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EXHIBIT 10.25
MANUFACTURERS' SERVICES LIMITED
2000 EQUITY INCENTIVE PLAN, AS AMENDED
1. DEFINED TERMS
Exhibit A, which is incorporated by reference, defines the terms
used in the Plan and sets forth certain operational rules related to those
terms.
2. GENERAL
The Plan has been established to advance the interests of the
Company by giving Stock-based and other incentives to selected Employees,
directors and other persons (including both individuals and entities) who
provide services to the Company or its Affiliates.
3. ADMINISTRATION
The Administrator has discretionary authority, subject only to the
express provisions of the Plan, to interpret the Plan; determine eligibility
for and grant Awards; determine, modify or waive the terms and conditions of
any Award; prescribe forms, rules and procedures (which it may modify or
waive); and otherwise do all things necessary to carry out the purposes of
the Plan. Once an Award has been communicated in writing to a Participant,
the Administrator may not, without the Participant's consent, alter the terms
of the Award so as to affect adversely the Participant's rights under the
Award, unless the Administrator expressly reserved the right to do so. In the
case of any Award intended to be eligible for the performance-based
compensation exception under Section 162(m), the Administrator shall exercise
its discretion consistent with qualifying the Award for such exception.
4. LIMITS ON AWARD UNDER THE PLAN
A. NUMBER OF SHARES. A maximum of (1) 10,675,000 shares of Stock,
plus (2) any shares of Stock available under the Company's
Existing Plan as a result of termination of options under the
Existing Plan, plus (3) an annual increase to be added on the
date of each annual meeting of the stockholders of the
Company, beginning with the 2000 annual meeting of the
stockholders, equal to one percent (1.0%) of the outstanding
shares of Stock on such date or such lesser amount determined
by the Board, may be delivered in satisfaction of Awards under
the Plan. The shares of Stock may be authorized, but unissued,
or reacquired shares of Stock. For purposes of the preceding
sentence, the following shares shall not be considered to have
been delivered under the Plan: (i) shares remaining under an
Award that terminates without having been exercised in full;
(ii) shares subject to an Award, where cash is delivered to a
Participant in lieu of such shares; (iii) shares of Restricted
Stock that have been forfeited in accordance with the terms of
the applicable Award; and (iv) shares held back, in
satisfaction of the exercise price or tax withholding
requirements, from shares that would otherwise have
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been delivered pursuant to an Award. The number of shares
of Stock delivered under an Award shall be determined net
of any previously acquired Shares tendered by the
Participant in payment of the exercise price or of
withholding taxes. A maximum of 10,675,000 shares of Stock
may be issued as ISO Awards under the Plan.
B. TYPE OF SHARES. Stock delivered by the Company under the Plan
may be authorized but unissued Stock or previously issued
Stock acquired by the Company and held in treasury. No
fractional shares of Stock will be delivered under the Plan.
C. OPTION & SAR LIMITS. The maximum number of shares of Stock for
which Stock Options may be granted to any person in any
calendar year, the maximum number of shares of Stock subject
to SARs granted to any person in any calendar year and the
aggregate maximum number of shares of Stock subject to other
Awards that may be delivered to any person in any calendar
year shall each be 1,000,000. For purposes of the preceding
sentence, the repricing of a Stock Option or SAR shall be
treated as a new grant to the extent required under Section
162(m). Subject to these limitations, each person eligible to
participate in the Plan shall be eligible in any year to
receive Awards covering up to the full number of shares of
Stock then available for Awards under the Plan.
D. OTHER AWARD LIMITS. No more than $1,000,000 may be paid to any
individual with respect to any Cash Performance Award. In
applying the limitation of the preceding sentence: (A)
multiple Cash Performance Awards to the same individual that
are determined by reference to performance periods of one year
or less ending with or within the same fiscal year of the
Company shall be subject in the aggregate to one limit of such
amount, and (B) multiple Cash Performance Awards to the same
individual that are determined by reference to one or more
multi-year performance periods ending in the same fiscal year
of the Company shall be subject in the aggregate to a separate
limit of such amount. With respect to any Performance Award
other than a Cash Performance Award or a Stock Option or SAR,
the maximum Award opportunity shall be 1,000,000 shares of
Stock or their equivalent value in cash, subject to the
limitations of Section 4.c.
5. ELIGIBILITY AND PARTICIPATION
The Administrator will select Participants from among those key
Employees, directors and other individuals or entities providing services to
the Company or its Affiliates who, in the opinion of the Administrator, are
in a position to make a significant contribution to the success of the
Company and its Affiliates. Eligibility for ISOs is further limited to those
individuals whose employment status would qualify them for the tax treatment
described in Sections 421 and 422 of the Code.
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6. RULES APPLICABLE TO AWARDS
a. ALL AWARDS
(1) TERMS OF AWARDS. The Administrator shall determine the terms
of all Awards subject to the limitations provided herein. In the case of an
ISO, the term shall be ten (10) years from the date of grant or such shorter
term as may be provided in the Award. Moreover, in the case of an ISO granted
to a Participant who, at the time the ISO is granted, owns stock representing
more than ten percent (10%) of the total combined voting power of all classes
of capital stock of the Company or any Parent or Subsidiary, the term of the
ISO shall be five (5) years from the date of grant or such shorter term as
may be provided in the Award.
(2) PERFORMANCE CRITERIA. Where rights under an Award depend in
whole or in part on satisfaction of Performance Criteria, actions by the
Company that have an effect, however material, on such Performance Criteria
or on the likelihood that they will be satisfied will not be deemed an
amendment or alteration of the Award.
(3) ALTERNATIVE SETTLEMENT. The Company may at any time
extinguish rights under an Award in exchange for payment in cash, Stock
(subject to the limitations of Section 4) or other property on such terms as
the Administrator determines, provided the holder of the Award consents to
such exchange.
(4) TRANSFERABILITY OF AWARDS. Except as the Administrator
otherwise expressly provides, Awards may not be transferred other than by
will or by the laws of descent and distribution, and during a Participant's
lifetime an Award requiring exercise may be exercised only by the Participant
(or in the event of the Participant's incapacity, the person or persons
legally appointed to act on the Participant's behalf).
(5) VESTING, ETC. Without limiting the generality of Section 3,
the Administrator may determine the time or times at which an Award will vest
(I.E., become free of forfeiture restrictions) or become exercisable and the
terms on which an Award requiring exercise will remain exercisable. Unless
the Administrator expressly provides otherwise, immediately upon the
cessation of the Participant's employment or other service relationship with
the Company and its Affiliates an Award requiring exercise will cease to be
exercisable and all Awards to the extent not already fully vested will be
forfeited, except that:
(A) all Stock Options and SARs held by a Participant
immediately prior to his or her death or Disability ,
to the extent then exercisable, will remain
exercisable by such Participant's executor,
administrator or representative or the person or
persons to whom the Stock Option or SAR is transferred
by will or the applicable laws of descent and
distribution, and to the extent not then exercisable
will vest and become exercisable upon such
Participant's death or Disability by such
Participant's executor, administrator or
representative or the person or persons to whom the
Stock Option or SAR is transferred by will or the
applicable laws of descent and distribution, in each
case for the lesser of (i) a one year period ending
with the first anniversary of the Participant's death
or Disability or (ii) the period
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ending on the latest date on which such Stock Option
or SAR could have been exercised without regard to
this Section 6.a.(5) and shall thereupon terminate;
(B) all Stock Options and SARs held by the Participant
immediately prior to the cessation of the
Participant's employment or other service relationship
for reasons other than death or Disability and except
as provided in (C) below, to the extent then
exercisable, will remain exercisable for the lesser of
(i) a period of three months or (ii) the period ending
on the latest date on which such Stock Option or SAR
could have been exercised without regard to this
Section 6.a.(5), and shall thereupon terminate; and
(C) all Stock Options and SARs held by the Participant
whose cessation of employment or other service
relationship is determined by the Administrator in its
sole discretion to result from the breach by the
Participant of any Non-Compete Agreement or
non-compete provision contained in any Employment
Agreement shall immediately terminate upon such
cessation.
Unless the Administrator expressly provides otherwise, a
Participant's "employment or other service relationship with the
Company and its Affiliates" will be deemed to have ceased, in
the case of an employee Participant, upon termination of the
Participant's employment with the Company and its Affiliates
(whether or not the Participant continues in the service of the
Company or its Affiliates in some capacity other than that of an
employee of the Company or its Affiliates), and in the case of
any other Participant, when the service relationship in respect
of which the Award was granted terminates (whether or not the
Participant continues in the service of the Company or its
Affiliates in some other capacity).
(6) TAXES. The Administrator will make such provision for the
withholding of taxes as it deems necessary. The Administrator may, but need
not, hold back shares of Stock from an Award or permit a Participant to
tender previously owned shares of Stock in satisfaction of tax withholding
requirements, but not in excess of the minimum tax withholding rates
applicable to the employee.
(7) DIVIDEND EQUIVALENTS, ETC. The Administrator may provide for
the payment of amounts in lieu of cash dividends or other cash distributions
with respect to Stock subject to an Award.
(8) RIGHTS LIMITED. Nothing in the Plan shall be construed as
giving any person the right to continued employment or service with the
Company or its Affiliates, or any rights as a shareholder except as to shares
of Stock actually issued under the Plan. The loss of existing or potential
profit in Awards will not constitute an element of damages in the event of
termination of employment or service for any reason, even if the termination
is in violation of an obligation of the Company or Affiliate to the
Participant.
(9) SECTION 162(m). In the case of an Award intended to be
eligible for the performance-based compensation exception under Section
162(m), the Plan and such Award shall be
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construed to the maximum extent permitted by law in a manner consistent with
qualifying the Award for such exception.
b. AWARDS REQUIRING EXERCISE
(1) TIME AND MANNER OF EXERCISE. Unless the Administrator
expressly provides otherwise, (a) an Award requiring exercise by the holder
will not be deemed to have been exercised until the Administrator receives a
written notice of exercise (in form acceptable to the Administrator) signed
by the appropriate person and accompanied by any payment required under the
Award; and (b) if the Award is exercised by any person other than the
Participant, the Administrator may require satisfactory evidence that the
person exercising the Award has the right to do so.
(2) EXERCISE PRICE. The Administrator shall determine the
exercise price of each Stock Option provided that each Stock Option intended
to qualify for the performance-based exception under Section 162(m) of the
Code and each ISO must have an exercise price that is not less than the fair
market value of the Stock subject to the Stock Option, determined as of the
date of grant. An ISO granted to an Employee described in Section 422(b)(6)
of the Code must have an exercise price that is not less than 110% of such
fair market value.
(3) PAYMENT OF EXERCISE PRICE, IF ANY. Where the exercise of an
Award is to be accompanied by payment: (a) all payments will be by cash or
check acceptable to the Administrator, or, if so permitted by the
Administrator (with the consent of the optionee of an ISO if permitted after
the grant), (i) through the delivery of shares of Stock which have been
outstanding for at least six months (unless the Administrator approves a
shorter period) and which have a fair market value equal to the exercise
price, (ii) by delivery of a promissory note of the person exercising the
Award to the Company, payable on such terms as are specified by the
Administrator, (iii) by delivery of an unconditional and irrevocable
undertaking by a broker to deliver promptly to the Company sufficient funds
to pay the exercise price, or (iv) by any combination of the foregoing
permissible forms of payment; and (b) where shares of Stock issued under an
Award are part of an original issue of shares, the Award shall require an
exercise price equal to at least the par value of such shares.
(4) ISOS. No ISO may be granted under the Plan after May 15,
2010, but ISOs previously granted may extend beyond that date.
c. AWARDS NOT REQUIRING EXERCISE
Awards of Restricted Stock and Unrestricted Stock may be made in
return for either (i) services determined by the Administrator to have a
value not less than the par value of the Awarded shares of Stock, or (ii)
cash or other property having a value not less than the par value of the
Awarded shares of Stock payable in such combination and type of cash, other
property (of any kind) or services as the Administrator may determine.
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7. EFFECT OF CERTAIN TRANSACTIONS
a. MERGERS, ETC.
In the event of a Covered Transaction, all outstanding Awards shall
vest and if relevant become exercisable and all deferrals, other than
deferrals of amounts that are neither measured by reference to nor payable in
shares of Stock, shall be accelerated, immediately prior to the Covered
Transaction and upon consummation of such Covered Transaction all Awards then
outstanding and requiring exercise shall be forfeited unless assumed by an
acquiring or surviving entity or its affiliate as provided in the following
sentence. In the event of a Covered Transaction, unless otherwise determined
by the Administrator, all Awards that are payable in shares of Stock and that
have not been exercised, exchanged or converted, as applicable, shall be
converted into and represent the right to receive the consideration to be
paid in such Covered Transaction for each share of Stock into which such
Award is exercisable, exchangeable or convertible, less the applicable
exercise price or purchase price for such Award. In connection with any
Covered Transaction in which there is an acquiring or surviving entity, the
Administrator may provide for substitute or replacement Awards from, or the
assumption of Awards by, the acquiring or surviving entity or its affiliates,
any such substitution, replacement or assumption to be on such terms as the
Administrator determines, provided that no such replacement or substitution
shall diminish in any way the acceleration of Awards provided for in this
section.
b. CHANGES IN AND DISTRIBUTIONS WITH RESPECT TO THE STOCK
(1) BASIC ADJUSTMENT PROVISIONS. In the event of a stock
dividend, stock split or combination of shares, recapitalization or other
change in the Company's capital structure after January 1, 2000, the
Administrator will make appropriate adjustments to the maximum number of
shares that may be delivered under the Plan under Section 4.a., and will also
make appropriate adjustments to the number and kind of shares of stock or
securities subject to Awards then outstanding or subsequently granted, any
exercise prices relating to Awards and any other provision of Awards affected
by such change.
(2) CERTAIN OTHER ADJUSTMENTS. The Administrator may also make
adjustments of the type described in paragraph (1) above to take into account
distributions to common stockholders other than those provided for in Section
7.a. and 7.b.(1), or any other event, if the Administrator determines that
adjustments are appropriate to avoid distortion in the operation of the Plan
and to preserve the value of Awards made hereunder; PROVIDED, that no such
adjustment shall be made to the maximum share limits described in Section
4.c. or 4.d., or otherwise to an Award intended to be eligible for the
performance-based exception under Section 162(m), except to the extent
consistent with that exception, nor shall any change be made to ISOs except
to the extent consistent with their continued qualification under Section 422
of the Code.
(3) CONTINUING APPLICATION OF PLAN TERMS. References in the Plan
to shares of Stock shall be construed to include any stock or securities
resulting from an adjustment pursuant to Section 7.b.(1) or 7.b.(2) above.
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8. LEGAL CONDITIONS ON DELIVERY OF STOCK
The Company will not be obligated to deliver any shares of Stock
pursuant to the Plan or to remove any restriction from shares of Stock
previously delivered under the Plan until the Company's counsel has approved
all legal matters in connection with the issuance and delivery of such
shares; if the outstanding Stock is at the time of delivery listed on any
stock exchange or national market system, the shares to be delivered have
been listed or authorized to be listed on such exchange or system upon
official notice of issuance; and all conditions of the Award have been
satisfied or waived. If the sale of Stock has not been registered under the
Securities Act of 1933, as amended, the Company may require, as a condition
to exercise of the Award, such representations or agreements as counsel for
the Company may consider appropriate to avoid violation of such Act. The
Company may require that certificates evidencing Stock issued under the Plan
bear an appropriate legend reflecting any restriction on transfer applicable
to such Stock.
9. AMENDMENT AND TERMINATION
Subject to the last sentence of Section 3, the Administrator may at
any time or times amend the Plan or any outstanding Award for any purpose
which may at the time be permitted by law, or may at any time terminate the
Plan as to any further grants of Awards; PROVIDED, that (except to the extent
expressly required or permitted by the Plan) no such amendment will, without
the approval of the stockholders of the Company, effectuate a change for
which stockholder approval is required in order for the Plan to continue to
qualify under Section 422 of the Code and for Awards to be eligible for the
performance-based exception under Section 162(m).
10. NON-LIMITATION OF THE COMPANY'S RIGHTS
The existence of the Plan or the grant of any Award shall not in any
way affect the Company's right to Award a person bonuses or other
compensation in addition to Awards under the Plan.
11. GOVERNING LAW
The Plan shall be construed in accordance with the laws of the
Commonwealth of Massachusetts.
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EXHIBIT A
DEFINITION OF TERMS
The following terms, when used in the Plan, shall have the meanings
and be subject to the provisions set forth below:
"ADMINISTRATOR": The Board or, if one or more has been appointed,
the Committee.
"AFFILIATE": Any corporation or other entity owning, directly or
indirectly, 50% or more of the outstanding Stock of the Company, or in which
the Company or any such corporation or other entity owns, directly or
indirectly, 50% of the outstanding capital stock (determined by aggregate
voting rights) or other voting interests.
"AWARD": Any or a combination of the following:
(i) Stock Options.
(ii) SARs.
(iii) Restricted Stock.
(iv) Unrestricted Stock.
(v) Deferred Stock.
(vi) Securities (other than Stock Options) that are
convertible into or exchangeable for Stock on such terms and conditions
as the Administrator determines.
(vii) Cash Performance Awards.
(viii) Performance Awards.
(ix) Grants of cash, or loans, made in connection with
other Awards in order to help defray in whole or in part the economic
cost (including tax cost) of the Award to the Participant.
"BOARD": The Board of Directors of the Company.
"CASH PERFORMANCE AWARD": A Performance Award payable in cash. The
right of the Company under Section 6.a.(3) to extinguish an Award in exchange
for cash or the exercise by the Company of such right shall not make an Award
otherwise not payable in cash a Cash Performance Award.
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"CODE": The U.S. Internal Revenue Code of 1986 as from time to time
amended and in effect, or any successor statute as from time to time in
effect.
"COMMITTEE": One or more committees of the Board which in the case
of Awards granted to officers of the Company shall be comprised solely of two
or more outside directors within the meaning of Section 162(m). Any Committee
may delegate ministerial tasks to such persons (including Employees) as it
deems appropriate.
"COMPANY": Manufacturers' Services Limited.
"COVERED TRANSACTION": Any of (i) a consolidation or merger in which
the Company is not the surviving corporation or which results in the
acquisition of at least 40% of the Company's then outstanding common stock by
a single person or entity or by a group of persons and/or entities acting in
concert, (ii) a sale or transfer of all or substantially all the Company's
assets, or (iii) a dissolution or liquidation of the Company.
"DEFERRED STOCK": A promise to deliver Stock or other securities in
the future on specified terms.
"DISABILITY": As defined in any Employment Agreement or, if there is
no such Employment Agreement, or if such Employment Agreement does not
contain any such defined term, then "Disability" shall mean the physical or
mental incapacity of the Participant and consequent inability of the
Participant, for a period of six (6) consecutive months or for an aggregate
of twelve (12) months in any twenty-four (24) consecutive month period, to
perform his duties with the Company. Any question as to the existence of the
Disability of such Participant as to which the Participant and the Company
cannot agree shall be determined in writing by a qualified independent
physician mutually acceptable to the Participant and the Company. If the
Participant and the Company cannot agree as to a qualified independent
physician, each shall appoint such a physician and those two physicians shall
select a third who shall make such determination in writing. The
determination of Disability made in writing to the Company and the
Participant shall be final and conclusive for all purposes of the Plan.
"EMPLOYEE": Any person who is employed by the Company or an
Affiliate.
"EXISTING PLAN": The Company's Second Amended and Restated
Non-Qualified Stock Option Plan.
"ISO": A Stock Option intended to be an "incentive stock option"
within the meaning of Section 422 of the Code. No Stock Option Awarded under
the Plan will be an ISO unless the Administrator expressly provides for ISO
treatment.
"PARENT": A "parent corporation," whether now or hereafter existing,
as defined in Section 424(e) of the Code.
"PARTICIPANT": An Employee, director or other person providing
services to the Company or its Affiliates who is granted an Award under the
Plan.
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"PERFORMANCE AWARD": An Award subject to Performance Criteria. The
Committee in its discretion may grant Performance Awards that are intended to
qualify for the performance-based compensation exception under Section 162(m)
and Performance Awards that are not intended so to qualify.
"PERFORMANCE CRITERIA": Specified criteria the satisfaction of which
is a condition for the exercisability, vesting or full enjoyment of an Award.
For purposes of Performance Awards that are intended to qualify for the
performance-based compensation exception under Section 162(m), a Performance
Criterion shall mean an objectively determinable measure of performance
relating to any of the following (determined either on a consolidated basis
or, as the context permits, on a divisional, subsidiary, line of business,
project or geographical basis or in combinations thereof): (i) sales;
revenues; assets; expenses; earnings before or after deduction for all or any
portion of interest, taxes, depreciation, amortization or other items,
whether or not on a continuing operations or an aggregate or per share basis;
return on equity, investment, capital or assets; one or more operating
ratios; borrowing levels, leverage ratios or credit rating; market share;
capital expenditures; cash flow; stock price; stockholder return; network
deployment; sales of particular products or services; customer acquisition,
expansion and retention; or any combination of the foregoing; or (ii)
acquisitions and divestitures (in whole or in part); joint ventures and
strategic alliances; spin-offs, split-ups and the like; reorganizations;
recapitalizations, restructurings, financings (issuance of debt or equity)
and refinancings; transactions that would constitute a change of control; or
any combination of the foregoing. A Performance Criterion measure and targets
with respect thereto determined by the Administrator need not be based upon
an increase, a positive or improved result or avoidance of loss.
"PLAN": The Manufacturers' Services Limited 2000 Equity Incentive
Plan as from time to time amended and in effect.
"RESTRICTED STOCK": An Award of Stock subject to restrictions
requiring that such Stock be redelivered to the Company if specified
conditions are not satisfied.
"SECTION 162(m)": Section 162(m) of the Code.
"SARs": Rights entitling the holder upon exercise to receive cash or
Stock, as the Administrator determines, equal to a function (determined by
the Administrator using such factors as it deems appropriate) of the amount
by which the Stock has appreciated in value since the date of the Award.
"STOCK": Common Stock of the Company, par value $ .001 per share.
"STOCK OPTIONS": Options entitling the recipient to acquire shares
of Stock upon payment of the exercise price.
"SUBSIDIARY": A "subsidiary corporation," whether now or hereafter
existing, as defined in Section 424(f) of the Code.
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"UNRESTRICTED STOCK": An Award of Stock not subject to any
restrictions under the Plan.
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