-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, IntMgHezDpwI5e/0g5stv728sgylPEerhIPSGhOhvi+OG6PLLtiGdRQdHkkB2pU0 /8I4Cv2DcD9BD19U9ixVJQ== 0000912057-97-002178.txt : 19970130 0000912057-97-002178.hdr.sgml : 19970130 ACCESSION NUMBER: 0000912057-97-002178 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 19970129 EFFECTIVENESS DATE: 19970129 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: DATA I/O CORP CENTRAL INDEX KEY: 0000351998 STANDARD INDUSTRIAL CLASSIFICATION: INSTRUMENTS FOR MEAS & TESTING OF ELECTRICITY & ELEC SIGNALS [3825] IRS NUMBER: 910864123 STATE OF INCORPORATION: WA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 SEC ACT: 1933 Act SEC FILE NUMBER: 333-20657 FILM NUMBER: 97513690 BUSINESS ADDRESS: STREET 1: 10525 WILLOWS RD NE STREET 2: P O BOX 97046 CITY: REDMOND STATE: WA ZIP: 98073-9746 BUSINESS PHONE: 2068816444 S-8 1 FORM S-8 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 29, 1997 REGISTRATION NO. 333-______ - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 DATA I/O CORPORATION -------------------- (EXACT NAME OF ISSUER AS SPECIFIED IN ITS CHARTER) WASHINGTON 91-0864123 ---------- ---------- (STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.) 10525 WILLOWS ROAD N.E., REDMOND, WASHINGTON 98052 -------------------------------------------- ----- (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (206) 881-6444 -------------- DATA I/O CORPORATION 1982 EMPLOYEE STOCK PURCHASE PLAN AMENDED AND RESTATED DECEMBER 11, 1996 AND DATA I/O CORPORATION 1996 DIRECTOR FEE PLAN ------------------------------------------- (FULL TITLES OF THE PLANS) STEVEN M. GORDON 10525 WILLOWS ROAD N.E. REDMOND, WASHINGTON 98052 --------------------------------------- (NAME AND ADDRESS OF AGENT FOR SERVICE) (206) 881-6444 -------------- (TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE) CALCULATION OF REGISTRATION FEE
- ---------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------- PROPOSED MAXIMUM PROPOSED TITLE OF OFFERING PRICE MAXIMUM AMOUNT OF SECURITIES AMOUNT TO BE PER AGGREGATE REGISTRATION TO BE REGISTERED REGISTERED SHARE (1) OFFERING PRICE FEE (1) - ---------------------------------------------------------------------------------------------------------------- COMMON STOCK 600,000 WITHOUT PAR VALUE SHARES $5.19 $3,114,000 $943.64 - ---------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------
(1) THE PROPOSED MAXIMUM OFFERING PRICE PER SHARE AND THE REGISTRATION FEE WERE CALCULATED IN ACCORDANCE WITH RULE 457(h) UNDER THE SECURITIES ACT OF 1933 BASED ON THE AVERAGE OF THE HIGH AND LOW PRICES FOR DATA I/O CORPORATION COMMON STOCK ON JANUARY 23, 1997, AS QUOTED BY THE NATIONAL ASSOCIATION OF SECURITIES DEALERS AUTOMATED QUOTATION NATIONAL MARKET SYSTEM, WHICH WAS $5.19 PER SHARE. (2) EARLIER REGISTRATION STATEMENTS (REGISTRATION STATEMENT NOS. 33-26472, 33- 42010, 33-66824 AND 33-95608) COVERING DATA I/O CORPORATION COMMON STOCK ARE INCORPORATED BY REFERENCE. PAGE 1 OF 23 PAGES EXHIBIT INDEX IS LOCATED ON PAGE II-5. PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE. The following documents filed or to be filed with the Commission by the Registrant are incorporated by reference in this registration statement. (a) The Registrant's Annual Report on Form 10-K for the fiscal year ended December 28, 1995, the Registrant's Quarterly Report on Form 10-Q for the quarters ended March 28, 1996, June 27, 1996, and September 26, 1996, filed with the Commission pursuant to Section 13(a) of the Exchange Act of 1934, as amended (the "Exchange Act"). (b) All other reports filed pursuant to Section 13(a) or 15(d) of the Exchange Act since the filing of the Form 10-K referred to in (a) above. (c) The description of the Registrant's Common Stock contained in a registration statement on Form 8-A filed pursuant to Section 12 of the Exchange Act (Registration No. 0-10394). (d) All documents filed by the Registrant pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date hereof and prior to the termination of the offering of the common stock pursuant to the Plans described herein shall be deemed to be incorporated by reference herein and to be a part hereof from the date of filing of such documents. ITEM 4. DESCRIPTION OF SECURITIES. Not Applicable ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL. None. ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS. The Washington Business Corporation Act (Sections 23B.08.500 through 23B.08.600 of the Revised Code of Washington) authorizes a court to award, or a corporation's Board of Directors to grant, indemnity to directors and officers in terms sufficiently broad to permit such indemnification under certain circumstances for liabilities arising under the Securities Act of 1933, as amended. Article IX of the Registrant's Bylaws provides for indemnification of its directors, officers, employees and other agents. The Washington Business Corporation Act includes a provision (Section 23B.08.320 of the Revised Code of Washington) that permits a corporation to limit a director's liability to the corporation or its shareholders for monetary damages for his acts or omissions as a director, except for those acts or omissions involving intentional misconduct or a knowing violation of law, certain unlawful distributions or a transaction whereby the director received a personal benefit to which he was not legally entitled. Article XIII of the Registrant's Articles of Incorporation contains provisions implementing, to the fullest extent, the allowed limitations on a director's liability to the Registrant or its shareholders. II-1 ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED. Not Applicable ITEM 8. EXHIBITS. EXHIBIT NUMBER EXHIBIT - -------------- ------- 5.1 Opinion of Heller, Ehrman, White & McAuliffe 10.1 Data I/O Corporation 1982 Employee Stock Purchase Plan Amended and Restated December 11, 1996 10.2 Data I/O Corporation 1996 Director Fee Plan 23.1 Consent of Heller, Ehrman, White & McAuliffe (See Exhibit 5.1) 23.2 Consent of Ernst & Young LLP, Independent Auditors 24 Power of Attorney (See page II-4 of this Registration Statement) ITEM 9. UNDERTAKINGS. (a) The undersigned Registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement; (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the Registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in this registration statement. (2) That for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post effective amendment any of the securities being registered which remain unsold at the termination of the offering. II-2 (b) The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant's annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934, (and, where applicable, each filing of an employee benefit plan's annual report pursuant to section 15(d) of the securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (h) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. II-3 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Redmond, State of Washington, on the 29th day of January, 1997. DATA I/O CORPORATION By: /s/ STEVEN M. GORDON --------------------------------------------- Steven M. Gordon, Vice President of Finance and Administration, Chief Financial Officer, Secretary and Treasurer (Principal Financial and Accounting Officer) POWER OF ATTORNEY Each person whose signature appears below constitutes and appoints Steven M. Gordon and Joel Hatlen, or either of them, his true and lawful attorney-in-fact and agent, with the power of substitution and resubstitution, for him in his name, place and stead, in any and all capacities, to sign any or all amendments to this Registration Statement, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorney-in-fact and his agent or his substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the date indicated. Signature Title Date --------- ----- ---- /s/ WILLIAM C. ERXLEBEN President, Chief Executive January 29, 1997 - -------------------------- Officer and Director (Principal William C. Erxleben Executive Officer) /s/ FRANCES M. CONLEY Director January 29, 1997 - -------------------------- Frances M. Conley /s/ EDWARD D. LAZOWSKA Director January 29, 1997 - -------------------------- Edward D. Lazowska /s/ W. HUNTER SIMPSON Director January 29, 1997 - -------------------------- W. Hunter Simpson /s/ DONALD R. STENQUIST Director January 29, 1997 - -------------------------- Donald R. Stenquist /s/ MILTON F. ZEUTSCHEL Director January 29, 1997 - -------------------------- Milton F. Zeutschel /s/ STEVEN M. GORDON Vice President of Finance and January 29, 1997 - -------------------------- Administration, Chief Financial Steven M. Gordon Officer, Secretary and Treasurer (Principal Financial and Accounting Officer) II-4 EXHIBIT INDEX Sequential Exhibit Number Exhibit Page No. - -------------- ------- -------- 5.1 Opinion of Heller, Ehrman, White & McAuliffe II-6 10.1 Data I/O Corporation 1982 Employee Stock Purchase Plan Amended and Restated December 11, 1996 II-9 10.2 Data I/O Corporation 1996 Director Fee Plan II-16 23.1 Consent of Heller, Ehrman, White & McAuliffe (see Exhibit 5.1) II-6 23.2 Consent of Ernst & Young LLP, Independent Auditors II-21 24 Power of Attorney (see page II-4 of this Registration Statement) II-4 II-5 EX-5.1 2 EXHIBIT 5.1 EXHIBIT 5.1 OPINION OF HELLER, EHRMAN, WHITE & MCAULIFFE II-6 January 29, 1997 Data I/O Corporation 10525 Willows Road N.E. Redmond, WA 98052 Re: REGISTRATION STATEMENT ON FORM S-8 UNDER THE SECURITIES ACT OF 1933, AS AMENDED Ladies and Gentlemen: Data I/O Corporation, a Washington corporation (the "Company"), has requested our opinion with respect to certain matters relating to the registration statement on Form S-8 (the "Registration Statement") which the Company will be filing with the Securities and Exchange Commission in connection with the registration under the Securities Act of 1933, as amended, of 600,000 shares (the "Shares") of common stock, without par value (the "Common Stock"), issuable by the Company: (1) upon the exercise of options to purchase shares (the "Options") granted pursuant to the Company's 1982 Employee Stock Purchase Plan, Amended and Restated December 11, 1996 (the "Employee Stock Purchase Plan"); or (2) pursuant to the Company's 1996 Director Fee Plan (the "Director Fee Plan", and, collectively with the Employee Stock Purchase Plan, the "Plans"). The Shares are currently unissued shares of the Company. The Shares are to be sold to employees of the Company or issued to eligible members of the Company's board of directors (the "Board") as described in the Plans. We have assumed the authenticity of all records, documents and instruments submitted to us as originals, the genuineness of all signatures, the legal capacity of natural persons and the authenticity and conformity to the originals of all records, documents and instruments submitted to us as copies. We have based our opinion upon our review of the following records, documents, instruments and certificates and such additional certificates relating to factual matters as we have deemed necessary and appropriate for our opinion: 1. The Articles of Incorporation of the Company, certified by the Washington Secretary of State as of January 21, 1997, and certified to us by an officer of the Company as being complete, unamended and in full force and effect as of the date of this opinion; 2. A Certificate of Existence/Authorization relating to the Company issued by the Secretary of State of the State of Washington, dated as of January 21, 1997; 3. The Bylaws of the Company, certified to us by an officer of the Company as being complete, unamended and in full force and effect as of the date of this opinion; II-7 4. Records certified to us by an officer of the Company as constituting all records of proceedings and of actions of the Board and shareholders of the Company relating to the adoption and amendment of the Plans, and reservation and issuance of shares under the Plans; 5. The Plans; 6. A certificate of the Company's transfer agent indicating the number of shares of capital stock of the Company outstanding as of January 20, 1997; and 7. A certificate of an officer of the Company, dated as of the date of this opinion, stating that no dissolution proceedings have been commenced with respect to the Company. This opinion is limited to the laws of the State of Washington and we disclaim any opinion as to the laws of any other jurisdiction. We further disclaim any opinion as to any statute, rule, regulation, ordinance, order or other promulgation of any regional or local governmental body or as to any related judicial or administrative opinion. Based upon the foregoing and subject to the assumptions and qualifications expressed herein, it is our opinion that: (1) the reservation for issuance of the Shares upon the exercise of the Options granted pursuant to the Employee Stock Purchase Plan has been duly authorized and, upon exercise of the Options and payment of the purchase price for the Shares and issuance and delivery of the Shares pursuant to the terms of the Employee Stock Purchase Plan, the Shares will be validly issued, fully paid and non-assessable; and (2) the reservation for issuance of the Shares under the Director Fee Plan has been duly authorized and upon issuance and delivery of the Shares pursuant to the terms of the Director Fee Plan, the Shares will be validly issued, fully paid and non-assessable. Our opinion is qualified to the extent that in the event of a stock split, share dividend or other reclassification of the Common Stock effected subsequent to the date hereof, the number of shares of Common Stock issuable upon the exercise of Options or pursuant to the Director Fee Plan may be adjusted automatically, as set forth in the terms of the Plans, such that the number of such shares may exceed the number of Company's remaining authorized, but unissued shares of Common Stock at the time the Options are exercised or shares are issued pursuant to the Director Fee Plan. We expressly disclaim any obligation to advise you of any developments in areas covered by this opinion that occur after the date of this opinion. We hereby authorize and consent to the use of this opinion as Exhibit 5.1 to the Registration Statement. Very truly yours, HELLER, EHRMAN, WHITE & McAULIFFE II-8 EX-10.1 3 EXHIBIT 10.1 EXHIBIT 10.1 DATA I/O CORPORATION 1982 EMPLOYEE STOCK PURCHASE PLAN AMENDED AND RESTATED DECEMBER 11, 1996 II-9 DATA I/O CORPORATION 1982 EMPLOYEE STOCK PURCHASE PLAN AMENDED AND RESTATED DECEMBER 11, 1996 1.1 PURPOSE This 1982 Employee Stock Purchase Plan (the "Plan") is intended as an incentive and to encourage stock ownership by all eligible employees of Data I/O Corporation (the "Company") and participating subsidiaries so that they may share in the fortunes of the Company by acquiring or increasing their proprietary interest in the Company. The Plan is designed to encourage eligible employees to remain in the employ of the Company. It is intended that options issued pursuant to this Plan shall constitute options issued pursuant to an "employee stock purchase plan" within the meaning of Section 423 of the Internal Revenue Code of 1986, as amended (the "Code"). 1.2 ELIGIBLE EMPLOYEES All regular, full-time employees of the Company or any of its participating subsidiaries shall be eligible to receive options under this Plan to purchase the Company's common stock, no par value (the "Common Stock") (except employees in countries whose laws make participating impractical). For purposes of this Plan, the term employee shall include all employees of the Company or any of its participating subsidiaries other than persons whose customary employment is twenty (20) hours or less per week or not more than five (5) months per calendar year. Persons who are employees on the August 1 next following the date that this Plan is approved by the stockholders of the Company shall receive their options as of such August 1. Persons who become eligible to participate in the Plan after the date on which the initial options are granted hereunder shall be granted options on the next date on which options are granted to all eligible employees. In no event may an employee participate in this Plan if such employee, immediately after the option is granted, owns stock possessing five percent (5%) or more of the total combined voting power or value of all classes of stock of the Company or of its parent corporation or subsidiary corporation, as the terms "parent corporation" and "subsidiary corporation" are defined in Section 424 (e) and (f) of the Code. For purposes of determining stock ownership under this paragraph, the rules of Section 424(d) of the Code shall apply and stock which the employee may purchase under outstanding options shall be treated as stock owned by the employee. 1.3 STOCK SUBJECT TO THE PLAN The stock subject to the options shall be shares of the Company's authorized but unissued Common Stock or shares of Common Stock reacquired by the Company including shares purchased in the open market. The aggregate number of shares which may be issued pursuant to the Plan is one million five hundred fifty thousand (1,550,000), subject to increase or decrease by reason of stock split-ups, reclassifications, stock dividends, changes in par value and the like. 1.4 PAYMENT PERIODS AND STOCK OPTIONS The period during which payroll deductions will accumulate under the Plan shall be six (6) months (the "Payment Period") and there shall be two (2) such Payment Periods in each calendar year, commencing August 1 and February 1 and terminating on January 31 and July 31 of each year, respectively. Each Payment Period includes only regular pay days falling within it. II-10 On the first business day of each Payment Period, the Company will grant to each eligible employee who is then a participant in the Plan an option to purchase on the last day of such Payment Period at the option price hereinafter provided such number of full shares of the Common Stock of the Company, reserved for the purpose of the Plan, as his or her accumulated payroll deductions on the last day of such Payment Period will pay for at such option price; provided and on condition that such employee remains eligible to participate in the Plan throughout such Payment Period; and provided further, that the maximum number of shares granted to any eligible employee hereunder in any Payment Period shall not exceed two (2) times the number of full shares of Common Stock as such employee's accumulated payroll deductions would pay for on the exercise date assuming an exercise price equal to eighty-five percent (85%) of the fair market value of the Company's Common Stock on the first day of such Payment Period. The option price for each Payment Period shall be the lesser of (i) eighty five percent (85%) of the fair market value of the Company's Common Stock on the first business day of the Payment Period; or (ii) eighty five percent (85%) of the fair market value of the Company's Common Stock on the last business day of the Payment Period, in either case rounded up to avoid fractions other than 1/32, 1/16, 1/8,1/4, 1/2 and 3/4 (the "Option Price"). In the event of an increase or decrease in the number of outstanding shares of Common Stock of the Company through stock split-ups, reclassifications, stock dividends, changes in par value and the like, an appropriate adjustment shall be made in the number of shares and Option Price per share provided for under the Plan, either by a proportionate increase in the number of shares and a proportionate decrease in the Option Price per share, or by a proportionate decrease in the number of shares and a proportionate increase in the Option Price per share, as may be required to enable an eligible employee who is then a participant in the Plan as to whom an option is exercised on the last day of any then current Payment Period to acquire such number of full shares as his accumulated payroll deductions on such date will pay for at the adjusted Option Price. For purposes of this Plan the term "fair market value" on any given day means: (i) if the Common Stock is listed on a national securities exchange, the average of the high and low prices of the Common Stock of the Company on such exchange or such other national securities exchange as shall be designated by the Board of Directors; or (ii) if the Common Stock is traded in the over-the- counter securities market, the last sale price of the Common Stock as quoted by NASDAQ National Market System or, if the Common Stock is not quoted in the National Market System, the mean between the closing bid and asked prices of the Common Stock as quoted by NASDAQ. For purposes of this Plan the term "business day" as used herein means a day on which there is trading on any national securities exchange as shall be designated by the Board of Directors pursuant to the preceding paragraph. No employee shall be granted an option which permits his or her rights to purchase Common Stock under the Plan and any similar plans of the Company or any parent or subsidiary corporations to accrue at a rate that exceeds twenty five thousand dollars ($25,000) of the fair market value of such stock (determined at the time such option is granted) for each calendar year in which such option is outstanding at any time. The purpose of the limitation in the preceding sentence is to comply with Section 423(b)(8) of the Code. 1.5 EXERCISE OF OPTION Each eligible employee who continues to be a participant in the Plan on the last business day of a Payment Period shall be deemed to have exercised his or her option on such date and shall be deemed to have purchased from the Company such number of full shares of Common Stock reserved for the purpose of the Plan as his or her accumulated payroll deductions on such date will pay for at such Option Price. If a participant is not an employee on the last business day of a Payment Period, such participant shall not be entitled to exercise his or her option. II-11 1.6 UNUSED PAYROLL DEDUCTIONS Only full shares of Common Stock may be purchased. Any balance remaining in an employee's account after a purchase will be reported to the employee and will be carried forward to the next Payment Period. 1.7 AUTHORIZATION FOR ENTERING PLAN An employee may enter the Plan by filling out, signing and delivering to the Corporate Secretary's office an authorization (the "Authorization"): (a) specifying the exact payroll deduction; (b) authorizing the purchase of stock in each Payment Period in accordance with the terms of the Plan; and (c) specifying the exact name in which stock purchased is to be issued as provided under 1.11 hereof. Such Authorization must be received by the Corporate Secretary's office at least ten (10) days before the beginning date of such next succeeding Payment Period. Unless an employee files a new Authorization or withdraws from the Plan, his deductions and purchases under the Authorization on file will continue so long as the Plan remains in effect. All payroll deductions made for an employee shall be deposited in the Company's general corporate account and shall not bear interest. An employee may not make any separate cash payment into such account and may reduce the amount of the deduction once during the Payment Period (see Section 1.9). The Company will maintain complete records showing the amount of payroll deductions of each employee. 1.8 MAXIMUM AMOUNT OF PAYROLL DEDUCTIONS An employee may authorize payroll deductions in any whole dollar amount up to but not more than ten percent (10%) of his or her regular base pay, provided, however, that the minimum deduction in respect of any Payment Period shall be five dollars ($5.00) (or such lesser amount as the Committee shall establish). The base pay of each Participant for each Payment Period is the regular straight time compensation earned during such period, before any deductions or withholdings, but excluding overtime, bonuses, amount paid as reimbursement of expenses and other additional compensation. 1.9 CHANGE IN PAYROLL DEDUCTIONS Deductions may be decreased only once in a Payment Period. A new Authorization will be required and must be received in the Corporate Secretary's office no later than six (6) days prior to the individual's pay date. 1.10 WITHDRAWAL FROM THE PLAN An employee may withdraw from the Plan, in whole but not in part, at any time prior to the last business day of each Payment Period by delivering a Withdrawal Notice to the Corporate Secretary's office, in which II-12 event the Company will refund the entire balance of his or her deductions not theretofore used to purchase stock under the Plan within thirty (30) days following receipt of the Withdrawal Notice. An employee who withdraws from the Plan will be treated like an employee who has never entered the Plan. To re-enter, an employee must file a new Authorization at least ten (10) days before the beginning date of the next Payment Period which cannot, however, become effective before the beginning of the next Payment Period following withdrawal. 1.11 ISSUANCE OF STOCK Certificates for stock issued to participants, or to a broker for benefit of participants, will be delivered as soon as practicable after each Payment Period. Stock purchased under the Plan will be issued only in the name of the employee, or if the Authorization so specifies, in the name of the employee and another person of legal age as joint tenants with rights of survivorship. In order to obtain the tax treatment provided by the Code for employee stock purchase plans within the meaning of Section 423 of the Code, the shares of stock received after the end of each Payment Period may not be sold by the employee until after a date which is the later of two (2) years from the date that the option to purchase such shares is granted (pursuant to Section 1.4 hereof) and one (1) year from the date that the shares are transferred to the employee. Sale or other disposition of such shares prior to such date may give rise to federal income tax and Federal Insurance Contribution Act ("FICA") withholding obligations on the part of the Company. Accordingly, if certificates representing shares are issued to employees upon exercise of options granted hereunder, they will bear a legend restricting transfer prior to such date, unless the employee shall have reimbursed the Company for any federal income tax and FICA withholding obligations arising out of the transaction. 1.12 NO TRANSFER OR ASSIGNMENT OF EMPLOYEE'S RIGHTS An employee's rights under the Plan are the employee's alone and may not be transferred or assigned to, or availed of by, any other person. Any option granted to an employee may be exercised during the employee's lifetime only by such employee and is not transferable other than by will or the laws of descent and distribution. 1.13 TERMINATION OF EMPLOYEE'S RIGHTS An employee's rights under the Plan will terminate when he ceases to be an employee because of resignation, retirement, lay-off, discharge, or change of status. A Withdrawal Notice will be considered as having been received from the employee on the day his or her employment ceases, and all payroll deductions not used will be refunded. If an employee's employment shall be terminated by reason of death or disability prior to the end of the current Payment Period, the employee (his or her designated beneficiary, in the event of his death, or if none, his or her legal representative) shall have the right, within ninety (90) days thereafter, to elect to have the balance in his or her account either refunded in cash or applied at the end of the current Payment Period toward the purchase of Common Stock. II-13 1.14 TERMINATION AND AMENDMENTS TO PLAN The Plan may be terminated at any time by the Company's Board of Directors. It will terminate in any case when all or substantially all of the unissued shares of Common Stock reserved for the purpose of the Plan have been purchased. If at any time shares of stock reserved for the purposes of the Plan remain available for purchase but not in sufficient number to satisfy all then unfilled purchase requirements, the available shares shall be apportioned among participants in proportion to their options and the Plan shall terminate. Upon such termination or any other termination of the Plan, all payroll deductions not used to purchase stock will be refunded. The Board of Directors also reserves the right to amend the Plan from time to time, in any respect, provided, however, that no amendment shall be effective without prior approval of the stockholders, which would (a) except as provided in Paragraphs 1.3 and 1.4, increase the number of shares of Common Stock to be offered above or (b) change the class of employees eligible to receive options under the Plan. 1.15 LIMITATIONS ON SALE OF STOCK PURCHASED UNDER THE PLAN The Plan is intended to provide Common Stock for investment and not for resale. The Company does not, however, intend to restrict or influence any employee in the conduct of his own affairs. An employee may, therefore, sell stock purchased under the Plan at any time, provided, however, that because of certain Federal tax requirements, each employee will agree by signing the Authorization to promptly give the Company notice of any such stock disposed of within two (2) years after the date of the first day of the Payment Period during which the stock was purchased indicating the number of such shares disposed. The employee assumes the risk of any market fluctuations in the price of such stock. 1.16 COMPANY'S PAYMENT OF EXPENSES RELATED TO THE PLAN The Company will bear all costs of administering and carrying out the Plan. 1.17 PARTICIPATING SUBSIDIARIES The term "participating subsidiaries" shall mean any subsidiary of the Company which is designated by the Board of Directors to participate in the Plan. The Board of Directors shall have the power to make such designation before or after the Plan is approved by the stockholders. 1.18 ADMINISTRATION OF THE PLAN The Plan shall be administered by a committee appointed by the Board of Directors of the Company (the "Committee"). The Committee shall consist of not less than three (3) members of the Company's Board of Directors. The Board of Directors may from time to time remove members from, or add members to, the Committee. Vacancies on the Committee, however caused, shall be filled by the Board of Directors. The Committee shall select one of its members as Chairman, and shall hold meetings at such times and places as it may determine. Acts by a majority of the Committee, or acts reduced to or approved in writing by a majority of the members of the Committee, shall be the valid acts of the Committee. No member of the Committee shall be eligible to participate in the Plan while serving as a member of the Committee. The interpretation and construction by the Committee of any provisions of the Plan or of any option granted under it shall be final unless otherwise determined by the Board of Directors. The Committee may from II-14 time to time adopt such rules and regulations for carrying out the Plan as it may deem best. No member of the Board of Directors or the Committee shall be liable for any action or determination made in good faith with respect to the Plan or any option granted under it. 1.19 OPTIONEES NOT STOCKHOLDERS Until such time as the applicable Common Stock is actually purchased by and issued to an employee pursuant to the Plan, no employee shall be considered a shareholder or have shareholder rights merely by reason of tendering to the Company an Authorization and, therefore, instituting payroll deductions and related actions. 1.20 APPLICATION OF FUNDS The proceeds received by the Company from the sale of Common Stock pursuant to options granted under the Plan will be used for general corporate purposes. 1.21 GOVERNMENTAL REGULATION The Company's obligation to sell and deliver shares of the Company's Common Stock under this Plan is subject to the approval of any governmental authority required in connection with the authorization, issuance or sale of such Common Stock. 1.22 WITHHOLDING OF ADDITIONAL FEDERAL INCOME TAX In accordance with Section 3402(a) of the Code and the regulations and rulings promulgated thereunder, the Company will withhold from the wages of participating employees, in all payroll periods following and in the same calendar year as the date on which compensation is deemed received by the employee, additional income taxes in respect of amounts deemed compensation to be included as includible gross income reported by the employee. 1.23 APPROVAL OF STOCKHOLDERS The Plan shall not take effect until approved by the holders of a majority of the outstanding shares of Common Stock of the Company, which approval must occur within the period beginning twelve (12) months before and ending twelve (12) months after the date the Plan is adopted by the Board of Directors. II-15 EX-10.2 4 EXHIBIT 10.2 EXHIBIT 10.2 DATA I/O CORPORATION 1996 DIRECTOR FEE PLAN II-16 DATA I/O CORPORATION 1996 DIRECTOR FEE PLAN This 1996 Director Fee Plan (the "Plan") provides for the payment of certain fees to directors of Data I/O Corporation, a Washington corporation (the "Company") who are not employees of the Company by delivery of shares of the Company's common stock (the "Common Stock"). ELIGIBILITY. Persons eligible to receive Common Stock under this Plan shall be all directors of the Company who are not otherwise employed by the Company or any Related Corporation, as defined below (each, a "Director", collectively, the "Directors"). As used in this Plan, the term "Related Corporation," when referring to a subsidiary corporation, shall mean any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company if, at the time of the granting of the Common Stock, each of the corporations other than the last corporation in the unbroken chain owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock of one of the other corporations in such chain. When referring to a parent corporation, the term "Related Corporation" shall mean any corporation (other than the Company) in an unbroken chain of corporations ending with the Company if, at the time of granting of the Common Stock, each of the corporations other than the Company owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock of one of the other corporations in such chain. STOCK. Subject to approval of this Plan by the shareholders of the Company as described in Section 7 hereof, so long as this Plan is in effect, each person serving as a member of the Board of Directors of the Company shall be entitled to receive shares of Common Stock in consideration of his or her service on the Board, payable annually in arrears. The number of shares of Common Stock payable hereunder each calendar year shall be determined pursuant to the following formula, rounded down to the nearest whole number: (A/365) x ($20,000/Share Price) A = the number of days of service as a director during the calendar year The Share Price shall mean the price per share of Common Stock determined as provided in this paragraph. If the Common Stock of the Company is publicly traded on the first trading day of the calendar year, the Share Price shall be the average of the high and low sale prices per share of Common Stock on such date or, in case no reported sales take place on such date, the average of the last reported bid and asked prices, in either case on the principal national securities exchange on which the Common Stock is listed or admitted to trading, or if not listed or admitted to trading on any national securities exchange, on the National Association of Securities Dealers Automated Quotation System. If the Common Stock is not traded in such manner that the quotations referred to above are available as of such date, the Share Price shall be deemed to be the greater of (i) the book value per share as set forth on the most recent quarterly financial statement of the Company available on such date, or (ii) the fair market value per share at such date as determined in good faith by the Board of Directors. Notwithstanding the foregoing, with respect to shares of Common Stock payable to a Director for service as a Director during the calendar year in which such person was first elected to the Board of Directors, the Share Price shall be determined in the manner described above as of the day on which such Director is elected to the Board of Directors, or if the Common Stock is publicly traded and such day is not a trading day, the first trading day thereafter. II-17 Certificates for shares deliverable under this Plan shall be earned as of January 1 of the year following the year of service regardless of whether the Director remains a Director on such date and shall be delivered to each Director by not later than February 15 of such following year. Shares of Common Stock issued pursuant to this Plan may not be sold, assigned or otherwise transferred or hypothecated until the expiration of six months after the conclusion of the calendar year to which the grant of shares relates. At the option of the Company, a stop-transfer order may be placed upon the stock books and records of the Company to enforce this limitation. Furthermore, certificates representing ownership of shares of Common Stock issued pursuant to this Plan shall bear the following legend: THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, ASSIGNED OR OTHERWISE HYPOTHECATED FOR VALUE PRIOR TO JULY 1, 199__. RESERVATION OF COMMON STOCK Subject to adjustment as set forth in Section 6 hereof, a total of 200,000 shares of authorized but unissued or reacquired Common Stock are hereby reserved for grant under this Plan. RIGHTS AS A SHAREHOLDER. A Director shall have no rights as a shareholder with respect to any shares to be delivered under this plan until such Director becomes a record holder of such shares. Subject to the provisions of Sections 6 below, no rights shall accrue to a Director and no adjustments shall be made on account of dividends (ordinary or extraordinary, whether in cash, securities or other property) or distributions or other rights declared on, or created in, the Common Stock for which the record date is prior to the date the Director becomes a record holder of the shares of Common Stock. SECURITIES REGULATION AND TAX WITHHOLDING. No shares of Common Stock shall be delivered hereunder unless the issuance and delivery of such shares shall comply with all relevant provisions of law, including, without limitation, any applicable state securities laws, the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, the rules and regulations thereunder and the requirements of any stock exchange or consolidated reporting system upon which such shares may then be listed or quoted. The inability of the Company to obtain from any regulatory body the authority deemed by the Company to be necessary for the lawful issuance of any shares under this Plan, or the unavailability of an exemption from registration for the issuance of any shares under this Plan shall relieve the Company of any liability with respect to the non-issuance of such shares; provided, however, if the Company refrains from issuing shares hereunder, the Director shall receive cash in lieu of shares at a rate of $20,000 per year, pro rated for actual days of service during the year. As a condition to participation in this Plan, each Director shall make such arrangements as the Company may require for the satisfaction of any federal, state, local or foreign withholding tax obligations that may arise in connection with delivery of shares under this Plan. The issuance, transfer or delivery of certificates of Common Stock granted under this Plan may be delayed, at the option of the Company, until the Company is satisfied that the applicable requirements of the federal and state securities laws and the withholding provisions of the Internal Revenue Code have been met. STOCK DIVIDEND, REORGANIZATION OF LIQUIDATION. If the Company should declare with respect to the Common Stock a stock-split or a dividend payable in shares of Common Stock, II-18 or a reverse-stock split or other combination of the Common Stock, or a reclassification of the Common Stock (each, an "Event"), then (1) the class and number of shares yet to be delivered to any Director subsequent to the record date for the Event, and (2) the class and number of shares reserved for grant under Section 3 of this Plan, shall be appropriately adjusted to account for the change in the number and class of capital stock of the Company outstanding as a result of the Event, without further action on the part of the Company, its Board of Directors or its shareholders. If the shareholders of the Company receive debt or equity securities of another Person ("Exchange Securities") or cash in exchange for or in place of shares of Common Stock in any transaction involving any merger, consolidation, reorganization or other transaction providing for the conversion or exchange of all or substantially all outstanding shares of Common Stock into Exchange Securities or cash, then payment to Directors of the retainer fee provided for by this Plan, pro rated through the date of closing of such transaction, shall be accelerated to such closing date and shall be paid in the form of Exchange Securities or cash, as the case may be. In such case, the amount of Exchange Securities or cash to be delivered in lieu of Common Stock shall be determined by adjusting the number of shares of Common Stock otherwise deliverable hereunder in the same proportion as used for determining the shares of Exchange Securities or cash the holders of the Common Stock received in such merger, consolidation, reorganization or other transaction. Notwithstanding the foregoing, if payment in the form of Exchange Securities would cause a Director to have engaged in a violation of Section 16 of the Securities Exchange Act of 1934 (taking into consideration any other transactions in the securities of the Company or Exchange Securities by the Director), then each such Director shall receive cash in lieu of Common Stock or Exchange Securities at a rate of $20,000 per year, pro rated for actual days of service during the year prior to the closing of such transaction. Except as provided in this Section 6, no Director shall have any rights by reason of any subdivision, combination or reclassification of shares of any class of the Company's capital stock, including shares of Common Stock, or the payment of any dividend payable on shares of Common Stock or any other change in the number or class of shares of the Company's outstanding capital stock, or by reason of any merger, consolidation, dissolution or liquidation of the Company, or by reason of any sale of all or substantially all of the assets of the Company other than in the usual and regular course of business, or by reason of any issuance of any shares of capital stock of the Company, including shares of Common Stock or securities convertible into or exchangeable or exercisable for shares of Common Stock, and no adjustment by reason thereof shall be made with respect to the number of shares to be granted to Directors as described in Section 2 hereof. EFFECTIVE DATE; TERM. The effective date of this Plan shall be January 1, 1996; PROVIDED that no shares of Common Stock shall be issued hereunder until the Company's shareholders have approved this Plan by the affirmative vote of a majority of the voting securities shares represented in person or by proxy at a duly convened meeting of the shareholders of the Company at which a quorum is present. If shareholder approval is not obtained by June 30, 1996, then this Plan shall be deemed abandoned. Otherwise, this Plan shall continue until terminated by action of the Board of Directors. INDEMNIFICATION OF BOARD. In addition to all other rights or indemnification they may have as directors of the Company or as members of the Board, members of the Board shall be indemnified by the Company for all reasonable expenses and liabilities of any type and nature, including reasonable attorneys' fees, incurred in connection with any action, suit or proceeding to which they or any of them are a party by reason of, or in connection with, the Plan or any grant of Common Stock hereunder, and against all amounts paid by them in settlement thereof (provided such settlement is approved by independent legal counsel selected by the Company), except to the extent that such expenses relate to matters for which it is adjudged that such Board members are liable for willful misconduct; PROVIDED, that within fifteen (15) days after the institution of any such action, suit or proceeding, member(s) of the II-19 Board shall, in writing, notify the Company of such action, suit or proceeding, so that the Company may have the opportunity to make appropriate arrangements to prosecute or defend the same. AMENDMENT OF PLAN. The Board of Directors may, at any time, modify, amend or terminate this Plan, including, without limitation, such modifications or amendments as are necessary to maintain compliance with applicable statutes, rules or regulations; PROVIDED, that (i) any amendment for which shareholder approval is required by Securities and Exchange Commission Rule 16b-3, as amended from time to time, or any successor rule or regulatory requirements (the "Rule"), in order for the Plan to be eligible or continue to qualify for the benefits of the Rule, shall be subject to approval of the shareholders of the Company in accordance with the Rule; and (ii) this Plan shall not be amended in any material respect more than once every six (6) months, other than to comport with changes in the Rule, the Internal Revenue Code of 1986, as amended, the Employee Retirement Security Act of 1974, as amended, or the rules thereunder. Approved by the Board of Directors of the Company: Date:_________________ /S/ STEVEN M. GORDON -------------------- Steven M. Gordon, Secretary Approved by Shareholders of the Company: Date:___________________ /S/ STEVEN M. GORDON -------------------- Steven M. Gordon, Secretary II-20 EX-23.2 5 EXHIBIT 23.2 EXHIBIT 23.2 CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS II-21 CONSENT OF INDEPENDENT AUDITORS We consent to the incorporation by reference in the Registration Statement on Form S-8 pertaining to the Data I/O Corporation 1982 Employee Stock Purchase Plan Amended and Restated December 11, 1996 and the Data I/O Corporation 1996 Director Fee Plan of our report dated February 7, 1996, with respect to the consolidated financial statements and schedules of Data I/O Corporation included in the Annual Report on Form 10-K for the year ended December 28, 1995, filed with the Securities and Exchange Commission. /S/ ERNST & YOUNG LLP Seattle, Washington January 29, 1997 -----END PRIVACY-ENHANCED MESSAGE-----