lesser of (i) 15% of his aggregate Compensation during said offering period, (ii) $5,000
or (iii) such lesser amount determined by the Board at least fifteen (15) days prior to the
scheduled beginning of the first offering period to be affected.




          (b) All payroll deductions made by a participant shall be credited to his account under the
Plan. A participant may not make any additional payments into such account.




          (c) A participant may discontinue his participation in the Plan as provided in paragraph 10,
or may lower, but not increase, the rate of his payroll deductions during the offering period by
completing or filing with the Company a new authorization for payroll deduction. The change in
rate shall be effective fifteen (15) days following the Company’s receipt of the new authorization.




     7. Grant of Option.



          (a) On the Offering Date of each offering period, each eligible Employee participating in the
Plan shall be granted an option to purchase (at the per share option price determined in accordance
with paragraph 7(b), below) a number of shares of the Company’s Common Stock determined by dividing
such Employee’s payroll deductions to be accumulated during such offering period (not to exceed the
amount determined in accordance with paragraph 6(a), above) by the option price per share
determined in accordance with paragraph 7(b), below, subject to the limitations set forth in
paragraphs 3(b) and 12 hereof; provided, however, that the maximum number of shares that may be
purchased by any Employee under any offering period is 1,000 shares.




          (b) The option price per share of the shares offered in a given offering period shall be the
lower of: (i) 85% of the fair market value of a share of the Common Stock of the Company on the
Offering Date; or (ii) 85% of the fair market value of a share of the Common Stock of the Company
on the Exercise Date. The fair market value of the Company’s Common Stock on a given date shall be
determined by the Board in its good faith discretion; provided, however, that where there is a
public market for the Common Stock, the fair market value per share shall be the closing bid price
or last sale price of the Common Stock for such date (or, if no closing bid or last sales price was
reported on such date, on the last trading date such closing bid or last sales price was reported),
as reported in the Wall Street Journal (or, if not so reported, as reported in such other
source as the Board deems reliable).




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     8. Exercise of Option. Unless a participant withdraws from the Plan as provided in
paragraph 10, his option for the purchase of shares will be exercised automatically on the Exercise
Date of the offering period, and the maximum number of full shares subject to option will be
purchased for him at the applicable option price with the accumulated payroll deductions in his
account. The shares purchased upon exercise of an option hereunder shall be deemed to be
transferred to the participant on the Exercise Date. During his lifetime, a participant’s option
to purchase shares hereunder is exercisable only by him.



     9. Delivery. After the Exercise Date of each offering period, the Company shall
arrange the delivery to each participant, or to a broker designated by the Company, as appropriate,
of the shares purchased upon exercise of his option. Any cash remaining to the credit of a
participant’s account under the Plan after a purchase by him of shares at the termination of each
offering period, or which is insufficient to purchase a full share of Common Stock of the Company,
shall be returned to said participant.



     10. Withdrawal; Termination of Employment.



          (a) A participant may withdraw all but not less than all the payroll deductions credited to
his account under the Plan at any time up to fifteen (15) days prior to the Exercise Date of the
offering period by giving written notice to the Company. All of the participant’s payroll
deductions credited to his account will be paid to him after receipt of his notice of withdrawal
and his option for the current period will be automatically terminated, and no further payroll
deductions for the purchase of shares will be made during the offering period.




          (b) Upon termination of the participant’s Continuous Status as an Employee prior to the
Exercise Date of the offering period for any reason, including retirement or death, the payroll
deductions credited to his account will be returned to him or, in the case of his death, to the
person or persons entitled thereto under paragraph 14, and his option will be automatically
terminated.




          (c) In the event an Employee fails to remain in Continuous Status as an Employee of the
Company for at least twenty (20) hours per week during the offering period in which the employee is
a participant, he will be deemed to have elected to withdraw from the Plan and the payroll
deductions credited to his account will be returned to him and his option terminated.




          (d) A participant’s withdrawal from an offering will not have any effect upon his eligibility
to participate in a succeeding offering or in any similar plan which may hereafter be adopted by
the Company. If a participant withdraws from an offering, payroll deductions will not resume at
the beginning of a succeeding offering period unless the participant delivers to the Company a new
subscription agreement in accordance with paragraph 5(a).




     11. Interest. No interest shall accrue on the payroll deductions of a participant in
the Plan.



     12. Stock.



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          (a) The maximum number of shares of the Company’s Common Stock which shall be made available
for sale under the Plan shall be 5,900,000 shares, subject to adjustment upon changes in
capitalization of the Company as provided in paragraph 18. If the total number of shares which
would otherwise be subject to options granted pursuant to paragraph 7(a) hereof on the Offering
Date of an offering period exceeds the number of shares then available under the Plan (after
deduction of all shares for which options have been exercised or are then outstanding), the Company
shall make a pro rata allocation of the shares remaining available for option grant
in as uniform a manner as shall be practicable and as it shall determine to be equitable. In such
event, the Company shall give written notice of such reduction of the number of shares subject to
the option to each Employee affected thereby and shall similarly reduce the rate of payroll
deductions, if necessary.




          (b) The participant will have no interest or voting right in shares covered by his option
until such option has been exercised.




          (c) Shares to be delivered to a participant under the Plan will be registered in the name of
the participant.




     13. Administration. The Plan shall be administered by the Board of the Company or a
committee of members of the Board appointed by the Board. The administration, interpretation or
application of the Plan by the Board or its committee shall be final, conclusive and binding upon
all participants. Members of the Board who are eligible Employees are permitted to participate in
the Plan, provided that:



          (a) Members of the Board who are eligible to participate in the Plan may not vote on any
matter affecting the administration of the Plan or the grant of any option pursuant to the Plan.




          (b) If a Committee is established to administer the Plan, no member of the Board who is
eligible to participate in the Plan may be a member of the Committee.




     14. Designation of Beneficiary.



          (a) A participant may file a written designation of a beneficiary who is to receive any shares
and cash, if any, from the participant’s account under the Plan in the event of such participant’s
death subsequent to the end of the offering period but prior to delivery to him of such shares and
cash. In addition, a participant may file a written designation of a beneficiary who is to receive
any cash from the participant’s account under the Plan in the event of such participant’s death
prior to the Exercise Date of the offering period.




          (b) Such designation of beneficiary may be changed by the participant at any time by written
notice. In the event of the death of a participant and in the absence of a beneficiary validly
designated under the Plan who is living at the time of such participant’s death, the Company shall
deliver such shares and/or cash to the executor or administrator of the estate of the participant,
or if no such executor or administrator has been appointed (to the knowledge of the Company), the
Company, in its discretion, may deliver such shares and/or cash to the spouse or to any one or more dependents or relatives of the participant, or if no spouse,
dependent or

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relative is known to the Company, then to such other person as the Company may
designate.




     15. Transferability. Neither payroll deductions credited to a participant’s account
nor any rights with regard to the exercise of an option or to receive shares under the Plan may be
assigned, transferred, pledged or otherwise disposed of in any way (other than by will, the laws of
descent and distribution or as provided in paragraph 14 hereof) by the participant. Any such
attempt at assignment, transfer, pledge or other disposition shall be without effect, except that
the Company may treat such act as an election to withdraw funds in accordance with paragraph 10.



     16. Use of Funds. All payroll deductions received or held by the Company under the
Plan may be used by the Company for any corporate purpose, and the Company shall not be obligated
to segregate such payroll deductions.



     17. Reports. Individual accounts will be maintained for each participant in the Plan.



     18. Adjustments Upon Changes in Capitalization. Subject to any required action by the
shareholders of the Company, the number of shares of Common Stock covered by each option under the
Plan which has not yet been exercised and the number of shares of Common Stock which have been
authorized for issuance under the Plan but have not yet been placed under option (collectively, the
“Reserves”), as well as the price per share of Common Stock covered by each option under the Plan
which has not yet been exercised, shall be proportionately adjusted for any increase or decrease in
the number of issued shares of Common Stocks resulting from a stock split, reverse stock split,
stock dividend, combination or reclassification of the Common Stock, or any other increase or
decrease in the number of shares of Common Stock effected without receipt of consideration by the
Company; provided, however, that conversion of any convertible securities of the Company shall not
be deemed to have been “effected without receipt of consideration”. Such adjustment shall be made
by the Board, whose determination in that respect shall be final, binding and conclusive. Except
as expressly provided herein, no issue by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and no adjustment by reason
thereof shall be made with respect to, the number or price of shares of Common Stock subject to an
option.



     In the event of the proposed dissolution or liquidation of the Company, the offering period
will terminate immediately prior to the consummation of such proposed action, unless otherwise
provided by the Board. In the event of a proposed sale of all or substantially all of the assets
of the Company, or the merger of the Company with or into another corporation, each option under
the Plan shall be assumed by such successor corporation or a parent or subsidiary of such successor
corporation, unless the Board, in the exercise of its sole discretion and in lieu of such
assumption, determines to shorten the offering period then in progress by setting a new Exercise
Date (the “New Exercise Date”). If the Board shortens the offering period then in progress in lieu
of assumption, the Board shall notify each participant in writing at least ten (10) business days
prior to the New Exercise Date, that the Exercise Date for the participant’s option has been
changed to the New Exercise Date and that either:



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          (a) the participant’s option will be exercised automatically on the New Exercise Date, unless
prior to such date the participant has withdrawn from the offering period as provided in Section
10; or




          (b) the Company shall pay to the participant on the New Exercise Date an amount in cash, cash
equivalents, or property as determined by the Board that is equal to the excess, if any, of (i) the
fair market value of the shares subject to the option over (ii) the aggregate option price had the
participant’s option been exercised automatically under part (a) above. In addition, all remaining
accumulated payroll deduction amounts shall be returned to the participant.




     For purposes of this paragraph 18, an option granted under the Plan shall be deemed to be
assumed if the option is replaced with a comparable option with respect to shares of capital stock
of the successor corporation or parent thereof. The determination of option comparability shall be
made by the Board and its determination shall be final, binding and conclusive on all persons.



     The Board may, if it so determines in the exercise of its sole discretion, also make provision
for adjusting the Reserves, as well as the price per share of Common Stock covered by each
outstanding option, in the event that the Company effects one or more reorganizations,
recapitalizations, rights offerings or other increases or reductions of shares of its outstanding
Common Stock, and in the event of the Company being consolidated with or merged into any other
corporation.



     19. Amendment or Termination. The Board of Directors of the Company may at any time
terminate or amend the Plan. Except as provided in paragraph 18, no such termination can affect
options previously granted, nor may an amendment make any change in any option theretofore granted
which adversely affects the rights of any participant, nor may an amendment be made without prior
approval of the shareholders of the Company (obtained in the manner described in paragraph 21) if
such amendment would:



          (a) Increase the number of shares that may be issued under the Plan;




          (b) Permit payroll deductions at a rate in excess of the lesser of (i) fifteen percent (15%)
of the participant’s Compensation or (ii) $5,000 per offering period;




          (c) Change the designation of the employees (or class of employees) eligible for participation
in the Plan; or




          (d) If the Company has a class of equity securities registered under Section 12 of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”) at the time of such amendment,
materially increase the benefits which may accrue to participants under the Plan.




     If any amendment requiring shareholder approval under this paragraph 19 of the Plan is made
subsequent to the first registration of any class of equity securities by the Company under Section
12 of the Exchange Act, such shareholder approval shall be solicited as described in paragraph 21
of the Plan.



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     20. Notices. All notices or other communications by a participant to the Company
under or in connection with the Plan shall be deemed to have been duly given when received in the
form specified by the Company at the location, or by the person, designated by the Company for the
receipt thereof.



     21. Shareholder Approval.



          (a) Continuance of the Plan shall be subject to approval by the shareholders of the Company
within twelve (12) months before or after the date the Plan is adopted. If such shareholder
approval is obtained at a duly held shareholders’ meeting, it must be obtained by the affirmative
vote of the holders of a majority of the votes cast at a shareholders’ meeting at which a quorum
representing a majority of all outstanding voting stock is, either in person or by proxy, present
and voting on the Plan; or if such shareholder approval is obtained by written consent, it must be
obtained by the written consent of the holders of a majority of the outstanding shares of the
Company entitled to vote on the Plan; provided, however, that approval at a meeting or by written
consent may be obtained by a lesser degree of shareholder approval if the Board determines, in its
discretion after consultation with the Company’s legal counsel, that such a lesser degree of
shareholder approval will comply with all applicable laws and will not adversely affect the
qualification of the Plan under Section 423 of the Code.




          (b) If any required approval by the shareholders of the Plan itself or of any amendment
thereto is solicited at any time otherwise than substantially in accordance with Section 14(a) of
the Exchange Act and the rules and regulations promulgated thereunder, then the Company shall, at
or prior to the first annual meeting of shareholders held subsequent to the granting of an option
hereunder to an officer or director, do the following:




               (i) furnish in writing to the holders entitled to vote for the Plan substantially the same
information which would be required (if proxies to be voted with respect to approval or disapproval
of the Plan or amendment were then being solicited) by the rules and regulations in effect under
Section 14(a) of the Exchange Act at the time such information is furnished; and



               (ii) file with, or mail for filing to, the Securities and Exchange Commission four copies of
the written information referred to in subsection (i) hereof not later than the date on which such
information is first sent or given to shareholders.



     22. Conditions Upon Issuance of Shares. Shares shall not be issued with respect to an
option unless the exercise of such option and the issuance and delivery of such shares pursuant
thereto shall comply with all applicable provisions of law, domestic or foreign, including, without
limitation, the Securities Act of 1933, as amended, the Securities Act of 1934, as amended, the
rules and regulations promulgated thereunder, and the requirements of any stock exchange upon which
the shares may then be listed, and shall be further subject to the approval of counsel for the
Company with respect to such compliance.



     23. Term of Plan. The Plan shall become effective upon the earlier to occur of its
adoption by the Board of Directors or its approval by the shareholders of the Company as
described in paragraph 21. It shall continue in effect for a term of twenty (20) years unless
sooner



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terminated under paragraph 19.



     24. Plan History. In May 1992 the Board adopted, and the shareholders approved, the
Plan. In January 1995 the Board adopted, and in May 1995 the shareholders ratified, an amendment
to the Plan to increase the number of shares available for issuance under the Plan from 150,000 to
250,000 shares. In March 1996, the Board approved, and in May 1996 the shareholders ratified, an
amendment to the Plan to increase the number of shares available for issuance thereunder from
250,000 shares to 290,000 shares. In April 1997, the Board approved, and in May 1997 the
shareholders ratified, an amendment to the Plan increasing the number of shares available for
issuance thereunder from 290,000 shares to 350,000 shares. In September 1997, the Company declared
a stock split, thus increasing the number of shares reserved for issuance under the Plan to 700,000
shares. In March 1998, the Board approved, and in May 1998 the shareholders ratified, an amendment
to the Plan increasing the number of shares available for issuance thereunder from 700,000 shares
to 950,000 shares. In February 1999, the Board approved, and in May 1999 the shareholders
ratified, an amendment to the Plan increasing the number of shares available for issuance
thereunder from 950,000 shares to 1,300,000 shares. In December 1999, the Company declared a stock
split, thus increasing the number of shares reserved for issuance under the Plan to 3,900,000
shares. In March 2002, the Board approved, and in May 2002 the shareholders ratified, an amendment
to the Plan increasing the number of shares available for issuance thereunder by 1,000,000 shares
from 3,900,000 shares to 4,900,000 shares. In March 2005, subject to shareholder approval, the
Board approved an amendment to the Plan in order to (a) increase the number of shares available for
issuance thereunder by 1,000,000 shares from 4,900,000 shares to 5,900,000 shares and (b) revise
various administrative provisions of the Plan as well as the termination provisions (under
paragraph 18 of the Plan) in the event of a sale of all or substantially all of the assets of the
Company or a merger of the Company. The amendment of the various administrative provisions and
paragraph 18 of the Plan, if approved by the shareholders, shall be effective for offering periods
beginning on or after May 1, 2005. In February 2007, subject to shareholder approval, the Board
approved an amendment to the Plan increasing the number of shares available for issuance thereunder
by 1,000,000 shares from 4,900,000 shares to 5,900,000 shares.




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