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August __, 2002
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Dear Mr. Oto:
This addendum to your Employment Agreement ("Addendum") supplements certain
provisions of the Option and Agreement and Plan of Merger entered into by and
among National Semiconductor Corporation ("National"), Nintai Acquisition Sub,
Inc. DigitalQuake, Inc. ("DigitalQuake"), ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
dated as of February 8, 2002, as amended as of the date hereof, and as same may
be subsequently amended from time to time (the "Merger Agreement") solely as
such provisions relate to National and each Principal Employee as an employee of
National. Capitalized terms used in this letter have the meanings assigned to
them in the Merger Agreement.
1. Section 3.5 of the Merger Agreement provides that you will receive the
second installment payment and the third installment payment due under
the Merger Agreement with respect to your DigitalQuake Options and
DigitalQuake Common Stock in cash. This Addendum supplements the
Merger Agreement to give you the option to receive all or a portion of
the second and third installment payments in cash or in shares of
National Common Stock as set forth below. As used herein, the
"National Common Stock" means the common stock, par value $.50 per
share, of National.
(a) You may elect to receive all or a part of the second installment
payment in cash or shares of National Common Stock by delivering
notice of such election to National in the form attached hereto
as Exhibit A and in the manner set forth for notices in Section
14.3 of the Merger Agreement (an "Election Notice") at least
fifteen (15) but no more than thirty (30) days prior to August
24, 2003, provided you have been continuously employed by
National in its Displays Group from the Effective Time through
August 24, 2003. Such notice shall specify the portion of the
second installment to be paid in cash and the portion to be paid
in shares of NSC Common Stock. The number of shares of National
Common Stock shall be determined in accordance with Section 3
below; and
(b) You may elect to receive all or a part of the third installment
payment in cash or shares of National Common Stock by delivering
notice of such election to National an Election Notice at least
fifteen (15) but no more than thirty (30) days prior to August
29, 2004, provided you have been continuously employed by
National in its Displays Group through August 29, 2004. Such
notice shall specify the portion of the third installment to be
paid in cash and the portion to be paid in shares of NSC Common
Stock. The number of shares of National Common Stock shall be
determined in accordance with Section 3 below.
2. The form of the Election Notice is attached hereto as Exhibit A If you
do not provide an Election Notice under Section 1(a) or Section 1(b),
you will be deemed to have elected to receive the applicable
installment payment entirely in cash.
3. The number of shares of National Common Stock to be issued to you upon
your election to receive all or a portion of the second or third
installment payment in shares of National Common Stock shall equal the
quotient of (x) the dollar amount of the applicable installment
payment payable to you which you have elected to receive in National
Common Stock on the Election Notice form divided by (y) the opening
price of the National Common Stock as reported on the New York Stock
Exchange Composite Tape on the Closing Date (or if there shall be no
trading on such date, then on the first subsequent date on which there
is trading). In the event National changes the number of shares of
National Common Stock issued and outstanding as a result of a stock
split, stock dividend or similar recapitalization with respect to such
stock and the record date therefor (in the case of a stock dividend)
or the effective date thereof (in the case of a stock split or similar
recapitalization for which a record date is not established) shall be
prior to August 29, 2004, the number of shares of National Common
Stock issuable pursuant to Section 1(a) or Section 1(b) above shall be
proportionately adjusted. National shall file a registration statement
with the U.S. Securities and Exchange Commission on Form S-8 or other
appropriate form with respect to the shares of National Common Stock
issuable pursuant to this letter prior to August 24, 2003.
4. Your right to receive the second installment payment and third
installment payment in whole or in part in shares of National Common
Stock is contingent upon your being continuously employed by National
in its Display Group from the Effective Time through August 24, 2003
and through August 29, 2004, respectively. Accordingly, you
acknowledge that your right to receive the second and third
installment payment in whole or in part in shares of National Common
Stock, with the number of shares to be determined by reference to a
fixed and determined price, is a benefit to which you would not
otherwise be entitled if you had not become an employee of National
upon the completion of the merger contemplated by the Merger
Agreement.
5. All of the shares of National Common Stock issuable pursuant to
Section 1(a) or Section 1(b) above will be validly issued, fully paid
and nonassessable and free of and not subject to any preemptive rights
or rights of first refusal created by statute or by National's Second
Restated Certificate of Incorporation, as amended, or Amended and
Restated Bylaws upon their issuance pursuant to this Addendum.
6. You understand that you may suffer adverse tax consequences in the
event you elect to receive all or part of the second or third
installment payments in shares of National Common Stock. You represent
that you have consulted with any tax consultants you deem advisable in
connection with your option to exercise such election and that you are
not relying on National for any tax advice.
Please sign below to confirm your agreement with the items set forth above.
Very truly yours,
NATIONAL SEMICONDUCTOR CORPORATION
By: //S// ▇ ▇ ▇▇▇▇▇▇▇
ACCEPTED AND AGREED TO AS OF
8/26/02:
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Exhibit A
NOTICE OF ELECTION TO RECEIVE INSTALLMENT PAYMENT IN CASH OR STOCK
To: National Semiconductor Corporation
From: ▇▇▇▇▇ ▇▇▇
Re: Election to Receive Installment Payment in Cash or Stock
Pursuant to the Option and Agreement and Plan of Merger entered into by and
among National Semiconductor Corporation ("National"), Nintai Acquisition Sub,
Inc. and DigitalQuake, Inc. ("DigitalQuake"), ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇.
▇▇▇▇ dated as of February 8, 2002 as amended (the "Merger Agreement") and the
Addendum to the Employment Agreement dated August ___, 2002 between National and
the undersigned, notice is hereby given that the undersigned hereby elects to
receive the installment payment set forth below contemplated by Section 3.5 of
the Merger Agreement in the form set forth below:.
Check as applicable:
_____ Second Installment Payment
_____ Third Installment Payment
Form of Payment
_____ All in cash, payable by check or wire transfer
_____ All in shares of National Common Stock
_____ A combination of cash and National Common Stock, with $________
to be paid in cash and $_________ to be paid in shares of
National Common Stock
Dated: ______________
________________________________
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