<PAGE>

                                                                    EXHIBIT 10.2


                          AMENDED AND RESTATED

                                  SMTC (HTM)

                          1998 EQUITY INCENTIVE PLAN

                                  ARTICLE I

                                Purpose of Plan

     This Amended and Restated SMTC (HTM) 1998 Equity Incentive Plan (the
"Plan") of SMTC Corporation, a Delaware corporation (the "Company"), adopted by
the Board of Directors and stockholders of the Company and effective as of
September 30, 1999 amends and restates the SMTC (HTM) 1998 Equity Incentive
Plan adopted by the Board of Directors and stockholders of the Company as of
July 30, 1999. This Plan is intended to advance the best interests of the
Company by providing directors, executive officers and other key employees of
the Company and its Subsidiaries who have substantial responsibility for the
management and growth of the Company with additional incentives by allowing such
employees to acquire an ownership interest in the Company. The Plan is a
compensatory benefit plan within the meaning of Rule 701 under the Securities
Act of 1933 (the "Securities Act"). The issuance of Common Stock pursuant to the
Plan is intended to qualify for the exemption from registration under the
Securities Act provided by Rule 701.

                                  ARTICLE II

                                  Definitions

     For purposes of the Plan the following terms have the indicated meanings:

     "Board" means the Board of Directors of the Company.

     "Cause"  means cause as defined in a Participant's written employment
agreement with the Company or, if no written employment agreement exists, shall
mean (i) a Participant's willful and repeated failure to comply with the lawful
directives of the Board or such Participant's supervisory personnel, (ii) any
criminal act or act of dishonesty, disloyalty, misconduct or moral turpitude by
a Participant that is injurious in any significant respect to the property,
operations, business or reputation of the Company or any subsidiary thereof,
(iii) a Participant's failure to exercise good faith efforts to discharge such
Participant's assigned duties as an employee, or (iv) material breach by a
Participant of his or her written employment agreement (if any) with the Company
after notice by the Company and reasonable opportunity to cure.

     "Class A-1 Common Stock" means the Class A-1 Common Stock, $.001 par value
per share, of the Company.

     "Class L Common Stock" means the Class L Common Stock, $.001 par value per
share, of the Company.
<PAGE>

     "Code" means the Internal Revenue Code of 1986, as amended, and any
successor statute.

     "Committee" means the Compensation Committee or such other committee of the
Board as the Board may designate to administer the Plan or, if for any reason
the Board has not designated such a committee, the Board.

     "Common Stock" means the common stock of the Company, including without
limitation the Class A-1 Common Stock and the Class L Common Stock.

     "Fair Market Value" of any share of Common Stock as of any date means the
fair market value of such share of Common Stock as of such date, as determined
in good faith by the Committee based on the consolidated results of operations,
financial condition and future prospects of the Company and such other factors
as the Committee may deem appropriate or, in the event that the Common Stock is
listed on a national securities exchange or traded in the NASDAQ National Market
System, the average of the closing sales prices of such Common Stock for the ten
trading days preceding the date of determination.  Fair Market Value shall be
determined without regard to any restriction on transferability of any share of
Common Stock other than any such restriction which by its terms will never
lapse.

     "Option Shares" means any Common Stock purchased pursuant to Options which
Common Stock is not, pursuant to the terms of the written agreement embodying
such Options, Restricted Stock.

     "Participant" means any executive or other key employee of the Company or
any Subsidiary who has been selected to participate in the Plan by the Committee
or the Board.

     "Restricted Stock" shall mean Common Stock purchased pursuant to Options,
which Common Stock is subject to restrictions under the Plan requiring that such
stock be redelivered to the Company if specified conditions are not satisfied.
The conditions to be satisfied in connection with any Restricted Stock, the
terms on which such stock must be redelivered to the Company, and all other
terms shall be determined by the Committee.

     "Sale of the Company" means the acquisition of a majority or more of the
outstanding voting securities of the Company by any person or "group" (as that
term is used in Regulation 13D under the Securities Exchange Act of 1934) other
than the stockholders of the Company as of the date hereof and their respective
affiliates.

     "Subsidiary" means any subsidiary corporation (as such term is defined in
Section 424(f) of the Code) of the Company.

                                 ARTICLE III

                                Administration

                                      -2-


<PAGE>

     The Plan shall be administered by the Committee. Subject to the limitations
of the Plan, the Committee acting in good faith shall have the sole and complete
authority to: (i) select Participants, (ii) grant stock purchase options
("Options") to Participants in such forms and amounts as it shall determine,
(iii) impose such limitations, restrictions and conditions upon such Options
and/or shares of Common Stock issued upon exercise thereof as it shall deem
appropriate, (iv) interpret the Plan and adopt, amend and rescind administrative
guidelines and other rules and regulations relating to the Plan, (v) correct any
defect or omission or reconcile any inconsistency in the Plan or in any Option
granted under the Plan and (vi) make all other determinations and take all other
actions necessary or advisable for the implementation and administration of the
Plan. The Committee's determinations on matters within its authority shall be
conclusive and binding upon the Participants, the Company and all other persons.
All expenses associated with the administration of the Plan shall be borne by
the Company. The Committee may, as approved by the Board and to the extent
permissible by law, delegate any of its authority hereunder to such persons or
entities as it deems appropriate.

                                  ARTICLE IV

                             Limitation on Shares

     The number of shares of Common Stock with respect to which Options may be
granted under the Plan shall not exceed 165,000 shares of Class A-1 Common Stock
and 4,000 shares of Class L Common Stock, respectively, subject to adjustment in
accordance with paragraph 6.5 herein. To the extent any Options expire
unexercised or are canceled, terminated or forfeited in any manner without the
issuance of Common Stock or to the extent that Restricted Stock or Option Shares
are repurchased by the Company, such shares of Common Stock shall again be
available under the Plan. The shares of Common Stock available under the Plan
may consist of authorized and unissued shares, treasury shares of a combination
thereof, as the Committee shall determine.

                                   ARTICLE V

                                    Awards

     5.1. Grant of Options.  The Committee may grant Options to Participants
          ----------------
from time to time in accordance with this Article V.  Options granted under the
Plan may be nonqualified stock options or "incentive stock options" within the
meaning of Section 422 of the Code or any successor provision, as specified by
the Committee; provided, however, that no Option intended as an incentive stock
option shall so qualify unless such Option satisfies all of the requirements of
Section 422 of the Code.  Options shall have a term not to exceed ten years from
the date of grant as specified by the Committee, and shall be exercisable at
such time or times as the Committee shall determine.

                                      -3-
<PAGE>

     5.2. Exercise Procedure.
          ------------------

          (a)  Time and Manner of Exercise.  Unless the Committee expressly
               ---------------------------
provides otherwise, an Option will not be deemed to have been exercised until
the Company receives a written notice of exercise (in form acceptable to the
Committee) signed by the appropriate person and accompanied by payment in full
of the applicable exercise price.

          (b)  Payment of Exercise Price.  Payment of such exercise price may be
               -------------------------
made (i) in cash (including check, bank draft or money order), (ii) at the
discretion of the Committee, by delivery of a full recourse promissory note
bearing interest at a rate not less than the applicable federal rate determined
pursuant to Section 1274 of the Code as of the date of purchase or exercise (a
"Note"), (iii) in shares of Common Stock valued at their Fair Market Value as of
the date of exercise, or (iv) a combination of the foregoing.

     5.3. Conditions and Limitations on Exercise.  At the discretion of the
          --------------------------------------
Committee, Options may be made exercisable, in one or more installments, upon
(i) the happenings of certain events, (ii) the passage of a specified period of
time, (iii) the fulfillment of certain conditions, or (iv) the achievement by
the Company or any Subsidiary of certain performance goals.  As a condition to
the exercise of any Options, the Participant shall agree to be bound by the
Stockholders Agreement dated July 30, 1999 among the Company, EMSIcon
Investments, LLC and the other equity security holders of the Company, with the
shares issued under the Options constituting "Management Shares" for purposes of
such Stockholders Agreement.  In the event of a Sale of the Company, the
Committee may provide, in its discretion, that the outstanding Options shall
become immediately exercisable and/or that such Options shall terminate if not
exercised as of the date of the Sale of the Company or any other designated date
or that such Options shall thereafter represent only the right to receive the
excess of the consideration per share of Common Stock offered in such Sale of
the Company over the exercise price of such Options.

     5.4. Expiration of Options.
          ---------------------

          (a) Normal Expiration.  In no event shall any part of any Option be
              -----------------
exercisable after the tenth anniversary of the date of grant or earlier stated
date of expiration thereof.

          (b) Early Expiration Upon Termination of Employment.  Except as
              -----------------------------------------------
otherwise provided by the Committee at the time of grant of such Options, upon
termination for any reason of a Participant's employment by the Company and its
Subsidiaries

              (i)   all Options or portions thereof held by such Participant
     that are not vested and exercisable on the date of such termination shall
     expire and be forfeited as of such date and all vested Options held by such
     Participant shall expire to the extent not exercised within 90 days
     following the date of such termination or, in the case of termination due
     to the Participant's death or disability, within one year following the
     date of such termination. Notwithstanding the foregoing, in the event of
     termination of

                                      -4-
<PAGE>

     a Participant's employment by the Company for Cause, all Options held by
     such Participant (whether or not vested) shall expire on the date of such
     termination;

              (ii)  all Restricted Stock held by the Participant at the time of
     such termination must be transferred to the Company (and, in the event the
     certificates representing such Restricted Stock are held by the Company,
     such Restricted Stock will be so transferred without any further action by
     the Participant, provided that except in the event the reason for such
     termination is the death of the Participant, the Participant shall deliver
     a duly executed stock power at such time) in consideration of the payment
     by the Company of an amount equal to the applicable Exercise Price for each
     share of Restricted Stock and will be deemed for all purposes to have been
     so transferred when the Company has tendered such payment.

     5.5. Repurchase Rights.  In the event of termination of a Participant's
          -----------------
employment with the Company and its subsidiaries for any reason, the Company
shall have the right, exercisable by delivery of written notice to the
Participant within 90 days after the date of such termination, to repurchase all
or any portion of the Restricted Stock as to which restrictions have lapsed, the
Option Shares and vested Options then held by such Participant at a repurchase
price in cash equal to Fair Market Value (over the applicable per-share Exercise
Price in the case of vested Options) or, in the case of termination of the
Participant's employment for Cause, at a repurchase price equal to the
applicable Exercise Price.  The closing of such repurchase shall occur within 30
days after delivery of the Company's notice of exercise.

                                  ARTICLE VI

                              General Provisions

     6.1. Written Agreement. Each Option granted hereunder shall be embodied in
          -----------------
a written agreement in substantially the form attached hereto (with such
modifications thereto as may be approved by the Committee) which shall be signed
by the Participant to whom the Option is granted and shall be subject to the
terms and conditions set forth herein.

     6.2. Listing, Registration and Legal Compliance.  If at any time the
          ------------------------------------------
Committee determines, in its discretion, that the listing, registration or
qualification of the shares subject to Options upon any securities exchange or
under any state or federal securities or other law or regulation, or the consent
or approval of any governmental regulatory body, is necessary or desirable as a
condition to or in connection with the granting of Options or the purchase or
issuance of shares thereunder, no Options may be granted or exercised, in whole
or in part, unless such listing, registration, qualification, consent or
approval shall have been effected or obtained free of any conditions not
acceptable to the Committee.  The holders of such Options will supply the
Company with such certificates, representations and information as the Company
shall request and shall otherwise cooperate with the Company in obtaining such
listing, registration, qualification, consent or approval.  In the case of
officers and other persons subject to Section

                                      -5-
<PAGE>

16(b) of the Securities Exchange Act of 1934, as amended, the Committee may at
any time impose any limitations upon the exercise of Options that, in the
Committee's discretion, are necessary or desirable in order to comply with such
Section 16(b) and the rules and regulations thereunder. If the Company, as part
of an offering of securities or otherwise, finds it desirable because of federal
or state regulatory requirements to reduce the period during which any Options
may be exercised, the Committee may, in its discretion and without the
Participant's consent, so reduce such period on not less than 20 days' prior
written notice to the holders thereof.

     6.3. Options Not Transferable.  Options may not be transferred other than
          ------------------------
by will or the laws of descent and distribution and, during the lifetime of the
Participant to whom they were granted, may be exercised only by such Participant
(or his or her legal guardian or legal representative).  In the event of the
death of a Participant, exercise of Options granted hereunder to such
Participant may be made only by the executor or administrator of such
Participant's estate or the person or persons to whom such Participant's rights
under the Option will pass by will or the laws of descent and distribution.

     6.4. Withholding of Taxes.  The Company may, if necessary or desirable,
          --------------------
withhold from any amounts due and payable by the Company to any Participant (or
secure payment from such Participant in lieu of withholding) the amount of any
withholding or other tax due from the Company with respect to any issuance or
exercise of Options granted under the Plan to such Participant, and the Company
may defer such issuance or exercise unless indemnified to its satisfaction
against the payment of any such amount.

     6.5. Adjustments.  In the event of a reorganization, recapitalization,
          -----------
merger in which there is no Sale of the Company, stock dividend or stock split,
or combination or other change in the shares of Common Stock, the Committee
shall, in order to prevent the dilution or enlargement of rights under
outstanding Options, make such adjustments in the number and type of shares
authorized by the Plan, the number and type of shares covered by outstanding
Options and the exercise prices specified therein as may be determined to be
appropriate and equitable. In the event of any stock split or reverse stock
split effected in connection with the initial public offering and sale of Common
Stock for cash pursuant to an effective registration statement Form S-1 (or any
successor form) under the Securities Act of 1933, as in effect from time to
time, if any adjustment of the number of shares covered by any outstanding
Option pursuant to the immediately preceding sentence results in such Option
becoming exercisable for a fractional number of shares, the number of shares
issuable upon exercise of such Option shall be rounded to the nearest number of
whole shares.

     6.6. Rights of Participants.  Nothing in the Plan shall interfere with or
          ----------------------
limit in any way the right of the Company or any Subsidiary to terminate any
Participant's employment at any time (with or without cause), or confer upon any
Participant any right to continue in the employ of the Company or any Subsidiary
for any period of time or to continue to receive such Participant's current (or
other) rate of compensation.  No employee shall have a right to be selected as a
Participant or, having been so selected, to be selected again as a Participant.

     6.7. Amendment, Suspension and Termination of Plan. The Committee may
          ---------------------------------------------
suspend or terminate the Plan or any portion thereof at any time and may amend
it from time to time in such respects as the Committee may deem advisable
provided, however, that no such amendment shall be made without stockholder
approval to the extent such approval is required by law, agreement or the rules
of any exchange upon which the Common Stock is listed, and no such amendment,
suspension or termination shall impair the rights of Participants under
outstanding Options

                                      -6-
<PAGE>

without the consent of the Participants affected thereby, except as provided
below. No Options shall be granted hereunder after the tenth anniversary of the
approval of the Plan by the stockholders of the Company.

     6.8.  Amendment of Outstanding Options.  The Committee may amend or modify
           --------------------------------
any Option in any manner to the extent that the Committee would have had the
authority under the Plan initially to grant such Option; provided that, except
as expressly contemplated elsewhere herein or in any agreement evidencing such
Option, no such amendment or modification shall impair the rights of any
Participant under any outstanding Option without the consent of such
Participant.

     6.9.  Indemnification.  In addition to such other rights of indemnification
           ---------------
as they may have as members of the Board or the Committee, the members of the
Committee shall be indemnified by the Company against all costs and expenses
reasonably incurred by them in connection with any action, suit or proceeding to
which they or any of them may be party by reason of any action taken or failure
to act under or in connection with the Plan or any Option granted under the
Plan, and against all amounts paid by them in settlement thereof (provided such
settlement is approved by independent legal counsel selected by the Company) or
paid by them in satisfaction of a judgment in any such action, suit or
proceeding; provided, however, that any such Committee member shall be entitled
to the indemnification rights set forth in this paragraph 6.9 only if such
member has acted in good faith and in a manner that such member reasonably
believed to be in or not opposed to the best interests of the Company and, with
respect to any criminal action or proceeding, had no reasonable cause to believe
that such conduct was unlawful, and further provided that upon the institution
of any such action, suit or proceeding a Committee member shall give the Company
written notice thereof and an opportunity to handle and defend the same before
such Committee member undertakes to handle and defend it on his own behalf.

     6.10. Restrictive Legend.
           ------------------

           (a) All stock certificates representing Common Stock issued pursuant
to an Option shall, unless otherwise determined by the Company, have affixed
thereto a legend substantially in the following form, in addition to any other
legend required by the Stockholders Agreement:

     "THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN A PRIVATE
     PLACEMENT, WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS
     AMENDED (THE "ACT"), AND MAY NOT BE SOLD, ASSIGNED, PLEDGED OR OTHERWISE
     TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION UNDER THE ACT
     COVERING THE TRANSFER OR AN OPINION OF COUNSEL, SATISFACTORY TO THE ISSUER,
     THAT REGISTRATION UNDER THE ACT IS NOT REQUIRED."

                                      -7-
<PAGE>

           (b) All stock certificates representing Restricted Stock shall,
unless otherwise determined by the Company, have affixed thereto a legend
substantially in the following form, in addition to any other legend required by
the Stockholders Agreement or any Pledge Agreement:

     "THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE RESTRICTED SECURITIES
     AND ARE SUBJECT TO FORFEITURE UNDER CERTAIN PROVISIONS OF THAT CERTAIN SMTC
     (HTM) 1998 EQUITY INCENTIVE PLAN OF THE COMPANY AND THAT CERTAIN GRANT OF
     STOCK OPTION AGREEMENT DATED JULY 30, 1999 BETWEEN THE COMPANY AND
     ______________________, A COPY OF WHICH MAY BE INSPECTED AT THE PRINCIPAL
     OFFICE OF THE COMPANY."

     6.11. Governing Law.  All questions concerning the construction,
           -------------
interpretation and validity of this Plan shall be governed by and construed and
enforced in accordance with the domestic laws of the State of Delaware, without
giving effect to any choice or conflict of law provision or rule (whether in the
State of Delaware or any other jurisdiction) that would cause the application of
the laws of any jurisdiction other than the State of Delaware.  In furtherance
of the foregoing, the internal law of the State of Delaware will control the
interpretation and construction of this Plan, even if under such jurisdiction's
choice of law or conflict of law analysis, the substantive law of some other
jurisdiction would ordinarily apply.

                                      -8-
<PAGE>

                               SMTC CORPORATION
                                 635 HOOD ROAD
                       MARKHAM, ONTARIO, CANADA, L3R 4N6


As of September 30, 1999

[Participant's Name]
[Business Address]

Re:  Grant of Stock Purchase Options

Dear [Participant]:

SMTC Corporation, a Delaware corporation (the "Company"), is pleased to advise
                                               -------
you that you have been granted options under the Amended and Restated SMTC (HTM)
1998 Equity Incentive Plan (the "Plan") as provided below (the "Agreement").
                                 ----                           ---------
Capitalized terms used and not defined herein have the meaning set forth in the
Plan (copy attached).

1.   Option Terms.
     ------------

     (a) Grant.  On the terms and subject to the conditions of this Agreement,
         -----
you hereby are granted an option to purchase up to ___________ shares of the
Company's Class A-1 Common Stock, $.001 par value (the "Option Shares"), at an
                                                        -------------
exercise price of $19.6792 per share (the "Exercise Price") (the "Option").
                                           --------------         ------
Your Option will expire at the close of business on September 30, 2009 (the
"Expiration Date"), subject to earlier expiration in connection with the
 ---------------
termination of your employment as provided below.  The Option is intended to be
a nonqualified option.

     (b) Vesting. Your Option will be exercisable only to the extent it has
         -------
vested.  The Option will be vested with respect to 25% of your total Option
Shares on each of the first, second and third anniversaries of September 30,
1999, and will become 100% vested on September 30, 2003, in each case if and
only if you have been continuously employed by the Company and/or its
subsidiaries from the date of the Agreement through such dates; provided,
however, that in the event of a Sale of the Company during the term of your
employment with the Company and/or its subsidiaries, your Option will
automatically become 100% vested.  In connection with any Sale of the Company,
the Company may provide on not less than 20 days' notice to you that any portion
of your Option which has not been exercised prior to or in connection with the
Sale of the Company will be forfeited.  In lieu of requiring such exercise,

                                      -9-

<PAGE>

the Company may provide for the cancellation of your Option in exchange for
payment equal to the excess (if any) of the consideration per share of the
Option Shares receivable in connection with such Sale of the Company over the
Exercise Price.

     (c) Termination of Options.  In no event shall any part of your Option be
         ----------------------
exercisable after the Expiration Date set forth in paragraph 1(a).  If your
employment with the Company and/or subsidiaries is terminated by the Company for
Cause, all of your Option not previously exercised shall expire and be forfeited
whether or not vested.  If your employment with the Company and/or its
subsidiaries terminates for any other reason, that portion of your Option that
is not vested and exercisable on the date of termination of your employment
shall expire and be forfeited, and the portion of your Option that is vested and
exercisable on the date of such termination shall expire, to the extent not
theretofore exercised, 90 days following such date of termination.

2.   Procedure for Purchase or Exercise.
     ----------------------------------

     (a) You may exercise all or any portion of your Option in any of the
methods described in Section 5.2 of the Plan, including the delivery of a full
recourse promissory note in form and substance satisfactory to the Company for
the product of the Exercise Price multiplied by the number of Option Shares that
you elect to purchase and a pledge agreement, executed by you, pledging your
Option Shares as collateral for the full recourse promissory note.

     (b) As a condition to any exercise of your Option, you agree to be bound by
the provisions of the Stockholders Agreement dated July 30, 1999 among the
Company and the stockholders signatory thereto, with the Option Shares
constituting "Management Stock" as defined therein.  In addition, you will
permit the Company to deliver to you all financial and other information
regarding the Company that the Company deems necessary to enable you to make an
informed investment decision, and you will make all customary investment
representations which the Company requires.

3.   Securities Law Restrictions.  You represent that when you exercise your
     ---------------------------
Option you will be purchasing the Common Stock covered thereby for your own
account and not on behalf of others.  You may not sell, transfer or dispose of
any Common Stock issued or purchased pursuant to this Agreement (except pursuant
to an effective registration statement under the Securities Act of 1933) without
first delivering to the Company an opinion of counsel reasonably acceptable in
form and substance to the Company that registration under the Securities Act or
any applicable state securities laws is not required in connection with such
transfer.  You further understand that the certificates for any Common Stock you
purchase will bear such legends as are required by the Plan or as the Company
deems necessary or desirable. In connection with an IPO, you agree to execute a
customary "holdback" agreement (not to exceed 180 days) in the form requested by
the underwriters for such offering.

                                      -10-
<PAGE>

4.   Restriction on Transfer.  Your Option and Option Shares are personal to you
     -----------------------
and are not transferable by you other than by will or the laws of descent and
distribution.  During your lifetime, only you (or your guardian or legal
representative) may exercise your Option.  In the event of your death, your
Option may be exercised only by the executor or administrator of your estate or
the person or persons to whom your rights under the Option shall pass by will or
the laws of intestate succession.  Your Option Shares are subject to certain
repurchase rights set forth in the Plan.

5.   Conformity with Plan.  Your Option is intended to conform in all respects
     --------------------
with, and is subject to all applicable provisions of, the Plan, which is
incorporated herein by reference. Inconsistencies between this Agreement and the
Plan shall be resolved in accordance with the terms of the Plan.  By executing
and returning the enclosed copy of this Agreement, you acknowledge your receipt
of this Agreement and the Plan and agree to be bound by all of the terms of this
Agreement and the Plan.

6.   Rights of Participants.  Nothing in this Agreement shall interfere with or
     ----------------------
limit in any way the right of the Company and/or its subsidiaries to terminate
your employment at any time (with or without Cause), or confer upon you any
right to continue in the employ of the Company and/or its subsidiaries for any
period of time or to continue to receive your current (or other) rate of
compensation.  Nothing in this Agreement shall confer upon you any right to be
selected to receive additional options under the Plan.

7.   Withholding of Taxes.  The Company may, if necessary or desirable, withhold
     --------------------
from any amounts due and payable by the Company to you (or secure payment from
you in lieu of withholding) the amount of any withholding or other tax due from
the Company with respect to the issuance or exercise of your Option, and the
Company may defer such issuance, exercise or conversion unless indemnified by
you to its satisfaction against the payment of any such amount.

8.   Adjustments.  In the event of a reorganization, recapitalization, merger in
     -----------
which there is no Sale of the Company, stock dividend or stock split, or
combination or other change in the shares of Common Stock, the Company may, in
order to prevent the dilution or enlargement of rights under your Options, make
such adjustments in the number and type of shares authorized by the Plan, the
number and type of shares covered by your Option and the Exercise Price
specified herein as may be determined to be appropriate and equitable.  In the
event of any stock split or reverse stock split effected in connection with the
initial public offering and sale of Common Stock for cash pursuant to an
effective registration statement on Form S-1 (or any successor form) under the
Securities Act of 1933, as in effect from time to time, if any adjustment of the
number of shares covered by your Option pursuant to the immediately preceding
sentence results in your Option becoming exercisable for a fractional number of
shares, the number of shares issuable upon exercise of your Option shall be
rounded to the nearest number of whole shares.

                                      -11-
<PAGE>

9.   Entire Agreement.  This Agreement and the documents referenced herein
     ----------------
constitute the entire understanding and agreement of the parties hereto with
respect to the subject matter hereof and thereof and supersede all prior and
contemporaneous agreements or understandings, inducements or conditions, express
or implied, written or oral, between the parties with respect hereto and
thereto.

                                    *******

                                      -12-
<PAGE>

Please execute a copy of this Agreement in the space below and return it to the
Company's Secretary at its executive offices to confirm your understanding and
acceptance of the agreements contained in the Agreement.


                                    Very Truly Yours,

                                    SMTC Corporation



                                    By____________________
                                    Name:
                                    Title:



The undersigned hereby acknowledges that he or she has read this Agreement and
the Plan and hereby agrees to be bound by all provisions set forth herein and
therein.



                                    [Participant]


                                    ________________________


Dated as of:  September 30, 1999

                                      -13-