EXHIBIT 10(g)
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TEXAS INSTRUMENTS
STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS
As Adopted April 16, 1998
The purpose of the Texas Instruments Stock Option Plan for Non-Employee
Directors (the "Plan") is to increase the proprietary and vested interest of
the non-employee directors of Texas Instruments Incorporated (the "Company") in
the growth and performance of the Company by granting such directors options to
purchase shares of the common stock of the Company, $1.00 par value ("Shares").
Section 1. Administration.
The Plan shall be administered by the Secretary of the Company (the
"Secretary"). Subject to the provisions of the Plan, the Secretary shall have
full power and authority to construe, interpret and administer the Plan. The
Secretary may issue rules and regulations for administration of the Plan. All
decisions of the Secretary shall be final, conclusive and binding upon all
parties, including the Company, the stockholders and the directors. In the
event of the absence or inability of the Secretary, any Assistant Secretary
shall have the authority to act in his place.
Subject to the terms of the Plan and applicable law, the Secretary shall
have full power and authority to: (i) interpret and administer the Plan and any
instrument or agreement relating to, or options to purchase common stock of the
Company granted under, the Plan; (ii) establish amend, suspend or waive such
rules and regulations and appoint such agents as the Secretary shall deem
appropriate for the proper administration of the Plan; and (iii) make any other
determination and take any other action that the Secretary deems necessary or
desirable for the administration of the Plan.
Section 2. Eligibility.
A member of the Board of Directors of the Company (the "Board") who is
not an employee of the Company or its subsidiaries shall be eligible for grant
of options under the Plan ("Eligible Director"). Any holder of an option
granted hereunder shall hereinafter be referred to as a "Participant."
Section 3. Shares Subject to the Plan.
The Shares deliverable upon the exercise of options will be made
available from treasury Shares.
Section 4. Option Grants.
Each individual who is an Eligible Director will be granted an option to
purchase 5,000 Shares as of the date of each regular January meeting of the
Compensation Committee of the Board or any successor committee (the
"Compensation Committee") following the effective date of the Plan or, if no
such January meeting is held, as of the date of the first meeting of the
Compensation Committee during a calendar year. The options granted will be
nonstatutory stock options not intended to qualify under Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code") and shall have the
following terms and conditions:
(a) Price. The Purchase price per share of Shares deliverable
upon the exercise of each option shall be 100% of the Fair
Market Value per share of the Shares on the date the option
is granted. For purposes of this Plan, Fair Market Value
shall be determined to be equal to the simple average of the
high and low prices of the Shares on the date of grant (or,
if there is no trading on the New York Stock Exchange on such
date, then on the first previous date on which there is such
trading) as reported in "New York Stock Exchange Composite
Transactions" in "The Wall Street Journal," rounded upward to
the next whole cent if such Fair Market Value should include
a fraction of a cent.
(b) Payment. The Secretary shall determine the method or
methods by which, and the form or forms, including, without
limitation, cash, Shares, or other property, or any
combination thereof, having a Fair Market Value on the
exercise date equal to the relevant exercise price, in which
payment of the exercise price with respect to an option may
be made or deemed to have been made.
(c) Exercisability and Term of Options. Subject to Section
4(d), options shall become exercisable in four equal annual
installments commencing on the first anniversary date of the
grant, provided the holder of such option remains an
Eligible Director until such anniversary date, and shall be
exercisable through the tenth anniversary date of the grant.
(d) Termination of Service as Eligible Director. The effect of
a Participant's termination of service as a director of the
Company shall be as follows:
(i) Termination for cause: All outstanding options
held by the Participant shall be canceled
immediately upon termination.
(ii) Death: All outstanding options held by the
Participant shall continue to full term, becoming
exercisable in accordance with Section 4(c), and
shall be exercisable by such Participant's heirs.
(iii) Permanent disability: All outstanding options
held by the Participant shall continue to full
term, becoming exercisable in accordance with
Section 4(c).
(iv) Termination after 8 years of service: All
outstanding options held by the Participant shall
continue to full term, becoming exercisable in
accordance with Section 4(c), except that any
option granted within less than six months prior
to termination shall be cancelled immediately
upon termination.
(v) Termination by reason of ineligibility to stand
for reelection under the Company's by-laws: All
outstanding options held by the Participant shall
continue to full term, becoming exercisable in
accordance with Section 4(c), except that any
option granted within less than six months prior
to termination shall be cancelled immediately
upon termination.
(vi) Other: For any termination other than those
specified above, all outstanding options held by
the Participant shall be exercisable for 30 days
after the date of termination, only to the extent
that such options were exercisable on the date of
termination, except as follows:
(A) If the Participant dies within 30 days
after his or her termination, then such
Participant's heirs may exercise the
options for a period of up to one year
after the Participant's death, but only
to the extent any unexercised portion
was exercisable on the date of
termination.
(B) If the Participant's termination occurs
within 30 days before the effective
date of a Change in Control (as defined
in Section 6), then the Change in
Control will be deemed to have occurred
first and the options shall be
exercisable in accordance with Section
4(c).
(e) Non-transferability of Options. No option shall be
transferable by a Participant except by will or by the laws
of descent and distribution, and during the Participant's
lifetime may be exercised only by Participant or, if
permissible under applicable law, by the Participant's legal
guardian or representative.
(f) Option Agreement. Each option granted hereunder shall be
evidenced by an agreement with the Company which shall
contain the terms and provisions set forth herein and shall
otherwise be consistent with the provisions of the Plan.
Section 5. Adjustment of and Changes in Shares.
In the event that the Secretary shall determine that any dividend or
other distribution (whether in the form of cash, Shares, other securities, or
other property), recapitalization, stock split, reverse stock split,
reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase or exchange of Shares or other securities of the Company, issuance
of warrants or other rights to purchase Shares or other securities of the
Company, or other similar corporate transaction or event affects the Shares
such that an adjustment is determined by the Secretary to be appropriate in
order to prevent dilution or enlargement of the benefits or potential benefits
intended to be made available under the Plan, then the Secretary shall, in such
manner as he or she may deem equitable, adjust any or all of (a) the number and
type of Shares subject to outstanding options, and (b) the exercise price with
respect to any option or, if deemed appropriate, make provision for a cash
payment to the holder of an outstanding option; provided, however, that no
fractional Shares shall be issued or outstanding hereunder. Notwithstanding
any such corporate transaction or event, no adjustment shall be made in the
number of Shares subject to options to be granted after the occurrence of any
such corporate transaction or event.
Section 6. Change of Control.
The provisions of Section 4(c) shall not apply and options outstanding
under the Plan shall be exercisable in full if a Change in Control occurs.
Change in Control means an event when (a) any Person, alone or together with
its Affiliates and Associates or otherwise, shall become an Acquiring Person
otherwise than pursuant to a transaction or agreement approved by the Board of
Directors of the Company prior to the time the Acquiring Person became such, or
(b) a majority of the Board of Directors of the Company shall change within any
24-month period unless the election or the nomination for election by the
Company's stockholders of each new director has been approved by a vote of at
least a majority of the directors then still in office who were directors at
the beginning of the period. For the purposes hereof, the terms Person,
Affiliates, Associates and Acquiring Person shall have the meanings given to
such terms in the Rights Agreement dated as of June 17, 1988 between the
Company and Harris Trust and Savings Bank, successor in interest to First
Chicago Trust Company of New York, (formerly Morgan Shareholder Services Trust
Company), as in effect on the date hereof; provided, however, that if the
percentage employed in the definition of Acquiring Person is reduced hereafter
from 20% in such Rights Agreement, then such reduction shall also be applicable
for the purposes hereof.
Section 7. No Rights of Stockholders.
Neither a Participant nor a Participant's legal representative shall be,
or have any of the rights and privileges of, a stockholder of the Company in
respect of any shares purchasable upon the exercise of any option, in whole or
in part, unless and until certificates for such shares shall have been issued.
Section 8. Plan Amendments.
The Board may amend, alter, suspend, discontinue or terminate the Plan
without the consent of any stockholder or Participant or other person:
provided, however, that no such action shall impair the rights under any option
theretofore granted under the Plan and that, notwithstanding any other
provision of the Plan or any option agreement, no such amendment, alteration,
suspension, discontinuation or termination shall be made that would permit
options to be granted with a per Share exercise price of less than the Fair
Market Value of a Share on the date of grant thereof.
Section 9. Effective Date.
The Plan shall become effective on April 16, 1998. The Plan shall
terminate April 16, 2003 unless the Plan is extended or terminated at an
earlier date.
Section 10. No Limit on Other Compensation Arrangements.
Nothing contained in the Plan shall prevent the Company from adopting or
continuing in effect other or additional compensation arrangements, and such
arrangements may be either generally applicable or applicable only in specific
cases.
Section 11. Governing Law.
The validity, construction, and effect of the Plan and any rules and
regulations relating to the Plan shall be determined in accordance with the
laws of the State of Delaware and applicable Federal law.
Section 12. Severability.
If any provision of the Plan or any option is or becomes or is deemed to
be invalid, illegal, or unenforceable in any jurisdiction, or as to any person
or option, or would disqualify the Plan or any option under any law deemed
applicable by the Board, such provision shall be construed or deemed amended to
conform to applicable laws, or if it cannot be so construed or deemed amended
without, in the determination of the Board, materially altering the intent of
the Plan or the option, such provision shall be stricken as to such
jurisdiction, person or option, and the remainder of the Plan and any such
option shall remain in full force and effect.
Section 13. No Right to Continued Board Membership.
The grant of options shall not be construed as giving a participant the
right to be retained as a director of the Company. The Board may at any time
fail or refuse to nominate a participant for election to the Board, and the
stockholders of the Company may at any election fail or refuse to elect any
participant to the Board free from any liability or claim under this Plan or
any options.
Section 14. No Trust or Fund Created.
Neither the Plan nor any options shall create or be construed to create a
trust or separate fund of any kind or a fiduciary relationship between the
Company and a participant or any other person. To the extent that any person
acquires a right to receive options, or Shares pursuant to options, from the
Company pursuant to this Plan, such right shall be no greater than the right of
any unsecured general creditor of the Company.
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TEXAS INSTRUMENTS
STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS
As Adopted April 16, 1998
The purpose of the Texas Instruments Stock Option Plan for Non-Employee
Directors (the "Plan") is to increase the proprietary and vested interest of
the non-employee directors of Texas Instruments Incorporated (the "Company") in
the growth and performance of the Company by granting such directors options to
purchase shares of the common stock of the Company, $1.00 par value ("Shares").
Section 1. Administration.
The Plan shall be administered by the Secretary of the Company (the
"Secretary"). Subject to the provisions of the Plan, the Secretary shall have
full power and authority to construe, interpret and administer the Plan. The
Secretary may issue rules and regulations for administration of the Plan. All
decisions of the Secretary shall be final, conclusive and binding upon all
parties, including the Company, the stockholders and the directors. In the
event of the absence or inability of the Secretary, any Assistant Secretary
shall have the authority to act in his place.
Subject to the terms of the Plan and applicable law, the Secretary shall
have full power and authority to: (i) interpret and administer the Plan and any
instrument or agreement relating to, or options to purchase common stock of the
Company granted under, the Plan; (ii) establish amend, suspend or waive such
rules and regulations and appoint such agents as the Secretary shall deem
appropriate for the proper administration of the Plan; and (iii) make any other
determination and take any other action that the Secretary deems necessary or
desirable for the administration of the Plan.
Section 2. Eligibility.
A member of the Board of Directors of the Company (the "Board") who is
not an employee of the Company or its subsidiaries shall be eligible for grant
of options under the Plan ("Eligible Director"). Any holder of an option
granted hereunder shall hereinafter be referred to as a "Participant."
Section 3. Shares Subject to the Plan.
The Shares deliverable upon the exercise of options will be made
available from treasury Shares.
Section 4. Option Grants.
Each individual who is an Eligible Director will be granted an option to
purchase 5,000 Shares as of the date of each regular January meeting of the
Compensation Committee of the Board or any successor committee (the
"Compensation Committee") following the effective date of the Plan or, if no
such January meeting is held, as of the date of the first meeting of the
Compensation Committee during a calendar year. The options granted will be
nonstatutory stock options not intended to qualify under Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code") and shall have the
following terms and conditions:
(a) Price. The Purchase price per share of Shares deliverable
upon the exercise of each option shall be 100% of the Fair
Market Value per share of the Shares on the date the option
is granted. For purposes of this Plan, Fair Market Value
shall be determined to be equal to the simple average of the
high and low prices of the Shares on the date of grant (or,
if there is no trading on the New York Stock Exchange on such
date, then on the first previous date on which there is such
trading) as reported in "New York Stock Exchange Composite
Transactions" in "The Wall Street Journal," rounded upward to
the next whole cent if such Fair Market Value should include
a fraction of a cent.
(b) Payment. The Secretary shall determine the method or
methods by which, and the form or forms, including, without
limitation, cash, Shares, or other property, or any
combination thereof, having a Fair Market Value on the
exercise date equal to the relevant exercise price, in which
payment of the exercise price with respect to an option may
be made or deemed to have been made.
(c) Exercisability and Term of Options. Subject to Section
4(d), options shall become exercisable in four equal annual
installments commencing on the first anniversary date of the
grant, provided the holder of such option remains an
Eligible Director until such anniversary date, and shall be
exercisable through the tenth anniversary date of the grant.
(d) Termination of Service as Eligible Director. The effect of
a Participant's termination of service as a director of the
Company shall be as follows:
(i) Termination for cause: All outstanding options
held by the Participant shall be canceled
immediately upon termination.
(ii) Death: All outstanding options held by the
Participant shall continue to full term, becoming
exercisable in accordance with Section 4(c), and
shall be exercisable by such Participant's heirs.
(iii) Permanent disability: All outstanding options
held by the Participant shall continue to full
term, becoming exercisable in accordance with
Section 4(c).
(iv) Termination after 8 years of service: All
outstanding options held by the Participant shall
continue to full term, becoming exercisable in
accordance with Section 4(c), except that any
option granted within less than six months prior
to termination shall be cancelled immediately
upon termination.
(v) Termination by reason of ineligibility to stand
for reelection under the Company's by-laws: All
outstanding options held by the Participant shall
continue to full term, becoming exercisable in
accordance with Section 4(c), except that any
option granted within less than six months prior
to termination shall be cancelled immediately
upon termination.
(vi) Other: For any termination other than those
specified above, all outstanding options held by
the Participant shall be exercisable for 30 days
after the date of termination, only to the extent
that such options were exercisable on the date of
termination, except as follows:
(A) If the Participant dies within 30 days
after his or her termination, then such
Participant's heirs may exercise the
options for a period of up to one year
after the Participant's death, but only
to the extent any unexercised portion
was exercisable on the date of
termination.
(B) If the Participant's termination occurs
within 30 days before the effective
date of a Change in Control (as defined
in Section 6), then the Change in
Control will be deemed to have occurred
first and the options shall be
exercisable in accordance with Section
4(c).
(e) Non-transferability of Options. No option shall be
transferable by a Participant except by will or by the laws
of descent and distribution, and during the Participant's
lifetime may be exercised only by Participant or, if
permissible under applicable law, by the Participant's legal
guardian or representative.
(f) Option Agreement. Each option granted hereunder shall be
evidenced by an agreement with the Company which shall
contain the terms and provisions set forth herein and shall
otherwise be consistent with the provisions of the Plan.
Section 5. Adjustment of and Changes in Shares.
In the event that the Secretary shall determine that any dividend or
other distribution (whether in the form of cash, Shares, other securities, or
other property), recapitalization, stock split, reverse stock split,
reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase or exchange of Shares or other securities of the Company, issuance
of warrants or other rights to purchase Shares or other securities of the
Company, or other similar corporate transaction or event affects the Shares
such that an adjustment is determined by the Secretary to be appropriate in
order to prevent dilution or enlargement of the benefits or potential benefits
intended to be made available under the Plan, then the Secretary shall, in such
manner as he or she may deem equitable, adjust any or all of (a) the number and
type of Shares subject to outstanding options, and (b) the exercise price with
respect to any option or, if deemed appropriate, make provision for a cash
payment to the holder of an outstanding option; provided, however, that no
fractional Shares shall be issued or outstanding hereunder. Notwithstanding
any such corporate transaction or event, no adjustment shall be made in the
number of Shares subject to options to be granted after the occurrence of any
such corporate transaction or event.
Section 6. Change of Control.
The provisions of Section 4(c) shall not apply and options outstanding
under the Plan shall be exercisable in full if a Change in Control occurs.
Change in Control means an event when (a) any Person, alone or together with
its Affiliates and Associates or otherwise, shall become an Acquiring Person
otherwise than pursuant to a transaction or agreement approved by the Board of
Directors of the Company prior to the time the Acquiring Person became such, or
(b) a majority of the Board of Directors of the Company shall change within any
24-month period unless the election or the nomination for election by the
Company's stockholders of each new director has been approved by a vote of at
least a majority of the directors then still in office who were directors at
the beginning of the period. For the purposes hereof, the terms Person,
Affiliates, Associates and Acquiring Person shall have the meanings given to
such terms in the Rights Agreement dated as of June 17, 1988 between the
Company and Harris Trust and Savings Bank, successor in interest to First
Chicago Trust Company of New York, (formerly Morgan Shareholder Services Trust
Company), as in effect on the date hereof; provided, however, that if the
percentage employed in the definition of Acquiring Person is reduced hereafter
from 20% in such Rights Agreement, then such reduction shall also be applicable
for the purposes hereof.
Section 7. No Rights of Stockholders.
Neither a Participant nor a Participant's legal representative shall be,
or have any of the rights and privileges of, a stockholder of the Company in
respect of any shares purchasable upon the exercise of any option, in whole or
in part, unless and until certificates for such shares shall have been issued.
Section 8. Plan Amendments.
The Board may amend, alter, suspend, discontinue or terminate the Plan
without the consent of any stockholder or Participant or other person:
provided, however, that no such action shall impair the rights under any option
theretofore granted under the Plan and that, notwithstanding any other
provision of the Plan or any option agreement, no such amendment, alteration,
suspension, discontinuation or termination shall be made that would permit
options to be granted with a per Share exercise price of less than the Fair
Market Value of a Share on the date of grant thereof.
Section 9. Effective Date.
The Plan shall become effective on April 16, 1998. The Plan shall
terminate April 16, 2003 unless the Plan is extended or terminated at an
earlier date.
Section 10. No Limit on Other Compensation Arrangements.
Nothing contained in the Plan shall prevent the Company from adopting or
continuing in effect other or additional compensation arrangements, and such
arrangements may be either generally applicable or applicable only in specific
cases.
Section 11. Governing Law.
The validity, construction, and effect of the Plan and any rules and
regulations relating to the Plan shall be determined in accordance with the
laws of the State of Delaware and applicable Federal law.
Section 12. Severability.
If any provision of the Plan or any option is or becomes or is deemed to
be invalid, illegal, or unenforceable in any jurisdiction, or as to any person
or option, or would disqualify the Plan or any option under any law deemed
applicable by the Board, such provision shall be construed or deemed amended to
conform to applicable laws, or if it cannot be so construed or deemed amended
without, in the determination of the Board, materially altering the intent of
the Plan or the option, such provision shall be stricken as to such
jurisdiction, person or option, and the remainder of the Plan and any such
option shall remain in full force and effect.
Section 13. No Right to Continued Board Membership.
The grant of options shall not be construed as giving a participant the
right to be retained as a director of the Company. The Board may at any time
fail or refuse to nominate a participant for election to the Board, and the
stockholders of the Company may at any election fail or refuse to elect any
participant to the Board free from any liability or claim under this Plan or
any options.
Section 14. No Trust or Fund Created.
Neither the Plan nor any options shall create or be construed to create a
trust or separate fund of any kind or a fiduciary relationship between the
Company and a participant or any other person. To the extent that any person
acquires a right to receive options, or Shares pursuant to options, from the
Company pursuant to this Plan, such right shall be no greater than the right of
any unsecured general creditor of the Company.