Document:

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Exhibit 10.42

AGREEMENT AND GENERAL RELEASE

 

Manufacturers’ Services Ltd., 300 Baker

Avenue, Concord, Massachusetts 01742, and its affiliates, subsidiaries,

divisions, successors and assigns (collectively referred to throughout this

Agreement as “Employer”), and James N. Poor, (“Employee”) agree that:

 

1.                                      Termination Date. Employee’s termination date

shall be May 3, 2002 (the “Termination Date”).

 

a.                                       If Employee

elects to continue medical and dental coverage under Employer’s medical and

dental plans in accordance with the continuation requirements of COBRA,

Employee shall pay for the cost of such coverage as outlined in the COBRA

communication that will be forwarded by The Stanton Group, to Employee’s home

address.  The Company shall pay the Employee

for up to eighteen (18) months a monthly payment equivalent to the Company

share (80%) of Medical and Dental Cobra costs. 

For the remainder of 2002, the payment will be a net payment of

$5,665.50.  In 2003, the amount will be

adjusted to reflect changes in COBRA rates and an additional eleven months’ net

payment will be made in January 2003. 

Such payments will terminate if you terminate your participation in the

COBRA coverage provided by the Company and any excess payments made by the

Company to you shall be promptly repaid to MSL.

 

b.                                      Employee will be

paid all accrued and unused vacation as of the Termination Date, in the first

paycheck following the Termination Date.

 

c.                                       Employee’s

participation in Employer’s short- and long-term disability insurance plans

will terminate on the Termination Date.

 

2.                                      Consideration. 

In exchange for Employee’s agreement to the terms of this Agreement and

General Release (“Agreement”), Employer shall consider Employee’s separation of

employment to be a mutual agreement.  In

addition, Employer shall do the following:

 

a.                                       Employer shall

pay salary continuation to Employee (notwithstanding Employee’s death) for a

twelve (12) month period following the Termination Date, less legally required

and voluntarily-authorized deductions, and Employee’s target incentive

compensation for 2002, for a total sum of $222,500.00.  This amount will begin to be paid in

accordance with MSL’s payroll practices and procedures following the Effective

Date of this Agreement and shall terminate in the event of any material breach

by Employee of the Agreement with Respect to Confidential Information and

Inventions and Non-Competition (the “Non-Competition Agreement”) that Employee

entered into with Employer on January 23, 1998.

 

 

b.                                      Employer will

provide you out-placement assistance up to a maximum of $20,000.00.

 

c.                                       Employee shall

have until November 3, 2002 to exercise stock options which have vested as of

the Termination Date.

 

3.                                      No

Consideration Absent Execution of this Agreement. 

Employee understands and agrees that Employee would not receive the

monies and/or benefits specified in paragraph “2” above, except for Employee’s

execution of this Agreement and General Release and the fulfillment of the

promises contained herein.

 

4.                                      Review

Period.  Employee has until June 13, 2002 to consider

this Agreement.  Employee is advised to

consult with an attorney of Employee’s choosing prior to executing this

Agreement.

 

5.                                      Revocation.  Employee may revoke this Agreement for a period of seven (7) days

following the day Employee executes this Agreement.  Any revocation within this period must be submitted, in writing,

to Alan Cormier and state, “I hereby revoke my acceptance of our Agreement and

General Release.”  The revocation must

be personally delivered to Alan  Cormier

or his designee, or mailed to:

 

Alan Cormier

Vice President and General Counsel

Manufacturers’ Services Ltd

300 Baker Ave Suite 106

Concord, MA 01742

 

If Employee mails a

revocation, it must be postmarked within seven (7) days of execution of this

Agreement.  This Agreement shall not

become effective or enforceable until the revocation period has expired (the

“Effective Date”).  If the last day of

the revocation period is a Saturday, Sunday, or legal holiday in Massachusetts,

then the revocation period shall not expire until the next following day which

is not a Saturday, Sunday, or legal holiday.

 

6.                                      General Release of Claims.  Employee knowingly and

voluntarily releases and forever discharges Employer, its parent corporation,

affiliates, subsidiaries, divisions, successors and assigns and the current,

former and future employees, attorneys, officers, directors and agents thereof

(collectively referred to as “Releasees”), of and from any and all claims,

known and unknown, which Employee has or may have against Releasees as of the

date of execution of this Agreement, including, but not limited to, any alleged

violation of;

 

•                                          The

National Labor Relations Act, as amended;

 

•                                          Title

VII of the Civil Rights Act of 1964, as amended;

 

•                                          Sections

1981 through 1988 of Title 42 of the United States Code, as amended;

 

2

 

•                                          The

Employee Retirement Income Security Act of 1974, as amended;

 

•                                          The

Immigration Reform Control Act, as amended;

 

•                                          The

Americans with Disabilities Act of 1990, as amended;

 

•                                          The

Age Discrimination in Employment Act of 1967, as amended;

 

•                                          The

Fair Labor Standards Act, as amended;

 

•                                          The

Occupational Safety and Health Act, as amended;

 

•                                          The

Massachusetts Law Against Discrimination, G.L. c. 151B;

 

•                                          The

Massachusetts Wage and Hour Laws, G.L. c. 151;

 

•                                          The

Massachusetts Civil Rights Act, G.L. c. 93;

 

•                                          The

Massachusetts Privacy Statute, G.L. c. 214, § 1B;

 

•                                          The

Massachusetts Wage Payment Statute, G.L. c. 149, § 148 et  seq.;

 

•                                          The

Massachusetts Sexual Harassment Statute, G.L. c. 214 § 1C;

 

•                                          The

Massachusetts Consumer Protection Act, G.L. c. 93A;

 

•                                          The

Massachusetts Civil Rights Act, G.L. c. 12, § 11;

 

•                                          The

Massachusetts Equal Rights Act, G.L. c. 93;

 

•                                          Equal

Pay Law for Massachusetts, as amended;

 

•                                          Any

other federal, state or local civil or human rights law or any other local,

state or federal law, regulation or ordinance;

 

•                                          Any

public policy, contract, tort, or common law; or

 

•                                          Any

allegation for costs, fees, or other expenses including attorneys’ fees

incurred in these matters.

 

7.                                      Affirmations.  Employee affirms that Employee has not filed, caused to be filed,

or presently is a party to any claim, complaint, or action against Employer in

any forum or form.  Employee further

affirms that Employee has been paid and has received all leave (paid or

unpaid), compensation, wages, bonuses, commissions, and/or benefits to which

Employee may be entitled and that no other leave (paid or unpaid),

compensation, wages, bonuses, commissions and/or benefits are due to Employee,

except as provided in this Agreement. 

Employee furthermore affirms that Employee has no known workplace

injuries or occupational diseases and has been provided and/or has not been

denied any leave requested under the Family and Medical Leave Act.

 

8.                                      Confidentiality.  Employee agrees not to disclose any information regarding the

existence or substance of this Agreement, except to his spouse, an attorney

and/or tax advisor with whom Employee chooses to consult regarding Employee’s

consideration of this Agreement.

 

3

 

9.                                      Cooperation.  Employee shall cooperate fully with Employer in the defense or

prosecution of any claims or actions now in existence or which may be brought

in the future against or on behalf of Employer which relate to events or

occurrences that transpired while Employee was employed by Employer.  Employee’s full cooperation in connection

with such claims or actions shall include, but not be limited to, being

available to meet with counsel to prepare for discovery or trial and to act as

a witness on behalf of Employer.  During

and after Employee’s employment, Employee shall also cooperate fully with

Employer in connection with any investigation or review by any federal, state

or local regulatory authority as any such investigation relates to events or

occurrences that transpired while Employee was employed with Employer.  Employee further agrees to execute and

deliver to Employer any security and other agreements, instructions,

statements, certificates, replacement option grants, or other documents, and

take any and all such other actions that relate to matters that were within the

scope of Employee’s authority while an employee or officer of Employer, as may

be requested by Employer, to effect, confirm or further assure or protect

Employer’s interests.

 

10.                               No Future Application for Employment.  Employee shall not apply in the future for

employment with Employer.

 

11.                               Governing Law and Interpretation. This Agreement

shall be governed and conformed in accordance with the laws of the Commonwealth

of Massachusetts without regard to its conflict of laws provisions.  In the event Employee breaches any provision

of this Agreement, Employee and Employer affirm that either may institute an

action to specifically enforce any term or terms of this Agreement.  Venue for all such actions will be in the

state or federal courts of the Commonwealth of Massachusetts.  Should any provision of this Agreement be

declared illegal or unenforceable by any court of competent jurisdiction and

cannot be modified to be enforceable, excluding the general release language,

such provision shall immediately become null and void, leaving the remainder of

this Agreement in full force and effect.

 

12.                               Non-admission of Wrongdoing.  Employee agrees that neither this Agreement nor the furnishing of

the consideration for this Release shall be deemed or construed at any time for

any purpose as an admission by Employer of any liability or unlawful conduct of

any kind.

 

13.                               Amendment.  This Agreement may not be modified, altered or changed except

upon express written consent of both Parties wherein specific reference is made

to this Agreement.

 

14.                               Entire

Agreement.  This Agreement sets forth the entire

agreement between the parties hereto, and fully supersedes any prior agreements

or understandings between the parties, except the Non-Competition

Agreement.  Employee acknowledges that

Employee has not relied on any representations, promises, or agreements of any

kind made to Employee in connection with Employee’s decision to sign this

Agreement, except for those set forth in this Agreement.

 

4

 

EMPLOYEE

ACKNOWLEDGES THAT EMPLOYEE HAS BEEN ADVISED IN WRITING THAT EMPLOYEE HAS AT

LEAST TWENTY-ONE (21) DAYS TO CONSIDER THIS AGREEMENT AND GENERAL RELEASE AND

IS ADVISED TO CONSULT WITH AN ATTORNEY PRIOR TO SIGNING THIS AGREEMENT AND

GENERAL RELEASE.

 

HAVING ELECTED

TO EXECUTE THIS AGREEMENT AND GENERAL RELEASE, TO FULFILL THE PROMISES SET

FORTH HEREIN, AND TO RECEIVE THEREBY THE CONSIDERATION SET FORTH IN PARAGRAPH

“2” ABOVE, EMPLOYEE FREELY AND KNOWINGLY, AND AFTER DUE CONSIDERATION, ENTERS

INTO THIS AGREEMENT AND GENERAL RELEASE INTENDING TO WAIVE, SETTLE AND RELEASE

ALL CLAIMS EMPLOYEE HAS OR MIGHT HAVE AGAINST EMPLOYER.

 

IN WITNESS WHEREOF, the parties hereto

knowingly and voluntarily-executed this Agreement and General Release as of the

dates set forth below:

 

	

  Employee

  	

  Manufacturers’

  Services Ltd.

  
	

   

  	

   

  
	

   

  	

   

  
	

   /s/ James N. Poor

  	

   

  	

  By:

  	

   /s/ Alan Cormier

  
	

  James N. Poor

  	

   

  	

  Alan Cormier

  
	

   

  	

   

  	

  Vice President and General Counsel

  
	

   

  	

   

  	

   

  
	

   May 7, 2002

  	

   

  	

   May 3, 2002

  
	

  Date

  	

   

  	

  Date

  

 

5Exhibit 10.43

 

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) 7,668,750 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 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 8,728,541 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.

 

2

 

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 

 

3

 

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 

 

4

 

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.

 

5

 

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.

 

6

 

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.

 

7

 

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.

 

8

 

“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.

 

9

 

“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.

 

“Unrestricted Stock”:  An Award of Stock not subject to any restrictions under the Plan.

 

10

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