Data I/O Corp DEFR14A, filed May 3, 2021
Data I/O Corp (DAIO)
DEFR14A
2021-05-03
View Original
Added on
October 19, 2026
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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 20549
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SCHEDULE 14A
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Proxy
Statement Pursuant to Section 14(a) of the SecuritiesExchange Act
of 1934 (Amendment No.)
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Filed by the
Registrant ☒·
Filed by a Party other than the
Registrant ☐·
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Check the appropriate box:
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to § 240.14a-12
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Data I/O Corporation
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
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Payment of Filing Fee (Check the appropriate box):
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No fee required
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Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
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1)
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Title of each class of securities to which transaction
applies:
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2)
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Aggregate number of securities to which transaction
applies:
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3)
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Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was
determined):
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4)
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Proposed maximum aggregate value of transaction:
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5)
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Total fee paid:
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date
of its filing.
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1)
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Amount Previously Paid:
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2)
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Form, Schedule or Registration Statement No.:
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3)
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Filing Party:
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4)
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Date Filed:
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AMENDMENT TO THE PROXY STATEMENT FOR THE
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 20, 2021
Data I/O Corporation previously sent or made available to its
shareholders proxy materials in connection with the solicitation of
proxies for use at the Company’s 2021 Annual Meeting of
Shareholders (the “Annual Meeting”) to be held on
Thursday, May 20, 2021 at Data I/O’s headquarters at 6645
185th Ave NE, Suite 100, Redmond, Washington 98052 at 10 a.m.
Pacific Time. The proxy materials included the definitive proxy
statement filed by the Company with the U.S. Securities and
Exchange Commission on April 5, 2021 (the “Proxy
Statement”) that contains important information about the
proposals to be acted upon at the Annual Meeting. Such proposals
include, among others, approval of a proposal to amend and restate
the Data I/O Corporation 2000 Stock Compensation Incentive Plan
(the “2000 Plan”) and to increase the number of shares
reserved for issuance under the 2000 Plan by an additional 700,000
shares of common stock (“Proposal No. 4”). A copy of
the proposed amended and restated 2000 Plan, as approved by the
Company’s Board of Directors in February 2021, was attached
as Appendix A to the Proxy Statement.
After further review and consideration, the Company’s Board
of Directors subsequently modified its proposed amendment and
restatement of the 2000 Plan, attached as Appendix A to this
amendment to the Proxy Statement dated May 3, 2021 (this
“Amendment”), by further amending and restating the
2000 Plan, subject to stockholder approval, to specify that
dividends or dividend equivalents that are accrued with respect to
unvested restricted share awards cannot be paid until all
conditions or restriction have been satisfied, waived or lapsed and
to modify permitted share recycling. All references to the
“2000 Plan” and the “amendment and restatement of
the 2000 Plan” contained in the Proxy Statement and proxy
card pertaining to the Annual Meeting shall be deemed to refer to
the 2000 Plan, as amended and restated in February 2021 and so
further amended and restated, and attached as Appendix A
hereto.
This Amendment should be reviewed together with the Proxy
Statement. To the extent that the information in this Amendment
differs from or updates the information contained in the Proxy
Statement, the information in this Amendment is more current and
supersedes that information contained in the Proxy
Statement.
In this Amendment, terms such as “we,” “us”
and “our” refer to Data I/O Corporation, which may also
be referred to as “Data I/O” or the
“Company”.
****
AMENDED DISCLOSURES
The following paragraphs reflect revisions of specified portions of
the Proxy Statement. Blacklining is included to highlight the
changes from the original text of the Proxy Statement. Bold,
underlined text represents new text that was not in the Proxy
Statement, and struck out text represents deleted text. Defined
terms used but not defined herein have the meanings set forth in
the Proxy Statement, and all page references refer to pages of the
Proxy Statement.
The first paragraph under Proposal 4 on page 22 of the Proxy
Statement is revised as follows:
“At the Annual Meeting, the shareholders of
Data I/O will be asked to approve an amendment and restatement of
the 2000 Plan, which, if approved, will increase the number of
shares of Common Stock that have been made available under the 2000
Plan by an additional 700,000 shares, to an aggregate of 3,228,739
shares, the fair market value of such securities is $17,338,328 as
of March 22, 2021, as well as make certain other modifications to
the 2000 Plan. As of March 22, 2021, Data I/O has outstanding
options and awards under the 2000 Plan with respect to 598,228
shares of Common Stock and 128,893 shares of Common Stock available
for grants. Changes or updates to the plan include: addition of
700,000 shares to the plan along with updating the amendment
notes; specifying
that dividends
or dividend equivalents that are accrued with respect to unvested
restricted share awards cannot be paid until all conditions or
restriction have been satisfied, waived or lapsed; modifications to
permitted share recycling; and
making explicit three items previously silent on 1) repricing of
stock option’s exercise price shall, in accordance with
NASDAQ, require shareholder approval; 2) excise tax gross ups are
not allowed; and 3) awards are not transferrable to 3rd party
financial institutions. Approval of the proposed increase will also
be deemed a ratification of the terms of the 2000 Plan, as
amended.”
The third paragraph on page 24 of the Proxy Statement under the
heading “Description of the 2000 Plan, As Proposed to be
Amended and Restated” is revised as follows:
“Awards may be granted in the form of
incentive stock options (“ISOs”) within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended (the
“Code”), nonqualified stock options
(“NQOs”) (each ISO or NQO, an “Option” and
collectively, “Options”), stock appreciation rights,
stock awards in the form of restricted stock (“Restricted
Stock”), or other arrangements determined by the Committee.
Any award may be granted either alone or in tandem with other
awards granted under the 2000 Plan. The option price of ISOs shall
be as determined by the Committee, but shall not be less than 100%
of the fair market value of the Common Stock on the grant date. The
option price of NQOs may be less than the fair market value of the
Common Stock on the date of the grant; however, as a matter of
policy Data I/O does not grant options with an exercise price that
is less than the fair market value of the shares on the date of
grant of the option. The Committee may condition the grant of the
award upon the attainment of specified performance goals or other
criteria, which need not be the same for all participants. No ISOs
may be granted under the 2000 Plan on or after February 22, 2027
(February 21, 2028 February
21, 2028 (May 3, 2031 if this
proposal is approved), but ISOs outstanding under the 2000 Plan may
extend beyond that date.”
A new paragraph on page 24 of the Proxy Statement under the heading
“Description of the 2000 Plan, As Proposed to be Amended and
Restated” is added as follows:
“Dividends
or Dividend Equivalents. Dividend Equivalents cannot be granted in
connection with grants of Options, Stock Appreciation Rights or
other Awards the value of which is based solely on an increase in
the value of the Shares after the grant of such Award. Further,
dividend and dividend equivalent amounts with respect to any Share
underlying any other Award (including awards of restricted stock)
may be accrued but cannot paid to a Participant until all
conditions or restrictions relating to such Share have been
satisfied, waived or lapsed.”
The following paragraph on page 27 of the Proxy Statement under the
heading “Certain Federal Income Tax Consequences –
Restricted Stock Awards” is revised as follows:
“Grant and Lapse of
Restrictions. Section 83(b)
election of the Internal Revenue Code allows the holder of a
restricted stock award to elect, within 30 days after the date he
receives a restricted stock award, to recognize and be taxed on
ordinary income equal to the fair market value of the common stock
at that time. If the holder does not make a Section 83(b) election
within 30 days from the date he receives a restricted stock award,
the holder will recognize ordinary income equal to the fair market
value of the common stock at expiration of the restriction period.
The holder’s basis in the shares will equal their fair market
value at the time the holder recognizes ordinary income.
The
holder will be taxed at ordinary income rates on cash dividends
paid before the end of the restriction period. Subject to the general rules concerning
deductibility of compensation, Data I/O will be allowed an income
tax deduction in the amount that, and for our taxable year in
which, the holder recognizes ordinary income in connection with a
restricted stock award. Dividends on the
restricted stock that are received by the holder before the end of
the restriction period also will be deductible by Data I/O subject
to the general rules concerning compensation.”
****
VOTING MATTERS; REVOCABILITY OF PROXIES
Except as described in this Amendment, the information provided in
the Proxy Statement continues to apply and should be considered in
voting your shares of Data I/O common stock. There are no changes
to the proxy card or voting instruction form previously mailed to
shareholders.
If you have already voted by Internet, telephone or by mail, then
you do not need to take any action unless you wish to change your
vote. If you have not yet voted, please do so as soon as possible.
If you have already voted and wish to change your vote based on any
of the information contained in this Amendment or otherwise, you
may revoke your proxy and change your vote at any time before the
final vote at the Annual Meeting. Important information regarding how to vote
your shares of Data I/O common stock and how to revoke a proxy
already given is available in the Proxy Statement under the heading
“Information Regarding Proxy”. Votes already cast will
remain valid and will be voted at the Annual Meeting unless changed
or revoked.
As a stockholder, your vote is very important and the Data I/O
Board encourages you to exercise your right to vote whether or not
you plan to attend the Annual Meeting and regardless of the number
of shares of Data I/O common stock that you own.
****
Important Notice Regarding the
Availability of Proxy Materials for the Shareholder Meeting To Be
Held on May 20, 2021. The proxy statement and annual report to
security holders are also available at http://www.dataio.com/company/investorrelations/annualmeeting.aspx.
APPENDIX
A
DATA I/O CORPORATION
2000 STOCK COMPENSATION INCENTIVE PLAN
(AS AMENDED AND RESTATED)
1.
PURPOSES
1.1
The
purpose of the Data I/O Corporation 2000 Stock Compensation
Incentive Plan, as amended and restated, (the “2000
Plan”) is to enhance the long-term shareholder value of Data
I/O Corporation, a Washington corporation (the
“Company”), by offering opportunities to employees,
persons to whom offers of employment have been extended, directors,
officers, consultants, agents, advisors and independent contractors
of Data I/O and its Subsidiaries (as defined in Section 2) to
participate in Data I/O's growth and success, and to encourage them
to remain in the service of Data I/O and its Subsidiaries and to
acquire and maintain stock ownership in Data I/O.
2.
DEFINITIONS
For
purposes of the 2000 Plan, the following terms shall be defined as
set forth below:
2.1
Acquired
Entities.
“Acquired
Entities” has the meaning given in Section 6.2.
2.2
Acquisition
Transaction.
“Acquisition
Transaction” has the meaning given in Section
6.2.
2.3
Award.
“Award”
means a grant made to a Participant pursuant to the 2000 Plan,
including, without limitation, grants of Options, Stock
Appreciation Rights, Stock Awards, Other Stock-Based Awards or any
combination of the foregoing.
2.4
Board.
“Board”
means the Board of Directors of Data I/O.
2.5
Cause.
“Cause”
means dishonesty, fraud, misconduct, disclosure of confidential
information, conviction of, or a plea of guilty or no contest to, a
felony under the laws of the United States or any state thereof,
habitual absence from work for reasons other than illness,
intentional conduct which causes significant injury to Data I/O,
habitual abuse of alcohol or a controlled substance, in each case
as determined by the Plan Administrator, and its determination
shall be conclusive and binding.
2.6
Change in
Control.
“Change
in Control” means (i) the consummation of a merger or
consolidation of Data I/O with or into another entity or any other
corporate reorganization, if more than 50% of the combined voting
power of the continuing or surviving entity’s securities
outstanding immediately after such merger, consolidation or other
reorganization is owned by persons who were not shareholders of
Data I/O immediately prior to such merger, consolidation or other
reorganization or (ii) the sale, transfer or other disposition of
all or substantially all of Data I/O’s assets. A transaction
shall not constitute a Change in Control if its sole purpose is to
change the state of Data I/O’s incorporation or to create a
holding company that will be owned in substantially the same
proportions by the persons who held Data I/O’s securities
immediately before such transaction.
A-1
2.7
Code.
“Code”
means the Internal Revenue Code of 1986, as amended from time to
time.
2.8
Common
Stock.
“Common
Stock” means the common stock, no par value, of Data
I/O.
2.9
Disability.
“Disability”
means a medically determinable mental or physical impairment or
condition of the Holder which is expected to result in death or
which has lasted or is expected to last for a continuous period of
twelve (12) months or more and which causes the Holder to be
unable, in the opinion of the Plan Administrator on the basis of
evidence acceptable to it, to perform his or her duties for Data
I/O and, in the case of a determination of Disability for purposes
of determining the exercise period for an Incentive Stock Option,
to be engaged in any substantial gainful activity. Upon making a
determination of Disability, the Plan Administrator shall, for
purposes of the 2000 Plan, determine the date of the Holder’s
termination of employment, service or contractual
relationship.
2.10
Exchange
Act.
“Exchange
Act” means the Securities Exchange Act of 1934, as
amended.
2.11
Fair Market
Value.
“Fair
Market Value” shall be as established in good faith by the
Plan Administrator or (a) if the Common Stock is listed on the
NASDAQ Capital Market, the mean between the high and low selling
prices for the Common Stock as reported by the NASDAQ Capital
Market for a single trading day or (b) if the Common Stock is
listed on the New York Stock Exchange or the American Stock
Exchange, the mean between the high and low selling prices for the
Common Stock as such prices are officially quoted in the composite
tape of transactions on such exchange for a single trading day. If
there is no such reported price for the Common Stock for the date
in question, then such price on the last preceding date for which
such price exists shall be determinative of Fair Market
Value.
2.12
Grant
Date.
“Grant
Date” means the date the Plan Administrator adopted the
granting resolution or a later date designated in a resolution of
the Plan Administrator as the date an Award is to be
granted.
2.13
Holder.
“Holder”
means the Participant to whom an Award is granted or the personal
representative of a Holder who has died.
2.14
Incentive Stock
Option.
“Incentive
Stock Option” means an Option to purchase Common Stock
granted under Section 7 with the intention that it qualify as an
“incentive stock option” as that term is defined in
Section 422 of the Code.
2.15
Involuntary
Termination.
“Involuntary
Termination” means termination of the Holder’s service
to Data I/O (or the parent or subsidiary company employing such
Holder) or the other party to the transaction constituting a Change
in Control by reason of (i) the involuntary discharge of such
Holder by Data I/O (or the parent or subsidiary company employing
such Holder) or the other party to the transaction constituting a
Change in Control for reasons other than Cause or (ii) the
voluntary resignation of the Holder following (A) a change in such
Holder’s position with Data I/O (or its successor or the
parent or subsidiary company that employs such Holder) or the other
party to the transaction constituting a Change in Control that
materially reduces such Holder’s level of authority or
responsibility or (B) a reduction in such Holder’s
compensation (including base salary, fringe benefits and
participation in bonus or incentive programs based on corporate
performance) by more than 20%.
A-2
2.16
Nonqualified Stock
Option.
“Nonqualified
Stock Option” means an Option to purchase Common Stock
granted under Section 7 other than an Incentive Stock
Option.
2.17
Option.
“Option”
means the right to purchase Common Stock granted under Section
7.
2.18
Option
Shares.
“Option
Shares” means the shares of Common Stock issuable upon a
Holder’s exercise of an Option granted under the 2000
Plan.
2.19
Other Stock-Based
Award.
“Other
Stock-Based Award” means an Award granted under Section
11.
2.20
Participant.
“Participant”
means an individual who is a Holder of an Award or, as the context
may require, any employee, director (including directors who are
not employees), officer, consultant, agent, advisor or independent
contractor of Data I/O or a Subsidiary who has been designated by
the Plan Administrator as eligible to participate in the 2000
Plan.
2.21
Plan
Administrator.
“Plan
Administrator” means the Board or any committee designated to
administer the 2000 Plan under Section 3.1.
2.22
Qualifying
Award.
“Qualifying
Award” means an Option or an Award that is held by a person
who had been an employee, director, consultant or agent to Data I/O
for at least 180 days as of the effective date of a Change in
Control.
2.23
Qualifying
Shares.
“Qualifying
Shares” means shares of Common Stock issued pursuant to a
Qualifying Award which are subject to the right of Data I/O to
repurchase some or all of such shares at the original purchase
price (if any) upon termination of the Holder’s services to
Data I/O.
2.24
Restricted
Stock.
“Restricted
Stock” means shares of Common Stock granted pursuant to a
Stock Award under Section 10, the rights of ownership of which are
subject to restrictions prescribed by the Plan
Administrator.
2.25
Securities
Act.
“Securities
Act” means the Securities Act of 1933, as
amended.
2.26
Stock Appreciation
Right.
“Stock
Appreciation Right” means an Award granted under Section
9.
2.27
Stock
Award.
“Stock
Award” means an Award granted under Section 10.
A-3
2.28
Subsidiary.
“Subsidiary,”
except as expressly provided otherwise, means any entity that is
directly or indirectly controlled by Data I/O or in which Data I/O
has a significant ownership interest, as determined by the Plan
Administrator, and any entity that may become a direct or indirect
parent of Data I/O.
2.29
Unvested
Portion.
“Unvested
Portion” means the portion of a Qualifying Award or
Qualifying Shares that is/are unvested as of the effective date of
a Change in Control.
2.30
Vested
Portion.
“Vested
Portion” means the portion of a Qualifying Award or
Qualifying Shares that is/are vested as of the effective date of a
Change in Control.
3.
ADMINISTRATION
3.1
Plan
Administrator.
The
2000 Plan shall be administered by the Board or a committee or
committees (which term includes subcommittees) appointed by, and
consisting of two or more members of, the Board. Any such committee
shall have the powers and authority vested in the Board hereunder
(including the power and authority to interpret any provision of
the 2000 Plan or of any Award). The Board, or any committee thereof
appointed to administer the 2000 Plan, is referred to herein as the
"Plan Administrator." If and so long as the Common Stock is
registered under Section 12(b) or 12(g) of the Exchange Act, the
Board shall consider in selecting the Plan Administrator and the
membership of any committee acting as Plan Administrator for any
persons subject or likely to become subject to Section 16 under the
Exchange Act the provisions regarding (a) “outside
directors” as contemplated by Section 162(m) of the Code and
(b) “Non-Employee Directors” as contemplated by Rule
16b-3 under the Exchange Act. The Board or Plan Administrator may
delegate the responsibility for administering the 2000 Plan with
respect to designated classes of eligible Participants to one or
more senior executive officers or committees thereof, the members
of which need not be members of the Board, subject to such
limitations as the Board deems appropriate. Committee members shall
serve for such term as the Board may determine, subject to removal
by the Board at any time.
3.2
Administration and
Interpretation by the Plan Administrator.
Except
for the terms, conditions and limitations explicitly set forth in
the 2000 Plan, the Plan Administrator shall have exclusive
authority, in its absolute discretion, to determine all matters
relating to Awards under the 2000 Plan, including the selection of
individuals to be granted Awards, the type of Awards, the number of
shares of Common Stock subject to an Award, all terms, conditions,
restrictions and limitations, if any, of an Award and the terms of
any instrument that evidences the Award. The Plan Administrator
shall also have exclusive authority to interpret the 2000 Plan and
may from time to time adopt, change and rescind rules and
regulations of general application for the 2000 Plan's
administration. This authority shall include the sole
authority to correct any defect, supply any omission or reconcile
any inconsistency in this 2000 Plan and make all other
determinations necessary or advisable for the administration of the
2000 Plan and do everything necessary or appropriate to administer
the 2000 Plan. The Plan Administrator's interpretation of the 2000
Plan and its rules and regulations, and all actions taken and
determinations made by the Plan Administrator pursuant to the 2000
Plan shall be conclusive and binding on all parties involved or
affected. The Plan Administrator may delegate administrative duties
to such of Data I/O's officers as it so determines.
4.
STOCK SUBJECT TO THE 2000 PLAN
4.1
Authorized Number of
Shares.
As
of March 10, 2000, Data I/O had outstanding options with respect to
1,215,000 shares of Common Stock and 270,499 shares of Common Stock
available for additional grants under the 2000 Plan and the Data
I/O 1986 Employee Stock Option Plan (“1986 Plan”).
Subject to adjustment from time to time as provided in Section
14.1, Awards of the authorized but unissued shares of Common Stock
under the 1986 Plan, or shares of Common Stock that become
available under the 1986 Plan as a result of the expiration or
termination of options, may be granted under this 2000 Plan. Awards
for an additional 300,000 shares of Common Stock shall also be
available for issuance under the 2000 Plan. Shares issued under the
2000 Plan shall be drawn from authorized and unissued shares. See
also Section 18 for 2000 Plan amendments.
A-4
4.2
Limitations.
(a) Subject
to adjustment from time to time as provided in Section 14.1, not
more than 200,000 shares of Common Stock may be made subject to
Awards under the 2000 Plan to any individual Participant in the
aggregate in any one (1) calendar year, except that Data I/O may
make additional one-time grants to newly hired Participants of up
to 100,000 shares per such Participant; such limitation shall be
applied in a manner consistent with the requirements of, and only
to the extent required for compliance with, the exclusion from the
limitation on deductibility of compensation under Section 162(m) of
the Code.
(b) Subject
to adjustment from time to time as provided in Section 14.1, not
more than 100,000 shares of Common Stock may be made subject to
Awards to any non-employee director in the aggregate in any one
calendar year.
4.3
Shares Available for
Awards.
(a) Shares
Added Back to Reserve. Subject to the limitations in (b) below, if
any Shares covered by an Award or to which an Award relates are not
purchased or are forfeited or are reacquired by the Company
(including any Shares covered by an Award that is settled in cash)
or if any Award otherwise terminates or is cancelled without
delivery of any Shares, then the number of Shares counted against
the aggregate number of Shares available under the Plan with
respect to such Award, to the extent of any such forfeiture,
reacquisition by the Company, termination or cancellation, shall
again be available for granting Awards under the
Plan.
(b) Shares
Not Added Bact to Reserve. Notwithstanding anything to the contrary
in (a) above, the following Shares will not again become available
for issuance under the Plan: (A) any Shares which would have been
issued upon any exercise of an Option but for the fact that the
exercise price was paid by a “net exercise” or any
Shares tendered in payment of the exercise price of an Option; (B)
any Shares withheld by the Company or Shares tendered to satisfy
any tax withholding obligation with respect to any Award; (C)
Shares covered by a stock-settled Stock Appreciation Right issued
under the Plan that are not issued in connection with settlement in
Shares upon exercise; or (D) Shares that are repurchased by the
Company using Option exercise proceeds.
(c) Cash
Only Awards. Awards that do not entitle the holder thereof
to receive or purchase Shares shall not be counted against the
aggregate number of Shares available for Awards under the
Plan.
(d) Substitute
Awards Relating to Acquired Entities. Shares issued under Awards
granted in substitution for awards previously granted by an entity
that is acquired by or merged with the Company or an Affiliate
shall not be counted against the aggregate number of Shares
available for Awards under the Plan.
5.
ELIGIBILITY
Awards
may be granted under the 2000 Plan to those officers, directors and
key employees of Data I/O and its Subsidiaries as the Plan
Administrator from time to time selects. Awards may also be made to
consultants, agents, advisors and independent contractors who
provide services to Data I/O and its Subsidiaries.
6.
AWARDS
6.1
Form and Grant of
Awards.
The
Plan Administrator shall have the authority, in its sole
discretion, to determine the type or types of Awards to be made
under the 2000 Plan. Such Awards may include, but are not limited
to, Incentive Stock Options, Nonqualified Stock Options, Stock
Appreciation Rights, Stock Awards and Other Stock-Based Awards.
Awards may be granted singly, in combination or in tandem so that
the settlement or payment of one automatically reduces or cancels
the other. Awards may also be made in combination or in tandem
with, in replacement of, as alternatives to, or as the payment form
for, grants or rights under any other employee or compensation plan
of Data I/O.
A-5
6.2
Acquired Company
Awards.
Notwithstanding
anything in the 2000 Plan to the contrary, the Plan Administrator
may grant Awards under the 2000 Plan in substitution for awards
issued under other plans, or assume under the 2000 Plan awards
issued under other plans, if the other plans are or were plans of
other acquired entities (“Acquired Entities”) (or the
parent of the Acquired Entity) and the new Award is substituted, or
the old Award is assumed, by reason of a merger, consolidation,
acquisition of property or of stock, reorganization or liquidation
(an “Acquisition Transaction”). If a written agreement
pursuant to which an Acquisition Transaction is completed is
approved by the Board and said agreement sets forth the terms and
conditions of the substitution for or assumption of outstanding
awards of the Acquired Entity, said terms and conditions shall be
deemed to be the action of the Plan Administrator without any
further action by the Plan Administrator, except as may be required
for compliance with Rule 16b-3 under the Exchange Act, and the
persons holding such Awards shall be deemed to be Participants and
Holders.
7.
AWARDS OF OPTIONS
7.1
Grant of
Options.
The
Plan Administrator is authorized under the 2000 Plan, in its sole
discretion, to issue Options as Incentive Stock Options or as
Nonqualified Stock Options, which shall be appropriately
designated.
7.2
Option Exercise
Price.
The
exercise price for shares purchased under an Option shall be as
determined by the Plan Administrator, but shall not be less than
100% of the Fair Market Value of the Common Stock on the Grant Date
with respect to Incentive Stock Options.
7.3
Term of
Options.
The term of each Option shall be as established by
the Plan Administrator or, if not so established, shall
be six (6) years from the Grant
Date.
7.4
Exercise of
Options.
The
Plan Administrator shall establish and set forth in each instrument
that evidences an Option the time at which or the installments in
which the Option shall become exercisable, which provisions may be
waived or modified by the Plan Administrator at any time. If not so
established in the instrument evidencing the Option or otherwise
set at the time of grant, the Option will be subject to the
following: (a) 25% of the Option shall vest and become exercisable
on each anniversary of the Grant Date such that the Option shall be
fully vested on the fourth anniversary of the Grant Date; (b) in no
event shall any additional Option Shares vest after termination of
Holder’s employment by or service to Data I/O; and (c) the
Plan Administrator may waive or modify the foregoing schedule at
any time.
To
the extent that the right to purchase shares has accrued there
under, an Option may be exercised from time to time by written
notice to Data I/O, in accordance with procedures established by
the Plan Administrator, setting forth the number of shares with
respect to which the Option is being exercised and accompanied by
payment in full as described in Section 7.5. An Option may not be
exercised as to less than 100 shares at any one time (or the lesser
number of remaining shares covered by the Option).
7.5
Payment of Exercise
Price.
The
exercise price for shares purchased under an Option shall be paid
in full to Data I/O by delivery of consideration equal to the
product of the Option exercise price and the number of shares
purchased. Such consideration must be paid in cash or check
(unless, at the time of exercise, the Plan Administrator determines
not to accept a personal check), except that the Plan
Administrator, in its sole discretion, may, either at the time the
Option is granted or at any time before it is exercised and subject
to such limitations as the Plan Administrator may determine,
authorize payment in cash and/or one or more of the following
alternative forms: (a) tendering (either actually or, if and so
long as the Common Stock is registered under Section 12(b) or 12(g)
of the Exchange Act, by attestation) Common Stock already owned by
the Holder for at least six months (or any shorter period necessary
to avoid a charge to Data I/O's earnings for financial reporting
purposes) having a Fair Market Value on the day prior to the
exercise date equal to the aggregate Option exercise price; (b) a
promissory note delivered pursuant to Section 12; (c) if and so
long as the Common Stock is registered under Section 12(b) or 12(g)
of the Exchange Act, delivery of a properly executed exercise
notice, together with irrevocable instructions, to (i) a third
party designated by Data I/O to deliver promptly to Data I/O the
aggregate amount of sale or loan proceeds to pay the Option
exercise price and any withholding tax obligations that may arise
in connection with the exercise and (ii) Data I/O to deliver the
certificates for such purchased shares directly to such third
party, all in accordance with the regulations of the Federal
Reserve Board; (d) the net exercise of the Option as defined below;
or (e) such other consideration as the Plan Administrator may
permit.
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In
the case of a "net exercise" of an Option, the Company will not
require a payment of the exercise price of the Option from the
Holder but will reduce the number of shares of Common Stock issued
upon the exercise by the largest number of whole shares that have a
Fair Market Value that does not exceed the aggregate exercise
price. With respect to any remaining balance of the aggregate
exercise price, the Company will accept a cash payment from the
Participant.
The
number of shares of Common Stock underlying an Option will decrease
following the exercise of such Option to the extent of (i) shares
used to pay the exercise price of an Option under the "net
exercise" feature, (ii) shares actually delivered to the Holder as
a result of such exercise, and (iii) shares withheld for purposes
of tax withholding.
7.6
Post-Termination Exercises.
The
Plan Administrator may establish and set forth in each instrument
that evidences an Option whether the Option will continue to be
exercisable, and the terms and conditions of such exercise, if a
Holder ceases to be employed by, or to provide services to, Data
I/O or its Subsidiaries, which provisions may be waived or modified
by the Plan Administrator at any time.
If
not so established in the instrument evidencing the Option, the
Option will be exercisable according to the following terms and
conditions, which may be waived or modified by the Plan
Administrator at any time.
In
case of termination of the Holder’s employment or services
other than by reason of death or Cause, the Option shall be
exercisable, to the extent of the number of shares purchasable by
the Holder at the date of such termination, only (a) within one (1)
year if the termination of the Holder’s employment or
services are coincident with Disability or (b) within three (3)
months after the date the Holder ceases to be an employee,
director, officer, consultant, agent, advisor or independent
contractor of Data I/O or a Subsidiary if termination of the
Holder’s employment or services is for any reason other than
death or Disability, but in no event later than the remaining term
of the Option. Any Option exercisable at the time of the
Holder’s death may be exercised, to the extent of the number
of shares purchasable by the Holder at the date of the
Holder’s death, by the personal representative of the
Holder’s estate entitled thereto at any time or from time to
time within one (1) year after the date of death, but in no event
later than the remaining term of the Option. In case of termination
of the Holder’s employment or services for Cause, the Option
shall automatically terminate upon first discovery by Data I/O of
any reason for such termination and the Holder shall have no right
to purchase any Shares pursuant to such Option, unless the Plan
Administrator determines otherwise. If a Holder’s employment
or services with Data I/O are suspended pending an investigation of
whether the Holder shall be terminated for Cause, all the
Holder’s rights under any Option likewise shall be suspended
during the period of investigation.
A
transfer of employment or services between or among Data I/O and
its Subsidiaries shall not be considered a termination of
employment or services. The effect of a Company-approved leave of
absence or short-term break in service on the terms and conditions
of an Option shall be determined by the Plan Administrator, in its
sole discretion.
8.
INCENTIVE STOCK OPTION LIMITATIONS
To
the extent required by Section 422 of the Code, Incentive Stock
Options shall be subject to the following additional terms and
conditions:
8.1 Dollar
Limitation.
To
the extent the aggregate Fair Market Value (determined as of the
Grant Date) of Common Stock with respect to which Incentive Stock
Options are exercisable for the first time during any calendar year
(under the 2000 Plan and all other stock option plans of Data I/O)
exceeds $100,000, such portion in excess of $100,000 shall be
treated as a Nonqualified Stock Option. In the event the
Participant holds two (2) or more such Options that become
exercisable for the first time in the same calendar year, such
limitation shall be applied on the basis of the order in which such
Options were granted.
8.2 10%
Shareholders.
If
a Participant owns more than 10% of the total voting power of all
classes of Data I/O's stock, then the exercise price per share of
an Incentive Stock Option shall not be less than 110% of the Fair
Market Value of the Common Stock on the Grant Date and the Option
term shall not exceed five (5) years. The determination of 10%
ownership shall be made in accordance with Section 422 of the
Code.
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8.3 Eligible
Employees.
Individuals
who are not employees of Data I/O or one of its parent corporations
or subsidiary corporations may not be granted Incentive Stock
Options. For purposes of this Section 8.3, “parent
corporation” and “subsidiary corporation” shall
have the meanings attributed to those terms for purposes of Section
422 of the Code.
8.4 Term.
The
term of an Incentive Stock Option shall not exceed ten (10)
years.
8.5
Exercisability.
To
qualify for Incentive Stock Option tax treatment, an Option
designated as an Incentive Stock Option must be exercised within
three (3) months after termination of employment for reasons other
than death, except that, in the case of termination of employment
due to total Disability, such Option must be exercised within one
(1) year after such termination. Employment shall not be deemed to
continue beyond the first 90 days of a leave of absence unless the
Participant's reemployment rights are guaranteed by statute or
contract.
8.6 Taxation
of Incentive Stock Options.
In
order to obtain certain tax benefits afforded to Incentive Stock
Options under Section 422 of the Code, the Participant must hold
the shares issued upon the exercise of an Incentive Stock Option
for two (2) years after the Grant Date of the Incentive Stock
Option and one (1) year from the date the shares are transferred to
the Participant. A Participant may be subject to the alternative
minimum tax at the time of exercise of an Incentive Stock Option.
The Participant shall give Data I/O prompt notice of any
disposition of shares acquired by the exercise of an Incentive
Stock Option prior to the expiration of such holding
periods.
8.7 Promissory
Notes.
The
amount of any promissory note delivered pursuant to Section 12 in
connection with an Incentive Stock Option shall bear interest at a
rate specified by the Plan Administrator but in no case less than
the rate required to avoid imputation of interest (taking into
account any exceptions to the imputed interest rules) for federal
income tax purposes.
8.8 Incorporation
of Other Provisions.
With
respect to Incentive Stock Options, if this 2000 Plan does not
contain any provision required to be included herein under Section
422 of the Code, such provision shall be deemed to be incorporated
herein with the same force and effect as if such provision had been
set out in full herein; provided, however, that to the extent any
Option that is intended to qualify as an Incentive Stock Option
cannot so qualify, the Option, to that extent, shall be deemed to
be a Nonqualified Stock Option for all purposes of this 2000
Plan.
9.
STOCK APPRECIATION RIGHTS
9.1
Grant of Stock
Appreciation Rights.
The
Plan Administrator may grant a Stock Appreciation Right separately
or in tandem with a related Option.
9.2
Tandem Stock
Appreciation Rights.
A
Stock Appreciation Right granted in tandem with a related Option
will give the Holder the right to surrender to Data I/O all or a
portion of the related Option and to receive an appreciation
distribution (in shares of Common Stock or cash or any combination
of shares and cash, as the Plan Administrator, in its sole
discretion, shall determine at any time) in an amount equal to the
excess of the Fair Market Value for the date the Stock Appreciation
Right is exercised over the exercise price per share of the right,
which shall be the same as the exercise price of the related
Option. A tandem Stock Appreciation Right will have the same other
terms and provisions as the related Option. Upon and to the extent
a tandem Stock Appreciation Right is exercised, the related Option
will terminate.
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9.3 Stand-Alone
Stock Appreciation Rights.
A
Stock Appreciation Right granted separately and not in tandem with
an Option will give the Holder the right to receive an appreciation
distribution in an amount equal to the excess of the Fair Market
Value for the date the Stock Appreciation Right is exercised over
the exercise price per share of the right. A stand-alone Stock
Appreciation Right will have such terms as the Plan Administrator
may determine, except that the term of the right, if not otherwise
established by the Plan Administrator, shall be ten (10) years from
the Grant Date.
9.4 Exercise
of Stock Appreciation Rights.
Unless
otherwise provided by the Plan Administrator in the instrument that
evidences the Stock Appreciation Right, the provisions of Section
7.6 relating to the termination of a Holder’s employment or
services shall apply equally, to the extent applicable, to the
Holder of a Stock Appreciation Right.
10.
STOCK AWARDS
10.1 Grant
of Stock Awards.
The
Plan Administrator is authorized to make Awards of Common Stock or
of rights to receive shares of Common Stock to Participants on such
terms and conditions and subject to such restrictions, if any
(which may be based on continuous service with Data I/O or the
achievement of performance goals related to (i) sales, gross
margin, operating profits or profits, (ii) growth in sales, gross
margin, operating profits or profits, (iii) return ratios related
to sales, gross margin, operating profits or profits, (iv) cash
flow, (v) asset management (including inventory management), or
(vi) total shareholder return, where such goals may be stated in
absolute terms or relative to comparison companies), as the Plan
Administrator shall determine, in its sole discretion, which terms,
conditions and restrictions shall be set forth in the instrument
evidencing the Award. The terms, conditions and restrictions that
the Plan Administrator shall have the power to determine shall
include, without limitation, the manner in which shares subject to
Stock Awards are held during the periods they are subject to
restrictions and the circumstances under which forfeiture of
Restricted Stock shall occur by reason of termination of the
Holder's services or upon the occurrence of other
events.
10.2 Issuance
of Shares.
Upon
the satisfaction of any terms, conditions and restrictions
prescribed with respect to a Stock Award, or upon the Holder's
release from any terms, conditions and restrictions of a Stock
Award, as determined by the Plan Administrator, Data I/O shall
transfer, as soon as practicable, to the Holder or, in the case of
the Holder's death, to the personal representative of the Holder's
estate or as the appropriate court directs, the appropriate number
of shares of Common Stock covered by the Award.
10.3 Waiver
of Restrictions.
Notwithstanding
any other provisions of the 2000 Plan, the Plan Administrator may,
in its sole discretion, waive the forfeiture period and any other
terms, conditions or restrictions on any Restricted Stock under
such circumstances and subject to such terms and conditions as the
Plan Administrator shall deem appropriate.
11.
OTHER STOCK-BASED AWARDS
The
Plan Administrator may grant other Awards under the 2000 Plan
pursuant to which shares of Common Stock (which may, but need not,
be shares of Restricted Stock pursuant to Section 10) are or may in
the future be acquired, or Awards denominated in stock units,
including ones valued using measures other than market value. Such
Other Stock-Based Awards may be granted alone or in addition to or
in tandem with any Award of any type granted under the 2000 Plan
and must be consistent with the 2000 Plan’s
purpose.
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12.
LOANS, INSTALLMENT PAYMENTS AND LOAN GUARANTEES
To
assist a Holder (excluding a Holder who is an officer or director
of Data I/O) in acquiring shares of Common Stock pursuant to an
Award granted under the 2000 Plan, the Plan Administrator, in its
sole discretion, may authorize, either at the Grant Date or at any
time before the acquisition of Common Stock pursuant to the Award,
(a) the extension of a loan to the Holder by Data I/O, (b) the
payment by the Holder of the purchase price, if any, of the Common
Stock in installments, or (c) the guarantee by Data I/O of a loan
obtained by the grantee from a third party. The terms of any loans,
installment payments or loan guarantees, including the interest
rate and terms of and security for repayment, will be subject to
the Plan Administrator's discretion; provided, however, that
repayment of any Company loan to the Holder shall be secured by
delivery of a full-recourse promissory note for the loan amount
executed by the Holder, together with any other form of security
determined by the Plan Administrator. The maximum credit available
is the purchase price, if any, of the Common Stock acquired, plus
the maximum federal and state income and employment tax liability
that may be incurred in connection with the
acquisition.
13.
ASSIGNABILITY
Except
as otherwise specified or approved by the Plan Administrator at the
time of grant of an Award or any time prior to its exercise, no
Award granted under the 2000 Plan may be assigned, pledged or
transferred by the Holder other than by will or by the laws of
descent and distribution, and during the Holder's lifetime, such
Awards may be exercised only by the Holder. Notwithstanding the
foregoing, and to the extent permitted by Section 422 of the Code,
the Plan Administrator, in its sole discretion, may permit such
assignment, transfer and exercise ability and may permit a Holder
of such Awards to designate a beneficiary who may exercise the
Award or receive compensation under the Award after the Holder's
death; provided, however, that (i) any Award so assigned or
transferred shall be subject to all the same terms and conditions
contained in the instrument evidencing the Award, (ii) the original
Holder shall remain subject to withholding taxes upon exercise,
(iii) any subsequent transfer of an Award shall be prohibited and
(iv) the events of termination of employment or contractual
relationship set forth in subsection 7.6 shall continue to apply
with respect to the original transferor-Holder.
14.
ADJUSTMENTS
14.1 Adjustment
of Shares.
In
the event that, at any time or from time to time, a stock dividend,
stock split, spin-off, combination or exchange of shares,
recapitalization, merger, consolidation, distribution to
shareholders other than a normal cash dividend, or other change in
Data I/O's corporate or capital structure results in (a) the
outstanding shares, or any securities exchanged therefor or
received in their place, being exchanged for a different number or
class of securities of Data I/O or of any other corporation or (b)
new, different or additional securities of Data I/O or of any other
corporation being received by the holders of shares of Common Stock
of Data I/O, then the Plan Administrator, in its sole discretion,
shall make such equitable adjustments as it shall deem appropriate
in the circumstances in (i) the maximum number and class of
securities subject to the 2000 Plan as set forth in Section 4.1,
(ii) the maximum number and class of securities that may be made
subject to Awards to any individual Participant as set forth in
Section 4.2, and (iii) the number and class of securities that are
subject to any outstanding Award and the per share price of such
securities, without any change in the aggregate price to be paid
therefor. The determination by the Plan Administrator as to the
terms of any of the foregoing adjustments shall be conclusive and
binding. Repricing of stock option exercise prices shall, in
accordance with NASDAQ rules, require shareholder
approval.
14.2 Dissolution,
Liquidation or Change in Control Transactions.
(a) In
the event of the proposed dissolution or liquidation of Data I/O,
Data I/O shall notify each Holder at least fifteen (15) days prior
to such proposed action. To the extent not previously exercised,
all Awards will terminate immediately prior to the consummation of
such proposed action.
(b)
Unless
the applicable agreement representing an Award provides otherwise,
or unless the Plan Administrator determines otherwise in its sole
and absolute discretion in connection with any Change in Control, a
Qualifying Award which is not vested or is not exercisable in full
shall become exercisable or vested in connection with a Change in
Control which becomes effective before the Holder’s service
to Data I/O terminates as follows:
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(i) If
the Qualifying Award remains outstanding following the Change in
Control, is assumed by the surviving entity or its parent, or the
surviving entity or its parent substitutes awards with
substantially the same terms for such Qualifying Award, the vesting
and exercisability of the Qualifying Award shall be accelerated to
the extent of 25% of the Unvested Portion thereof, and the
remaining 75% of the Unvested Portion of such Qualifying Award
shall vest in accordance with the vesting schedule set forth in the
applicable Award agreement.
(ii) If
the Qualifying Award remains outstanding following the Change in
Control, is assumed by the surviving entity or its parent, or the
surviving entity or its parent substitutes options with
substantially the same terms for such Qualifying Award and if the
Holder thereof is subject to an Involuntary Termination within 180
days following such Change in Control, then all Awards held by such
Holder (or options issued in substitution thereof) shall become
vested or exercisable in full, whether or not the vesting
requirements set forth in the Award agreement have been satisfied,
for a period of 90 days commencing on the effective date of such
Holder’s Involuntary Termination, or if shorter, the
remaining term of the Award.
(iii) If
a Qualifying Award does not remain outstanding, and either such
Qualifying Award is not assumed by the surviving entity or its
parent, or the surviving entity or its parent does not substitute
awards with substantially the same terms for such Qualifying Award,
such Qualifying Award shall become vested or exercisable in full,
whether or not the vesting requirements set forth in the Award
agreement have been satisfied, for a period prior to the effective
date of such Change in Control of a duration specified by the Plan
Administrator, and thereafter the Award shall
terminate.
(c)
Unless
the applicable agreement representing an Award provides otherwise,
or unless the Plan Administrator determines otherwise in its sole
and absolute discretion in connection with any Change in Control,
the vesting of Qualifying Shares shall be accelerated, and Data
I/O’s repurchase right with respect to such shares shall
lapse, in connection with a Change in Control which becomes
effective before such Holder’s service to Data I/O terminates
as follows:
(i) If
Qualifying Awards were outstanding at the effective time of the
Change in Control and they are partially accelerated pursuant to
Subsection (b)(i) above or if there were no Qualifying Awards
outstanding at the effective time of the Change in Control, the
vesting of all Qualifying Shares shall be accelerated to the extent
of 25% of the Unvested Portion thereof, and the remaining 75% of
the Unvested Portion of such Qualifying Shares shall vest in
accordance with the vesting schedule set forth in the applicable
Award agreement.
(ii) If
the preceding clause (i) applied and if a Holder of Qualifying
Shares is subject to an Involuntary Termination within 180 days
following the same Change in Control, then all Qualifying Shares
held by such Holder (or shares issued in substitution thereof)
shall become vested in full, whether or not the vesting
requirements set forth in the applicable Award agreement have been
satisfied.
(iii) If
Qualifying Awards were outstanding at the effective time of the
Change in Control and they are accelerated in full pursuant to
Subsection (b)(iii) above or otherwise, the vesting of all
Qualifying Shares shall be accelerated in full, and Data
I/O’s repurchase right with respect to all such shares shall
lapse in full, whether or not the vesting requirements set forth in
the applicable Award agreement have been
satisfied.
14.3
Further Adjustment of
Awards.
Subject
to the preceding Section 14.2, the Plan Administrator shall have
the discretion, exercisable at any time before a sale, merger,
consolidation, reorganization, dissolution, liquidation or Change
in Control of Data I/O, as defined by the Plan Administrator, to
take such further action as it determines to be necessary or
advisable, and fair and equitable to Participants, with respect to
Awards. Such authorized action may include (but shall not be
limited to) establishing, amending or waiving the type, terms,
conditions or duration of, or restrictions on, Awards so as to
provide for earlier, later, extended or additional time for
exercise, payment or settlement or lifting restrictions, differing
methods for calculating payments or settlements, alternate forms
and amounts of payments and settlements and other modifications,
and the Plan Administrator may take such actions with respect to
all Participants, to certain categories of Participants or only to
individual Participants. The Plan Administrator may take such
actions before or after granting Awards to which the action relates
and before or after any public announcement with respect to such
sale, merger, consolidation, reorganization, dissolution,
liquidation or Change in Control that is the reason for such
action. Without limiting the generality of the foregoing, if Data
I/O is a party to a merger or consolidation, outstanding Awards
shall be subject to the agreement of merger or consolidation. Such
agreement, without the Holder’s consent, may provide
for:
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(a)
the
continuation of such outstanding Award by Data I/O (if Data I/O is
the surviving corporation);
(b)
the
assumption of the 2000 Plan and some or all outstanding Awards by
the surviving corporation or its parent;
(c)
the
substitution by the surviving corporation or its parent of Awards
with substantially the same terms for such outstanding Awards;
or
(d)
the
cancellation of such outstanding Awards with or without payment of
any consideration.
14.4
Limitations.
The
grant of Awards will in no way affect Data I/O's right to adjust,
reclassify, reorganize or otherwise change its capital or business
structure or to merge, consolidate, dissolve, liquidate or sell or
transfer all or any part of its business or assets.
14.5 Fractional
Shares.
In
the event of any adjustment in the number of shares covered by any
Award, any fractional shares resulting from such adjustment shall
be disregarded and each such Award shall cover only the number of
full shares resulting from such adjustment.
15.
WITHHOLDING
Data
I/O may require the Holder to pay to Data I/O in cash the amount of
any withholding taxes that Data I/O is required to withhold with
respect to the grant, exercise, payment or settlement of any Award.
Data I/O shall have the right to withhold from any Award or any
shares of Common Stock issuable pursuant to an Award or from any
cash amounts otherwise due or to become due from Data I/O to the
Participant an amount equal to such taxes. Data I/O may also deduct
from any Award any other amounts due from the Participant to Data
I/O or a Subsidiary.
16.
AMENDMENT AND TERMINATION OF 2000 PLAN
16.1
Amendment of 2000
Plan.
The
2000 Plan may be amended by the Board in such respects as it shall
deem advisable including, without limitation, such modifications or
amendments as are necessary to maintain compliance with applicable
statutes, rules or regulations; however, to the extent required for
compliance with Section 422 of the Code or any applicable law or
regulation, shareholder approval will be required for any amendment
that will increase the aggregate number of shares as to which
Incentive Stock Options may be granted or change the class of
persons eligible to participate. Amendments made to the 2000 Plan
which would constitute “modifications” to Incentive
Stock Options outstanding on the date of such Amendments shall not
be applicable to such outstanding Incentive Stock Options but shall
have prospective effect only. The Board may condition the
effectiveness of any amendment on the receipt of shareholder
approval at such time and in such manner as the Board may consider
necessary for Data I/O to comply with or to avail Data I/O, the
Holders or both of the benefits of any securities, tax, market
listing or other administrative or regulatory requirement which the
Board determines to be desirable. Whenever shareholder approval is
sought, and unless required otherwise by applicable law or exchange
requirements, the proposed action shall require the affirmative
vote of holders of a majority of the shares present, entitled to
vote and voting on the matter without including abstentions or
broker non-votes in the denominator.
16.2
Termination Of 2000
Plan.
Data
I/O's shareholders or the Board may suspend or terminate the 2000
Plan at any time. The 2000 Plan will have no fixed expiration date;
provided, however, that no Incentive Stock Options may be granted
more than ten (10) years after the earlier of the 2000 Plan's
adoption by the Board or approval by the shareholders.
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17.
GENERAL
17.1 Award
Agreements.
Awards
granted under the 2000 Plan shall be evidenced by a written
agreement which shall contain such terms, conditions, limitations
and restrictions as the Plan Administrator shall deem advisable and
which are not inconsistent with the 2000 Plan.
17.2 Continued
Employment or Services; Rights In Awards.
None
of the 2000 Plan, participation in the 2000 Plan as a Participant
or any action of the Plan Administrator taken under the 2000 Plan
shall be construed as giving any Participant or employee of Data
I/O any right to be retained in the employ of Data I/O or limit
Data I/O's right to terminate the employment or services of the
Participant.
17.3 Registration;
Certificates For Shares.
Data
I/O shall be under no obligation to any Participant to register for
offering or resale or to qualify for exemption under the Securities
Act, or to register or qualify under state securities laws, any
shares of Common Stock, security or interest in a security paid or
issued under, or created by, the 2000 Plan, or to continue in
effect any such registrations or qualifications if made. Data I/O
may issue certificates for shares with such legends and subject to
such restrictions on transfer and stop-transfer instructions as
counsel for Data I/O deems necessary or desirable for compliance by
Data I/O with federal and state securities laws.
Inability
of Data I/O to obtain, from any regulatory body having
jurisdiction, the authority deemed by
Data I/O's counsel to be necessary for the lawful issuance and sale
of any shares hereunder or the unavailability of an exemption from
registration for the issuance and sale of any shares hereunder
shall relieve Data I/O of any liability in respect of the
non-issuance or sale of such shares as to which such requisite
authority shall not have been obtained.
17.4 No
Rights As A Shareholder.
No
Option, Stock Appreciation Right or Other Stock-Based Award shall
entitle the Holder to any cash dividend, voting or other right of a
shareholder unless and until the date of issuance under the 2000
Plan of the shares that are the subject of such Award, free of all
applicable restrictions. Further (a) no dividend equivalents shall
be granted to Participants in connection with grants of Options,
Stock Appreciation Rights or other Awards the value of which is
based solely on an increase in the value of the Shares after the
grant of such Award, and (b) dividend and dividend equivalent
amounts with respect to any Share underlying any other Award may be
accrued but may not be paid to a Participant until all conditions
or restrictions relating to such Share have been satisfied, waived
or lapsed.
17.5 Compliance
With Laws And Regulations.
In
interpreting and applying the provisions of the 2000 Plan, any
Option granted as an Incentive Stock Option pursuant to the 2000
Plan shall, to the extent permitted by law, be construed as an
“incentive stock option” within the meaning of Section
422 of the Code.
17.6 No
Trust Or Fund.
The
2000 Plan is intended to constitute an “unfunded” plan.
Nothing contained herein shall require Data I/O to segregate any
monies or other property, or shares of Common Stock, or to create
any trusts, or to make any special deposits for any immediate or
deferred amounts payable to any Participant, and no Participant
shall have any rights that are greater than those of a general
unsecured creditor of Data I/O.
17.7 Severability.
If
any provision of the 2000 Plan or any Award is determined to be
invalid, illegal or unenforceable in any jurisdiction, or as to any
person, or would disqualify the 2000 Plan or any Award under any
law deemed applicable by the Plan Administrator, 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
Plan Administrator’s determination, materially altering the
intent of the 2000 Plan or the Award, such provision shall be
stricken as to such jurisdiction, person or Award, and the
remainder of the 2000 Plan and any such Award shall remain in full
force and effect.
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17.8
Restrictions.
(a)
Excise
tax gross-ups are not allowed.
(b)
Awards are not transferable to
3rd
party financial
institutions.
18.
EFFECTIVE DATE
The
2000 Plan's effective date is the date on which it is adopted by
the Board, so long as it is approved by Data I/O's shareholders at
any time within twelve (12) months of such adoption.
The
original 2000 Plan was adopted by the Board on February 28, 2000
and approved by Data I/O's shareholders in May 2000. The 2000 Plan
was amended and approved by the Board and Data I/O's shareholders
in: 2002 to add an additional 200,000 shares; 2004, to add an
additional 300,000 shares; 2006, to add an additional 300,000
shares; 2009, to add an additional 300,000 shares; 2011, to add an
additional 300,000 shares; 2012, to add an additional 300,000
shares; 2017, to add an additional 250,000 shares and 2018, to add
an additional 300,000 shares of Common Stock to be reserved for
issuance under the 2000 Plan On February 24, 2021, the Board
amended and restated the 2000 Plan to add an additional 700,000
shares of Common Stock to be reserved for issuance under the 2000
Plan and the Plan was further amended on May 3, 2021 [to limit
recycling of Shares and to clarify that dividends and dividend
equivalents may be accrued with respect to unvested Awards but
cannot be paid until all restrictions applicable to the Award have
been satisfied or waived].
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