EXHIBIT 99.7
MICROELECTRONIC PACKAGING, INC.
STOCK ISSUANCE AGREEMENT
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AGREEMENT made this _____ day of ___________________ 19____, by and between
Microelectronic Packaging, Inc., a California corporation, and , a
Participant in the Corporation's 1993 Stock Option/Stock Issuance Plan (the
"Plan").
All capitalized terms in this Agreement shall have the meaning assigned to
them in this Agreement or in the attached Appendix.
A. PURCHASE OF SHARES
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1. Purchase. Participant hereby purchases _____________ shares of Common
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Stock (the "Purchased Shares") pursuant to the provisions of the Stock Issuance
Program at the purchase price of $______ per share (the "Purchase Price").
2. Payment. Concurrently with the delivery of this Agreement to the
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Corporation, Participant shall pay the Purchase Price for the Purchased Shares
in cash or check payable to the Corporation and shall deliver a duly-executed
blank Assignment Separate from Certificate (in the form attached hereto as
Exhibit I) with respect to the Purchased Shares.
3. Shareholder Rights. Until such time as the Corporation exercises the
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Repurchase Right, Participant (or any successor in interest) shall have all the
rights of a shareholder (including voting, dividend and liquidation rights) with
respect to the Purchased Shares, subject, however, to the transfer restrictions
of this Agreement.
4. Escrow. The Corporation shall have the right to hold the Purchased
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Shares in escrow until those shares have vested in accordance with the
Vesting Schedule.
5. Compliance with Law. Under no circumstances shall shares of Common
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Stock or other assets be issued or delivered to Participant pursuant to the
provisions of this Agreement unless, in the opinion of counsel for the
Corporation or its successors, there shall have been compliance with all
applicable requirements of Federal and state securities laws, all applicable
listing requirements of any stock exchange (or the Nasdaq National Market, if
applicable) on which the Common Stock is at the time listed for trading and all
other requirements of law or of any regulatory bodies having jurisdiction over
such issuance and delivery.
B. TRANSFER RESTRICTIONS
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1. Restriction on Transfer. Except for any Permitted Transfer,
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Participant shall not transfer, assign, encumber or otherwise dispose of any
of the Purchased Shares which are subject to the Repurchase Right.
2. Restrictive Legend. The stock certificate for the Purchased Shares
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shall be endorsed with the following restrictive legend:
"The shares represented by this certificate are unvested and subject
to certain repurchase rights granted to the Corporation and accordingly may
not be sold, assigned, transferred, encumbered, or in any manner disposed
of except in conformity with the terms of a written agreement dated
____________, 199__ between the Corporation and the registered holder of
the shares (or the predecessor in interest to the shares). A copy of such
agreement is maintained at the Corporation's principal corporate offices."
3. Transferee Obligations. Each person (other than the Corporation) to
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whom the Purchased Shares are transferred by means of a Permitted Transfer must,
as a condition precedent to the validity of such transfer, acknowledge in
writing to the Corporation that such person is bound by the provisions of this
Agreement and that the transferred shares are subject to the Repurchase Right to
the same extent such shares would be so subject if retained by Participant.
C. REPURCHASE RIGHT
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1. Grant. The Corporation is hereby granted the right (the "Repurchase
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Right"), exercisable at any time during the sixty (60)-day period following the
date Participant ceases for any reason to remain in Service, to repurchase at
the Purchase Price all or any portion of the Purchased Shares in which
Participant is not, at the time of his or her cessation of Service, vested in
accordance with the Vesting Schedule set forth in Paragraph C.3 or the special
acceleration provisions of Paragraph C.5 (such shares to be hereinafter referred
to as the "Unvested Shares").
2. Exercise of the Repurchase Right. The Repurchase Right shall be
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exercisable by written notice delivered to each Owner of the Unvested Shares
prior to the expiration of the sixty (60)-day exercise period. The notice shall
indicate the number of Unvested Shares to be repurchased and the date on which
the repurchase is to be effected, such date to be not more than thirty (30) days
after the date of such notice. The certificates representing the Unvested
Shares to be repurchased shall be delivered to the Corporation on or before the
close of business on the date specified for the repurchase. Concurrently with
the receipt of such stock certificates, the Corporation shall pay to Owner, in
cash or cash equivalent (including the cancellation of any purchase-money
indebtedness), an amount equal to the Purchase Price previously paid for the
Unvested Shares to be repurchased from Owner.
2.
3. Termination of the Repurchase Right. The Repurchase Right shall
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terminate with respect to any Unvested Shares for which it is not timely
exercised under Paragraph C.2. In addition, the Repurchase Right shall terminate
and cease to be exercisable with respect to any and all Purchased Shares in
which Participant vests in accordance with the following Vesting Schedule:
(i) Upon Participant's completion of one (1) year of Service
measured from ______________, 199__, Participant shall acquire a vested
interest in, and the Repurchase Right shall lapse with respect to, one-
third (1/3) of the Purchased Shares.
(ii) Participant shall acquire a vested interest in, and the
Repurchase Right shall lapse with respect to, the remaining Purchased
Shares in two (2) successive equal annual installments upon Participant's
completion of each additional year of Service over the two (2)-year period
measured from the initial vesting date under subparagraph (i) above.
4. Recapitalization. Any new, substituted or additional securities
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or other property (including cash paid other than as a regular cash dividend)
which is by reason of any Recapitalization distributed with respect to the
Purchased Shares shall be immediately subject to the Repurchase Right and any
escrow requirements hereunder, but only to the extent the Purchased Shares are
at the time covered by such right or escrow requirements. Appropriate
adjustments to reflect such distribution shall be made to the number and/or
class of securities subject to this Agreement and to the price per share to be
paid upon the exercise of the Repurchase Right in order to reflect the effect of
any such Recapitalization upon the Corporation's capital structure; provided,
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however, that the aggregate purchase price shall remain the same.
5. Corporate Transaction.
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(a) Immediately prior to the consummation of any Corporate
Transaction, the Repurchase Right shall automatically lapse in its entirety and
the Purchased Shares shall vest in full, except to the extent the Repurchase
Right is to be assigned to the successor corporation (or parent thereof) in
connection with the Corporate Transaction.
(b) To the extent the Repurchase Right remains in effect
following a Corporate Transaction, such right shall apply to the new capital
stock or other property (including any cash payments) received in exchange for
the Purchased Shares in consummation of the Corporate Transaction, but only to
the extent the Purchased Shares are at the time covered by such right.
Appropriate adjustments shall be made to the price per share payable upon
exercise of the Repurchase Right to reflect the effect of the Corporate
Transaction upon the Corporation's capital structure; provided, however ,
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that the aggregate purchase price shall remain the same. The new securities or
other property (including cash payments) issued or distributed with respect to
the Purchased Shares in consummation of the Corporate Transaction shall
immediately be deposited in escrow with the Corporation (or the successor
entity) and shall not be released from escrow until
3.
Participant vests in such securities or other property in accordance with the
same Vesting Schedule in effect for the Purchased Shares.
(c) The Repurchase Right may also be subject to termination in whole
or in part on an accelerated basis, and the Purchased Shares subject to
immediate vesting, in accordance with the terms of any special Addendum attached
to this Agreement.
D. SPECIAL TAX ELECTION
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1. Section 83(b) Election. Under Code Section 83, the excess of the
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fair market value of the Purchased Shares on the date any forfeiture
restrictions applicable to such shares lapse over the Purchase Price paid for
such shares will be reportable as ordinary income on the lapse date. For this
purpose, the term "forfeiture restrictions" includes the right of the
Corporation to repurchase the Purchased Shares pursuant to the Repurchase Right.
Participant may elect under Code Section 83(b) to be taxed at the time the
Purchased Shares are acquired, rather than when and as such Purchased Shares
cease to be subject to such forfeiture restrictions. Such election must be filed
with the Internal Revenue Service within thirty (30) days after the date of this
Agreement. Even if the fair market value of the Purchased Shares on the date of
this Agreement equals the Purchase Price paid (and thus no tax is payable), the
election must be made to avoid adverse tax consequences in the future. THE FORM
FOR MAKING THIS ELECTION IS ATTACHED AS EXHIBIT II HERETO. PARTICIPANT
UNDERSTANDS THAT FAILURE TO MAKE THIS FILING WITHIN THE APPLICABLE THIRTY (30)-
DAY PERIOD WILL RESULT IN THE RECOGNITION OF ORDINARY INCOME AS THE FORFEITURE
RESTRICTIONS LAPSE.
2. FILING RESPONSIBILITY. PARTICIPANT ACKNOWLEDGES THAT IT IS
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PARTICIPANT'S SOLE RESPONSIBILITY, AND NOT THE CORPORATION'S, TO FILE A TIMELY
ELECTION UNDER CODE SECTION 83(b), EVEN IF PARTICIPANT REQUESTS THE CORPORATION
OR ITS REPRESENTATIVES TO MAKE THIS FILING ON HIS OR HER BEHALF.
E. GENERAL PROVISIONS
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1. Assignment. The Corporation may assign the Repurchase Right to any
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person or entity selected by the Board, including (without limitation) one
or more shareholders of the Corporation.
2. No Employment or Service Contract. Nothing in this Agreement or
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in the Plan shall confer upon Participant any right to continue in Service for
any period of specific duration or interfere with or otherwise restrict in any
way the rights of the Corporation (or any Parent or Subsidiary employing or
retaining Participant) or of Participant, which rights are hereby expressly
reserved by each, to terminate Participant's Service at any time for any reason,
with or without cause.
4.
3. Notices. Any notice required to be given under this Agreement shall be
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in writing and shall be deemed effective upon personal delivery or upon deposit
in the U.S. mail, registered or certified, postage prepaid and properly
addressed to the party entitled to such notice at the address indicated below
such party's signature line on this Agreement or at such other address as such
party may designate by ten (10) days advance written notice under this paragraph
to all other parties to this Agreement.
4. No Waiver. The failure of the Corporation in any instance to exercise
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the Repurchase Right shall not constitute a waiver of any other repurchase
rights that may subsequently arise under the provisions of this Agreement or any
other agreement between the Corporation and Participant. No waiver of any breach
or condition of this Agreement shall be deemed to be a waiver of any other or
subsequent breach or condition, whether of like or different nature.
5. Cancellation of Shares. If the Corporation shall make available, at the
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time and place and in the amount and form provided in this Agreement, the
consideration for the Purchased Shares to be repurchased in accordance with the
provisions of this Agreement, then from and after such time, the person from
whom such shares are to be repurchased shall no longer have any rights as a
holder of such shares (other than the right to receive payment of such
consideration in accordance with this Agreement). Such shares shall be deemed
purchased in accordance with the applicable provisions hereof, and the
Corporation shall be deemed the owner and holder of such shares, whether or not
the certificates therefor have been delivered as required by this Agreement.
6. Participant Undertaking. Participant hereby agrees to take whatever
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additional action and execute whatever additional documents the Corporation may
deem necessary or advisable in order to carry out or effect one or more of the
obligations or restrictions imposed on either Participant or the Purchased
Shares pursuant to the provisions of this Agreement.
7. Agreement is Entire Contract. This Agreement constitutes the entire
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contract between the parties hereto with regard to the subject matter hereof.
This Agreement is made pursuant to the provisions of the Plan and shall in all
respects be construed in conformity with the terms of the Plan.
8. Governing Law. This Agreement shall be governed by, and construed in
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accordance with, the laws of the State of California without resort to that
State's conflict-of-laws rules.
9. Counterparts. This Agreement may be executed in counterparts, each of
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which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.
5.
10. Successors and Assigns. The provisions of this Agreement shall inure to
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the benefit of, and be binding upon, the Corporation and its successors and
assigns and upon Participant, Participant's assigns and the legal
representatives, heirs and legatees of Participant's estate, whether or not any
such person shall have become a party to this Agreement and have agreed in
writing to join herein and be bound by the terms hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day and
year first indicated above.
MICROELECTRONIC PACKAGING, INC.
By:
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Title:
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Address:
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PARTICIPANT
Address:
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6.
EXHIBIT I
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED ______________________ hereby sell(s), assign(s) and
transfer(s) unto Microelectronic Packaging, Inc. (the "Corporation"),
___________________(_______) shares of the Common Stock of the Corporation
standing in his or her name on the books of the Corporation represented by
Certificate No. ___________________ herewith and do(es) hereby irrevocably
constitute and appoint _______________________________ Attorney to transfer the
said stock on the books of the Corporation with full power of substitution in
the premises.
Dated: _______, 199__.
Signature
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Instruction: Please do not fill in any blanks other than the signature line.
Please sign exactly as you would like your name to appear on the issued stock
certificate. The purpose of this assignment is to enable the Corporation to
exercise the Repurchase Right without requiring additional signatures on the
part of Participant.
EXHIBIT II
SECTION 83(b) TAX ELECTION
This statement is being made under Section 83(b) of the Internal Revenue Code,
pursuant to Treas. Reg. Section 1.83-2.
(1) The taxpayer who performed the services is:
Name:
Address:
Taxpayer Ident. No.:
(2) The property with respect to which the election is being made is
____________ shares of the common stock of Microelectronic Packaging, Inc.
(3) The property was issued on _____________, 199___.
(4) The taxable year in which the election is being made is the calendar year
199__.
(5) The property is subject to a repurchase right pursuant to which the issuer
has the right to acquire the property at the original purchase price if
for any reason taxpayer's employment with the issuer terminates. The
issuer's repurchase right lapses in a series of annual installments over a
three (3)-year period ending on _______________________________.
(6) The fair market value at the time of transfer (determined without regard
to any restriction other than a restriction which by its terms will never
lapse) is $_____________per share.
(7) The amount paid for such property is $____________ per share.
(8) A copy of this statement was furnished to Microelectronic Packaging, Inc.
for whom taxpayer rendered the services underlying the transfer of
property.
(9) This statement is executed on ________________________, 199__.
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Spouse (if any) Taxpayer
This election must be filed with the Internal Revenue Service Center with which
taxpayer files his or her Federal income tax returns and must be made within
thirty (30) days after the execution date of the Stock Issuance Agreement. This
filing should be made by registered or certified mail, return receipt requested.
Participant must retain two (2) copies of the completed form for filing with his
or her Federal and state tax returns for the current tax year and an additional
copy for his or her records.
APPENDIX
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The following definitions shall be in effect under the Agreement:
A. Agreement shall mean this Stock Issuance Agreement.
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B. Board shall mean the Corporation's Board of Directors.
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C. Code shall mean the Internal Revenue Code of 1986, as amended.
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D. Common Stock shall mean the Corporation's common stock.
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E. Corporate Transaction shall mean either of the following shareholder-
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approved transactions:
(i) a merger or consolidation in which the Corporation is not the
surviving entity, except for a transaction the principal purpose of which
is to change the state in which the Corporation is incorporated, or
(ii) the sale, transfer or other disposition of all or
substantially all of the assets of the Corporation in complete liquidation
or dissolution of the Corporation, or
(iii) any reverse merger in which the Corporation is the
surviving entity but in which securities possessing more than fifty percent
(50%) of the total combined voting power of the Corporation's outstanding
securities are transferred to person or person different from the persons
holding those securities immediately prior to such merger.
F. Corporation shall mean Microelectronic Packaging, Inc., a California
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corporation.
G. Owner shall mean Participant and all subsequent holders of the
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Purchased Shares who derive their chain of ownership through a Permitted
Transfer from Participant.
H. Parent shall mean any corporation (other than the Corporation) in an
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unbroken chain of corporations ending with the Corporation, provided each
corporation in the unbroken chain (other than the Corporation) owns, at the time
of the determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
I. Participant shall mean the person to whom the Purchased Shares are
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issued under the Stock Issuance Program.
A-1.
J. Permitted Transfer shall mean (i) a gratuitous transfer of the
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Purchased Shares, provided and only if Participant obtains the Corporation's
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prior written consent to such transfer, (ii) a transfer of title to the
Purchased Shares effected pursuant to Participant's will or the laws of
intestate succession following Participant's death or (iii) a transfer to the
Corporation in pledge as security for any purchase-money indebtedness incurred
by Participant in connection with the acquisition of the Purchased Shares.
K. Plan shall mean the Corporation's 1993 Stock Option/Stock Issuance
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Plan.
L. Plan Administrator shall mean either the Board or a committee of the
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Board acting in its administrative capacity under the Plan.
M. Purchase Price shall have the meaning assigned to such term in
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Paragraph A.1.
N. Purchased Shares shall have the meaning assigned to such term in
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Paragraph A.1.
O. Recapitalization shall mean any stock dividend, stock split,
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recapitalization, combination of shares, exchange of shares or other change
affecting the Corporation's outstanding Common Stock as a class without the
Corporation's receipt of consideration.
P. Repurchase Right shall mean the right granted to the Corporation in
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accordance with Article C.
Q. Service shall mean the Participant's performance of services for the
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Corporation (or any Parent or Subsidiary) in the capacity of an employee,
subject to the control and direction of the employer entity as to both the work
to be performed and the manner and method of performance, a non-employee member
of the board of directors or a consultant.
R. Stock Issuance Program shall mean the Stock Issuance Program under the
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Plan.
S. Subsidiary shall mean any corporation (other than the Corporation) in
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an unbroken chain of corporations beginning with the Corporation, provided each
corporation (other than the last corporation) in the unbroken chain owns, at the
time of the determination, stock possessing fifty percent (50%) or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain.
T. Vesting Schedule shall mean the vesting schedule specified in
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Paragraph C.3, subject to the acceleration provisions of Paragraph C.5.
U. Unvested Shares shall have the meaning assigned to such term in
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Paragraph C.1.
A-2.
