<PAGE>
As filed with the Securities and Exchange Commission on February 25, 1998
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-----------------------
MICROELECTRONIC PACKAGING, INC.
(Exact name of registrant as specified in its charter)
California 94-3142624
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
9577 Chesapeake Drive, San Diego, CA 92123
(Address of principal executive offices) (Zip Code)
------------------------
MICROELECTRONIC PACKAGING, INC.
1993 Stock Option/Stock Issuance Plan
(Full title of the plan)
------------------------
Andrew Wrobel
President and Chief Executive Officer
MICROELECTRONIC PACKAGING, INC.
9577 Chesapeake Drive, San Diego, CA 92123
(Name and address of agent for service)
(619) 292-7000
(Telephone number, including area code, of agent for service)
------------------------
CALCULATION OF REGISTRATION FEE
================================================================================
<TABLE>
<CAPTION>
Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price Offering Registration
Registered Registered(1) per Share(2) Price(2) Fee
- ------------- ------------- ------------ ------------- ------------
<S> <C> <C> <C> <C>
Common Stock, 4,000,000 $0.52 $2,080,000.00 $613.60
no par value
</TABLE>
================================================================================
(1) This Registration Statement shall also cover any additional shares of
Common Stock which become issuable under the 1993 Stock Option/Stock Issuance
Plan by reason of any stock dividend, stock split, recapitalization or other
similar transaction effected without the receipt of consideration which results
in an increase in the number of the Registrant's outstanding shares of Common
Stock.
(2) 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 selling prices per share of Common Stock of Microelectronic Packaging, Inc.
on February 19, 1998 as reported by the OTC Bulletin Board.
<PAGE>
PART II
Information Required in the Registration Statement
Item 3. Incorporation of Documents by Reference
---------------------------------------
Microelectronic Packaging, Inc. (the "Registrant") hereby incorporates
by reference into this Registration Statement the following documents previously
filed with the Securities and Exchange Commission (the "Commission"):
a. The Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996, filed with the Commission on April 15, 1997,
together with the amendments thereto on Forms 10K/A, filed with the
Commission on June 23, 1997 and June 27, 1997;
b. The Registrant's Quarterly Reports on Forms 10-Q for the fiscal
quarters ended March 31, 1997, June 30, 1997 and September 30, 1997,
filed with the Commission on May 15, 1997, August 14, 1997 and
November 12, 1997, respectively;
c. The Company's Current Reports on Forms 8-K, filed with the Commission
on January 15, 1997, March 14, 1997 and July 23, 1997, respectively;
and
d. The Registrant's Registration Statement No. 0-23562 on Form 8-A filed
with the Commission on March 3, 1994, in which there is described the
terms, rights and provisions applicable to the Registrant's
outstanding Common Stock.
All reports and definitive proxy or information statements filed
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of
1934, as amended (the "1934 Act") after the date of this Registration Statement
and prior to the filing of a post-effective amendment which indicates that all
securities offered hereby have been sold or which deregisters all securities
then remaining unsold shall be deemed to be incorporated by reference into this
Registration Statement and to be a part hereof from the date of filing of such
documents. Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a statement
contained herein or in any subsequently filed document which also is deemed to
be incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Registration Statement.
Item 4. Description of Securities
-------------------------
Not applicable.
Item 5. Interests of Named Experts and Counsel
--------------------------------------
Not applicable.
Item 6. Indemnification of Directors and Officers
-----------------------------------------
The California General Corporation Law provides that directors
will not be personally liable to the Registrant for monetary damages arising
from a breach of their fiduciary duty to the Registrant as directors, including
such conduct during a merger or tender offer, in certain circumstances. Such
limitation does not affect liability for any breach of a director's duty to the
Registrant or its shareholders (i) with respect to approval by the director of
any transaction from which he or she derives an improper personal benefit, (ii)
with respect to acts or omissions involving an absence of good faith, that he or
she believes to be contrary to the best interests of the Registrant or its
shareholders, that involve intentional misconduct or a knowing and culpable
violation of law, that constitute an unexcused pattern of inattention that
amounts to an abdication of his or her duty to the Registrant or its
shareholders, or that show a reckless disregard for his or her duty to the
Registrant or its shareholders in circumstances in which he
II-1
<PAGE>
or she was, or should have been aware, in the ordinary course of performing his
or her duties, or a risk of serious injury to the Registrant or its
shareholders, or (iii) based on transactions between the Registrant and its
directors or another corporation with interrelated directors or on improper
distributions, loans, or guarantees under applicable sections of the California
Corporations Code. Such limitations of liability also do not affect the
availability of equitable remedies such as injunctive relief or rescission,
although in certain circumstances equitable relief may not be available as a
practical matter. The limitation may relieve the directors of monetary liability
to the Registrant for grossly negligent conduct, including conduct in situations
involving attempted takeovers of the Registrant. No claim or litigation is
currently pending against the Registrant's directors that would be affected by
the limitation of liability.
Section 317 of the California Corporations Code 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 (including reimbursement for expenses
incurred) arising under the Securities Act of 1933, as amended (the "1933 Act").
Article IX of the Amended and Restated Articles of Incorporation of the
Registrant and Article VI, Section 4 of the Registrant's Bylaws provide for
indemnification of its directors and officers and other agents to the maximum
extent permitted by the California Corporations Code. The Second Amended and
Restated Registration Rights Agreement, Waiver Agreement and Conversion
Agreement also provides for indemnification by the Registrant in favor of the
shareholders against certain liabilities, including liabilities arising under
the securities laws. The Registrant also maintains insurance for the benefit of
its directors and officers that insures such persons against certain
liabilities, including liabilities under the securities laws. The Registrant has
entered into an indemnification agreement with each of its directors and
officers whereby the Registrant will reimburse its directors and officers
against certain liabilities, including liabilities arising under the securities
laws.
Item 7. Exemption from Registration Claimed
-----------------------------------
Not Applicable.
Item 8. Exhibits
--------
<TABLE>
<CAPTION>
Exhibit Number Exhibit
- -------------- -------
<C> <S>
4 Instruments Defining Rights of Shareholders. Reference is made
to Registrant's Registration Statement No. 0-23562 on Form 8-A,
which is incorporated herein by reference pursuant to Item 3(d).
5 Opinion and Consent of Brobeck, Phleger & Harrison LLP.
23.1 Consent of Independent Auditors - BDO Seidman, LLP.
23.2 Consent of Independent Accountants - Price Waterhouse LLP.
23.3 Consent of Brobeck, Phleger & Harrison LLP is contained in
Exhibit 5.
24 Power of Attorney. Reference is made to page II-4 of this
Registration Statement.
99.1 1993 Stock Option/Stock Issuance Plan.
99.2 Form of Notice of Grant of Stock Option.
99.3 Form of Stock Option Agreement.
99.4 Form of Addendum to Stock Option Agreement (Special Tax
Elections).
99.5 Form of Notice of Grant of Stock Option (Non-Employee Director
Automatic Grant).
99.6 Form of Stock Option Agreement (Non-Employee Director Automatic
Grant).
99.7 Form of Stock Issuance Agreement.
</TABLE>
II-2
<PAGE>
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 1933 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, and (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 clauses (1)(i) and (1)(ii) shall 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 1934 Act that are incorporated by reference
into the Registration Statement; (2) that for the purpose of determining any
liability under the 1933 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; and (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 Registrant's 1993 Stock Option/Stock
Issuance Plan.
B. The undersigned Registrant hereby undertakes that, for purposes
of determining any liability under the 1933 Act, each filing of the Registrant's
annual report pursuant to Section 13(a) or Section 15(d) of the 1934 Act that is
incorporated by reference into 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.
C. Insofar as indemnification for liabilities arising under the
1933 Act may be permitted to directors, officers or controlling persons of the
Registrant pursuant to the indemnification provisions summarized in Item 6
above, or otherwise, the Registrant has been informed that, in the opinion of
the Commission, such indemnification is against public policy as expressed in
the 1933 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 whether such
indemnification by it is against public policy as expressed in the 1933 Act, and
will be governed by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, 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 Diego, State of California, on this 24th
of February 1998.
MICROELECTRONIC PACKAGING, INC.
By /s/ ANDREW WROBEL
--------------------------------------
Andrew Wrobel
President and Chief Executive Officer,
Director
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned officers and directors of Microelectronic
Packaging, Inc., a California corporation, do hereby constitute and appoint
Andrew Wrobel and Denis J. Trafecanty, and each of them, the lawful attorneys
and agents, with full power of substitution and resubstitution, with full power
and authority to do any and all acts and things and to execute any and all
instruments which said attorneys and agents, and any one of them, determine may
be necessary or advisable or required to enable said corporation to comply with
the Securities Act of 1933, as amended, and any rules or regulations or
requirements of the Commission in connection with this Registration Statement.
Without limiting the generality of the foregoing power and authority, the powers
granted include the power and authority to sign the names of the undersigned
officers and directors in the capacities indicated below to this Registration
Statement, to any and all amendments, both pre-effective and post-effective, and
supplements to this Registration Statement, and to any and all instruments or
documents filed as part of or in conjunction with this Registration Statement or
amendments or supplements thereof, and each of the undersigned hereby ratifies
and confirms all that said attorneys and agents, or any of them, shall do or
cause to be done by virtue hereof. This Power of Attorney may be signed in
several counterparts.
IN WITNESS WHEREOF, each of the undersigned has executed this Power of
Attorney as of the date indicated.
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
Signatures Title Date
- ---------- ----- ----
/s/ ANDREW WROBEL President and February 24, 1998
- ----------------------- Chief Executive
Andrew Wrobel Officer, Director
(Principal Executive
Officer)
/s/ DENIS J. TRAFECANTY Senior Vice President, February 24, 1998
- ----------------------- Chief Financial Officer
Denis J. Trafecanty and Secretary
(Principal Financial and
Accounting Officer)
II-4
<PAGE>
Signatures Title Date
- ---------- ----- ----
/s/ LEWIS SOLOMAN Chairman of the Board February 24, 1998
- ---------------------- of Directors
Lewis Solomon
/s/ FRANK L. HOWLAND Director February 24, 1998
- ----------------------
Frank L. Howland
/s/ ANTHONY J.A. BRYAN Director February 24, 1998
- ----------------------
Anthony J.A. Bryan
/s/ GARY S. STEIN Director February 24, 1998
- ----------------------
Gary S. Stein
II-5
<PAGE>
EXHIBIT INDEX
-------------
<TABLE>
<CAPTION>
Exhibit Number Exhibit
- -------------- -------
<C> <S>
4 Instruments Defining Rights of Shareholders. Reference is
made to Registrant's Registration Statement No. 0-23562 on
Form 8-A, which is incorporated herein by reference pursuant
to Item 3(d).
5 Opinion and Consent of Brobeck, Phleger & Harrison LLP.
23.1 Consent of Independent Auditors - BDO Seidman, LLP.
23.2 Consent of Independent Accountants - Price Waterhouse LLP.
23.3 Consent of Brobeck, Phleger & Harrison LLP is contained in
Exhibit 5.
24 Power of Attorney. Reference is made to page II-4 of this
Registration Statement.
99.1 1993 Stock Option/Stock Issuance Plan.
99.2 Form of Notice of Grant of Stock Option.
99.3 Form of Stock Option Agreement.
99.4 Form of Addendum to Stock Option Agreement (Special Tax
Elections).
99.5 Form of Notice of Grant of Stock Option (Non-Employee
Director Automatic Grant).
99.6 Form of Stock Option Agreement (Non-Employee Director
Automatic Grant).
99.7 Form of Stock Issuance Agreement.
</TABLE>
<PAGE>
EXHIBIT 5
February 23, 1998
Microelectronic Packaging, Inc.
9577 Chesapeake Drive
San Diego, CA 92123
Re: Microelectronic Packaging, Inc. Registration Statement
for Offering of 4,000,000 Shares of Common Stock
------------------------------------------------------
Ladies and Gentlemen:
We refer to your registration on Form S-8 (the "Registration
Statement") under the Securities Act of 1933, as amended, of 4,000,000 shares of
the Common Stock of Microelectronic Packaging, Inc. (the "Company") under the
Company's 1993 Stock Option/Stock Issuance Plan. We advise you that, in our
opinion, when such shares have been issued and sold pursuant to the applicable
provisions of the 1993 Stock Option/Stock Issuance Plan and in accordance with
the Registration Statement, such shares will be validly issued, fully paid and
nonassessable shares of the Company's Common Stock.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ BROBECK, PHLEGER & HARRISON LLP
BROBECK, PHLEGER & HARRISON LLP
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
Microelectronic Packaging, Inc.
San Diego, California
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 of our report dated March 26, 1997, except for Note 17
paragraph 8, which is as of April 5, 1997, and Note 9 paragraph 11 which is as
of April 10, 1997, relating to the consolidated financial statements of Micro-
electronic Packaging, Inc., as of our report dated March 26, 1997, relating to
the schedules, appearing in the Company's Annual Report on Form 10-K for the
year ended December 31, 1996. Our report contains an explanatory paragraph
regarding the Company's ability to continue as a going concern.
/s/ BDO Seidman, LLP
--------------------
BDO SEIDMAN, LLP
Costa Mesa, California
February 24, 1998
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated April 11, 1995, on the 1994
consolidated financial statements of Microelectronic Packaging, Inc., which
appears on page F-2 of Microelectronic Packaging, Inc.'s Annual Report on Form
10-K for the year ended December 31, 1996.
/s/ PRICE WATERHOUSE LLP
PRICE WATERHOUSE LLP
San Diego, California
February 20, 1998
<PAGE>
EXHIBIT 99.1
MICROELECTRONIC PACKAGING, INC.
1993 STOCK OPTION/STOCK ISSUANCE PLAN
-------------------------------------
(As Amended and Restated through April 10, 1997)
ARTICLE ONE
GENERAL
-------
I. PURPOSE OF THE PLAN
A. This 1993 Stock Option/Stock Issuance Plan (the "Plan") is
intended to promote the interests of Microelectronic Packaging, Inc., a
California corporation (the "Corporation"), by providing eligible individuals
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 (or its parent or subsidiary
corporations).
B. The Discretionary Option Grant and Stock Issuance Programs under
this Plan became effective on April 21, 1994, the date on which the shares of
the Corporation's Common Stock were first registered under Section 12(g) of the
Securities Exchange Act of 1934, as amended (the "1934 Act"). Such date is
hereby designated as the Plan Effective Date. The Automatic Option Grant Program
under this Plan became effective immediately upon the execution and final
pricing of the Underwriting Agreement for the initial public offering of the
Corporation's Common Stock. The execution date of such Underwriting Agreement is
hereby designated as the Automatic Grant Program Effective Date.
C. This April 1997 restatement of the Plan shall become effective
immediately upon its adoption by the Board of Directors, subject, however, to
shareholder approval. The Plan shall be administered in compliance with the
applicable requirements of SEC Rule 16b-3, as in effect from time to time.
D. This Plan serves as the successor to the Corporation's 1988 Stock
Option Plan (the "Predecessor Plan"), and no further option grants or share
issuances shall be made under the Predecessor Plan from and after the Plan
Effective Date. All outstanding stock options and unvested share issuances under
the Predecessor Plan on such Plan Effective Date are hereby incorporated into
this Plan and shall accordingly be treated as outstanding stock options and
unvested share issuances under this Plan. However, each outstanding option grant
so incorporated shall continue to be governed solely by the express terms and
conditions of the instrument evidencing such grant, and no provision of this
Plan shall be deemed to affect or otherwise modify the rights or obligations of
the holders of such incorporated options with respect to their acquisition of
shares of the Corporation's Common Stock thereunder. All unvested shares of
Common Stock outstanding under the Predecessor Plan on the Plan Effective Date
shall continue to be governed solely by the express terms and conditions of the
instruments evidencing such issuances, and no
<PAGE>
provision of this Plan shall be deemed to affect or modify the rights or
obligations of the holders of such unvested shares.
II. DEFINITIONS
A. For purposes of the Plan, the following definitions shall be in
effect:
Board: the Corporation's Board of Directors.
Change in Control: a change in ownership or control of the
Corporation effected through either of the following transactions:
(i) the acquisition directly or indirectly by any person or
related group of persons (other than the Corporation or a person that
directly or indirectly controls, is controlled by, or is under common
control with, the Corporation) of beneficial ownership (within the meaning
of Rule 13d-3 of the 1934 Act) of securities possessing more than fifty
percent (50%) of the total combined voting power of the Corporation's
outstanding securities pursuant to a tender or exchange offer made directly
to the Corporation's shareholders which the Board does not recommend such
shareholders to accept; or
(ii) a change in the composition of the Board over a period of
thirty-six (36) consecutive months or less such that a majority of the
Board members ceases, by reason of one or more contested elections for
Board membership, to be comprised of individuals who either (A) have been
Board members continuously since the beginning of such period or (B) have
been elected or nominated for election as Board members during such period
by at least a majority of the Board members described in clause (A) who
were still in office at the time such election or nomination was approved
by the Board.
Code: the Internal Revenue Code of 1986, as amended.
Common Stock: shares of the Corporation's common stock.
Corporate Transaction: any of the following shareholder-approved
transactions to which the Corporation is a party:
(i) a merger or consolidation in which the Corporation is not
the surviving entity, except for a transaction the principal purpose of
which is to change the state in which the Corporation is incorporated,
(ii) the sale, transfer or other disposition of all or
substantially all of the assets of the Corporation in complete liquidation
or dissolution of the Corporation, or
2.
<PAGE>
(iii) any reverse merger in which the Corporation is the
surviving entity but 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 those who
held such securities immediately prior to such merger.
Employee: an individual who performs services while in the employ of
the Corporation or one or more parent or subsidiary corporations, subject to the
control and direction of the employer entity not only as to the work to be
performed but also as to the manner and method of performance.
Fair Market Value: the Fair Market Value per share of Common Stock
determined in accordance with the following provisions:
- If the Common Stock is at the time traded on the Nasdaq Electronic
Bulletin Board, the Fair Market Value shall be the average of the highest
bid price and the lowest asked price per share on the date in question, as
such prices are reported by the National Association of Securities Dealers
through the Nasdaq Electronic Bulletin Board or any successor system. If
there are no reported bid or asked prices for the Common Stock on the date
in question, then the average of the highest bid price and the lowest asked
price on the last preceding date for which such quotations exist shall be
determinative of the Fair Market Value.
- If the Common Stock is not at the time listed or admitted to
trading on any national stock exchange but is traded on the Nasdaq National
Market, the Fair Market Value shall be the closing selling price per share
on the date in question, as such price is reported by the National
Association of Securities Dealers through the Nasdaq National Market or any
successor system. If there is no reported closing selling price for the
Common Stock on the date in question, then the closing selling price on the
last preceding date for which such quotation exists shall be determinative
of Fair Market Value.
- If the Common Stock is at the time listed or admitted to trading
on any national stock exchange, then the Fair Market Value shall be the
closing selling price per share on the date in question on the exchange
determined by the Plan Administrator to be the primary market for the
Common Stock, as such price is officially quoted in the composite tape of
transactions on such exchange. If there is no reported sale of Common Stock
on such exchange on the date in question, then the Fair Market Value shall
be the closing selling price on the exchange on the last preceding date for
which such quotation exists.
Optionee: a person to whom an option is granted under the
Discretionary Option Grant or Automatic Option Grant Program.
3.
<PAGE>
Participant: a person who is issued Common Stock under the Stock
Issuance Program.
Permanent Disability or Permanently Disabled: the inability of the
Optionee or the Participant to engage in any substantial gainful activity by
reason of any medically determinable physical or mental impairment expected to
result in death or to be of continuous duration of twelve (12) months or more.
Plan Administrator: the particular entity, whether the Primary
Committee, the Board or the Secondary Committee, which is authorized to
administer the Discretionary Option Grant and Stock Issuance Programs with
respect to one or more classes of eligible persons, to the extent such entity is
carrying out its administrative functions under those programs with respect to
the persons under its jurisdiction.
Primary Committee: the committee of two (2) or more non-employee
Board members appointed by the Board to administer the Discretionary Option
Grant and Stock Issuance Programs with respect to Section 16 Insiders.
Secondary Committee: a committee of two (2) or more Board members
appointed by the Board to administer the Discretionary Option Grant and Stock
Issuance Programs with respect to eligible persons other than Section 16
Insiders.
Section 16 Insider: an officer or director of the Corporation subject
to the short-swing profit liabilities of Section 16 of the 1934 Act.
Service: the performance of services on a periodic basis for the
Corporation (or any parent or subsidiary corporation) in the capacity of an
Employee, a non-employee member of the board of directors or an independent
consultant or advisor, except to the extent otherwise specifically provided in
the applicable stock option or stock issuance agreement.
B. The following provisions shall be applicable in determining the
parent and subsidiary corporations of the Corporation:
Any corporation (other than the Corporation) in an unbroken chain
of corporations ending with the Corporation shall be considered to be a
parent of the Corporation, provided each such corporation in the unbroken
chain (other than the Corporation) owns, at the time of the determination,
stock possessing fifty percent (50%) or more of the total combined voting
power of all classes of stock in one of the other corporations in such
chain.
Each corporation (other than the Corporation) in an unbroken chain
of corporations beginning with the Corporation shall be considered to be a
subsidiary of the Corporation, provided each such corporation (other than
the last
4.
<PAGE>
corporation) in the unbroken chain owns, at the time of the determination,
stock possessing fifty percent (50%) or more of the total combined voting
power of all classes of stock in one of the other corporations in such
chain.
III. STRUCTURE OF THE PLAN
A. Stock Programs. The Plan shall be divided into three separate
--------------
components: the Discretionary Option Grant Program specified in Article Two, the
Automatic Option Grant Program specified in Article Three and the Stock Issuance
Program specified in Article Four. Under the Discretionary Option Grant Program,
eligible individuals may, at the discretion of the Plan Administrator, be
granted options to purchase shares of Common Stock in accordance with the
provisions of Article Two. Under the Automatic Option Grant Program, each
individual serving as an eligible non-employee Board member on the Automatic
Grant Program Effective Date and each individual who first joins the Board as an
eligible non-employee director after the Automatic Grant Program Effective Date
will at periodic intervals receive option grants to purchase shares of Common
Stock in accordance with the provisions of Article Three, with the first such
grants to be made on the Automatic Grant Program Effective Date. Under the Stock
Issuance Program, eligible individuals may be issued shares of Common Stock
directly, either through the immediate purchase of such shares at a price not
less than eighty-five percent (85%) of the fair market value of the shares at
the time of issuance or as a bonus for past services rendered the Corporation.
B. General Provisions. Unless the context clearly indicates
------------------
otherwise, the provisions of Articles One and Five shall apply to the
Discretionary Option Grant Program, the Automatic Option Grant Program and the
Stock Issuance Program and shall accordingly govern the interests of all
individuals under the Plan.
IV. ADMINISTRATION OF THE PLAN
A. The Primary Committee shall have sole and exclusive authority to
administer the Discretionary Option Grant and Stock Issuance Programs with
respect to Section 16 Insiders, other than to those Section 16 Insiders who are
serving on the Primary Committee. The Board shall retain sole and exclusive
authority to administer the Discretionary Option Grant and Stock Issuance
Programs with respect to members of the Primary Committee.
B. Administration of the Discretionary Option Grant and Stock
Issuance Programs with respect to all other persons eligible to participate in
those programs may, at the Board's discretion, be vested in the Primary
Committee or a Secondary Committee, or the Board may retain the power to
administer those programs with respect to such persons. The members of the
Secondary Committee may be individuals who are Employees eligible to receive
discretionary option grants or direct stock issuances under the Plan or any
stock option, stock appreciation, stock bonus or other stock plan of the
Corporation (or any parent or subsidiary).
C. Members of the Primary Committee or any Secondary Committee shall
serve for such period of time as the Board may determine and may be removed by
the Board at any
5.
<PAGE>
time. The Board may also at any time terminate the functions of any Secondary
Committee and reassume all powers and authority previously delegated to such
committee.
D. Each Plan Administrator shall, within the scope of its
administrative functions under the Plan, 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 Discretionary Option Grant and
Stock Issuance Programs and to make such determinations under, and issue such
interpretations of, the provisions of such programs and any outstanding options
or stock issuances thereunder as it may deem necessary or advisable. Decisions
of the Plan Administrator within the scope of its administrative functions under
the Plan shall be final and binding on all parties who have an interest in the
Discretionary Option Grant or Stock Issuance Program under its jurisdiction or
any option or stock issuance thereunder.
E. Service on the Primary Committee or the Secondary Committee shall
constitute service as a Board member, and members of each such committee shall
accordingly be entitled to full indemnification and reimbursement as Board
members for their service on such committee. No member of the Primary Committee
or the Secondary Committee shall be liable for any act or omission made in good
faith with respect to the Plan or any option grants or stock issuances under the
Plan.
F. Administration of the Automatic Option Grant Program shall be
self-executing in accordance with the express terms and conditions of Article
Three, and the Plan Administrator shall exercise no discretionary functions with
respect to option grants made pursuant to that program.
V. OPTION GRANTS AND STOCK ISSUANCES
A. The persons eligible to participate in the Discretionary Option
Grant Program under Article Two and the Stock Issuance Program under Article
Four shall be limited to the following:
(i) officers and other key employees of the Corporation (or its
parent or subsidiary corporations) who render services which contribute to
the management, growth and financial success of the Corporation (or its
parent or subsidiary corporations);
(ii) non-employee Board members; and
(iii) those consultants or other independent contractors who
provide valuable services to the Corporation (or its parent or subsidiary
corporations).
B. The Plan Administrator shall have full authority to determine, (i)
with respect to the option grants made under the Discretionary Option Grant
Program, which eligible
6.
<PAGE>
individuals are to receive option grants, the number of shares to be covered by
each such grant, the status of the granted option as either an incentive stock
option ("Incentive Option") that satisfies the requirements of Section 422 of
the Code or a non-statutory option not intended to meet such requirements, the
time or times at which each granted option is to become exercisable and the
maximum term for which the option may remain outstanding and (ii), with respect
to stock issuances under the Stock Issuance Program, the number of shares to be
issued to each Participant, the vesting schedule (if any) to be applicable to
the issued shares, and the consideration to be paid by the individual for such
shares.
C. Approval by the Plan Administrator of an option grant under the
Discretionary Option Grant Program shall constitute approval by such Plan
Administrator of the subsequent exercise, and payment of the exercise price of,
such option in accordance with the terms and conditions thereof.
VI. STOCK SUBJECT TO THE PLAN
A. Shares of Common Stock shall be available for issuance under the
Plan and shall be drawn from either the Corporation's authorized but unissued
shares of Common Stock or from reacquired shares of Common Stock, including
shares repurchased by the Corporation on the open market. The maximum number of
shares of Common Stock which may be issued over the term of the Plan shall not
exceed 4,690,632 shares, subject to adjustment from time to time in accordance
with the provisions of this Section VI. Such authorized share reserve includes
the two million two hundred thousand (2,200,000)-share increase authorized by
the Board on November 21, 1996, and the one million eight hundred thousand
(1,800,000)-share increase authorized by the Board on April 10, 1997. To the
extent one or more outstanding options under the Predecessor Plan incorporated
into this Plan are subsequently exercised, the number of shares issued with
respect to each such option shall reduce, on a share-for-share basis, the number
of shares available for issuance under this Plan.
B. No one person participating in the Plan may receive options,
separately exercisable stock appreciation rights and direct stock issuances for
more than 500,000 shares of Common Stock in the aggregate per calendar year,
beginning with the 1996 calendar year.
C. Should one or more outstanding options under this Plan (including
outstanding options under the Predecessor Plan incorporated into this Plan)
expire or terminate for any reason prior to exercise in full (including any
option cancelled in accordance with the cancellation-regrant provisions of
Section IV of Article Two of the Plan), then the shares subject to the portion
of each option not so exercised shall be available for subsequent option grants
under the Plan. Unvested shares issued under the Plan and subsequently
repurchased by the Corporation at the original option or issue price paid per
share shall be added back to the share reserve and shall accordingly be made
available for subsequent issuance under the Plan. However, should the exercise
price of an outstanding option under the Plan (including any option incorporated
from the Predecessor Plan) be paid with shares of Common Stock or should shares
of Common Stock otherwise issuable under the Plan be withheld by the Corporation
in satisfaction of the withholding
7.
<PAGE>
taxes incurred in connection with the exercise of an outstanding option under
the Plan or the vesting of a direct share issuance made under the Plan, then the
number of shares of Common Stock available for issuance under the Plan shall be
reduced by the gross number of shares for which the option is exercised or which
vest under the share issuance, and not by the net number of shares of Common
Stock actually issued to the holder of such option or share issuance.
D. Should any change be made to the Common Stock issuable under the
Plan by reason of any stock split, stock dividend, recapitalization, combination
of shares, exchange of shares or other change affecting the outstanding Common
Stock as a class without the Corporation's receipt of consideration, then
appropriate adjustments shall be made to (i) the maximum number and/or class of
securities issuable under the Plan, (ii) the number and/or class of securities
for which any one person may be granted options, separately exercisable stock
appreciation rights and direct stock issuances per calendar year, (iii) the
number and/or class of securities for which automatic option grants are to be
subsequently made per eligible non-employee Board member under the Automatic
Option Grant Program, (iv) the number and/or class of securities and price per
share in effect under each option outstanding under either the Discretionary
Option Grant or Automatic Option Grant Program and (v) the number and/or class
of securities and price per share in effect under each outstanding option
incorporated into this Plan from the Predecessor Plan. Such adjustments to the
outstanding options are to be effected in a manner which shall preclude the
enlargement or dilution of rights and benefits under such options. The
adjustments determined by the Plan Administrator shall be final, binding and
conclusive.
8.
<PAGE>
ARTICLE TWO
DISCRETIONARY OPTION GRANT PROGRAM
----------------------------------
I. TERMS AND CONDITIONS OF OPTIONS
Options granted pursuant to the Discretionary Option Grant Program
shall be authorized by action of the Plan Administrator and may, at the Plan
Administrator's discretion, be either Incentive Options or non-statutory
options. Individuals who are not Employees of the Corporation or its parent or
subsidiary corporations may only be granted non-statutory options. Each granted
option shall be evidenced by one or more instruments in the form approved by the
Plan Administrator; provided, however, that each such instrument shall comply
--------
with the terms and conditions specified below. Each instrument evidencing an
Incentive Option shall, in addition, be subject to the applicable provisions of
Section II of this Article Two.
A. Option Price.
------------
1. The option price per share shall be fixed by the Plan
Administrator in accordance with the following provisions:
(i) The option price per share of Common Stock subject to an
Incentive Option shall in no event be less than one hundred percent (100%)
of the Fair Market Value of such Common Stock on the grant date.
(ii) The option price per share of Common Stock subject to a
non-statutory stock option shall in no event be less than eighty-five
percent (85%) of the Fair Market Value of such Common Stock on the grant
date.
2. The option price shall become immediately due upon exercise of
the option and, subject to the provisions of Section I of Article Five and the
instrument evidencing the grant, shall be payable in one of the following
alternative forms specified below:
(i) full payment in cash or check drawn to the Corporation's
order;
(ii) full payment in shares of Common Stock 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 (as such term is defined below);
9.
<PAGE>
(iii) full payment in a combination of shares of Common Stock
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 and cash or check drawn to the
Corporation's order; or
(iv) full payment through a broker-dealer sale and remittance
procedure pursuant to which the Optionee shall provide irrevocable written
instructions to (I) a Corporation-designated brokerage firm to effect the
immediate sale of the purchased shares and remit to the Corporation, out of
the sale proceeds available on the settlement date, sufficient funds to
cover the aggregate option price payable for the purchased shares plus all
applicable Federal and state income and employment taxes required to be
withheld by the Corporation in connection with such purchase and (II) the
Corporation to deliver the certificates for the purchased shares directly
to such brokerage firm in order to complete the sale transaction.
For purposes of this subparagraph 2, the Exercise Date shall be the
date on which written notice of the option exercise is delivered to the
Corporation. Except to the extent the sale and remittance procedure is used in
connection with the exercise of the option, payment of the option price for the
purchased shares must accompany such notice.
B. Term and Exercise of Options. Each option granted under this
----------------------------
Discretionary Option Grant Program shall be exercisable at such time or times
and during such period as is determined by the Plan Administrator and set forth
in the instrument evidencing the grant. No such option, however, shall have a
maximum term in excess of ten (10) years from the grant date. During the
lifetime of the Optionee, the option shall be exercisable only by the Optionee
and shall not be assignable or transferable by the Optionee other than by will
or by the laws of descent and distribution following the Optionee's death.
C. Termination of Service.
----------------------
1. The following provisions shall govern the exercise period
applicable to any outstanding options held by the Optionee at the time of
cessation of Service or death.
(i) Should an Optionee cease Service for any reason (other
than death) while holding one or more outstanding options under this
Article Two, then none of those options shall remain exercisable for more
than a ninety (90)-day period (or such shorter period determined by the
Plan Administrator and set forth in the instrument evidencing the grant)
measured from the date of such cessation of Service.
(ii) Any option held by the Optionee under this Article Two
and exercisable in whole or in part on the date of his or her death may be
subsequently exercised by the personal representative of the Optionee's
estate or by
10.
<PAGE>
the person or persons to whom the option is transferred pursuant to the
Optionee's will or in accordance with the laws of descent and distribution.
Such exercise, however, must occur prior to the earlier of (A) six (6)
-------
months measured from the date of the Optionee's death or (B) the specified
expiration date of the option term. Upon the occurrence of the earlier
event, the option shall terminate.
(iii) Under no circumstances shall any such option be
exercisable after the specified expiration date of the option term.
(iv) During the applicable post-Service exercise period, the
option may not be exercised in the aggregate for more than the number of
shares (if any) in which the Optionee is vested at the time of his or her
cessation of Service. Upon the expiration of the limited post-Service
exercise period or (if earlier) upon the specified expiration date of the
option term, each such option shall terminate and cease to be outstanding
with respect to any vested shares for which the option has not otherwise
been exercised. However, each outstanding option shall immediately
terminate and cease to be outstanding, at the time of the Optionee's
cessation of Service, with respect to any shares for which the option is
not otherwise at that time exercisable or in which the Optionee is not
otherwise vested.
(v) Should (A) the Optionee's Service be terminated for
misconduct (including, but not limited to, any act of dishonesty, willful
misconduct, fraud or embezzlement) or (B) the Optionee make any
unauthorized use or disclosure of confidential information or trade secrets
of the Corporation or its parent or subsidiary corporations, then in any
such event all outstanding options held by the Optionee under this Article
Two shall terminate immediately and cease to be outstanding.
2. The Plan Administrator shall have complete discretion, exercisable
either at the time the option is granted or at any time while the option remains
outstanding, to permit one or more options held by the Optionee under this
Article Two to be exercised, during the limited post-Service exercise period
applicable under subparagraph 1 above, not only with respect to the number of
vested shares of Common Stock for which each such option is exercisable at the
time of the Optionee's cessation of Service but also with respect to one or more
subsequent installments in which Optionee would have otherwise vested had such
cessation of Service not occurred.
D. Shareholder Rights.
------------------
An Optionee shall have no shareholder rights with respect to any
shares covered by the option until such individual shall have exercised the
option and paid the option price for the purchased shares.
11.
<PAGE>
E. Repurchase Rights.
-----------------
The shares of Common Stock acquired upon the exercise of any Article
Two option grant may be subject to repurchase by the Corporation in accordance
with the following provisions:
(i) The Plan Administrator shall have the discretion to
authorize the issuance of unvested shares of Common Stock under this
Article Two. Should the Optionee cease Service while holding such unvested
shares, the Corporation shall have the right to repurchase any or all of
those unvested shares at the option price paid per share. The terms and
conditions upon which such repurchase right shall be exercisable (including
the period and procedure for exercise and the appropriate vesting schedule
for the purchased shares) shall be established by the Plan Administrator
and set forth in the instrument evidencing such repurchase right.
(ii) All of the Corporation's outstanding repurchase rights
under this Article Two shall automatically terminate, and all shares
subject to such terminated rights shall immediately vest in full, upon the
occurrence of a Corporate Transaction, except to the extent: (A) any such
repurchase right is expressly assigned to the successor corporation (or
parent thereof) in connection with the Corporate Transaction or (B) such
termination is precluded by other limitations imposed by the Plan
Administrator at the time the repurchase right is issued.
(iii) The Plan Administrator shall have the discretionary
authority, exercisable either before or after the Optionee's cessation of
Service, to cancel the Corporation's outstanding repurchase rights with
respect to one or more shares purchased or purchasable by the Optionee
under this Article Two and thereby accelerate the vesting of such shares in
whole or in part at any time.
II. INCENTIVE OPTIONS
The terms and conditions specified below shall be applicable to all
Incentive Options granted under this Article Two. Incentive Options may only be
granted to individuals who are Employees. Options which are specifically
designated as "non-statutory" options when issued under the Plan shall not be
---
subject to such terms and conditions.
A. Dollar Limitation. The aggregate Fair Market Value (determined as
-----------------
of the respective date or dates of grant) of the Common Stock for which one or
more options granted to any Employee after December 31, 1986 under this Plan (or
any other option plan of the Corporation or its parent or subsidiary
corporations) may for the first time become exercisable as incentive stock
options under the Federal tax laws during any one calendar year shall not exceed
the sum of One Hundred Thousand Dollars ($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 stock options under the Federal tax laws
12.
<PAGE>
shall be applied on the basis of the order in which such options are granted.
Should the number of shares of Common Stock for which any Incentive Option first
becomes exercisable in any calendar year exceed the applicable One Hundred
Thousand Dollar ($100,000) limitation, then that option may nevertheless be
exercised in that calendar year for the excess number of shares as a non-
statutory option under the Federal tax laws.
B. 10% Shareholder. If any individual to whom an Incentive Option is
---------------
granted is the owner of stock (as determined under Section 424(d) of the Code)
possessing more than ten percent (10%) of the total combined voting power of all
classes of stock of the Corporation or any one of its parent or subsidiary
corporations, then the option price per share shall not be less than one hundred
ten percent (110%) of the Fair Market Value per share of Common Stock on the
grant date, and the option term shall not exceed five (5) years, measured from
the grant date.
Except as modified by the preceding provisions of this Section II, the
provisions of Articles One, Two and Five of the Plan shall apply to all
Incentive Options granted hereunder.
III. CORPORATE TRANSACTIONS/CHANGES IN CONTROL
A. In the event of any Corporate Transaction, each option which is at
the time outstanding under this Article Two shall automatically accelerate so
that each such option shall, immediately prior to the specified effective date
for the Corporate Transaction, become fully exercisable with respect to the
total number of shares of Common Stock at the time subject to such option and
may be exercised for all or any portion of such shares. However, an outstanding
option under this Article Two shall not so accelerate if and to the extent: (i)
such option is, in connection with the Corporate Transaction, either to be
assumed by the successor corporation or parent thereof or to be replaced with a
comparable option to purchase shares of the capital stock of the successor
corporation or parent thereof, (ii) such option is to be replaced with a cash
incentive program of the successor corporation which preserves the option spread
existing at the time of the Corporate Transaction and provides for subsequent
payout in accordance with the same vesting schedule applicable to such option,
or (iii) the acceleration of such option is subject to other limitations imposed
by the Plan Administrator at the time of the option grant. The determination of
option comparability under clause (i) above shall be made by the Plan
Administrator, and its determination shall be final, binding and conclusive.
B. Immediately following the consummation of the Corporate
Transaction, all outstanding options under this Article Two shall terminate and
cease to be outstanding, except to the extent assumed by the successor
corporation or its parent company.
C. Each outstanding option under this Article Two which is assumed in
connection with the Corporate Transaction or is otherwise to continue in effect
shall be appropriately adjusted, immediately after such Corporate Transaction,
to apply and pertain to the number and class of securities which would have been
issued to the option holder, in consummation of such Corporate Transaction, had
such person exercised the option immediately prior to such Corporate
Transaction. Appropriate adjustments shall also be made to the option price
13.
<PAGE>
payable per share, provided the aggregate option price payable for such
--------
securities shall remain the same. In addition, the class and number of
securities available for issuance under the Plan following the consummation of
the Corporate Transaction shall be appropriately adjusted.
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 (upon such terms as it may deem appropriate) for the
automatic acceleration of one or more outstanding options granted under the Plan
that are assumed or replaced in a Corporate Transaction and do not otherwise
accelerate at that time, in the event the Optionee's Service should subsequently
terminate within a designated period following the effective date of such
Corporate Transaction.
E. The grant of options under this Article Two 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.
F. The Plan Administrator shall have the discretionary authority,
exercisable either at the time the option is granted or at any time while the
option remains outstanding, to provide for the automatic acceleration of one or
more outstanding options under this Article Two (and the termination of one or
more of the Corporation's outstanding repurchase rights under this Article Two)
upon the occurrence of a Change in Control. The Plan Administrator shall also
have full power and authority to condition any such option acceleration (and the
termination of any outstanding repurchase rights) upon the subsequent
termination of the Optionee's Service within a specified period following the
Change in Control.
G. Any options accelerated in connection with the Change in Control
shall remain fully exercisable until the expiration or sooner termination of the
option term.
H. The exercisability as incentive stock options under the Federal
tax laws of any options accelerated under this Section III in connection with a
Corporate Transaction or Change in Control shall remain subject to the dollar
limitation of Section II of this Article Two. To the extent such dollar
limitation is exceeded, the accelerated option shall be exercisable as a non-
statutory option under the Federal tax laws.
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 optionees, the
cancellation of any or all outstanding options under this Article Two (including
outstanding options under the Predecessor Plan incorporated into this Plan) and
to grant in substitution new options under the Plan covering the same or
different numbers of shares of Common Stock but with an option price per share
not less than (i) one hundred percent (100%) of the Fair Market Value on the new
grant date in the case of a grant of an Incentive Option, (ii) one hundred ten
percent (110%) of such Fair Market Value in the case of a grant of an Incentive
14.
<PAGE>
Option to a 10% Shareholder or (iii) eighty-five percent (85%) of such Fair
Market Value in the case of all other grants.
ARTICLE THREE
AUTOMATIC OPTION GRANT PROGRAM
------------------------------
I. ELIGIBILITY
The individuals eligible to receive automatic option grants pursuant
to the provisions of this Article Three program shall be limited to those
individuals who are serving as non-employee Board members on the Automatic Grant
Program Effective Date or who are first elected or appointed as non-employee
Board members on or after such Effective Date, whether through appointment by
the Board or election by the Corporation's shareholders. Each non-employee Board
member eligible to participate in the Automatic Option Grant Program pursuant to
the foregoing criteria shall be designated an Eligible Director for purposes of
the Plan.
II. TERMS AND CONDITIONS OF AUTOMATIC OPTION GRANTS
A. Grant Dates. Subject to shareholder approval of the amendments to
-----------
the Plan adopted by the Board on November 21, 1996, option grants shall be made
under this Article Three on the dates specified below:
1. Initial Grant. Each Eligible Director who is first elected or
appointed as a non-employee Board member on or after November 21, 1996, shall
automatically be granted, on the date of such initial election or appointment
(as the case may be), a Non-Statutory Option to purchase 15,000 shares of Common
Stock upon the terms and conditions of this Article Three.
2. Annual Grant. On the date of each Annual Shareholders
Meeting, beginning with the 1997 Annual Meeting, each individual who is to
continue to serve as an Eligible Director shall automatically be granted,
whether or not such individual is standing for re-election as a Board member at
that Annual Meeting, a Non-Statutory Option to purchase an additional 10,000
shares of Common Stock upon the terms and conditions of this Article Three.
There shall be no limit on the number of such 10,000-share option grants any one
Eligible Director may receive over his or her period of Board service.
3. November 1996 Grant. Each individual who is serving as an
Eligible Director on November 21, 1996, shall automatically be granted on such
date a Non-Statutory Option to purchase 15,000 shares of Common Stock upon the
terms and conditions of this Article Three.
B. Exercise Price. The exercise price per share of Common Stock
--------------
subject to each automatic option grant made under this Article Three shall be
equal to one hundred percent
15.
<PAGE>
(100%) of the Fair Market Value per share of Common Stock on the automatic grant
date.
C. Payment.
-------
The exercise price shall be payable in one of the alternative
forms specified below:
(i) full payment in cash or check drawn to the Corporation's
order;
(ii) full payment in shares of Common Stock 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 (as such term is defined below);
(iii) full payment in a combination of shares of Common Stock 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 and cash or check drawn to the Corporation's order; or
(iv) full payment through a sale and remittance procedure
pursuant to which the Optionee shall provide irrevocable written
instructions to (I) a Corporation-designated brokerage firm to effect the
immediate sale of the purchased shares and remit to the Corporation, out of
the sale proceeds available on the settlement date, sufficient funds to
cover the aggregate exercise price payable for the purchased shares and
(II) the Corporation to deliver the certificates for the purchased shares
directly to such brokerage firm in order to complete the sale transaction.
For purposes of this subparagraph C, the Exercise Date shall be the
date on which written notice of the option exercise is delivered to the
Corporation. Except to the extent the sale and remittance procedure specified
above is used for the exercise of the option for vested shares, payment of the
exercise price for the purchased shares must accompany the exercise notice.
D. Option Term. Each automatic grant under this Article Three shall
-----------
have a maximum term of ten (10) years measured from the automatic grant date.
E. Exercisability. Each automatic grant shall become exercisable in
--------------
a series of four (4) equal and successive annual installments over the
Optionee's period of continued service as a Board member, with the first such
installment to become exercisable one (1) year after the automatic grant date.
The exercisability of each automatic grant outstanding under this Article Three
shall be accelerated as provided in Section II.G and Section III of this Article
Three.
F. Non-Transferability. During the lifetime of the Optionee, each
-------------------
automatic option grant shall be exercisable only by the Optionee and shall not
be assignable or transferable by the Optionee other than by will or by the laws
of descent and distribution following Optionee's
16.
<PAGE>
death.
G. Effect of Termination of Board Membership.
-----------------------------------------
1. Should the Optionee cease to serve as a Board member for any
reason (other than death or Permanent Disability) while holding one or more
automatic option grants under this Article Three, then such individual shall
have a ninety (90)-day period following the date of such cessation of Board
membership in which to exercise each such option for any or all of the shares of
Common Stock for which that option is exercisable at the time of such cessation
of Board service. Each such option shall immediately terminate and cease to be
outstanding, at the time of such cessation of Board service, with respect to any
shares for which the option is not otherwise at that time exercisable.
2. Should the Optionee die within ninety (90) days after
cessation of Board service, then any automatic option grant held by the Optionee
at the time of death may subsequently be exercised, for any or all of the shares
of Common Stock for which such option is exercisable at the time of the
Optionee's cessation of Board membership (less any option shares subsequently
purchased by the Optionee prior to death), by the personal representative of the
Optionee's estate or by the person or persons to whom the option is transferred
pursuant to the Optionee's will or in accordance with the laws of descent and
distribution. Any such exercise must occur within six (6) months after the date
of the Optionee's death.
3. Should the Optionee die or become Permanently Disabled while
serving as a Board member, then any automatic option grant held by such Optionee
under this Article Three shall accelerate in full, and the Optionee (or the
representative of the Optionee's estate or the person or persons to whom the
option is transferred upon the Optionee's death) shall have a six (6)-month
period following the date of the Optionee's cessation of Board membership in
which to exercise such option for any or all of the shares of Common Stock
subject to the option at the time of such cessation of Board membership.
4. In no event shall any automatic grant under this Article Three
remain exercisable after the expiration date of the ten (10)-year option term.
Upon the expiration of the applicable post-service exercise period under
subparagraph 1, 2 or 3 above or (if earlier) upon the expiration of the ten
(10)-year option term, the automatic grant shall terminate and cease to be
outstanding for any unexercised shares for which the option was otherwise
exercisable at the time of the Optionee's cessation of Board membership.
H. Shareholder Rights. The holder of an automatic option grant under
------------------
this Article Three shall have none of the rights of a shareholder with respect
to any shares subject to such option until such individual shall have exercised
the option and paid the exercise price for the purchased shares.
I. Remaining Terms. The remaining terms and conditions of each
---------------
automatic option grant shall be as set forth in the form Director Automatic
Grant Agreement attached as
17.
<PAGE>
Exhibit A.
III. CORPORATE TRANSACTION/CHANGE IN CONTROL
A. In the event of any Corporate Transaction, each automatic option
grant at the time outstanding under this Article Three shall automatically
accelerate so that each such option shall, immediately prior to the specified
effective date for the Corporate Transaction, become fully exercisable with
respect to the total number of shares of Common Stock at the time subject to
such option and may be exercised for all or any portion of those shares as
fully-vested shares. Immediately after the consummation of the Corporate
Transaction, all automatic option grants under this Article Three shall
terminate and cease to be outstanding.
B. In connection with any Change in Control, each automatic option
grant at the time outstanding under this Article Three shall automatically
accelerate so that each such option shall, immediately prior to the specified
effective date for the Change in Control, become fully exercisable with respect
to the total number of shares of Common Stock at the time subject to such option
and may be exercised for all or any portion of those shares as fully-vested
shares. Any option accelerated in connection with the Change in Control shall
remain fully exercisable until the expiration or sooner termination of the
option term.
C. The automatic option grants outstanding under this Article Three
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.
18.
<PAGE>
ARTICLE FOUR
STOCK ISSUANCE PROGRAM
----------------------
I. TERMS AND CONDITIONS OF STOCK ISSUANCES
Shares may be issued under the Stock Issuance Program through direct
and immediate purchases without any intervening stock option grants. The issued
shares shall be evidenced by a Stock Issuance Agreement ("Issuance Agreement")
that complies with the terms and conditions of this Article Four.
A. Consideration.
-------------
1. Shares of Common Stock shall be issued under the Stock
Issuance Program for one or more of the following items of consideration which
the Plan Administrator may deem appropriate in each individual instance:
(i) cash or check drawn to the Corporation's order;
(ii) a promissory note payable to the Corporation's order in
one or more installments, which may be subject to cancellation in whole or
in part upon terms and conditions established by the Plan Administrator; or
(iii) past services rendered to the Corporation or any parent
or subsidiary corporation.
2. Shares of Common Stock may, in the absolute discretion of the
Plan Administrator, be issued for consideration with a value less than one
hundred percent (100%) of the Fair Market Value of such shares at the time of
issuance, but in no event less than eighty-five percent (85%) of such Fair
Market Value.
B. Vesting Provisions.
------------------
1. Shares of Common Stock issued under the Stock Issuance Program
may, in the absolute discretion of the Plan Administrator, be fully and
immediately vested upon issuance or may vest in one or more installments over
the Participant's period of Service. The elements of the vesting schedule
applicable to any unvested shares of Common Stock issued under the Stock
Issuance Program, namely:
(i) the Service period to be completed by the Participant or
the performance objectives to be achieved by the Corporation,
(ii) the number of installments in which the shares are to
vest,
19.
<PAGE>
(iii) the interval or intervals (if any) which are to lapse
between installments, and
(iv) the effect which death, Permanent Disability or other
event designated by the Plan Administrator is to have upon the vesting
schedule,
shall be determined by the Plan Administrator and incorporated into the Issuance
Agreement executed by the Corporation and the Participant at the time such
unvested shares are issued.
2. The Participant shall have full shareholder rights with
respect to any shares of Common Stock issued to him or her under the Plan,
whether or not his or her interest in those shares is vested. Accordingly, the
Participant shall have the right to vote such shares and to receive any regular
cash dividends paid on such shares. Any new, additional or different shares of
stock or other property (including money paid other than as a regular cash
dividend) which the Participant may have the right to receive with respect to
his or her unvested shares by reason of any stock dividend, stock split,
reclassification of Common Stock or other similar change in the Corporation's
capital structure or by reason of any Corporate Transaction shall be issued,
subject to (i) the same vesting requirements applicable to his or her unvested
shares and (ii) such escrow arrangements as the Plan Administrator shall deem
appropriate.
3. Should the Participant cease to remain in Service while
holding one or more unvested shares of Common Stock under the Plan, then those
shares shall be immediately surrendered to the Corporation for cancellation, and
the Participant shall have no further shareholder rights with respect to those
shares. To the extent the surrendered shares were previously issued to the
Participant for consideration paid in cash or cash equivalent (including the
Participant's purchase-money promissory note), the Corporation shall repay to
the Participant the cash consideration paid for the surrendered shares and shall
cancel the unpaid principal balance of any outstanding purchase-money note of
the Participant attributable to such surrendered shares.
4. The Plan Administrator may in its discretion elect to waive
the surrender and cancellation of one or more unvested shares of Common Stock
(or other assets attributable thereto) which would otherwise occur upon the non-
completion of the vesting schedule applicable to such shares. Such waiver shall
result in the immediate vesting of the Participant's interest in the shares of
Common Stock as to which the waiver applies. Such waiver may be effected at any
time, whether before or after the Participant's cessation of Service.
II. CORPORATE TRANSACTIONS/CHANGE IN CONTROL
A. Upon the occurrence of any Corporate Transaction, all unvested
shares of Common Stock at the time outstanding under the Stock Issuance Program
shall immediately vest in full, except to the extent the Plan Administrator
imposes limitations in the Issuance Agreement which preclude such accelerated
vesting in whole or in part.
20.
<PAGE>
B. The Plan Administrator shall have the discretionary authority,
exercisable either at the time the shares are issued under the Stock Issuance
Program or at any time while the issued shares remain unvested, to provide for
the immediate and automatic vesting of one or more of those shares at the time
of a Change in Control. The Plan Administrator shall also have full power and
authority to condition any such accelerated vesting upon the subsequent
termination of the Participant's Service within a specified period following the
Change in Control.
III. TRANSFER RESTRICTIONS/SHARE ESCROW
A. Unvested shares may, in the Plan Administrator's discretion, be
held in escrow by the Corporation until the Participant's interest in such
shares vests or may be issued directly to the Participant with restrictive
legends on the certificates evidencing such unvested shares. To the extent an
escrow arrangement is utilized, the unvested shares and any securities or other
assets issued with respect to such shares (other than regular cash dividends)
shall be delivered in escrow to the Corporation to be held until the
Participant's interest in such shares (or other securities or assets) vests.
Alternatively, if the unvested shares are issued directly to the Participant,
the restrictive legend on the certificates for such shares shall read
substantially as follows:
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE UNVESTED AND ARE
ACCORDINGLY SUBJECT TO (I) CERTAIN TRANSFER RESTRICTIONS AND (II)
CANCELLATION OR REPURCHASE IN THE EVENT THE REGISTERED HOLDER (OR HIS/HER
PREDECESSOR IN INTEREST) CEASES TO REMAIN IN THE CORPORATION'S SERVICE.
SUCH TRANSFER RESTRICTIONS AND THE TERMS AND CONDITIONS OF SUCH
CANCELLATION OR REPURCHASE ARE SET FORTH IN A STOCK ISSUANCE AGREEMENT
BETWEEN THE CORPORATION AND THE REGISTERED HOLDER (OR HIS/HER PREDECESSOR
IN INTEREST) DATED ________________, 199__, A COPY OF WHICH IS ON FILE AT
THE PRINCIPAL OFFICE OF THE CORPORATION."
B. The Participant shall have no right to transfer any unvested
shares of Common Stock issued to him or her under the Stock Issuance Program.
For purposes of this restriction, the term "transfer" shall include (without
limitation) any sale, pledge, assignment, encumbrance, gift, or other
disposition of such shares, whether voluntary or involuntary. Upon any such
attempted transfer, the unvested shares shall immediately be cancelled, and
neither the Participant nor the proposed transferee shall have any rights with
respect to those shares. However, the Participant shall have the right to make a
gift of unvested shares acquired under the Stock Issuance Program to his or her
spouse or issue, including adopted children, or to a trust established for such
spouse or issue, provided the donee of such shares delivers to the Corporation a
written agreement to be bound by all the provisions of the Stock Issuance
Program and the Issuance Agreement applicable to the gifted shares.
21.
<PAGE>
ARTICLE FIVE
MISCELLANEOUS
-------------
I. LOANS OR INSTALLMENT PAYMENTS
A. The Plan Administrator may, in its discretion, assist any Optionee
or Participant (including an Optionee or Participant who is an officer of the
Corporation) in the exercise of one or more options granted to such Optionee
under the Discretionary Option Grant Program or the purchase of one or more
shares issued to such Participant under the Stock Issuance Program, including
the satisfaction of any Federal and state income and employment tax obligations
arising therefrom, by (i) authorizing the extension of a loan from the
Corporation to such Optionee or Participant or (ii) permitting the Optionee or
Participant to pay the option price or purchase price for the purchased Common
Stock in installments over a period of years. The terms of any loan or
installment method of payment (including the interest rate and terms of
repayment) shall be upon such terms as the Plan Administrator specifies in the
applicable option or issuance agreement or otherwise deems appropriate under the
circumstances. Loans or installment payments may be authorized with or without
security or collateral. However, any loan made to a consultant or other non-
employee advisor must be secured by property other than the purchased shares of
Common Stock. In all events, the maximum credit available to the Optionee or
Participant may not exceed the option or purchase price of the acquired shares
plus any Federal and state income and employment tax liability incurred by the
Optionee or Participant in connection with the acquisition of such shares.
B. The Plan Administrator may, in its absolute discretion, determine
that one or more loans extended under this financial assistance program shall be
subject to forgiveness by the Corporation in whole or in part upon such terms
and conditions as the Plan Administrator may deem appropriate.
II. AMENDMENT OF THE PLAN AND AWARDS
A. The Board has complete and exclusive power and authority to amend
or modify the Plan (or any component thereof) in any or all respects whatsoever.
However, no such amendment or modification shall adversely affect rights and
obligations with respect to options at the time outstanding under the Plan, nor
adversely affect the rights of any Participant with respect to Common Stock
issued under the Stock Issuance Program prior to such action, unless the
Optionee or Participant consents to such amendment. In addition, amendments to
the Plan shall be subject to shareholder approval to the extent required under
applicable law or regulation.
B. (i) Options to purchase shares of Common Stock may be granted
under the Discretionary Option Grant Program and (ii) shares of Common Stock may
be issued under the Stock Issuance Program, which are in both instances in
excess of the number of shares then available for issuance under the Plan,
provided any excess shares actually issued under the
22.
<PAGE>
Discretionary Option Grant Program or the Stock Issuance Program are held in
escrow until shareholder approval is obtained for a sufficient increase in the
number of 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 option grants or excess share issuances are made, then (I) any
unexercised excess options shall terminate and cease to be exercisable and (II)
the Corporation shall promptly refund the purchase price paid for any excess
shares actually issued under the Plan and held in escrow, together with interest
(at the applicable Short Term Federal Rate) for the period the shares were held
in escrow.
III. TAX WITHHOLDING
The Corporation's obligation to deliver shares of Common Stock upon
the exercise of stock options for such shares or the vesting of such shares
under the Plan shall be subject to the satisfaction of all applicable Federal,
state and local income tax and employment tax withholding requirements.
The Plan Administrator may, in its discretion and in accordance with
the provisions of this Section III of Article Five and such supplemental rules
as the Plan Administrator may from time to time adopt (including the applicable
safe-harbor provisions of Rule 16b-3 of the Securities and Exchange Commission),
provide any or all holders of non-statutory options (other than the automatic
grants made pursuant to Article Three of the Plan) or unvested shares under the
Plan with the right to use shares of Common Stock in satisfaction of all or part
of the Federal, state and local income and employment tax liabilities incurred
by such holders in connection with the exercise of their options or the vesting
of their shares (the "Taxes"). Such right may be provided to any such holder in
either or both of the following formats:
(i) Stock Withholding: The holder of the non-statutory option
-----------------
or unvested shares may be provided with the election to have the
Corporation withhold, from the shares of Common Stock otherwise issuable
upon the exercise of such non-statutory option or the vesting of such
shares, a portion of those shares with an aggregate Fair Market Value equal
to the percentage of the applicable Taxes (not to exceed one hundred
percent (100%)) designated by the holder.
(ii) Stock Delivery: The Plan Administrator may, in its
--------------
discretion, provide the holder of the non-statutory option or the unvested
shares with the election to deliver to the Corporation, at the time the
non-statutory option is exercised or the shares vest, one or more shares of
Common Stock previously acquired by such individual (other than in
connection with the option exercise or share vesting triggering the Taxes)
with an aggregate Fair Market Value equal to the percentage of the Taxes
incurred in connection with such option exercise or share vesting (not to
exceed one hundred percent (100%)) designated by the holder.
23.
<PAGE>
IV. EFFECTIVE DATE AND TERM OF PLAN
A. This Plan, as successor to the Predecessor Plan, became effective
as of the Plan Effective Date, and no further option grants or stock issuances
shall be made under the Predecessor Plan from and after the Plan Effective Date.
B. Each stock option grant outstanding under the Predecessor Plan
immediately prior to the Plan Effective Date was incorporated into this Plan and
is treated as an outstanding option under this Plan, but each such option shall
continue to be governed solely by the terms and conditions of the instrument
evidencing such grant, and nothing in this Plan shall be deemed to affect or
otherwise modify the rights or obligations of the holders of such options with
respect to their acquisition of shares of Common Stock thereunder. Each unvested
share of Common Stock outstanding under the Predecessor Plan on the Plan
Effective Date shall continue to be governed solely by the terms and conditions
of the instrument evidencing such share issuance, and nothing in this Plan shall
be deemed to affect or otherwise modify the rights or obligations of the holder
of such unvested shares.
C. The option/vesting acceleration provisions of Section III of
Article Two and Section II of Article Four relating to Corporate Transactions
and Changes in Control may, in the Plan Administrator's discretion, be extended
to one or more stock options or unvested share issuances which are outstanding
under the Predecessor Plan on the Plan Effective Date but which do not otherwise
provide for such acceleration.
D. The Plan was amended by the Board on June 5, 1995 to increase the
number of shares of Common Stock authorized for issuance under the Plan by an
additional 110,000 shares, and the Plan was further amended by the Board on
February 29, 1996 to (i) increase the number of shares of Common Stock
authorized for issuance under the Plan by an additional 190,000 shares and (ii)
establish a 500,000-share limit on the aggregate number of shares of Common
Stock for which any one participant may be issued stock options and direct stock
issuances over the remaining term of the Plan. Each of the above amendments was
approved by the shareholders at the 1996 Annual Meeting.
E. The Plan was amended on November 21, 1996 to effect the following
changes: (i) increase the number of shares of Common Stock authorized for
issuance over the term of the Plan by an additional 2,200,000 shares, (ii)
render the non-employee Board members eligible to receive option grants under
the Discretionary Option Grant Program, (iii) provide for administration of the
Plan by either a Primary Committee, Secondary Committee or the Board, (iv) allow
unvested shares issued under the Plan and subsequently repurchased by the
Company at the option exercise price or issue price paid per share to be
reissued under the Plan, (v) amend the Automatic Option Grant Program to (a)
provide for special option grants to be made to eligible Board members on
November 21, 1996, (b) increase the number of shares of Common Stock for which
Options are to be granted to non-employee Board members on their initial
election or appointment and (c) increase the number of shares of Common Stock
for which options are to be granted on an annual basis to non-employee Board
members upon their re-election to the Board at
24.
<PAGE>
each Annual Shareholders Meeting, beginning with the 1997 Annual Meeting, and
(v) effect a series of technical changes to the provisions of the Plan in order
to take advantage of the recent amendments to Rule 16b-3 of the Securities
Exchange Act of 1934 which exempts certain officer and director transactions
under the Plan from the short-swing liability provisions of the federal
securities laws.
F. On April 10, 1997, the Board again amended the Plan to increase
the number shares of Common Stock reserved for issuance over the term of the
Plan by an additional 1,800,000 shares.
G. Both the November 21, 1996 and the April 10, 1997 amendments were
approved by the shareholders at the 1997 Annual Meeting.
H. All option grants made prior to the November 21, 1996 amendments
shall remain outstanding in accordance with the terms and conditions of the
respective instruments evidencing those options, and nothing in the November 21,
1996 amendments shall be deemed to modify or in any way affect those outstanding
options. Subject to the foregoing limitations, the Plan Administrator may make
option grants under the Plan at any time before the date fixed herein for the
termination of the Plan.
I. The Plan shall terminate upon the earlier of (i) December 8, 2003
-------
or (ii) the date on which all shares available for issuance under the Plan shall
have been issued pursuant to the exercise of the options granted under the Plan
or the issuance of shares (whether vested or unvested) under the Stock Issuance
Program. If the date of termination is determined under clause (i) above, then
all option grants and unvested share issuances outstanding on such date shall
thereafter continue to have force and effect in accordance with the provisions
of the instruments evidencing such grants or issuances.
V. USE OF PROCEEDS
Any cash proceeds received by the Corporation from the sale of shares
pursuant to option grants or share issuances under the Plan shall be used for
general corporate purposes.
VI. REGULATORY APPROVALS
A. The implementation of the Plan, the granting of any option under
the Plan, the issuance of any shares under the Stock Issuance Program, and the
issuance of Common Stock upon the exercise or surrender of the option grants
made hereunder 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 Common Stock issued
pursuant to it.
B. No shares of Common Stock or other assets shall be issued or
delivered under this Plan unless and until there shall have been compliance with
all applicable requirements
25.
<PAGE>
of Federal and state securities laws, including the filing and effectiveness of
the Form S-8 registration statement for the shares of Common Stock issuable
under the Plan, and all applicable listing requirements of any securities
exchange on which stock of the same class is then listed.
VII. NO EMPLOYMENT/SERVICE RIGHTS
Neither the action of the Corporation in establishing the Plan, nor
any action taken by the Plan Administrator hereunder, nor any provision of the
Plan shall be construed so as to grant any individual the right to remain in the
employ or service of the Corporation (or any parent or subsidiary corporation)
for any period of specific duration, and the Corporation (or any parent or
subsidiary corporation retaining the services of such individual) may terminate
such individual's employment or service at any time and for any reason, with or
without cause.
VIII. MISCELLANEOUS PROVISIONS
A. The right to acquire Common Stock or other assets under the Plan
may not be assigned, encumbered or otherwise transferred by any Optionee or
Participant.
B. The provisions of the Plan relating to the exercise of options
and the vesting of shares shall be governed by the laws of the State of
California, as such laws are applied to contracts entered into and performed in
such State.
C. The provisions of the Plan shall inure to the benefit of, and be
binding upon, the Corporation and its successors or assigns, whether by
Corporate Transaction or otherwise, and the Participants and Optionees, the
legal representatives of their respective estates, their respective heirs or
legatees and their permitted assignees.
26.
<PAGE>
EXHIBIT 99.2
MICROELECTRONIC PACKAGING, INC.
NOTICE OF GRANT OF STOCK OPTION
Notice is hereby given of the following stock option grant (the "Option") to
purchase shares of the Common Stock of Microelectronic Packaging, Inc. (the
"Corporation"):
Optionee:
-------- ---------------------------------------------------------------
Grant Date:
---------- ---------------------------------------------------------------
Exercise Price: $ per share
-------------- ----------------
Number of Option Shares: shares
----------------------- ---------
Expiration Date:
--------------- -----------------------------------------------------------
Type of Option:
-------------- -----------------------------------------------------------
Exercise Schedule: The Option shall become exercisable for one-third (1/3)
-----------------
of the Option Shares upon Optionee's completion of one (1) year of
Service measured from the Grant Date and shall become exercisable for
the balance of the Option Shares in two (2) successive equal annual
installments upon Optionee's completion of each additional year of
Service over the two (2)-year period measured from the first
anniversary of the Grant Date. In no event shall the Option become
exercisable for any additional Option Shares following Optionee's
cessation of Service.
Optionee understands and agrees that the Option is granted subject to and in
accordance with the terms of the Microelectronic Packaging, Inc. 1993 Stock
Option/Stock Issuance Plan (the "Plan"). Optionee further agrees to be bound by
the terms of the Plan and the terms of the Option as set forth in the Stock
Option Agreement attached hereto as Exhibit A. Optionee hereby acknowledges
receipt of a copy of the official prospectus for the Plan attached hereto as
Exhibit B. A copy of the Plan is available upon request to the Corporate
Secretary at the Corporation's principal executive offices.
No Employment or Service Contract. Nothing in this Notice or in the attached
---------------------------------
Stock Option Agreement or in the Plan shall confer upon Optionee any right to
continue in Service for any period of specific duration or interfere with or
otherwise restrict in any way the rights of the Corporation (or any parent or
subsidiary employing or retaining Optionee) or of Optionee, which rights are
hereby expressly reserved by each, to terminate Optionee's Service at any time
for any reason whatsoever, with or without cause.
<PAGE>
Definitions. All capitalized terms in this Notice shall have the meaning
-----------
assigned to them in this Notice or in the Attached Stock Option Agreement.
Dated: , 199
-------------- -
MICROELECTRONIC PACKAGING, INC.
By:
-----------------------------------------
Title:
--------------------------------------
---------------------------------------------
OPTIONEE
Address:
-----------------------------------
-----------------------------------
ATTACHMENTS:
- -----------
Exhibit A: Stock Option Agreement
Exhibit B: Plan Summary and Prospectus
2.
<PAGE>
EXHIBIT A
---------
STOCK OPTION AGREEMENT
<PAGE>
EXHIBIT B
---------
PLAN SUMMARY AND PROSPECTUS
<PAGE>
EXHIBIT 99.3
MICROELECTRONIC PACKAGING, INC.
STOCK OPTION AGREEMENT
----------------------
WITNESSETH:
----------
RECITALS
- --------
A. The Corporation's 1993 Stock Option/Stock Issuance Plan, as amended and
restated through April 10, 1997 (the "Plan"), has been implemented for the
purpose of attracting and retaining the services of key employees (including
officers and directors), non-employee Board members and consultants and other
independent advisors.
B. Optionee is an individual who is to render valuable services to the
Corporation or one or more parent or subsidiary corporations, and this Agreement
is executed pursuant to, and is intended to carry out the purposes of, the Plan
in connection with the grant of a stock option to purchase shares of the
Corporation's common stock ("Common Stock") under the Plan.
NOW, THEREFORE, it is hereby agreed as follows:
1. Grant of Option. Subject to and upon the terms and conditions set forth
---------------
in this Agreement, the Corporation hereby grants to Optionee, as of the grant
date (the "Grant Date") specified in the accompanying Notice of Grant of Stock
Option (the "Grant Notice"), a stock option to purchase up to that number of
shares of the Corporation's Common Stock (the "Option Shares") as is specified
in the Grant Notice. Such Option Shares shall be purchasable from time to time
during the option term at the exercise price (the "Exercise Price") specified in
the Grant Notice.
2. Option Term. This option shall expire at the close of business on the
-----------
expiration date (the "Expiration Date") specified in the Grant Notice, unless
sooner terminated in accordance with Paragraph 5 or 6.
3. Limited Transferability. This option shall be exercisable only by
-----------------------
Optionee during Optionee's lifetime and shall not be transferable or assignable
by Optionee other than by will or by the laws of descent and distribution
following Optionee's death.
4. Exercisability. This option shall become exercisable for the Option
--------------
Shares in accordance with the exercise schedule specified in the Grant Notice.
As the option becomes exercisable for one or more installments, those
installments shall accumulate, and the option shall remain exercisable for the
accumulated installments until the Expiration Date or sooner termination of the
option term under Paragraph 5, 6 or 19. In no event shall this option become
exercisable for any additional Option Shares following Optionee's cessation of
Service.
5. Cessation of Service. The option term specified in Paragraph 2 shall
--------------------
<PAGE>
terminate (and this option shall cease to remain outstanding) prior to the
Expiration Date in accordance with the following provisions:
a. This option shall immediately terminate and cease to remain
outstanding for any Option Shares for which it is not exercisable at the
time of Optionee's cessation of Service (as defined below).
b. Should Optionee cease Service for any reason other than death while
this option remains outstanding, then Optionee shall have a ninety (90)-day
period measured from the date of such cessation of Service in which to
exercise this option to the extent outstanding at the time. In no event,
however, may this option be exercised at any time after the specified
Expiration Date of the option term.
c. Should Optionee die while in Service or during the ninety (90)-day
period following his or her cessation of Service, then the personal
representative of Optionee's estate or the person or persons to whom this
option is transferred pursuant to Optionee's will or in accordance with the
laws of descent and distribution shall have the right to exercise the
option to the extent outstanding at the time. Such right shall lapse, and
this option shall terminate and cease to remain outstanding, upon the
earlier of (i) the expiration of the six (6)-month period measured
-------
from the date of Optionee's death or (ii) the Expiration Date.
d. During the applicable period of post-Service exercisability under
subparagraphs b through c above, this option may not be exercised in the
aggregate for more than the number of Option Shares (if any) for which this
option is, at the time of Optionee's cessation of Service, exercisable in
accordance with either the normal exercise provisions specified in the
Grant Notice or the special acceleration provisions of Paragraph 6 of this
Agreement.
e. Should (i) Optionee's Service be terminated for misconduct
(including, but not limited to, any act of dishonesty, willful misconduct,
fraud or embezzlement) or (ii) Optionee make any unauthorized use or
disclosure of confidential information or trade secrets of the Corporation
or any parent or subsidiary, then in any such event this option shall
terminate immediately and cease to be outstanding.
f. For purposes of this Agreement, the following definitions shall be
in effect:
Optionee shall be deemed to remain in Service for so long as such
individual performs services on a periodic basis for the Corporation (or
any parent or subsidiary corporation) in the capacity of an Employee, a
non-employee member of the Board or an independent consultant or advisor.
2.
<PAGE>
Optionee shall be considered to be an Employee for so long as such
individual performs services while in the employ of the Corporation or any
parent or subsidiary, subject to the control and direction of the employer
entity not only as to the work to be performed but also as to the manner
and method of performance.
A corporation shall be considered to be a subsidiary of the
Corporation if it is a member of an unbroken chain of corporations
beginning with the Corporation, provided each such corporation in the
unbroken chain (other than the last corporation) owns, at the time of
determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other
corporations in such chain.
A corporation shall be considered to be a parent of the Corporation
if it is a member of an unbroken chain ending with the Corporation provided
each such corporation in the unbroken chain (other than the Corporation)
owns, at the time of determination, stock possessing fifty percent (50%) or
more of the total combined voting power of all classes of stock in one of
the other corporations in such chain.
6. Corporate Transaction/Change in Control.
---------------------------------------
a. In the event of any of the following shareholder-approved
transactions to which the Corporation is a party (a "Corporate Transaction"):
(1) a merger or consolidation in which the Corporation is not the
surviving entity, except for a transaction the principal purpose of which
is to change the state in which the Corporation is incorporated,
(2) the sale, transfer or other disposition of all or
substantially all of the assets of the Corporation in complete liquidation
or dissolution of the Corporation, or
(3) any reverse merger in which the Corporation is the surviving
entity but 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 merger,
this option, to the extent outstanding at such time but not
otherwise fully exercisable, shall automatically accelerate so that this option
shall, immediately prior to the specified effective date for the Corporate
Transaction, become exercisable for all the Option Shares at the time subject to
this option and may be exercised for all or any portion of such shares as fully-
vested shares. No such acceleration of this option, however, shall occur if and
to the extent: (i) this option is, in connection with the Corporate Transaction,
either to be assumed by the successor corporation or parent thereof or replaced
with a comparable option to purchase shares of the capital
3.
<PAGE>
stock of the successor corporation or parent thereof or (ii) this option is to
be replaced with a cash incentive program of the successor corporation which
preserves the spread existing at the time of the Corporate Transaction on the
Option Shares for which this option is not otherwise at the time exercisable
(the excess of the Fair Market Value of those Option Shares over the aggregate
Exercise Price payable for such shares) and provides for subsequent pay-out in
accordance with the same vesting schedule in effect for those Option Shares
pursuant to the option exercise schedule set forth in the Grant Notice. The
determination of option comparability under clause (i) shall be made by the Plan
Administrator, and such determination shall be final, binding and conclusive.
b. This option shall terminate immediately after the consummation of
such Corporate Transaction, except to the extent the option is expressly assumed
by the successor corporation or parent thereof.
c. This Agreement shall not in any way affect the right of the
Corporation to adjust, reclassify, reorganize or otherwise make changes in its
capital or business structure or to merge, consolidate, dissolve, liquidate or
sell or transfer all or any part of its business or assets.
7. Adjustment in Option Shares.
---------------------------
a. In the event any change is made to the Common Stock issuable
under the Plan by reason of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares or other change affecting the
outstanding Common Stock as a class effected without the Corporation's receipt
of consideration, the Plan Administrator shall make appropriate adjustments to
(i) the number and/or class of securities subject to this option and (ii) the
Exercise Price payable per share in order to prevent any dilution or enlargement
of rights and benefits hereunder. Such adjustments shall be final, binding and
conclusive.
b. If this option is to be assumed in connection with any Corporate
Transaction under Paragraph 6 or is otherwise to continue outstanding, then this
option shall, immediately after such Corporate Transaction, be appropriately
adjusted to apply and pertain to the number and class of securities which would
have been issued to Optionee in the consummation of such Corporate Transaction
had the option been exercised immediately prior to such Corporate Transaction.
Appropriate adjustments shall also be made to the Exercise Price payable per
share, provided the aggregate Exercise Price payable hereunder shall remain the
--------
same.
8. Privilege of Stock Ownership. The holder of this option shall not
----------------------------
have any of the rights of a shareholder with respect to the Option Shares
until such individual shall have exercised the option and paid the
Exercise Price for the purchased Option Shares.
9. Manner of Exercising Option.
---------------------------
a. In order to exercise this option with respect to all or any part
of the Option Shares for which this option is at the time exercisable, Optionee
(or in the case of exercise after Optionee's death, Optionee's executor,
administrator, heir or legatee, as the case may be) must take the following
actions:
4.
<PAGE>
(1) Deliver to the Corporate Secretary of the Corporation an executed
notice of exercise in substantially the form of Exhibit I to this Agreement (the
"Exercise Notice") in which there is specified the number of Option Shares to be
purchased under the exercised option.
(2) Pay the aggregate Exercise Price for the purchased shares through one
or more of the following alternatives:
(a) full payment in cash or by check made payable to the
Corporation's order;
(b) full payment in shares of Common Stock 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 (as such term is defined below);
(c) full payment through a combination of shares of Common Stock 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 and cash or check payable to the Corporation's order; or
(d) full payment effected through a broker-dealer sale and remittance
procedure pursuant to which Optionee shall provide concurrent irrevocable
instructions to (i) a Corporation-designated brokerage firm to effect the
immediate sale of the purchased shares and remit to the Corporation, out of
the sale proceeds available on the settlement date, sufficient funds to cover
the aggregate Exercise Price payable for the purchased shares plus all
applicable Federal, state and local income and employment taxes required to
be withheld in connection with such purchase and (ii) the Corporation to
deliver the certificates for the purchased shares directly to such brokerage
firm in order to complete the sale transaction.
(3) Furnish to the Corporation appropriate documentation that the
person or persons exercising this option (if other than Optionee) have the
right to exercise the option.
(4) Make appropriate arrangements with the Corporation (or Parent or
Subsidiary employing or retaining Optionee) for satisfaction of all Federal,
state and local income and employment tax withholding requirements applicable
to the option exercise.
5.
<PAGE>
b. For purposes of this Agreement, the Exercise Date shall be the date
on which the executed Exercise Notice shall have been delivered to the
Corporation. Except to the extent the sale and remittance procedure specified
above is utilized in connection with the option exercise, payment of the
Exercise Price for the purchased shares must accompany such Exercise Notice.
c. For all valuation purposes under this Agreement, the Fair Market
Value per share of Common Stock on any relevant date shall be determined in
accordance with the following provisions:
(1) If the Common Stock is at the time traded on the Nasdaq
Electronic Bulletin Board, the Fair Market Value shall be the average of
the highest bid price and the lowest asked price per share on the date in
question, as such prices are reported by the National Association of
Securities Dealers on the Nasdaq Electronic Bulletin Board. If there are no
reported bid or asked prices for the Common Stock on the date in question,
then the average of the highest bid price and the lowest asked price on the
last preceding date for which such quotations exist shall be determinative
of the Fair Market Value.
(2) If the Common Stock is not at the time listed or admitted to
trading on any national securities exchange but is traded on the Nasdaq
National Market, the Fair Market Value shall be the closing selling price
per share on the date in question, as such price is reported by the
National Association of Securities Dealers on the Nasdaq National Market.
If there is no reported closing selling price for the Common Stock on the
date in question, then the closing selling price on the last preceding date
for which such quotation exists shall be determinative of Fair Market
Value.
(3) If the Common Stock is at the time listed or admitted to trading
on any national securities exchange, then the Fair Market Value shall be
the closing selling price per share on the date in question on the
securities exchange determined by the Plan Administrator to be the primary
market for the Common Stock, as such price is officially quoted in the
composite tape of transactions on such exchange. If there is no reported
sale of Common Stock on such exchange on the date in question, then the
Fair Market Value shall be the closing selling price on the exchange on the
last preceding date for which such quotation exists.
d. As soon as practical after receipt of the Exercise Notice, the
Corporation shall mail or deliver to or on behalf of Optionee (or any other
person or persons exercising this option in accordance herewith) a certificate
or certificates representing the purchased Option Shares.
e. In no event may this option be exercised for any fractional share.
6.
<PAGE>
10. Governing Law. The interpretation, performance and enforcement of this
-------------
Agreement shall be governed by the laws of the State of California without
resort to that State's conflict-of-laws provisions.
11. Compliance with Laws and Regulations. The exercise of this option and
------------------------------------
the issuance of Option Shares upon such exercise shall be subject to compliance
by the Corporation and Optionee with all applicable requirements of law relating
thereto and with all applicable regulations of any securities exchange on which
shares of the Corporation's Common Stock may be listed at the time of such
exercise and issuance.
12. Successors and Assigns. Except to the extent otherwise provided in
----------------------
Paragraph 3 or 5, the provisions of this Agreement shall inure to the benefit
of, and be binding upon, the successors, administrators, heirs and legal
representatives of Optionee and the successors and assigns of the Corporation.
13. Liability of Corporation. The inability of the Corporation to obtain
------------------------
approval from any regulatory body having authority deemed by the Corporation to
be necessary to the lawful issuance and sale of any Common Stock pursuant to
this option shall relieve the Corporation of any liability with respect to the
non-issuance or sale of the Common Stock as to which such approval shall not
have been obtained. The Corporation shall use its best efforts to obtain all
such approvals.
14. No Employment/Service Contract. Nothing in this Agreement or in the Plan
------------------------------
shall confer upon Optionee any right to continue in the Service of the
Corporation (or any parent or subsidiary employing or retaining Optionee) for
any period of specific duration or interfere with or otherwise restrict in any
way the rights of the Corporation (or any such parent or subsidiary) or of
Optionee, which rights are hereby expressly reserved by each party, to terminate
Optionee's Service at any time for any reason whatsoever, with or without cause.
15. Notices. Any notice required to be given or delivered to the Corporation
-------
under the terms of this Agreement shall be in writing and addressed to the
Corporation in care of the Corporate Secretary at the Corporation's principal
offices at 9350 Trade Place, San Diego, California 92126. Any notice required
to be given or delivered to Optionee shall be in writing and addressed to
Optionee at the address indicated on the Grant Notice. All notices shall be
deemed to have been given or delivered upon personal delivery or upon deposit in
the U.S. mail, by registered or certified mail, postage prepaid and properly
addressed to the party to be notified.
16. Construction. This Agreement and the option evidenced hereby are made
------------
and granted pursuant to the Plan and are in all respects limited by and subject
to the express terms and provisions of the Plan. All decisions of the Plan
Administrator with respect to any question or issue arising under the Plan or
this Agreement shall be conclusive and binding on all persons having an interest
in this option.
17. Additional Terms Applicable to an Incentive Stock Option. In the event
--------------------------------------------------------
this option is designated an incentive stock option in the Grant Notice, the
following terms and conditions shall also apply to the grant:
7.
<PAGE>
a. This option shall cease to qualify for favorable tax treatment as an
incentive stock option under the Federal tax laws if (and to the extent) this
option is exercised for one or more Option Shares more than three (3) months
after the date Optionee ceases to be an Employee for any reason other than
death.
b. If this option is to become exercisable in a series of installments
as indicated in the Grant Notice, no such installment shall qualify for
favorable tax treatment as an incentive stock option under the Federal tax laws
if (and to the extent) the aggregate Fair Market Value (determined at the Grant
Date) of the shares of the Corporation's Common Stock for which such installment
first becomes exercisable hereunder will, when added to the aggregate value
(determined as of the respective date or dates of grant) of the Common Stock or
other securities for which this option or one or more other incentive stock
options granted to Optionee prior to the Grant Date (whether under the Plan or
any other option plan of the Corporation or any parent or subsidiary) first
become exercisable during the same calendar year, exceed One Hundred Thousand
Dollars ($100,000) in the aggregate. Should the number of shares of Common Stock
for which this option first becomes exercisable in any calendar year exceed the
applicable One Hundred Thousand Dollar ($100,000) limitation, the option may
nevertheless be exercised for those excess shares in such calendar year as a
non-statutory option.
c. Should the exercisability of this option be accelerated upon a
Corporate Transaction in accordance with Paragraph 6, then this option shall
qualify for favorable tax treatment as an incentive stock option under the
Federal tax laws only to the extent the aggregate Fair Market Value (determined
at the Grant Date) of the number of shares of the Corporation's Common Stock for
which this option first becomes exercisable in the calendar year in which the
Corporate Transaction occurs does not, when added to the aggregate value
(determined as of the respective date or dates of grant) of the shares of Common
Stock or other securities for which this option or one or more other incentive
stock options granted to Optionee prior to the Grant Date (whether under the
Plan or any other option plan of the Corporation or any parent or subsidiary)
first become exercisable during the same calendar year, exceed One Hundred
Thousand Dollars ($100,000) in the aggregate. Should the number of shares of
Common Stock for which this option first becomes exercisable in the calendar
year of such Corporate Transaction exceed the applicable One Hundred Thousand
Dollar ($100,000) limitation, the option may nevertheless be exercised for the
excess shares in such calendar year as a non-statutory option.
d. Should Optionee hold, in addition to this option, one or more other
options to purchase shares of the Corporation's Common Stock which become
exercisable for the first time in the same calendar year as this option, then
the foregoing limitations on the exercisability of such options as incentive
stock options under the Federal tax laws shall be applied on the basis of the
order in which such options are granted.
18. Excess Shares. If the Option Shares covered by this Agreement exceed, as
-------------
of the Grant Date, the number of shares of Common Stock which may without
shareholder approval be issued under the Plan, then this option shall be void
with respect to those excess shares, unless shareholder approval of an amendment
sufficiently increasing the number of shares of Common Stock issuable under the
Plan is obtained in accordance with the provisions of the Plan.
8.
<PAGE>
EXHIBIT I
---------
NOTICE OF EXERCISE OF STOCK OPTION
----------------------------------
I hereby notify Microelectronic Packaging, Inc. (the "Corporation") that I
elect to purchase ____________________ shares of the Corporation's Common Stock
(the "Purchased Shares") at the option exercise price of $_____ per share (the
"Exercise Price") pursuant to that certain option (the "Option") granted to me
under the Corporation's 1993 Stock Option/Stock Issuance Plan on
____________________, 199__ to purchase up to ___________ shares of the
Corporation's Common Stock.
Concurrently with the delivery of this Exercise Notice to the Corporate
Secretary of the Corporation, I shall hereby pay to the Corporation the Exercise
Price for the Purchased Shares in accordance with the provisions of my agreement
with the Corporation evidencing the Option and shall deliver whatever additional
documents may be required by such agreement as a condition for exercise.
Alternatively, I may utilize the special broker-dealer sale and remittance
procedure specified in my agreement to effect the payment of the Exercise Price
for the Purchased Shares.
__________, 199__
Date
------------------------------------------------
Optionee
Address:
--------------------------------------
--------------------------------------
Print name in exact manner
it is to appear on the
stock certificate: ------------------------------------------------
Address to which certificate
is to be sent, if different
from address above: ------------------------------------------------
------------------------------------------------
Social Security Number: ------------------------------------------------
<PAGE>
EXHIBIT 99.4
ADDENDUM
TO
STOCK OPTION AGREEMENT
The following provisions are hereby incorporated into, and are hereby made a
part of, that certain Stock Option Agreement dated ((2)) (the "Option
Agreement") by and between Microelectronic Packaging, Inc. (the "Corporation")
and ((1))
("Optionee") evidencing the non-statutory stock option granted on such date to
Optionee under the terms of the Corporation's 1993 Stock Option/Stock Issuance
Plan, and such provisions shall be effective immediately. Capitalized terms
used in this Addendum, to the extent not otherwise specifically defined herein,
shall have the meanings assigned to such terms in the Option Agreement.
SPECIAL TAX ELECTIONS
1. Stock Withholding. Optionee is hereby granted the election to have the
-----------------
Corporation withhold, at the time the option is exercised, a portion of the
purchased Option Shares with an aggregate Fair Market Value not to exceed one
hundred percent (100%) of the applicable Federal, state and local income and
employment tax withholding liability (the "Withholding Taxes") Optionee incurs
in connection with the option exercise.
Any such exercise of the election must be effected in accordance with
the following terms and conditions:
a. The election must be made on or before the date the liability for the
Withholding Taxes incurred in connection with the option exercise is
determined (the "Tax Determination Date").
b. The election shall be irrevocable.
c. The election shall be pre-approved by the Plan Administrator at the
time the option is granted.
d. The Option Shares withheld pursuant to the election shall be valued
at Fair Market Value on the Tax Determination Date in accordance with the
valuation procedures of Paragraph 9.c of the Option Agreement.
e. In no event may the number of shares requested to be withheld exceed
in Fair Market Value the dollar amount of the Withholding Taxes incurred by
Optionee in connection with the option exercise.
<PAGE>
2. Stock Delivery. Optionee is hereby granted the election to deliver, at
--------------
the time the option is exercised, one or more shares of the Corporation's Common
Stock previously acquired by Optionee (other than in connection with the
acquisition triggering the Withholding Taxes) with an aggregate Fair Market
Value not to exceed one hundred percent (100%) of the Withholding Taxes incurred
in connection with such option exercise.
Any such exercise of the election must be effected in accordance with the
following terms and conditions:
a. The election must be made on or before the Tax Determination Date for
the Withholding Taxes.
b. The election shall be irrevocable.
c. The election shall be pre-approved by the Plan Administrator at the
time the option is granted.
d. The shares of Common Stock delivered in satisfaction of the Withholding
Taxes shall be valued at Fair Market Value on the Tax Determination Date in
accordance with the valuation procedures of Paragraph 9.c of the Option
Agreement.
e. In no event may the number of delivered shares exceed in Fair Market
Value the dollar amount of the Withholding Taxes incurred by Optionee in
connection with the exercise of the option.
IN WITNESS WHEREOF, Microelectronic Packaging, Inc. has caused this
Addendum to be executed by its duly-authorized officer, and Optionee has
executed this Addendum, all as of the Effective Date specified below.
MICROELECTRONIC PACKAGING, INC.
By:
---------------------------------------------
Title:
------------------------------------------
-------------------------------------------------
OPTIONEE
EFFECTIVE DATE: ((2))
2.
<PAGE>
EXHIBIT 99.5
MICROELECTRONIC PACKAGING, INC.
NOTICE OF GRANT OF NON-EMPLOYEE DIRECTOR
AUTOMATIC STOCK OPTION
Notice is hereby given of the following stock option (the "Option") to
purchase shares of the common stock of Microelectronic Packaging, Inc. (the
"Corporation"):
Optionee: ___________________________________________________
--------
Grant Date: _____________________________________
----------
Type of Option: Non-Statutory Stock Option
--------------
Option Price: $_____________________________ per share
------------
Number of Option Shares: ________________ shares
-----------------------
Expiration Date: ________________________________
---------------
Exercise Schedule: The Option shall become exercisable in four (4)
-----------------
successive equal annual installments upon Optionee's completion of each
year of service as a member of the Corporation's Board of Directors (the
"Board") over the four (4)-year period measured from the Grant Date. In no
event shall the Option become exercisable for any additional Option Shares
following Optionee's cessation of Board service.
Optionee understands and agrees that the Option is granted subject to and
in accordance with the terms of the automatic option grant program under the
Corporation's 1993 Stock Option/Stock Issuance Plan (the "Plan"). Optionee
further agrees to be bound by the terms of the Plan and the terms of the Option
as set forth in the Automatic Stock Option Agreement attached hereto as Exhibit
A.
Optionee hereby acknowledges receipt of a copy of the official prospectus
for the Plan in the form attached hereto as Exhibit B. A copy of the Plan is
available upon request made to the Corporate Secretary at the Corporate Offices
at 9350 Trade Place, San Diego, CA 92126.
No Impairment of Rights. Nothing in this Notice or the attached Automatic
-----------------------
Stock Option Agreement or the Plan shall interfere with or otherwise restrict
the right of the Corporation and the Corporation's shareholders to remove
Optionee from the Board at any time in accordance with the provisions of
applicable law.
<PAGE>
Definitions. All capitalized terms in this Notice shall have the meaning
-----------
assigned to them in this Notice or in the attached Automatic Stock Option
Agreement.
DATED: _________________, 199___
MICROELECTRONIC PACKAGING, INC.
By:______________________________________
Title:___________________________________
_________________________________________
OPTIONEE
Address:_________________________________
_________________________________________
ATTACHMENTS:
- -----------
Exhibit A: Automatic Stock Option Agreement
Exhibit B: Plan Summary and Prospectus
2.
<PAGE>
EXHIBIT A
---------
Automatic Stock Option Agreement
<PAGE>
EXHIBIT B
---------
Plan Summary and Prospectus
<PAGE>
EXHIBIT 99.6
MICROELECTRONIC PACKAGING, INC.
NON-EMPLOYEE DIRECTOR AUTOMATIC STOCK OPTION AGREEMENT
RECITALS
- --------
A. The Corporation has approved an automatic option grant program under
the 1993 Stock Option/Stock Issuance Plan (the "Plan") pursuant to which the
non-employee members of the Corporation's Board of Directors (the "Board") will
automatically receive periodic option grants designed to reward them for
services they have rendered to the Corporation and to encourage them to continue
in the service of the Corporation.
B. Optionee is a non-employee member of the Board, and this Agreement is
executed pursuant to, and is intended to carry out the purposes of, the Plan in
connection with the automatic grant of a stock option to purchase shares of the
Corporation's common stock ("Common Stock") under the Plan.
C. The granted option is intended to be a non-statutory option which does
not meet the requirements of Section 422 of the Internal Revenue Code and is
- ---
designed to provide Optionee with a meaningful incentive to continue to serve as
a member of the Board.
NOW, THEREFORE, it is hereby agreed as follows:
1. Grant of Option. Subject to and upon the terms and conditions set
---------------
forth in this Agreement, there is hereby granted to Optionee, as of the date of
grant (the "Grant Date") specified in the accompanying Notice of Grant of Non-
Employee Director Automatic Stock Option (the "Grant Notice"), a stock option to
purchase up to that number of shares of Common Stock (the "Option Shares") as is
specified in the Grant Notice. The Option Shares shall be purchasable from time
to time during the option term at the price per share (the "Option Price")
specified in the Grant Notice.
2. Option Term. This option shall have a maximum term of ten (10) years
-----------
measured from the Grant Date and shall expire at the close of business on the
Expiration Date specified in the Grant Notice, unless sooner terminated in
accordance with Paragraph 5 or 7 of this Agreement.
3. Limited Transferability. This option shall be neither transferable
-----------------------
nor assignable by Optionee, other than a transfer of this option effected by
will or by the laws of descent and distribution following Optionee's death, and
may be exercised, during Optionee's lifetime, only by Optionee.
<PAGE>
4. Dates of Exercise. This option shall become exercisable for the
-----------------
Option Shares in a series of successive annual installments as specified in the
Grant Notice. As the option becomes exercisable for one or more installments,
those installments shall accumulate, and the option shall remain exercisable for
the accumulated installments until the expiration or sooner termination of the
option term. In no event shall this option become exercisable for any additional
Option Shares following Optionee's cessation of service as a Board member.
5. Cessation of Board Service. Should Optionee's service as a Board
--------------------------
member cease while this option remains outstanding, then the option term
specified in Paragraph 2 shall terminate (and this option shall cease to be
outstanding) prior to the Expiration Date in accordance with the following
provisions:
(i) Should Optionee cease to serve as a Board member for any
reason (other than death or permanent disability) while holding this
option, then the period for exercising this option shall be reduced to a
ninety (90)-day period commencing with the date of such cessation of Board
service, but in no event shall this option be exercisable at any time after
the Expiration Date. During such limited period of exercisability, this
option may not be exercised for more than the number of Option Shares (if
any) for which it is exercisable on the date Optionee ceases service as a
Board member.
(ii) Should Optionee die during the ninety (90)-day period
following his or her cessation of Board service, then the personal
representative of Optionee's estate or the person or persons to whom the
option is transferred pursuant to Optionee's will or in accordance with the
laws of descent and distribution shall have the right to exercise this
option for any or all of the Option Shares for which the option is
exercisable at the time of Optionee's cessation of Board service (less any
Option Shares purchased by Optionee after his or her cessation of Board
service but prior to death). Such right of exercise shall terminate, and
this option shall accordingly cease to be outstanding, upon the earlier of
-------
(A) the expiration of the six (6)-month period measured from the date of
Optionee's death or (B) the specified Expiration Date of the option term.
(iii) Should Optionee die or become permanently disabled while
serving as a Board member, then this option shall accelerate in full and
Optionee, or the personal representative of Optionee's estate or the person
or persons to whom the option is transferred pursuant to Optionee's will or
in accordance with the laws of descent and distribution, shall have the
right to exercise this option for any or all of the Option Shares subject
to this option at the time of Optionee's cessation of Board service. Such
right of exercise shall terminate, and this option shall accordingly cease
to be outstanding, upon the earlier of (A) the expiration of the six (6)-
-------
month period measured from the date on which Optionee dies or becomes
permanently disabled or (B) the specified Expiration Date of the option
term.
2.
<PAGE>
(iv) Upon Optionee's cessation of Board service for any reason
(other than death or permanent disability), this option shall immediately
terminate and cease to be outstanding with respect to any and all Option
Shares for which such option is not otherwise at that time exercisable in
accordance with the normal exercise provisions of Paragraph 4 or the
special acceleration provisions of Paragraph 7 or 8.
(v) Optionee shall be deemed to be permanently disabled if
Optionee is unable to engage in any substantial gainful activity by reason
of any medically determinable physical or mental impairment expected to
result in death or to be of continuous duration of twelve (12) months or
more.
6. Adjustment in Option Shares. Should any change be made to the Common
---------------------------
Stock issuable under the Plan by reason of any stock split, stock dividend,
combination of shares, exchange of shares or other change affecting such Common
Stock as a class without the Corporation's receipt of consideration, then the
number and class of securities purchasable under this option and the Option
Price payable per share shall be appropriately adjusted to prevent the dilution
or enlargement of Optionee's rights hereunder; provided, however, the aggregate
--------
Option Price shall remain the same.
7. Corporate Transaction. In the event of any of the following
---------------------
shareholder-approved transactions to which the Corporation is a party (a
"Corporate Transaction"):
(i) a merger or consolidation in which the Corporation is not
the surviving entity, except for a transaction the principal purpose of
which is to change the state in which the Corporation is incorporated,
(ii) the sale, transfer or other disposition of all or
substantially all of the assets of the Corporation in complete liquidation
or dissolution of the Corporation, or
(iii) any reverse merger in which the Corporation is the surviving
entity but 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 those who held such
securities immediately prior to such merger,
this option, to the extent outstanding at such time but not otherwise
fully exercisable, shall automatically accelerate so that such option shall,
immediately prior to the specified effective date for the Corporate Transaction,
become exercisable for all of the Option Shares at the time subject to this
option and may be exercised for all or any portion of such shares as fully-
vested shares of Common Stock. Upon the consummation of the Corporate
Transaction, this option shall terminate and cease to be outstanding.
3.
<PAGE>
8. Change in Control.
-----------------
(a) This option, to the extent outstanding at the time of a Change in
Control (as defined below) but not otherwise fully exercisable, shall
automatically accelerate so that this option shall, immediately prior to the
effective date of such Change in Control, become exercisable for all of the
Option Shares at the time subject to this option and may be exercised for all or
any portion of such shares as fully-vested shares of Common Stock. This option
as so accelerated shall remain fully exercisable until the earlier of (i) the
specified Expiration Date of the option term or (ii) the sooner termination of
this option in accordance with Paragraph 5 or 7.
(b) For purposes of this Agreement, a Change in Control shall be deemed to
occur in the event of a change in ownership or control of the Corporation
effected through either of the following transactions:
(i) the acquisition directly or indirectly by any person or related
group of persons (other than the Corporation or a person that directly or
indirectly controls, is controlled by, or is under common control with, the
Corporation) of beneficial ownership (within the meaning of Rule 13d-3 of
the Securities Exchange Act of 1934) of securities possessing more than
fifty percent (50%) of the total combined voting power of the Corporation's
outstanding securities pursuant to a tender or exchange offer made directly
to the Corporation's shareholders which the Board does not recommend such
shareholders to accept; or
(ii) a change in the composition of the Board over a period of
thirty-six (36) consecutive months or less such that a majority of the
Board members ceases, by reason of one or more contested elections for
Board membership, to be comprised of individuals who either (A) have been
Board members continuously since the beginning of such period or (B) have
been elected or nominated for election as Board members during such period
by at least a majority of the Board members described in clause (A) who
were still in office at the time such election or nomination was approved
by the Board.
9. Manner of Exercising Option.
---------------------------
(a) In order to exercise this option for all or any part of the Option
Shares for which the option is at the time exercisable, Optionee (or in the case
of exercise after Optionee's death, Optionee's executor, administrator, heir or
legatee, as the case may be) must take the following actions:
(i) Provide the Secretary of the Corporation with written notice of
the option exercise (the "Exercise Notice"), in substantially the form of
Exhibit I attached hereto, in which there is specified the number of Option
Shares to be purchased under the exercised option.
4.
<PAGE>
(ii) Pay the aggregate Option Price for the purchased shares in
one of the following alternative forms:
1. full payment in cash or check drawn to the Corporation's
order;
2. full payment in shares of Common Stock held by Optionee 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;
3. full payment in a combination of shares of Common Stock 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 and cash or check drawn to the Corporation's order; or
4. full payment effected through a broker-dealer sale and
remittance procedure pursuant to which Optionee shall provide irrevocable
instructions to (A) a Corporation-designated brokerage firm to effect the
immediate sale of the purchased shares and remit to the Corporation, out of
the sale proceeds available on the settlement date, sufficient funds to
cover the aggregate Option Price payable for the purchased shares and (B)
the Corporation to deliver the certificates for the purchased shares
directly to such brokerage firm in order to complete the sale.
(iii) Furnish to the Corporation appropriate documentation that the
person or persons exercising the option (if other than Optionee) have the
right to exercise this option.
(b) For purposes of subparagraph 9(a) above and for all other valuation
purposes under this Agreement, the Fair Market Value per share of Common Stock
on any relevant date shall be the determined in accordance with the following
provisions:
(i) If the Common Stock is at the time traded on the Nasdaq
Electronic Bulletin Board, the Fair Market Value shall be the average of
the highest bid price and the lowest asked price per share on the date in
question, as such prices are reported by the National Association of
Securities Dealers on the Nasdaq Electronic Bulletin Board. If there are no
reported bid or asked prices for the Common Stock on the date in question,
then the average of the highest bid price and the lowest asked price on the
last preceding date for which such quotations exist shall be determinative
of the Fair Market Value.
5.
<PAGE>
(ii) If the Common Stock is not at the time listed or admitted to
trading on any national stock exchange but is traded on the Nasdaq National
Market, the Fair Market Value shall be the closing selling price per share
on the date in question, as such price is reported by the National
Association of Securities Dealers on the Nasdaq National Market. If there
is no reported closing selling price for the Common Stock on the date in
question, then the closing selling price on the last preceding date for
which such quotation exists shall be determinative of Fair Market Value.
(iii) If the Common Stock is at the time listed or admitted to trading
on any national stock exchange, then the Fair Market Value shall be the
closing selling price per share on the date in question on the exchange
serving as the primary market for the Common Stock, as such price is
officially quoted in the composite tape of transactions on such exchange.
If there is no reported sale of Common Stock on such exchange on the date
in question, then the Fair Market Value shall be the closing selling price
on the exchange on the last preceding date for which such quotation exists.
(c) The Exercise Date shall be the date on which the Exercise Notice
is delivered to the Secretary of the Corporation. Except to the extent the sale
and remittance procedure specified above is utilized in connection with the
option exercise, payment of the Option Price for the purchased shares must
accompany such notice.
(d) As soon as practical after the Exercise Date, the Corporation shall
issue to or on behalf of Optionee (or other person or persons exercising this
option) a certificate or certificates representing the purchased Option Shares.
(e) In no event may this option be exercised for any fractional share.
10. Shareholder Rights. The holder of this option shall not have any of
------------------
the rights of a shareholder with respect to the Option Shares until such
individual shall have exercised this option and paid the Option Price for the
purchased shares.
11. No Impairment of Rights. This Agreement shall not in any way affect
-----------------------
the right of the Corporation to adjust, reclassify, reorganize or otherwise make
changes in its capital or business structure or to merge, consolidate, dissolve,
liquidate or sell or transfer all or any part of its business or assets. In
addition, this Agreement shall not in any way be construed or interpreted so as
to affect adversely or otherwise impair the right of the Corporation or the
shareholders to remove Optionee from the Board at any time in accordance with
the provisions of applicable law.
6.
<PAGE>
12. Compliance with Laws and Regulations. The exercise of this option and
------------------------------------
the issuance of the Option Shares upon such exercise shall be subject to
compliance by the Corporation and Optionee with all applicable requirements of
law relating thereto and with all applicable regulations of any stock exchange
on which shares of the Common Stock may be listed at the time of such exercise
and issuance.
13. Successors and Assigns. Except to the extent otherwise provided in
-----------------------
Paragraph 3, the provisions of this Agreement shall inure to the benefit of, and
be binding upon, the successors, administrators, heirs, legal representatives
and assigns of Optionee and the successors and assigns of the Corporation.
14. Discharge of Liability. The inability of the Corporation to obtain
----------------------
approval from any regulatory body having authority deemed by the Corporation to
be necessary to the lawful issuance and sale of any Common Stock pursuant to
this option shall relieve the Corporation of any liability with respect to the
non-issuance or sale of the Common Stock as to which such approval shall not
have been obtained. However, the Corporation shall use its best efforts to
obtain all such applicable approvals.
15. Notices. Any notice required to be given or delivered to the
-------
Corporation under the terms of this Agreement shall be in writing and addressed
to the Corporation in care of the Corporate Secretary at the Corporate Offices
at 9350 Trade Place, San Diego, CA 92126. Any notice required to be given or
delivered to Optionee shall be in writing and addressed to Optionee at the
address indicated below Optionee's signature line on the Grant Notice. All
notices shall be deemed to have been given or delivered upon personal delivery
or upon deposit in the U.S. mail, postage prepaid and properly addressed to the
party to be notified.
16. Construction/Governing Law. This Agreement and the option evidenced
--------------------------
hereby are made and granted pursuant to the Plan and are in all respects limited
by and subject to the express terms and provisions of the Plan, including the
automatic option grant provisions of Article Three of the Plan. The
interpretation, performance, and enforcement of this Agreement shall be governed
by the laws of the State of California without resort to that State's conflict-
of-laws rules.
7.
<PAGE>
EXHIBIT I
---------
NOTICE OF EXERCISE OF
---------------------
NONSTATUTORY STOCK OPTION
-------------------------
I hereby notify Microelectronic Packaging, Inc. (the "Corporation") that I
elect to purchase _________ shares of Common Stock of the Corporation (the
"Purchased Shares") pursuant to that certain option (the "Option") granted to me
on ___________, 199_ to purchase up to __________ shares of the Corporation's
Common Stock at an option price of $______ per share (the "Exercise Price").
Concurrently with the delivery of this Exercise Notice to the Secretary of
the Corporation, I shall hereby pay to the Corporation the Exercise Price for
the Purchased Shares in accordance with the provisions of my agreement with the
Corporation evidencing the Option and shall deliver whatever additional
documents may be required by such agreement as a condition for exercise.
Alternatively, I may utilize the special broker/dealer sale and remittance
procedure specified in my agreement to effect payment of the Exercise Price for
the Purchased Shares.
_____________________ ___________________
Date Optionee
Address: _________________________
___________________________________
Print name in exact manner
it is to appear on the
stock certificate: _________________________________________
Address to which certificate
is to be sent, if different
from address above: _________________________________________
_________________________________________
Social Security Number: _________________________________________
<PAGE>
EXHIBIT 99.7
MICROELECTRONIC PACKAGING, INC.
STOCK ISSUANCE AGREEMENT
------------------------
AGREEMENT made this _____ day of ___________________ 19____, by and between
Microelectronic Packaging, Inc., a California corporation, and , a
Participant in the Corporation's 1993 Stock Option/Stock Issuance Plan (the
"Plan").
All capitalized terms in this Agreement shall have the meaning assigned to
them in this Agreement or in the attached Appendix.
A. PURCHASE OF SHARES
------------------
1. Purchase. Participant hereby purchases _____________ shares of Common
--------
Stock (the "Purchased Shares") pursuant to the provisions of the Stock Issuance
Program at the purchase price of $______ per share (the "Purchase Price").
2. Payment. Concurrently with the delivery of this Agreement to the
-------
Corporation, Participant shall pay the Purchase Price for the Purchased Shares
in cash or check payable to the Corporation and shall deliver a duly-executed
blank Assignment Separate from Certificate (in the form attached hereto as
Exhibit I) with respect to the Purchased Shares.
3. Shareholder Rights. Until such time as the Corporation exercises the
------------------
Repurchase Right, Participant (or any successor in interest) shall have all the
rights of a shareholder (including voting, dividend and liquidation rights) with
respect to the Purchased Shares, subject, however, to the transfer restrictions
of this Agreement.
4. Escrow. The Corporation shall have the right to hold the Purchased
------
Shares in escrow until those shares have vested in accordance with the
Vesting Schedule.
5. Compliance with Law. Under no circumstances shall shares of Common
-------------------
Stock or other assets be issued or delivered to Participant pursuant to the
provisions of this Agreement unless, in the opinion of counsel for the
Corporation or its successors, there shall have been compliance with all
applicable requirements of Federal and state securities laws, all applicable
listing requirements of any stock exchange (or the Nasdaq National Market, if
applicable) on which the Common Stock is at the time listed for trading and all
other requirements of law or of any regulatory bodies having jurisdiction over
such issuance and delivery.
<PAGE>
B. TRANSFER RESTRICTIONS
---------------------
1. Restriction on Transfer. Except for any Permitted Transfer,
-----------------------
Participant shall not transfer, assign, encumber or otherwise dispose of any
of the Purchased Shares which are subject to the Repurchase Right.
2. Restrictive Legend. The stock certificate for the Purchased Shares
------------------
shall be endorsed with the following restrictive legend:
"The shares represented by this certificate are unvested and subject
to certain repurchase rights granted to the Corporation and accordingly may
not be sold, assigned, transferred, encumbered, or in any manner disposed
of except in conformity with the terms of a written agreement dated
____________, 199__ between the Corporation and the registered holder of
the shares (or the predecessor in interest to the shares). A copy of such
agreement is maintained at the Corporation's principal corporate offices."
3. Transferee Obligations. Each person (other than the Corporation) to
----------------------
whom the Purchased Shares are transferred by means of a Permitted Transfer must,
as a condition precedent to the validity of such transfer, acknowledge in
writing to the Corporation that such person is bound by the provisions of this
Agreement and that the transferred shares are subject to the Repurchase Right to
the same extent such shares would be so subject if retained by Participant.
C. REPURCHASE RIGHT
----------------
1. Grant. The Corporation is hereby granted the right (the "Repurchase
-----
Right"), exercisable at any time during the sixty (60)-day period following the
date Participant ceases for any reason to remain in Service, to repurchase at
the Purchase Price all or any portion of the Purchased Shares in which
Participant is not, at the time of his or her cessation of Service, vested in
accordance with the Vesting Schedule set forth in Paragraph C.3 or the special
acceleration provisions of Paragraph C.5 (such shares to be hereinafter referred
to as the "Unvested Shares").
2. Exercise of the Repurchase Right. The Repurchase Right shall be
--------------------------------
exercisable by written notice delivered to each Owner of the Unvested Shares
prior to the expiration of the sixty (60)-day exercise period. The notice shall
indicate the number of Unvested Shares to be repurchased and the date on which
the repurchase is to be effected, such date to be not more than thirty (30) days
after the date of such notice. The certificates representing the Unvested
Shares to be repurchased shall be delivered to the Corporation on or before the
close of business on the date specified for the repurchase. Concurrently with
the receipt of such stock certificates, the Corporation shall pay to Owner, in
cash or cash equivalent (including the cancellation of any purchase-money
indebtedness), an amount equal to the Purchase Price previously paid for the
Unvested Shares to be repurchased from Owner.
2.
<PAGE>
3. Termination of the Repurchase Right. The Repurchase Right shall
-----------------------------------
terminate with respect to any Unvested Shares for which it is not timely
exercised under Paragraph C.2. In addition, the Repurchase Right shall terminate
and cease to be exercisable with respect to any and all Purchased Shares in
which Participant vests in accordance with the following Vesting Schedule:
(i) Upon Participant's completion of one (1) year of Service
measured from ______________, 199__, Participant shall acquire a vested
interest in, and the Repurchase Right shall lapse with respect to, one-
third (1/3) of the Purchased Shares.
(ii) Participant shall acquire a vested interest in, and the
Repurchase Right shall lapse with respect to, the remaining Purchased
Shares in two (2) successive equal annual installments upon Participant's
completion of each additional year of Service over the two (2)-year period
measured from the initial vesting date under subparagraph (i) above.
4. Recapitalization. Any new, substituted or additional securities
----------------
or other property (including cash paid other than as a regular cash dividend)
which is by reason of any Recapitalization distributed with respect to the
Purchased Shares shall be immediately subject to the Repurchase Right and any
escrow requirements hereunder, but only to the extent the Purchased Shares are
at the time covered by such right or escrow requirements. Appropriate
adjustments to reflect such distribution shall be made to the number and/or
class of securities subject to this Agreement and to the price per share to be
paid upon the exercise of the Repurchase Right in order to reflect the effect of
any such Recapitalization upon the Corporation's capital structure; provided,
--------
however, that the aggregate purchase price shall remain the same.
5. Corporate Transaction.
---------------------
(a) Immediately prior to the consummation of any Corporate
Transaction, the Repurchase Right shall automatically lapse in its entirety and
the Purchased Shares shall vest in full, except to the extent the Repurchase
Right is to be assigned to the successor corporation (or parent thereof) in
connection with the Corporate Transaction.
(b) To the extent the Repurchase Right remains in effect
following a Corporate Transaction, such right shall apply to the new capital
stock or other property (including any cash payments) received in exchange for
the Purchased Shares in consummation of the Corporate Transaction, but only to
the extent the Purchased Shares are at the time covered by such right.
Appropriate adjustments shall be made to the price per share payable upon
exercise of the Repurchase Right to reflect the effect of the Corporate
Transaction upon the Corporation's capital structure; provided, however ,
-------
that the aggregate purchase price shall remain the same. The new securities or
other property (including cash payments) issued or distributed with respect to
the Purchased Shares in consummation of the Corporate Transaction shall
immediately be deposited in escrow with the Corporation (or the successor
entity) and shall not be released from escrow until
3.
<PAGE>
Participant vests in such securities or other property in accordance with the
same Vesting Schedule in effect for the Purchased Shares.
(c) The Repurchase Right may also be subject to termination in whole
or in part on an accelerated basis, and the Purchased Shares subject to
immediate vesting, in accordance with the terms of any special Addendum attached
to this Agreement.
D. SPECIAL TAX ELECTION
--------------------
1. Section 83(b) Election. Under Code Section 83, the excess of the
----------------------
fair market value of the Purchased Shares on the date any forfeiture
restrictions applicable to such shares lapse over the Purchase Price paid for
such shares will be reportable as ordinary income on the lapse date. For this
purpose, the term "forfeiture restrictions" includes the right of the
Corporation to repurchase the Purchased Shares pursuant to the Repurchase Right.
Participant may elect under Code Section 83(b) to be taxed at the time the
Purchased Shares are acquired, rather than when and as such Purchased Shares
cease to be subject to such forfeiture restrictions. Such election must be filed
with the Internal Revenue Service within thirty (30) days after the date of this
Agreement. Even if the fair market value of the Purchased Shares on the date of
this Agreement equals the Purchase Price paid (and thus no tax is payable), the
election must be made to avoid adverse tax consequences in the future. THE FORM
FOR MAKING THIS ELECTION IS ATTACHED AS EXHIBIT II HERETO. PARTICIPANT
UNDERSTANDS THAT FAILURE TO MAKE THIS FILING WITHIN THE APPLICABLE THIRTY (30)-
DAY PERIOD WILL RESULT IN THE RECOGNITION OF ORDINARY INCOME AS THE FORFEITURE
RESTRICTIONS LAPSE.
2. FILING RESPONSIBILITY. PARTICIPANT ACKNOWLEDGES THAT IT IS
---------------------
PARTICIPANT'S SOLE RESPONSIBILITY, AND NOT THE CORPORATION'S, TO FILE A TIMELY
ELECTION UNDER CODE SECTION 83(b), EVEN IF PARTICIPANT REQUESTS THE CORPORATION
OR ITS REPRESENTATIVES TO MAKE THIS FILING ON HIS OR HER BEHALF.
E. GENERAL PROVISIONS
------------------
1. Assignment. The Corporation may assign the Repurchase Right to any
----------
person or entity selected by the Board, including (without limitation) one
or more shareholders of the Corporation.
2. No Employment or Service Contract. Nothing in this Agreement or
---------------------------------
in the Plan shall confer upon Participant any right to continue in Service for
any period of specific duration or interfere with or otherwise restrict in any
way the rights of the Corporation (or any Parent or Subsidiary employing or
retaining Participant) or of Participant, which rights are hereby expressly
reserved by each, to terminate Participant's Service at any time for any reason,
with or without cause.
4.
<PAGE>
3. Notices. Any notice required to be given under this Agreement shall be
-------
in writing and shall be deemed effective upon personal delivery or upon deposit
in the U.S. mail, registered or certified, postage prepaid and properly
addressed to the party entitled to such notice at the address indicated below
such party's signature line on this Agreement or at such other address as such
party may designate by ten (10) days advance written notice under this paragraph
to all other parties to this Agreement.
4. No Waiver. The failure of the Corporation in any instance to exercise
---------
the Repurchase Right shall not constitute a waiver of any other repurchase
rights that may subsequently arise under the provisions of this Agreement or any
other agreement between the Corporation and Participant. No waiver of any breach
or condition of this Agreement shall be deemed to be a waiver of any other or
subsequent breach or condition, whether of like or different nature.
5. Cancellation of Shares. If the Corporation shall make available, at the
----------------------
time and place and in the amount and form provided in this Agreement, the
consideration for the Purchased Shares to be repurchased in accordance with the
provisions of this Agreement, then from and after such time, the person from
whom such shares are to be repurchased shall no longer have any rights as a
holder of such shares (other than the right to receive payment of such
consideration in accordance with this Agreement). Such shares shall be deemed
purchased in accordance with the applicable provisions hereof, and the
Corporation shall be deemed the owner and holder of such shares, whether or not
the certificates therefor have been delivered as required by this Agreement.
6. Participant Undertaking. Participant hereby agrees to take whatever
-----------------------
additional action and execute whatever additional documents the Corporation may
deem necessary or advisable in order to carry out or effect one or more of the
obligations or restrictions imposed on either Participant or the Purchased
Shares pursuant to the provisions of this Agreement.
7. Agreement is Entire Contract. This Agreement constitutes the entire
----------------------------
contract between the parties hereto with regard to the subject matter hereof.
This Agreement is made pursuant to the provisions of the Plan and shall in all
respects be construed in conformity with the terms of the Plan.
8. Governing Law. This Agreement shall be governed by, and construed in
-------------
accordance with, the laws of the State of California without resort to that
State's conflict-of-laws rules.
9. Counterparts. This Agreement may be executed in counterparts, each of
------------
which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.
5.
<PAGE>
10. Successors and Assigns. The provisions of this Agreement shall inure to
----------------------
the benefit of, and be binding upon, the Corporation and its successors and
assigns and upon Participant, Participant's assigns and the legal
representatives, heirs and legatees of Participant's estate, whether or not any
such person shall have become a party to this Agreement and have agreed in
writing to join herein and be bound by the terms hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day and
year first indicated above.
MICROELECTRONIC PACKAGING, INC.
By:
-----------------------------------------
Title:
--------------------------------------
Address:
------------------------------------
---------------------------------------------
---------------------------------------------
PARTICIPANT
Address:
------------------------------------
---------------------------------------------
6.
<PAGE>
EXHIBIT I
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED ______________________ hereby sell(s), assign(s) and
transfer(s) unto Microelectronic Packaging, Inc. (the "Corporation"),
___________________(_______) shares of the Common Stock of the Corporation
standing in his or her name on the books of the Corporation represented by
Certificate No. ___________________ herewith and do(es) hereby irrevocably
constitute and appoint _______________________________ Attorney to transfer the
said stock on the books of the Corporation with full power of substitution in
the premises.
Dated: _______, 199__.
Signature
-----------------------------
Instruction: Please do not fill in any blanks other than the signature line.
Please sign exactly as you would like your name to appear on the issued stock
certificate. The purpose of this assignment is to enable the Corporation to
exercise the Repurchase Right without requiring additional signatures on the
part of Participant.
<PAGE>
EXHIBIT II
SECTION 83(b) TAX ELECTION
This statement is being made under Section 83(b) of the Internal Revenue Code,
pursuant to Treas. Reg. Section 1.83-2.
(1) The taxpayer who performed the services is:
Name:
Address:
Taxpayer Ident. No.:
(2) The property with respect to which the election is being made is
____________ shares of the common stock of Microelectronic Packaging, Inc.
(3) The property was issued on _____________, 199___.
(4) The taxable year in which the election is being made is the calendar year
199__.
(5) The property is subject to a repurchase right pursuant to which the issuer
has the right to acquire the property at the original purchase price if
for any reason taxpayer's employment with the issuer terminates. The
issuer's repurchase right lapses in a series of annual installments over a
three (3)-year period ending on _______________________________.
(6) The fair market value at the time of transfer (determined without regard
to any restriction other than a restriction which by its terms will never
lapse) is $_____________per share.
(7) The amount paid for such property is $____________ per share.
(8) A copy of this statement was furnished to Microelectronic Packaging, Inc.
for whom taxpayer rendered the services underlying the transfer of
property.
(9) This statement is executed on ________________________, 199__.
- ------------------------------ --------------------------------------------
Spouse (if any) Taxpayer
This election must be filed with the Internal Revenue Service Center with which
taxpayer files his or her Federal income tax returns and must be made within
thirty (30) days after the execution date of the Stock Issuance Agreement. This
filing should be made by registered or certified mail, return receipt requested.
Participant must retain two (2) copies of the completed form for filing with his
or her Federal and state tax returns for the current tax year and an additional
copy for his or her records.
<PAGE>
APPENDIX
--------
The following definitions shall be in effect under the Agreement:
A. Agreement shall mean this Stock Issuance Agreement.
---------
B. Board shall mean the Corporation's Board of Directors.
-----
C. Code shall mean the Internal Revenue Code of 1986, as amended.
----
D. Common Stock shall mean the Corporation's common stock.
------------
E. Corporate Transaction shall mean either of the following shareholder-
---------------------
approved transactions:
(i) a merger or consolidation in which the Corporation is not the
surviving entity, except for a transaction the principal purpose of which
is to change the state in which the Corporation is incorporated, or
(ii) the sale, transfer or other disposition of all or
substantially all of the assets of the Corporation in complete liquidation
or dissolution of the Corporation, or
(iii) any reverse merger in which the Corporation is the
surviving entity but in which securities possessing more than fifty percent
(50%) of the total combined voting power of the Corporation's outstanding
securities are transferred to person or person different from the persons
holding those securities immediately prior to such merger.
F. Corporation shall mean Microelectronic Packaging, Inc., a California
-----------
corporation.
G. Owner shall mean Participant and all subsequent holders of the
-----
Purchased Shares who derive their chain of ownership through a Permitted
Transfer from Participant.
H. 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, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
I. Participant shall mean the person to whom the Purchased Shares are
-----------
issued under the Stock Issuance Program.
A-1.
<PAGE>
J. Permitted Transfer shall mean (i) a gratuitous transfer of the
------------------
Purchased Shares, provided and only if Participant obtains the Corporation's
--------------------
prior written consent to such transfer, (ii) a transfer of title to the
Purchased Shares effected pursuant to Participant's will or the laws of
intestate succession following Participant's death or (iii) a transfer to the
Corporation in pledge as security for any purchase-money indebtedness incurred
by Participant in connection with the acquisition of the Purchased Shares.
K. Plan shall mean the Corporation's 1993 Stock Option/Stock Issuance
----
Plan.
L. Plan Administrator shall mean either the Board or a committee of the
------------------
Board acting in its administrative capacity under the Plan.
M. Purchase Price shall have the meaning assigned to such term in
--------------
Paragraph A.1.
N. Purchased Shares shall have the meaning assigned to such term in
----------------
Paragraph A.1.
O. Recapitalization shall mean any stock dividend, stock split,
----------------
recapitalization, combination of shares, exchange of shares or other change
affecting the Corporation's outstanding Common Stock as a class without the
Corporation's receipt of consideration.
P. Repurchase Right shall mean the right granted to the Corporation in
----------------
accordance with Article C.
Q. Service shall mean the Participant's performance of services for the
-------
Corporation (or any Parent or Subsidiary) in the capacity of an employee,
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, a non-employee member
of the board of directors or a consultant.
R. Stock Issuance Program shall mean the Stock Issuance Program under the
----------------------
Plan.
S. 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, stock possessing fifty percent (50%) or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain.
T. Vesting Schedule shall mean the vesting schedule specified in
----------------
Paragraph C.3, subject to the acceleration provisions of Paragraph C.5.
U. Unvested Shares shall have the meaning assigned to such term in
---------------
Paragraph C.1.
A-2.
