As filed with the Securities and Exchange Commission on April 13, 2000
Registration No. 333- _____
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Flextronics International Ltd.
(Exact Name of Registrant as Specified in Its Charter)
Singapore Not Applicable
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
11 Ubi Road 1, #07-01/02, Meiban Industrial Building, Singapore 408723
(Address of Principal Executive Offices)
Share options granted under the Palo Alto Products
International Pte Ltd 1996 Share Option Plan assumed by the Registrant
Share options granted under The DII Group, Inc. 1994 Employee Stock
Purchase Plan assumed by the Registrant
(Full Title of the Plans)
Michael E. Marks
Chairman and Chief Executive Officer
Flextronics International Ltd.
11 Ubi Road 1, #07-01/02
Meiban Industrial Building
Singapore 408723
(65) 844-3366
(Name, Address and Telephone Number of Agent For Service)
Copies to:
David K. Michaels, Esq.
Joshua N. Sun, Esq.
Fenwick & West LLP
Two Palo Alto Square
Palo Alto, California 94306
This Registration Statement shall become effective immediately upon filing with
the Securities and Exchange Commission, and sales of the registered securities
will begin as soon as reasonably practicable after such effective date.
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of Amount Proposed Maximum Proposed
Securities to be Offering Price Maximum Aggregate Amount of
to be Registered Registered Per Share Offering Price (6) Registration Fee
---------------- ---------- ---------------- ------------------ ----------------
<S> <C> <C> <C> <C>
Ordinary Shares, S$0.01 par value 395,883 (1) $19.70(3) $7,798,824.25 $2,292.85
Ordinary Shares, S$0.01 par value 29,124 (2) $53.66(4) $1,562,793.84 $459.46
</TABLE>
(1) Represents share options granted under the Palo Alto Products International
Pte Ltd 1996 Share Option Plan assumed by the Registrant. Pursuant to Rule
429 promulgated under the Securities Act of 1933, as amended (the
"Securities Act"), the prospectuses relating to this Registration Statement
also relate to the shares registered under Form S-8 Registration Statement
Nos. 33-99924, 333-42255, 333-71049 and 333-95189. A total of 16,400,000
shares issuable under the 1993 Share Option Plan has previously been
registered under the Securities Act.
(2) Represents shares subject to assumed outstanding share options as of April
4, 2000 granted under The DII Group, Inc. 1994 Employee Stock Purchase
Plan.
(3) Represents the weighted average per share exercise price for such
outstanding options, calculated pursuant to Rule 457(h) solely for the
purpose of calculating the registration fee.
(4) Calculated solely for purposes of this offering under Rule 457(h) of the
Securities Act of 1933, as amended, on the basis of the average of the high
and low prices per Ordinary Share of Flextronics International Ltd. on
April 12, 2000 as reported by the Nasdaq National Market.
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<PAGE>
Item 3. Incorporation of Documents by Reference.
The following documents filed with the Securities and Exchange Commission
(the "Commission") are incorporated herein by reference:
(a) the Registrant's Annual Report on Form 10-K for the fiscal year ended
March 31, 1999, as amended, filed pursuant to Section 13(a) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
which Annual Report contains audited financial statements for the
fiscal year ended March 31, 1999;
(b) the Registrant's Quarterly Reports on Form 10-Q for the fiscal
quarters ended June 25, 1999, September 24, 1999 and December 31, 1999
filed pursuant to Section 13(a) of the Exchange Act;
(c) the Registrant's Current Reports on Form 8-K filed with the Commission
on October 29, 1999, December 6, 1999 and December 23, 1999; and
(d) the description of the Registrant's Ordinary Shares contained in the
Registrant's registration statement on Form 8-A filed with the
Commission under Section 12(g) of the Exchange Act.
All documents subsequently filed by the Registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment which indicates that all securities registered hereby
have been sold or which deregisters all securities then remaining unsold, shall
be deemed to be incorporated by reference herein and to be a part hereof from
the date of the filing of such documents.
Item 4. Description of Securities.
Not Applicable.
Item 5. Interests of Named Experts and Counsel.
Not Applicable.
Item 6. Indemnification of Directors and Officers.
Article 155 of the Flextronics articles provides that, subject to the
Singapore Companies Act, every director or other officer shall be entitled to be
indemnified by Flextronics against all liabilities incurred by him in the
execution and discharge of his duties or in relation thereto, including any
liability in defending any proceedings, civil or criminal, which relate to
anything done or omitted or alleged to have been done or omitted by him as an
officer or employee of Flextronics and in which judgment is given in his favor,
or the proceedings otherwise disposed of without finding or admission of any
material breach of duty; in which he is acquitted; or in connection with any
application under any statute for relief from liability for any act or omission
in which relief is granted to him by the court.
In addition, no director or other officer shall be liable for the acts,
receipts, neglects or defaults of any other director or officer, joining in any
receipt or other act for conformity, any loss or expense happening to
Flextronics, through the insufficiency or deficiency of title to any property
acquired by order of the directors for Flextronics or for the insufficiency or
deficiency of any security upon which any of the moneys of Flextronics are
invested or for any loss or damage arising from the bankruptcy, insolvency or
tortious act of any person with whom any moneys, securities or effects are
deposited, or any other loss or misfortune which happens in the execution of his
duties, unless the same happens through his own negligence, willful default,
breach of duty or breach of trust.
Section 172 of the Companies Act renders void any provision for
indemnifying a company's directors or officers against liability which by law
would otherwise attach to them for any negligence, default, breach of duty or
breach of trust of which they may be guilty relating to the company. However, a
company is not prohibited from
<PAGE>
purchasing and maintaining insurance against any such liability except where the
liability arises out of conduct involving dishonesty or a willful breach of
duty, or indemnifying a director or officer against any liability incurred in
defending any proceedings, whether civil or criminal, in which judgment is given
in his favor or in which he is acquitted, or in connection with any application
in relation to liability in which relief is granted to him by the court.
Flextronics has entered into indemnification agreements with its officers
and directors. These indemnification agreements provide Flextronics' officers
and directors with indemnification to the maximum extent permitted by the
Companies Act. Flextronics has also obtained a policy of directors' and
officers' liability insurance that will insure directors and officers against
the cost of defense, settlement or payment of a judgment under certain
circumstances.
Item 7. Exemption from Registration Claimed.
Not Applicable.
Item 8. Exhibits.
4.1 Palo Alto Products International Pte Ltd 1996 Share Option Plan.
4.2 The DII Group, Inc. 1994 Employee Stock Purchase Plan.
5.1 Opinion of Allen & Gledhill (The DII Group).
5.2 Opinion of Allen & Gledhill (Palo Alto Products International).
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Moore Stephens.
23.3 Consent of Allen & Gledhill (included in Exhibits 5.1 and 5.2).
24.1 Power of Attorney. Reference is made to the signature page of this
Registration Statement.
Item 9. Undertakings.
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;
(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. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered
(if the total dollar value of securities offered would
not exceed that which was registered) and any deviation
from the low or high end of the estimated maximum
offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20 percent change in the
maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
Registration Statement; and
<PAGE>
(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 (1)(i) and (1)(ii) above do not apply if
the Registration Statement is on Form S-3, Form S-8 or Form F-3, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or 15(d) of the Exchange Act
that are incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, 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.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) 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.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions discussed in Item 6 hereof, or otherwise,
the Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities 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 hereby, 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 whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
<PAGE>
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 San Jose, State of California, on the 13th day of
April, 2000.
FLEXTRONICS INTERNATIONAL LTD.
By: /s/ Michael E. Marks
----------------------------------
Michael E. Marks
Chairman of the Board,
Chief Executive Officer and
Authorized U.S. Representative
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints jointly and severally, Michael E. Marks
and Robert R.B. Dykes and each one of them, his attorneys-in-fact, each with the
power of substitution, for him in any and all capacities, to sign any and all
amendments to this registration statement (including any and all amendments,
including post-effective amendments), 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 each of said
attorneys-in-fact, or his substitutes, may 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 below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------- ----- ----
<S> <C> <C>
/s/ Michael E. Marks Chairman of the Board, and Chief Executive April 13, 2000
- -----------------------
Michael E. Marks Officer (principal executive officer)
/s/ Tsui Sung Lam Director April 13, 2000
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Tsui Sung Lam
/s/ Robert R.B. Dykes President, Systems Group and Chief April 13, 2000
- -----------------------
Robert R.B. Dykes Financial Officer (principal financial
and accounting officer)
/s/ Michael J. Moritz Director April 13, 2000
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Michael J. Moritz
/s/ Richard L. Sharp Director April 13, 2000
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Richard L. Sharp
/s/ Patrick Foley Director April 13, 2000
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Patrick Foley
/s/ Alain Ahkong Director April 13, 2000
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Alain Ahkong
/s/ Shing Leong Hui Director April 13, 2000
- -----------------------
Shing Leong Hui
</TABLE>
<PAGE>
EXHIBIT INDEX
Exhibit
Number Document Description
- ------- --------------------
4.1 Palo Alto Products International Pte Ltd 1996 Share Option Plan.
4.2 The DII Group, Inc. 1994 Employee Stock Purchase Plan.
5.1 Opinion of Allen & Gledhill (The DII Group).
5.2 Opinion of Allen & Gledhill (Palo Alto Products International).
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Moore Stephens.
23.3 Consent of Allen & Gledhill (included in Exhibits 5.1 and 5.2).
24.1 Power of Attorney. Reference is made to the signature page of this
Registration Statement.
Exhibit 4.1
PALO ALTO PRODUCTS INTERNATIONAL PTE., LTD.
1996 SHARE OPTION PLAN
(Amended as of ____________, 1998)
ARTICLE ONE
GENERAL PROVISIONS
I. PURPOSE OF THE PLAN
This 1996 Share Option Plan (the "Plan") is intended to promote the
interests of Palo Alto Products International Pte., Ltd., a Singapore
corporation (the "Corporation"), by providing eligible persons with the
opportunity to acquire a proprietary interest, or otherwise increase their
proprietary interest in the Corporation as an incentive for them to remain in
the service of the Corporation.
Capitalized terms herein shall have the meanings assigned to such terms in
the attached Appendix.
II. ADMINISTRATION OF THE PLAN
A. The Plan shall be administered by the Board. However, any or all
administrative functions otherwise exercisable by the Board may be
delegated to the Committee. Members of the Committee shall serve for such
period of time as the Board may determine and shall be subject to removal
by the Board at any time. The Board may also at any time terminate the
functions of the Committee and reassume all powers and authority previously
delegated to the Committee.
B. The Plan Administrator shall have full power and authority (subject
to the provisions of the Plan) to establish such rules and regulations as
it may deem appropriate for proper administration of the Plan and to make
such determinations under, and issue such interpretations of, the Plan and
any outstanding options or share issuances thereunder as it may deem
necessary or advisable. Decisions of the Plan Administrator shall be final
and binding on all parties who have an interest in the Plan or any option
or share issuance thereunder.
III. ELIGIBILITY
A. The persons eligible to participate in the Plan are as follows:
(i) officers and other key employees of the Corporation (or any
Parent or Subsidiary) who render services which contribute to the
management, growth and financial success of the Corporation (or such
Parent or Subsidiary);
<PAGE>
(ii) non-employee members of the Board or of the board of
directors of any Parent or Subsidiary, provided such individuals are
not residents of Singapore; or
(iii) those consultants or other independent contractors who
provide valuable services to the Corporation (or any Parent or
Subsidiary), provided such individuals are not residents of Singapore.
B. The Plan Administrator shall have full authority to determine which
eligible persons are to receive option grants, the time or times when such
option grants are to be made, the number of Ordinary Shares to be covered
by each such grant, the status of the granted option as either an Incentive
Option or a Non-Statutory Option under the U.S. tax laws, the time or times
at which each granted option is to become exercisable and the maximum term
for which the option is to remain outstanding.
IV. ORDINARY SHARES SUBJECT TO THE PLAN
A. The maximum number of Ordinary Shares which may be issued over the
term of the Plan shall not exceed 1,000,000 Ordinary Shares. All Ordinary
Shares issued under the Plan shall be drawn from the Corporation's
authorized but unissued Ordinary Shares.
B. Ordinary Shares subject to outstanding options shall be available
for subsequent issuance under the Plan to the extent (i) the options expire
or terminate for any reason prior to exercise in full or (ii) the options
are cancelled in accordance with the cancellation provisions of Article
Two.
C. Should any change be made to the Ordinary Shares by reason of any
share split, share dividend, recapitalization, combination of shares,
exchange of shares or other change affecting the outstanding Ordinary
Shares as a class without the Corporation's receipt of consideration,
appropriate adjustments shall be made to (i) the maximum number and/or
class of securities issuable under the Plan and (ii) the number and/or
class of securities and the exercise price per share in effect under each
outstanding option in order to prevent the dilution or enlargement of
benefits thereunder. The adjustments determined by the Plan Administrator
shall be final, binding and conclusive.
<PAGE>
ARTICLE TWO
OPTION GRANT PROGRAM
I. OPTION TERMS
Each option shall be evidenced by one or more documents in the form
approved by the Plan Administrator; provided, however, that each such document
shall comply with the terms specified below. Each document evidencing an
Incentive Option shall, in addition, be subject to the provisions of the Plan
applicable to such options.
A. Exercise Price.
1. The exercise price per Ordinary Share shall be fixed by the Plan
Administrator in accordance with the following provisions:
(i) The exercise price per Ordinary Share subject to an Incentive
Option shall in no event be less than one hundred percent (100%) of
the Fair Market Value per Ordinary Share on the grant date.
(ii) The exercise price per Ordinary Share subject to a
Non-Statutory Option shall in no event be less than eighty-five
percent (85%) of the Fair Market Value per Ordinary Share on the grant
date.
(iii) In no event may the exercise price per Ordinary Share
subject to any Incentive or Non-Statutory Option be less than the par
value of such Ordinary Share.
(iv) If the person to whom the option is granted is a 10%
Shareholder, then the exercise price per share shall not be less than
one hundred ten percent (110%) of the Fair Market Value per Ordinary
Share on the option grant date.
2. The exercise price shall become immediately due upon exercise of
the option and shall, subject to the provisions of Section I of Article
Three and the documents evidencing the option, be payable in cash or check
made payable to the Corporation. Should the Ordinary Shares be registered
under Section 12(g) of the 1934 Act at the time the option is exercised,
then the exercise price may also be paid as follows:
(i) in Ordinary Shares held for the requisite period necessary to
avoid a charge to the Corporation's earnings for financial reporting
purposes and valued at Fair Market Value on the Exercise Date, or
(ii) through a special sale and remittance procedure pursuant to
which the Optionee shall concurrently provide irrevocable written
instructions (A) to a Corporation-designated brokerage firm to effect
the immediate sale of the purchased shares and remit to the
Corporation, out of the
<PAGE>
sale proceeds available on the settlement date, sufficient funds to
cover the aggregate exercise price payable for the purchased shares
plus all applicable U.S. federal, state and local income and
employment taxes and all applicable foreign taxes required to be
withheld by the Corporation by reason of such exercise and (B) to the
Corporation to deliver the certificates for the purchased shares
directly to such brokerage firm in order to complete the sale.
Except to the extent such sale and remittance procedure is utilized,
payment of the exercise price for the purchased shares must be made on the
Exercise Date.
B. Exercise and Term of Options. Each option shall be exercisable at such
time or times, during such period and for such number of shares as shall be
determined by the Plan Administrator and set forth in the documents evidencing
the option grant. However, no option shall have a term in excess of ten (10)
years measured from the option grant date.
C. Effect of Termination of Service.
1. The following provisions shall govern the exercise of any options
held by the Optionee at the tune of cessation of Service or death:
(i) Should the Optionee cease to remain in Service for any reason
other than Disability or death, then the Optionee shall have a period
of three (3) months following the date of such cessation of Service
during which to exercise each outstanding option held by such
Optionee.
(ii) Should Optionee's Service terminate by reason of Disability,
then the Optionee shall have a period of twelve (12) months following
the date of such cessation of Service during which to exercise each
outstanding option held by such Optionee.
(iii) If the Optionee dies while holding an outstanding option,
then the personal representative of his or her estate or the person or
persons to whom the option is transferred pursuant to the Optionee's
will or the laws of inheritance shall have a twelve (12)-month period
following the date of the Optionee's death to exercise such option.
(iv) Under no circumstances, however, shall any such option be
exercisable after the specified expiration of the option term.
(v) During the applicable post-Service exercise period, the
option may not be exercised in the aggregate for more than the number
of Ordinary Shares (if any) for which the option is exercisable on the
date of the Optionee's cessation of Service. Upon the expiration of
the applicable exercise period or (if earlier) upon the expiration of
the option term, the option shall terminate and cease to be
outstanding for any otherwise exercisable Ordinary Shares for which
the option has not been exercised. However, the option shall,
immediately upon the Optionee's cessation of Service, terminate and
cease to be
<PAGE>
outstanding with respect to any and all Ordinary Shares for which the
option is not otherwise at the time exercisable.
2. The Plan Administrator shall have the discretion, exercisable
either at the time an option is granted or at any time while the option
remains outstanding, to:
(i) extend the period of time for which the option is to remain
exercisable following Optionee's cessation of Service or death from
the limited period otherwise in effect for that option to such greater
period of time as the Plan Administrator shall deem appropriate, but
in no event beyond the expiration of the option term, and/or
(ii) permit the option to be exercised, during the applicable
post-Service exercise period, not only with .respect to the number of
Ordinary Shares for which such option is exercisable at the time of
the Optionee's cessation of Service but also with respect to one or
more additional installments for which the option would have otherwise
become exercisable had the Optionee continued in Service.
D. Shareholder Rights. The holder of an option shall have no shareholder
rights with respect to the Ordinary Shares subject to the option until such
person shall have exercised the option, paid the exercise price and become a
holder of record of the purchased shares.
E. Limited Transferability of Options. During the lifetime of the Optionee,
the option shall be exercisable only by the Optionee and shall not be assignable
or transferable other than by will or by the laws of descent and distribution
following the Optionee's death.
F. Withholding. The Corporation's obligation to deliver Ordinary Shares
upon the exercise of any options granted under the Plan shall be subject to the
satisfaction of all applicable U.S. federal, state and local income and
employment tax withholding requirements and all applicable withholding
requirements of foreign tax laws. For Optionees who reside in the United States,
the Corporation shall collect all Federal, state and local income and employment
withholding taxes. For non-United States citizens residing outside the United
States, the Corporation shall collect all taxes required under applicable
foreign laws.
II. INCENTIVE OPTIONS
The terms specified below shall be applicable to all Incentive Options.
Except as modified by the provisions of this Section II, all the provisions of
the Plan shall be applicable to Incentive Options. Options which are
specifically designated as Non-Statutory Options shall not be subject to the
terms of this Section II.
A. Eligibility. Incentive Options may only be granted to Employees.
B. Dollar Limitation. The aggregate Fair Market Value of the Ordinary
Shares (determined as of the respective date or dates of grant) for which one or
more options granted to any Employee under the Plan (or any other option plan of
the Corporation or any
<PAGE>
Parent or Subsidiary) may for the first time become exercisable as Incentive
Options during any one (1) calendar year shall not exceed the sum of One Hundred
Thousand U.S. Dollars (US$100,000). To the extent the Employee holds two (2) or
more such options which become exercisable for the first time in the same
calendar year, the foregoing limitation on the exercisability of such options as
Incentive Options shall be applied on the basis of the order in which such
options are granted. Should the number of Ordinary Shares for which any
Incentive Option first becomes exercisable in any calendar year exceed the
applicable One Hundred Thousand U.S. Dollar (US$100,000) limitation, then that
option may nevertheless be exercised in such calendar year for the excess number
of shares as a Non-Statutory Option under the Code.
III. CORPORATE TRANSACTION
A. Each option outstanding under the Plan at the time of a Corporate
Transaction but not otherwise fully exercisable for all the option shares shall
automatically accelerate so that each such option shall, immediately prior to
the effective date of the Corporate Transaction, become exercisable for all of
the Ordinary Shares at the time subject to that option and may be exercised for
any or all of those shares as fully-vested Ordinary Shares. However, an
outstanding option shall not become exercisable on such an accelerated basis if
and to the extent: (i) such option is assumed by the successor corporation (or
parent thereof) in the Corporate Transaction or (ii) such option is to be
replaced with a cash incentive program of the successor corporation which
preserves the spread existing on the option shares at the time of the Corporate
Transaction and provides for subsequent payout in accordance with the same
vesting schedule applicable to that option or (iii) the acceleration of the
option is subject to other limitations imposed by the Plan Administrator at the
time of the option grant.
B. Immediately following the consummation of the Corporate Transaction, all
outstanding options shall terminate and cease to be outstanding, except to the
extent assumed by the successor corporation (or parent thereof).
C. Each option which is assumed in connection with a Corporate Transaction
shall be appropriately adjusted, immediately after such Corporate Transaction,
to apply to the number and class of securities which would have been issuable to
the Optionee in consummation of such Corporate Transaction, had the option been
exercised immediately prior to such Corporate Transaction. Appropriate
adjustments shall also be made to (i) the number and class of securities
available for issuance under the Plan following the consummation of such
Corporate Transaction and (ii) the exercise price payable per share under each
outstanding option, provided the aggregate exercise price payable for such
securities shall remain the same.
D. The Plan Administrator shall have the discretion, exercisable either at
the time the option is granted or at any time while the option remains
outstanding, to provide for the automatic acceleration (in whole or in part) of
one or more outstanding options upon the occurrence of a Corporate Transaction,
whether or not those options are to be assumed or replaced in the Corporate
Transaction.
E. The Plan Administrator shall also have full power and authority,
exercisable either at the time the option is granted or at any time while the
option remains outstanding, to structure such option so that the option will
automatically accelerate and become
<PAGE>
immediately exercisable for all the Ordinary Shares at the time subject to that
option should the Optionee's Service terminate by reason of an Involuntary
Termination within a designated period (not to exceed eighteen (18) months)
following the effective date of any Corporate Transaction in which the option is
assumed. Any option so accelerated shall remain exercisable for the option
shares until the earlier of (i) the expiration of the option term or (ii) the
expiration of the one (1)-year period measured from the effective date of the
Involuntary Termination.
F. The portion of any Incentive Option accelerated in connection with a
Corporate Transaction shall remain exercisable as an Incentive Option only to
the extent the applicable One Hundred Thousand U.S. Dollar limitation is not
exceeded. To the extent such dollar limitation is exceeded, the accelerated
portion of such option shall be exercisable as a Non-Statutory Option under the
Code.
G. The grant of options under the Plan shall in no way affect the right of
the Corporation 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.
IV. CANCELLATION AND REGRANT OF OPTIONS
The Plan Administrator shall have the authority to effect, at any time and
from time to time, with the consent of the affected option holders, the
cancellation of any or all outstanding options under the Plan and to grant in
substitution therefor new options covering the same or different number of
Ordinary Shares but with an exercise price per Ordinary Share not less than (i)
eighty-five percent (85%) of the Fair Market Value per Ordinary Share on the new
grant date or (ii) one hundred percent (100%) of such Fair Market Value in the
case of an Incentive Option, but in no event shall the exercise price per
Ordinary Share be less than the par value of such Ordinary Share.
<PAGE>
ARTICLE THREE
MISCELLANEOUS
I. FINANCING
A. The Plan Administrator may, in its discretion but subject to any
prohibition imposed by any applicable laws, permit any Optionee who is an
Employee to pay the option exercise price by delivering a full-recourse,
interest-bearing promissory note payable in one or more installments and secured
by the purchased shares. In no event shall the maximum credit available to the
Optionee exceed the sum of (i) the aggregate option exercise price payable for
the purchased shares (less the par value of those shares) plus (ii) any U.S.
federal, state and local and any foreign income and employment tax liability
incurred by the Optionee in connection with the option exercise.
B. All financial assistance provided under this Section I of Article Three
shall be effected in compliance with the applicable provisions of Section
76(9)(b) of the Companies Act, Chapter 50 of Singapore (or any successor
statutory provision).
II. EFFECTIVE DATE AND TERM OF PLAN
A. The Plan became effective when adopted by the Board on December 31, 1996
and was approved by the Corporation's shareholders on the same date. The Plan
Administrator may grant options under the Plan at any time after the effective
date of the Plan and before the date fixed herein for termination of the Plan.
B. The Plan shall terminate upon the earliest of (i) the expiration of the
ten (10)-year period measured from the date the Plan is adopted by the Board,
(ii) the date on which all shares available for issuance under the Plan shall
have been issued or (iii) the termination of all outstanding options in
connection with a Corporate Transaction. All options outstanding at that time
under the Plan shall continue to have full force and effect in accordance with
the provisions of the documents evidencing those options.
III. AMENDMENT OF THE PLAN
A. The Board shall have complete and exclusive power and authority to amend
or modify the Plan in any or all respects. However, no such amendment or
modification shall adversely affect the rights and obligations with respect to
options at the time outstanding under the Plan unless the Optionee consents to
such amendment or modification. In addition, certain amendments may require
shareholder approval pursuant to applicable laws and regulations.
B. The Plan was amended by the Board on ____________, 1998 (the "1998
Increase") to increase the maximum number of ordinary shares authorized for
issuance over the term of the Plan from 500,000 shares to 1,000,000 shares. The
1998 Increase is subject to shareholder approval within twelve (12) months
following the date of its authorization by the Board and no option grants made
on the basis of the 500,000-share increase shall become
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exercisable in whole or in part unless and until the 1998 Increase is approved
by the shareholders. Should such shareholder approval not be obtained, then any
options granted on the basis of the 500,000-share increase shall terminate
without ever becoming exercisable for those shares, and no further option grants
or direct stock issuances shall be made on the basis of such share increase.
Subject to the foregoing limitations, the Plan Administrator may make option
grants and direct stock issuances under the Plan at any time before the date
fixed herein for the termination of the Plan.
C. Options may be granted under the Plan in excess of the number of
Ordinary Shares then available for issuance under the Plan, provided any excess
shares actually issued under those options shall be held in escrow until there
is obtained shareholder approval of an amendment sufficiently increasing the
number of Ordinary Shares available for issuance under the Plan. If such
shareholder approval is not obtained within twelve (12) months after the date
the first such excess issuances are made, then (i) any unexercised options
Granted on the basis of such excess shares shall terminate and cease to be
outstanding and (ii) the Corporation shall promptly refund to the Optionees the
exercise price paid for any excess shares issued under the Plan and held in
escrow, together with interest (at the applicable U.S. Short Term Federal Rate)
for the period the shares were held in escrow, and such shares shall thereupon
be automatically cancelled and cease to be outstanding.
IV. USE OF PROCEEDS
Any cash proceeds received by the Corporation from the sale of Ordinary
Shares under the Plan shall be used for General corporate purposes.
V. WITHHOLDING
The Corporation's obligation to deliver Ordinary Shares upon the exercise
of any options or upon the issuance or vesting of any shares issued under the
Plan shall be subject to the satisfaction of all applicable U.S. federal, state
and local income and employment tax withholding requirements and all applicable
foreign tax withholding requirements. For Optionees who reside in the United
States, the Corporation shall collect the applicable U.S. federal, state and
local income and employment withholding taxes. For Optionees who are non-United
States citizens residing outside the United States, the Corporation shall
collect all taxes required under applicable foreign laws.
VI. REGULATORY APPROVALS
The implementation of the Plan, the granting of any options under the Plan
and the issuance of any Ordinary Shares upon the exercise of those options shall
be subject to the Corporation's procurement of all approvals and permits
required by regulatory authorities having jurisdiction over the Plan, the
options granted under it and the Ordinary Shares issued pursuant to it.
VII. NO EMPLOYMENT OR SERVICE RIGHTS
Nothing in the Plan shall confer upon the Optionee or the Participant any
right to continue in Service for any period of specific duration or interfere
with or otherwise restrict in
<PAGE>
any way the rights of the Corporation (or any Parent or Subsidiary employing or
retaining such person) or of the Optionee or the Participant, which rights are
hereby expressly reserved by each, to terminate such person's Service at any
time for any reason, with or without cause.
VIII. FINANCIAL REPORTS
The Corporation shall deliver a balance sheet and an income statement at
least annually to each individual holding an outstanding option under the Plan,
unless such individual is a key Employee whose duties in connection with the
Corporation (or any Parent or Subsidiary) assure such individual access to
equivalent information.
<PAGE>
APPENDIX
The following definitions shall be in effect under the Plan:
A. Board shall mean the Corporation's Board of Directors.
B. Code shall mean the U.S. Internal Revenue Code of 1986, as amended.
C. Committee shall mean a committee of two (2) or more Board members
appointed by the Board to exercise one or more administrative functions under
the Plan.
D. Corporate Transaction shall mean either of the following
shareholder-approved transactions to which the Corporation is a party:
(i) a mercer or consolidation in which securities possessing more
than fifty percent (50%) of the total combined voting power of the
Corporation's outstanding securities are transferred to a person or
persons different from the persons holding those securities
immediately prior to such transaction, or
(ii) the sale, transfer or other disposition of all or
substantially all of the Corporation's assets, whether in complete
liquidation or dissolution of the Corporation or otherwise.
E. Corporation shall mean Palo Alto Products International Pte., Ltd., a
Singapore corporation.
F. Disability shall mean the inability of the Optionee or Participant to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment and shall be determined by the Plan
Administrator on the basis of such medical evidence as the Plan Administrator
deems warranted under the circumstances.
G. Employee shall mean an individual who is in the employ of the
Corporation (or any Parent or Subsidiary), subject to the control and direction
of the employer entity as to both the work to be performed and the manner and
method of performance.
H. Exercise Date shall mean the date on which the Corporation shall have
received written notice of the option exercise.
I. Fair Market Value per Ordinary Share on any relevant date shall be
determined in accordance with the following provisions:
(i) If the Ordinary Shares are at the time traded on the Nasdaq
National Market, then the Fair Market Value shall be the closing
selling price per Ordinary Share on the date in question, as such
price is reported by the National Association of Securities Dealers on
the Nasdaq National Market or any successor system. If there is no
closing selling price for the Ordinary Shares on the date in question,
then the Fair Market Value shall be the closing selling
<PAGE>
price on the last preceding date for which such quotation exists.
(ii) If the Ordinary Shares are at the time listed on any Stock
Exchange, then the Fair Market Value shall be the closing selling
price per Ordinary Share on the date in question on the Stock Exchange
determined by the Plan Administrator to be the primary market for the
Ordinary Shares, as such price is officially quoted in the composite
tape of transactions on such exchange. If there is no closing selling
price for the Ordinary Shares on the date in question, then the Fair
Market Value shall be the closing selling price on the last preceding
date for which such quotation exists.
(iii) If the Ordinary Shares are at the time neither listed on
any Stock Exchange nor traded on the Nasdaq National Market, then the
Fair Market Value shall be determined by the Plan Administrator after
taking into account such factors as the Plan Administrator shall deem
appropriate.
J. Incentive Option shall mean an option which satisfies the requirements
of Code Section 422.
K. Involuntary Termination shall mean the termination of the Service of any
individual which occurs by reason of:
(i) such individual's involuntary dismissal or discharge by the
Corporation for reasons other than Misconduct, or
(ii) such individual's voluntary resignation following (A) a
change in his or her position with the Corporation which materially
reduces his or her level of responsibility, (B) a reduction in his or
her level of compensation (including base salary, fringe benefits and
target bonuses under any corporate-performance based bonus or
incentive programs) by more than fifteen percent (15%) or (C) a
relocation of such individual's place of employment by more than fifty
(50) miles, provided and only if such change, reduction or relocation
is effected without the individual's consent.
L. Misconduct shall mean the commission of any act of fraud, embezzlement
or dishonesty by the Optionee or Participant, any unauthorized use or disclosure
by such person of confidential information or trade secrets of the Corporation
(or any Parent or Subsidiary), or any other intentional misconduct by such
person adversely affecting the business or affairs of the Corporation (or any
Parent or Subsidiary) in a material manner. The foregoing definition shall not
be deemed to be inclusive of all the acts or omissions which the Corporation (or
any Parent or Subsidiary) may consider as grounds for the dismissal or discharge
of any
<PAGE>
Optionee, Participant or other person in the Service of the Corporation (or any
Parent or Subsidiary).
M. 1934 Act shall mean the U.S. Securities Exchange Act of 1934, as
amended.
N. Non-Statutory Option shall mean an option not intended to satisfy the
requirements of Code Section 422.
O. Option Grant Program shall mean the option grant program in effect under
the Plan.
P. Optionee shall mean any person to whom an option is granted under the
Plan.
Q. Ordinary Shares shall mean ordinary shares of the Corporation with a par
value of S$0.10 Singapore per share.
R. Parent shall mean any corporation (other than the Corporation) in an
unbroken chain of corporations ending with the Corporation, provided each
corporation in the unbroken chain (other than the Corporation) owns, at the time
of the determination, shares possessing fifty percent (50%) or more of the total
combined voting power of all classes of shares in one of the other corporations
in such chain.
S. Plan shall mean the Corporation's 1996 Share Option Plan, as set forth
in this document.
T. Plan Administrator shall mean either the Board or the Committee acting
in its capacity as administrator of the Plan.
U. Service shall mean the provision of services to the Corporation (or any
Parent or Subsidiary) by a person in the capacity of an Employee, or a
consultant or independent advisor, except to the extent otherwise specifically
provided in the documents evidencing the option grant.
V. Stock Exchange shall mean either the American Stock Exchange or the New
York Stock Exchange.
W. Subsidiary shall mean any corporation (other than the Corporation) in an
unbroken chain of corporations beginning with the Corporation, provided each
corporation (other than the last corporation) in the unbroken chain owns, at the
time of the determination, shares possessing fifty percent (50%) or more of the
total combined voting power of all classes of shares in one of the other
corporations in such chain.
X. 10% Shareholder shall mean the owner of shares (as determined under Code
Section 424(d)) possessing more than ten percent (10%) of the total combined
voting power of all classes of shares of the Corporation (or any Parent or
Subsidiary).
The DII Group
Amended and Restated
1994 EMPLOYEE STOCK PURCHASE PLAN
(as amended through July 27, 1997)
1. Purposes.
The DOVatron International, Inc. 1994 Employee Stock Purchase Plan (the
"Plan") is intended to provide an incentive for employees of DOVatron
International, Inc. (the "Company") and its Subsidiaries (as hereinafter
defined) to acquire a proprietary interest in the Company through the purchase
of ordinary shares (as hereinafter defined) of the Company. It is the intention
of the Company to have the Plan qualify as an "Employee Stock Purchase Plan"
under Section 423 of the Internal Revenue Code of 1986, as amended (the "Code").
The provisions of the Plan shall, accordingly, be construed so as to extend and
limit the participation in a manner consistent with the requirements of such
section of the Code.
2. Definitions.
(a) "Base Pay" means regular straight-time earnings, excluding payments for
overtime, shift premium, incentive compensation, bonuses, and other special
payments.
(b) "Board" means the Board of Directors of the Company.
(c) "Committee" means the Committee of the Board described in Paragraph 12
hereof.
(d) "Ordinary Shares" means the ordinary shares, S$0.01 par value per
share, of the Company.
(e) "Company" shall also include each Subsidiary of DOVatron International,
Inc., unless the context otherwise requires.
(f) "Employee" means any person who is customarily employed by the Company
or any Subsidiary for more than 20 hours per week on a full or part-time basis.
(g) "Participant" shall mean each eligible Employee who is having an amount
withheld from his Base Pay under Paragraph 6 hereof at the time of reference.
(h) "Subsidiary" means any corporation or other entity in which the Company
owns, directly or indirectly, eighty percent (80%) or more of the combined
voting power of all classes of stock or other ownership interest in the entity.
(i) "Trading Day" shall mean a day on which national stock exchanges in the
United States are open for trading.
3. Eligibility.
(a) Participation in the Plan is voluntary. Any Employee who shall have
completed six months' Employment and shall be employed by the Company on the
date his participation in the Plan is to become effective
<PAGE>
shall be eligible to participate in the Plan; provided, however, that the Board
or the Committee, as the case may be, shall have the power, subject to the
requirements of Section 423 of the Code and Rule 16b-3 (as defined in Section 12
below), in each case, as amended and in effect from time to time, and upon its
determination that such waiver is appropriate and in the best interests of the
Company, to waive the six-month employment requirement and to fix, or to
delegate to the officers of the Corporation the authority to fix, the terms and
conditions of any such waiver.
(b) Any provision of the Plan to the contrary notwithstanding, no Employee
shall be granted an option to participate in the Plan:
(i) if, immediately after the grant, such Employee (or any other
person whose shares would be attributed to such Employee pursuant to
Section 424(d) of the Code) would own shares and/or hold outstanding
options to purchase shares, possessing 5% or more of the total combined
voting power or value of all classes of shares of the Company or of any
subsidiary of the Company (for purposes of this Paragraph the rules of
Section 425(d) of the Code shall apply in determining shares ownership of
any Employee); or
(ii) which permits his rights to purchase shares under all employee
stock purchase plans (within the meaning of Section 423 of the Code) of the
Company and its subsidiaries to accrue at a rate which exceeds $25,000 of
the fair market value of the Ordinary Shares (determined at the time such
option is granted) for each calendar year in which such option is
outstanding at any time. For purposes of this Paragraph 3(b)(ii) the
provisions of Section 423(b)(8)(A), (B) and (C) of the Code shall be
applicable.
4. Shares Subject to the Plan and Offerings.
(a) The total number of Ordinary Shares which may be issued upon the
exercise of options granted under the Plan shall not exceed 200,000 (subject to
adjustment as provided in Paragraph 16), and such shares shall be unissued
shares. If any option which shall have been granted shall expire or terminate
for any reason without having been exercised in full, the unpurchased shares
shall again become available for purposes of the Plan (unless the Plan shall
have been terminated).
(b) The Plan will be implemented by one or more offerings ("Offering" or
"Offerings") with a new Offering commencing on the first Trading Day on or after
January 1 and July 1 of each year, or on such other date as the Committee shall
determine, and ending on June 30 and December 31 of each year, or six months
after the commencement date, and continuing until terminated in accordance with
the terms hereof. The Committee shall have the power to change the duration of
an Offering with respect to future Offerings by giving at least fifteen (15)
days' prior notice to the scheduled Offering to be affected thereby. The
commencement and ending dates of each Offering are hereinafter called the
"Offering Commencement Date" and "Offering Termination Date," respectively. Each
Offering will provide options to eligible Employees to purchase Ordinary Shares
under the Plan. Participation in any one or more of the Offerings under the Plan
shall neither limit, nor require, participation in any other Offering.
5. Participation.
(a) An eligible Employee may become a Participant by completing an
authorization for a payroll deduction on the form provided by the Company and
filing it with the office of the Company's Chief Financial Officer or such other
office designated by the Committee during the calendar month immediately
preceding, and at least five (5) business days prior to, the applicable Offering
Commencement Date, and such authorization shall thereupon become effective on
the applicable Offering Commencement Date; provided, however, that the Board or
the Committee, as the case may be, shall have the power, subject to the
requirements of Section 423 of the Code and Rule 16b-3 (as defined in Section 12
below), in each case, as amended and in effect from time to time, and upon its
determination that such waiver is appropriate and in the best interests of the
Company, to waive the requirement that eligible Employees file payroll deduction
forms during the calendar month preceding the applicable Offering Commencement
Date and by the fifth business day prior to the applicable Offering Commencement
Date and to fix, or to delegate to the officers of the Corporation the authority
to fix, the terms and conditions of any such waiver.
2
<PAGE>
(b) Payroll deductions for a Participant shall commence on the applicable
Offering Commencement Date when his authorization for a payroll deduction
becomes effective, or, when a Participant's authorization for a payroll
deduction is filed after the fifth business day prior to the Offering
Commencement Date, in accordance with applicable terms and conditions fixed
pursuant to Section 5(a) above, on such later date as is determined pursuant to
such terms and conditions. No payroll deductions will be commenced in any
Offering after the first pay day of such Offering unless such payrolls
deductions are as a result of and pursuant to a waiver made in accordance with
Section 5(a) above.
6. Payroll Deductions.
(a) At the time a Participant files his authorization for a payroll
deduction, he shall elect to have deductions made from his pay on each pay day
during the time he is a Participant in an Offering at a rate not exceeding 10%
of his Base Pay on the applicable Offering Commencement Date. All payroll
deductions made for a Participant shall be withheld in whole percentages only.
Unless otherwise determined by the Committee, if a Participant's Base Pay
changes within an Offering period, the change shall have no effect on the amount
of each payroll deduction for that Offering period, but will be reflected for
subsequent Offering periods. A Participant's authorization shall remain in
effect for successive Offerings unless terminated in accordance with the
provisions hereof.
(b) All payroll deductions made for a Participant shall be credited to his
account under the Plan. A Participant may not make any separate cash payment
into such account. No interest shall be payable to a Participant on any amounts
which have been credited to such account.
(c) A Participant may discontinue his participation in the Plan as provided
in Paragraph 10, but no other change can be made during an Offering and,
specifically, a Participant may not alter the amount of his payroll deductions
for that Offering. A Participant may increase or decrease the rate of payroll
deductions for any future Offering by completing and filing with the Company a
new authorization at least five (5) business days prior to the beginning of such
future Offering, authorizing a change in payroll deductions.
(d) Notwithstanding anything herein to the contrary, a Participant's
payroll deduction may be decreased to 0% at any time to the extent necessary to
comply with Section 423(b)(8) of the Code and Section 3(b) hereof. Subject to
the preceding sentence, payroll deductions shall recommence at the rate provided
in such Participant's authorization at the beginning of the next succeeding
Offering, unless terminated by the Participant as provided in Paragraph 10
hereof.
(e) Notwithstanding any other provision of this Plan, if a Participant (an
"Insider") who is subject to the provisions of Section 16 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), who has elected to
participate in the Plan by authorizing payroll deductions for the purchase of
Ordinary Shares, terminates participation in the Plan pursuant to Paragraph
10(a) hereof, or has his payroll deductions suspended pursuant to Paragraph
10(c) hereof, such Insider shall not be permitted to resume payroll deductions
under the Plan for a period of six months from the date of such termination or
suspension.
7. Granting of Option.
(a) For each of the Offerings, a Participant shall be deemed to have been
granted an option to purchase, on the applicable Offering Commencement Date, as
many full shares as he will be able to purchase with the payroll deductions
credited to his account during the Offering and payroll deductions carried
forward from previous Offerings, rounded down to the nearest whole number of a
share.
(b) The option price of the Ordinary Shares purchased with payroll
deductions made during each Offering for a Participant therein shall be the
lower of:
3
<PAGE>
(i) 85% of (A) if the Ordinary Shares is listed on a national
securities exchange in the United States on the Offering Commencement Date
applicable to such Offering, the average of the high and low sale prices of
the Ordinary Shares on such national securities exchange, or (B) if the
Ordinary Shares is not listed on a national securities exchange, the
average of the high and low sale prices of the Ordinary Shares on the
National Association of Securities Dealers, Inc. Automated Quotation System
("Nasdaq"), as reported by The Wall Street Journal on the Offering
Commencement Date applicable to such Offering (or on the next regular
Trading Day on which Ordinary Shares of the Company shall be traded in the
event that Ordinary Shares shall have been traded on the Offering
Commencement Date); or
(ii) 85% of (A) if the Ordinary Shares is listed on a national
securities exchange in the United States on the Offering Termination Date
applicable to such Offering, the average of the high and low sale prices of
the Ordinary Shares on such national securities exchange, or (B) if the
Ordinary Shares is not listed on a national securities exchange, the
average of the high and low sale prices of the Ordinary Shares on Nasdaq,
as reported by The Wall Street Journal on the Offering Termination Date
applicable to such Offering (or on the next regular Trading Day on which
shares of the Ordinary Shares shall be traded in the event that no Ordinary
Shares shall have been traded on the Offering Termination Date).
Provided always that in no event shall the option price be less than the
par value of the Company's Ordinary Shares.
8. Exercise of Option.
(a) Unless a Participant gives written notice to the Company as hereinafter
provided, his option for the purchase of Ordinary Shares with payroll deductions
made during an Offering will be deemed to have been exercised automatically on
the Offering Termination Date applicable to such Offering, for the purchase of
the number of full Ordinary Shares which the accumulated payroll deductions in
his account at that time will purchase at the applicable option price, rounded
down to the nearest whole number of a share. No fractional shares will be
purchased. Any excess payroll deductions accumulated in a Participant's account
which are not sufficient to purchase full shares shall be retained in the
Participant's account for the immediately subsequent Offering, subject to
earlier withdrawal by the Participant as provided herein.
(b) During a Participant's lifetime, a Participant's option to purchase
shares hereunder is exercisable only by him.
9. Delivery.
As promptly as practicable after the Offering Termination Date of each
Offering, the Company will arrange the delivery to each Participant of the
Ordinary Shares purchased upon the exercise of his option.
10. Withdrawal.
(a) A Participant may withdraw all, but not less than all, of the payroll
deductions credited to his account under the Plan and not yet used to exercise
the option granted to the Participant by giving written notice to the Company.
All of the Participant's payroll deductions credited to his account will be paid
to such Participant as soon as practicable after receipt of such notice of
withdrawal and such Participant's option for such Offering will be automatically
terminated, and no further payroll deductions for purchased shares will be made
during the Offering. If a Participant withdraws from an Offering, payroll
deductions will not resume at the beginning of the succeeding Offering unless
the Participant delivers to the Company a new authorization therefor.
(b) A Participant's withdrawal from any Offering will not have any effect
upon his eligibility to participate in any succeeding Offering or in any similar
plan which may hereafter be adopted by the Company.
4
<PAGE>
(c) Upon termination of the Participant's employment for any reason,
including retirement, death and disability while in the employ of the Company,
his participation in the Offering shall immediately terminate and the payroll
deductions credited to his account and not yet used to exercise the option will
be returned to him, or, in the case of his death, to the person or persons
entitle thereto under Paragraph 13.
11. Ordinary Shares.
(a) The maximum number of Ordinary Shares which shall be made available for
sale under the Plan shall be 200,000 shares, subject to adjustment upon changes
in capitalization of the Company as provided in Paragraph 16. If the total
number of Ordinary Shares for which options are to be exercised on a given
Offering Termination Date exceeds the maximum number of shares available for
sale (subject to adjustment as provided herein), the Company shall make a pro
rata allocation of the shares available for delivery and distribution in as
nearly a uniform manner as shall be practicable and as it shall determine to be
equitable.
(b) The Participant will have no interest in Ordinary Shares covered by his
option until such option has been exercised.
(c) Ordinary Shares to be delivered to a Participant under the Plan will be
registered in the name of the Participant.
12. Administration.
(a) The Plan shall be administered by the Board, or its Compensation
Committee.
(b) The Board or the Committee, as the case may be, shall have the plenary
power, subject to and within the limits of the express provisions of the Plan:
(i) to construe and interpret the Plan and options granted under it,
and to establish, amend and revoke rules and regulations for its
administration. The Board, or the Committee, as the case may be, in the
exercise of this power, shall generally determine all questions of policy
and expediency that may arise, may correct any defect, and reconcile any
inconsistency in the Plan or in any instrument associated with the Plan in
a manner and to the extent it shall deem necessary or expedient to make the
Plan fully effective, and
(ii) to establish the terms of each Offering of Ordinary Shares under
the Plan.
Notwithstanding the foregoing provisions of this Paragraph 12, in the event
that Rule 16b-3 promulgated under the Exchange Act ("Rule 16b-3") provides
specific requirements for the administrators of plans of this type, the Plan
shall be only administered by such a body and in such a manner as shall comply
with the applicable requirements of Rule 16b-3. Unless permitted by Rule 16b-3,
no discretion concerning decisions regarding the Plan shall be afforded to any
Committee or person that is not "disinterested" as that term is used in Rule
16b-3.
The terms and conditions of options granted hereunder to, and the purchase
of shares by, Insiders, shall comply with the applicable provisions of Rule
16b-3. This Plan shall be deemed to contain, and such options shall contain, and
the shares issued upon exercise thereof shall be subject to, such additional
conditions and restrictions as may be required by Rule 16b-3 to qualify for the
maximum exemption from Section 16 of the Exchange Act with respect to Plan
transactions.
5
<PAGE>
13. Designation of Beneficiary.
A Participant may file a written designation of a beneficiary who is to
receive any cash from the Participant's account under the Plan in the event of
such Participant's death subsequent to an Offering Termination Date on which the
Participant's option is exercised but prior to delivery to such Participant of
such Ordinary Shares and/or cash. Such designation of beneficiary may be changed
by the Participant at any time by written notice on a form supplied by the
Company. Upon the death of a Participant and upon receipt by the Company of
proof of the identity and existence, at the Participant's death, of a
beneficiary validly designated by him under the Plan, the Company shall deliver
such to such beneficiary. In the event of the death of a Participant and in the
absence of a beneficiary validly designated under the Plan who is living at the
time of such Participant's death, the Company shall deliver such cash to the
executor or administrator of the estate of the Participant, or if no such
executor or administrator has been appointed (to the knowledge of the Company),
the Company, in its discretion, may deliver such cash to the spouse or to any
one or more dependents or relatives of the Participant, or if no spouse,
dependent or relative is known to the Company, then to such other person as the
Company may designate. No beneficiary shall, prior to the death of the
Participant by whom he has been designated, acquire any interest in the cash
credited to the Participant under the Plan.
14. Transferability.
Neither payroll deductions credited to a Participant's accounts nor any
rights with regard to the exercise of an option or to receive Ordinary Shares
under the Plan may be assigned, transferred, pledged, or otherwise disposed of
in any way by the Participant otherwise than by will or the laws of descent and
distribution. Any such attempted assignment, transfer, pledge, or other
disposition shall be without effect, except that the Company may treat such act
as an election to withdraw funds in accordance with Paragraph 10 hereof.
The Company may require each Participant who acquired Ordinary Shares under
the Plan, as a condition of such acquisition, to notify the Company in the event
he disposes of the Ordinary Shares before the second anniversary of the Offering
Commencement Date on which the option with respect to such Ordinary Shares was
acquired, and in the event of such disposition while an employee of the Company,
and upon the exercise of the option, the Company may withhold from such
Participant's Base Pay such amount as it reasonably determines to be necessary
to satisfy the Company's obligation to withhold for federal and state taxes with
respect to such event.
15. Use of Funds.
All interest on the payroll deductions received or held by the Company
under this Plan shall be for the benefit of the Company and the Participants
shall not be entitled to any interest thereon.
16. Adjustments Upon Changes in Capitalization.
(a) Changes in Capitalization
Subject to any required action by the shareholders of the Company, the
number of Ordinary Shares as well as the price per Ordinary Share covered by
each option under the Plan which has not yet been exercised shall be
proportionately adjusted for any increase or decrease in the number of issued
Ordinary Shares resulting from a stock split, reverse stock split, stock
dividend, stock dividend, combination or reclassification of the Ordinary
Shares, or any other increase or decrease in the number of Ordinary Shares
effected without receipt of consideration by the Company; provided, however,
that conversion of any convertible securities of the Company shall not be deemed
to have been "effected without receipt of consideration." Such adjustment shall
be final, binding, and conclusive. Except as expressly provided herein, no
issuance by the Company of Ordinary Shares of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or price
of Ordinary Shares subject to an option.
6
<PAGE>
(b) Dissolution or Liquidation
In the event of the proposed dissolution or liquidation of the Company, the
Offering will terminate immediately prior to the consummation of such proposed
action, unless otherwise provided by the Board or the Committee, as the case may
be.
(c) Merger Or Asset Sale
In the event of a proposed sale of all or substantially all of the assets
of the Company, or the merger of the Company with or into another corporation,
each option under the Plan shall, to the extent permitted by all applicable
laws, be assumed or an equivalent option shall be substituted by such successor
corporation or a parent or subsidiary of such successor corporation, unless the
Board or the Committee, as the case may be, determines, in the exercise of its
sole discretion and in lieu of such assumption or substitution, to shorten the
Offering period then in progress by setting a new Offering Termination Date (the
"New Termination Date"). If the Board of the Committee, as the case may be,
shortens the Offering then in progress in lieu of assumption or substitution in
the event of a merger or sale of assets, the Board or the Committee, as the case
may be, shall notify each Participant in writing, at least ten (10) business
days prior to the New Termination Date, of the New Termination Date and that his
option will be exercised automatically on the New Termination Date, unless prior
to such date he has withdrawn from the Offering as provided for herein. For
purposes of this Paragraph, an option granted under the Plan shall be deemed to
be assumed if, following the sale of assets or merger, the option confers the
right to purchase, for each Ordinary Share subject to the option immediately
prior to the sale of assets or merger, the consideration (whether stock, cash or
other securities or property) received in the sale of assets or merger by
holders of Ordinary Shares for each Ordinary Share held on the effective date of
the transaction (and if such holders were offered a choice of consideration, the
type of consideration chosen by the holders of a majority of the outstanding
Ordinary Shares); provided, however, that if such consideration received in the
sale of assets or merger was not solely Ordinary Shares of the successor
corporation or its parent (as defined in Section 424(e) of the Code), the Board
or the Committee, as the case may be, may, with the consent of the successor
corporation and the Participant, provide for the consideration to be received
upon exercise of the option to be solely Ordinary Shares of the successor
corporation or its parent equal in fair market value to the per share
consideration received by holders of Ordinary Shares in the sale of assets or
merger.
17. Reports.
Individual accounts will be maintained for each Participant in the Plan.
Statements of account will be given to Participant at least annually, within
such time as the Board may reasonably determine, which statements will set forth
the amount of payroll deductions, the purchase price, the number of shares
purchased and the remaining cash balance, if any, or such other information as
the Board or the Committee may determine.
18. Amendment or Termination.
The Board or the Committee, as the case may be, may at any time and for any
reason, terminate or amend the Plan. Except as hereinafter provided, no
termination or amendment will affect or change options previously granted to any
Participant, nor may any amendment be made without prior approval of the
shareholders of the Company if such amendment would increase the number of
shares which may be issued under the Plan.
19. Notices.
All notices or other communications by a Participant to the Company under
or in connection with the Plan shall be in writing on a form provided by the
Company and shall be deemed to have been duly given when received at the
location or by the person designated by the Company for the receipt thereof.
7
<PAGE>
20. Conditions Upon Issuance of Shares.
Shares shall not be issued with respect to an option unless the exercise of
such option and the issuance and delivery of such shares pursuant thereto shall
comply with all applicable provisions of law, domestic or foreign, including,
without limitation, the Securities Act of 1933, as amended, the Exchange Act,
the rules and regulations promulgated thereunder and the requirements of any
stock exchange upon which the shares may then be listed, and shall be further
subject to the approval of counsel for the Company with respect to such
compliance.
As a condition to the exercise of an option, the Company may require the
person exercising such option to represent and warrant at the time of any such
exercise that the shares are being purchased only for investment and without any
present intention to sell or distribute such shares if, in the opinion of
counsel for the Company, such a representation is required by any of the
aforementioned applicable provisions of law.
21. Term of Plan.
The Plan has been adopted by the Board and is effective as of March 14,
1994. The Plan shall continue in effect for a term of ten (10) years thereafter
unless sooner terminated under Section 18 hereof or until the number of Ordinary
Shares reserved for issuance hereunder is exhausted.
8
[ON THE LETTERHEAD OF ALLEN & GLEDHILL]
Flextronics International Ltd.
11 Ubi Road 1, #07-01/02,
Meiban Industrial Building,
Singapore 408723. 13th April, 2000
Dear Sirs,
Registration Statement on Form S-8 of
Flextronics International Ltd. (the "Company")
1. At your request, we have examined the Registration Statement on Form S-8
(the "Registration Statement") filed or to be filed by the Company with the
Securities and Exchange Commission on or about 13th April, 2000 in
connection with the registration under the Securities Act of 1933, as
amended, of, inter alia, an aggregate of 18,090 ordinary shares of S$0.01
each in the capital of the Company ("Ordinary Shares") (the "Option
Shares") subject to issuance by the Company upon the valid exercise of
purchase rights represented by outstanding share options deemed to have
been granted under The DII Group, Inc. 1994 Employee Stock Purchase Plan
adopted by the Company (the "1994 DII ESPP").
2. As your Singapore counsel, we have examined the proceedings taken by the
Company in connection with:-
(a) the adoption of the 1994 DII ESPP;
(b) the allotment and issuance of new Ordinary Shares arising from the
exercise of the purchase rights represented by outstanding share
options deemed to have been granted under the 1994 DII ESPP (the
"Company's Allotment Procedures").
3. We have also made such other examinations of law and fact as we have
considered necessary in order to form a basis for the opinion hereafter
expressed.
4. Based on the foregoing and assuming that:-
(a) the total issued and paid-up share capital of the Company consequent
upon the issue of the Option Shares from time to time will not exceed
the authorised share capital of the Company at any time; and
(b) there shall be subsisting a valid authority given pursuant to Section
161 of the Singapore Companies Act, Chapter 50 in respect of the issue
of the Option Shares from time to time,
we are of the opinion that the Option Shares allotted and issued by the
Company (i) upon the exercise of the purchase rights represented by
outstanding share options deemed to have been granted under the 1994 DII
ESPP in accordance with its terms
<PAGE>
against full payment of the applicable exercise price, (ii) pursuant to the
Company's Allotment Procedures, and (iii) represented by share certificates
issued by the Company in respect of such Option Shares, will be legally
issued and fully-paid.
5. We consent to the use of this opinion as an exhibit to the
Registration Statement and further consent to all references to us, if
any, in the Registration Statement and any amendments thereto.
Yours faithfully,
/s/ Allen & Gledhill
[ON THE LETTERHEAD OF ALLEN & GLEDHILL]
13th April, 2000
Flextronics International Ltd.
11 Ubi Road 1, #07-01/02,
Meiban Industrial Building,
Singapore 408723.
Dear Sirs,
Registration Statement on Form S-8 of
Flextronics International Ltd. (the "Company")
1. At your request, we have examined the Registration Statement on Form S-8 (the
"Registration Statement") filed or to be filed by the Company with the
Securities and Exchange Commission on or about 13th April, 2000 in connection
with the registration under the Securities Act of 1933, as amended, an aggregate
of 395,883 Ordinary Shares (the "Option Shares") to be issued by the Company
upon the valid exercise of subscription rights represented by outstanding share
options deemed to have been granted under Palo Alto Products International Pte
Ltd 1996 Share Option Plan (as amended in 1998) (the "PAPI Share Option Plan")
assumed by the Company pursuant to the terms of the Exchange Agrement entered
into as of 14th January, 2000 by and among (1)the Company, (2) Palo Alto
Products International Pte Ltd ("PAPI") and (3) the shareholders of PAPI, Palo
Alto Manufacturing (Thailand) Limited ("PAMT") and Palo Alto Plastic (Thailand)
Limited ("PAPT") as listed on Exhibit A to the Agreement (the "Exchange
Agreement").
<PAGE>
2. As your Singapore counsel, we have examined the following documents:-
(a) a copy of the resolutions of the shareholders of the Company passed at
the Annual General Meeting of the Company held on 27 August 1999
relating to the authorisation for the issue of and the allotment and
issue of the ordinary shares in the capital of the Company; and
(b) a copy of the resolutions of the Board of Directors of the Company
passed on 31st March, 2000 relating to the assumption of the PAPI
Share Option Plan and the procedure for the allotment and issue of new
Ordinary Shares (the "Company's Allotment Procedures") arising from
the exercise of the subscription rights conferred under outstanding
share options granted or, as the case may be, deemed to have been
granted, under the PAPI Share Option Plan.
3. We have also made such other examinations of law and fact as we have
considered necessary in order to form a basis for the opinion hereinafter
expressed.
4. We have assumed:-
(a) that the total issued and paid-up share capital of the Company
consequent upon the issue of the Option Shares from time to time will
not exceed the authorised share capital of the Company at any time;
(b) that there shall be subsisting a valid authority given pursuant to
Section 161 of the Singapore Companies Act, Chapter 50 in respect of
the issue of the Option Shares from time to time;
(c) that the Company is obliged under the laws of the State of California
to adhere to the provisions of Section 2.9 of the Exchange Agreement
and to issue the Option Shares in accordance with the terms and
conditions of the PAPI Share Option Plan subject to the provisions of
Section 2.9 of the Exchange Agreement;
(d) the continued applicability and enforceability of all the terms and
conditions of the PAPI Share Option Plan under the laws of the State
of California to the Company except to the extent set forth in Section
2.9 of the Exchange Agreement;
(e) that to the extent that any terms and conditions of the PAPI Share
Option Plan infringe the laws of Singapore that by virtue of the
provisions of Section 2.9 of the Exchange Agreement such terms and
conditions, if any, will not apply;
(f) that the copies of the Company's Resolutions and the Company's Board
Resolutions submitted to us for examination are true, complete and
up-to-date copies and that the Company's Resolutions and the Company's
Board Resolutions have not been rescinded or modified and they remain
in full force and effect and that no other resolution or other action
has been taken which
<PAGE>
could affect the validity of the Company's Resolutions and the
Company's Board Resolutions; and
(g) the genuineness of all signatures on all documents and the
completeness, and the conformity to original documents, of all copy or
other specimen documents submitted to us.
5. This opinion only relates to the laws of general application of Singapore as
at the date hereof and as currently applied by the Singapore courts, and is
given on the basis that it will be governed by and construed in accordance with
the laws of Singapore. We have made no investigation of, and do not express or
imply any views on, the laws of any country other than Singapore. In respect of
the PAPI Share Option Plan and the Exchange Agreement, we have assumed due
compliance with all matters concerning United States federal laws, California
laws and the laws of all other relevant jurisdictions other than Singapore.
6. Based on the foregoing assumptions, we are of the opinion that the Option
Shares allotted and issued by the Company (i) upon the exercise of the
subscription rights represented by outstanding share options granted or, as the
case may be, deemed to have been granted, under the PAPI Share Option Plan in
accordance with its terms against full payment of the applicable exercise price,
(ii) pursuant to the Company's Allotment Procedures, and (iii) represented by
share certificates issued by the Company in respect of such Option Shares, will
be legally issued and fully-paid.
7. We consent to the use of this opinion as an exhibit to the Registration
Statement and further consent to all references to us, if any, in the
Registration Statement and any amendments thereto.
Yours faithfully,
/s/ Allen & Gledhill
Exhibit 23.01
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our
report dated December 22, 1999 included in Flextronics International Ltd's Form
8-K filed on December 23, 1999 and to all references to our Firm included in
this registration statement. Our report dated April 21, 1999 included in
Flextronics International Ltd.'s Form 10-K for the year ended March 31, 1999 is
no longer appropriate since restated financial statements have been presented
giving effect to a business combination accounted for as a pooling-of-interests.
Arthur Andersen LLP
San Jose, California
April 13, 2000
[MOORE STEPHENS LETTERHEAD]
10 April 2000
Flextronics International Limited
2090 Fortune Drive
San Jose
CA 95131
USA
FLEXTONICS INTERNATIONAL LIMITED
FORM S-8
As independent public accountants, we hereby consent to the use of our reports
(and to all references to our Firm) included in or made a part of the
registration statement.
/s/ Moore Stephens
Moore Stephens
