EXIHIBIT 99.3
EMCORE CORPORATION
STOCK OPTION ASSUMPTION AGREEMENT
OPTIONEE: 1
STOCK OPTION ASSUMPTION AGREEMENT issued as of the 5th day of
December, 1997 by Emcore Corporation, a New Jersey corporation ("EMCORE").
WHEREAS, the undersigned individual ("Optionee") holds one or more
outstanding options to purchase shares of the common stock of MicroOptical
Devices, Inc., a Delaware corporation ("MODE"), which were granted to Optionee
under MODE'S 1996 Stock Option Plan (the "Plan") and are evidenced by a Notice
of Grant of Stock Option and Stock Option Agreement (the "Option Agreement")
between MODE and Optionee.
WHEREAS, MODE has this day been acquired by Emcore through merger of a
wholly-owned Emcore subsidiary ("Acquisition Corporation") with and into MODE
(the "Merger") pursuant to the Agreement and Plan of Merger dated as of December
5, 1997 by and among Emcore, MODE, Acquisition Corporation and certain
stockholders of MODE (the "Merger Agreement").
WHEREAS, the provisions of the Merger Agreement require Emcore to
assume all obligations of MODE under all options outstanding under the Plan at
the consummation of the Merger and to issue to the holder of each outstanding
option an agreement evidencing the assumption of such option.
WHEREAS, pursuant to the provisions of the Merger Agreement, the
exchange ratio in effect for the Merger is .17724 of a share of Emcore common
stock ("Emcore Stock") for each outstanding share of MODE common stock (the
"Conversion Ratio").
WHEREAS, this Agreement is to become effective immediately upon the
consummation of the Merger (the "Effective Time") in order to reflect certain
adjustments to Optionee's outstanding options under the Plan which have become
necessary by reason of the assumption of those options by Emcore in connection
with the Merger.
NOW, THEREFORE, it is hereby agreed as follows:
1. The stock options held by Optionee under the Plan immediately
prior to the Effective Time (the "MODE Options") and the exercise price payable
per share are set forth in Exhibit A hereto. Emcore hereby assumes, as of the
Effective Time, all the duties and obligations of MODE under each of the MODE
Options. In connection with such assumption, the number of shares of Emcore
Stock purchasable under each MODE Option hereby assumed and the exercise price
payable thereunder have been adjusted to reflect the Conversion Ratio at
which shares of MODE common stock ("MODE Stock") were converted into shares of
Emcore Stock in consummation of the Merger. Accordingly, the number of shares
of Emcore Stock subject to each MODE Option hereby assumed shall be as specified
for that option in attached Exhibit B, and the adjusted exercise price payable
per share of Emcore Stock under the assumed MODE Option shall be as indicated
for that option in attached Exhibit B.
2. The intent of the foregoing adjustments to each assumed MODE
Option is to assure that the spread between the aggregate fair market value of
the shares of Emcore Stock purchasable under each such option and the aggregate
exercise price as adjusted pursuant to this agreement will, immediately after
the consummation of the Merger, equal the spread which existed, immediately
prior to the Merger, between the then aggregate fair market value of the MODE
Stock subject to the MODE Option and the aggregate exercise price in effect at
such time under the Option Agreement. Such adjustments are also designed to
preserve, immediately after the Merger, on a per share basis, the same ratio of
exercise price per option share to fair market value per share which existed
under the MODE Option immediately prior to the Merger.
3. The following provisions shall govern each MODE Option hereby
assumed by Emcore:
(a) Unless the context otherwise requires, all references to the
"Corporation" in each Option Agreement, the Stock Purchase Agreement
delivered to Optionee with each Stock Option Agreement and in the Plan
(as incorporated into such Option and Stock Purchase Agreements) shall
mean Emcore, all references to "Common Stock" shall mean shares of
Emcore Stock, and all references to the "Plan Administrator" shall
mean the Compensation Committee of the Emcore Board of Directors.
(b) The grant date and the expiration date of each assumed MODE
Option and all other provisions which govern either the exercisability
or the termination of such assumed MODE Option shall remain the same
as set forth in the Option Agreement applicable to that option and
shall accordingly govern and control Optionee's rights under this
Agreement to purchase Emcore Stock.
(c) If, as of the Effective Time, Optionee has been in MODE's
Service, as defined in the Option Agreement, for less than one (1)
year, then, after such Effective Time, the shares of Emcore Stock
issuable upon exercise of each of Optionee's assumed MODE Options
shall continue to vest in accordance with the Vesting Schedule in
effect under the applicable Option Agreement immediately prior to the
Effective Time, with the number of shares of Emcore Stock subject to
each installment adjusted to reflect the Conversion Ratio.
Accordingly, no accelerated vesting of the shares subject to such MODE
Options shall be deemed to automatically occur by reason of the
Merger.
(d) If, as of the Effective Time, Optionee has been in MODE's
Service for at least one (1) year, then, effective as of the Effective
Time, pursuant to the terms of the Option Agreement, the Vesting
Schedule for each of Optionee's assumed MODE Options shall accelerate
by twelve (12) months, so that MODE'S repurchase right with respect to
each installment of option shares shall terminate, and vesting of each
installment of option shares shall occur, twelve (12) months earlier
than the date otherwise specified for such installment in the Vesting
Schedule.
(e) MODE's repurchase rights with respect to any unvested shares
of MODE Stock issuable upon exercise of the MODE Options after the
Effective Time shall be assigned to Emcore as of the Effective Time.
Such repurchase rights shall be exercisable after the Effective Time
with respect to all unvested shares of Emcore Stock issuable upon
exercise of the MODE Options and shall be exercisable upon the same
terms and conditions in effect immediately prior to the Effective
Time, except that the shares purchasable thereunder and the repurchase
price per share shall be adjusted to reflect the Conversion Ratio.
(f) For purposes of applying any and all provisions of the Option
Agreement relating to Optionee's Service, Optionee shall be deemed to
continue in Service for so long as Optionee renders services as an
employee, director, consultant or independent advisor to Emcore or any
present or future Emcore subsidiary, including (without limitation)
MODE. Accordingly, the provisions of the Option Agreement governing
the termination of the assumed MODE Option upon Optionee's cessation
of Service with MODE shall hereafter be applied on the basis of
Optionee's cessation of Service with Emcore and its subsidiaries, and
each assumed MODE Option shall accordingly terminate within the
designated time period in effect under the Option Agreement for that
option, following such cessation of Service with Emcore and its
subsidiaries.
(g) The adjusted exercise price payable for the Emcore Stock
subject to each assumed MODE Option shall be payable in any of the
forms authorized under the Option Agreement applicable to that option.
(h) In order to exercise each assumed MODE Option, Optionee must
deliver to Emcore a written notice of exercise in which the number of
shares of Emcore Stock to be purchased thereunder must be indicated.
The exercise notice must be accompanied by payment of the adjusted
exercise price payable for the purchased shares of Emcore Stock and
should be delivered to Emcore at the following address:
Emcore Corporation
000 Xxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx
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4. Except to the extent specifically modified by this Option
Assumption Agreement, all of the terms and conditions of each Option Agreement
as in effect immediately prior to the Merger shall continue in full force and
effect and shall not in any way be amended, revised or otherwise affected by
this Stock Option Assumption Agreement.
IN WITNESS WHEREOF, Emcore has caused this Stock Option Assumption
Agreement to be executed on its behalf by its duly-authorized officer as of the
5th day of December, 1997.
EMCORE CORPORATION
By:
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Title:
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ACKNOWLEDGMENT
The undersigned acknowledges receipt of the foregoing Stock Option
Assumption Agreement and understands that all rights and liabilities with
respect to each of his or her MODE Options hereby assumed by Emcore, Inc. are as
set forth in the Option Agreement, the Plan and such Stock Option Assumption
Agreement.
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1, OPTIONEE
DATED: __________________, 199_
EXHIBIT A
Optionee's Outstanding Options to Purchase Shares of MicroOptical Devices, Inc.
Common Stock (Pre-Merger)
Optionee Shares Exercise Price
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1 2 3
EXHIBIT B
Optionee's Outstanding Options to Purchase Shares of Emcore, Inc.
Common Stock (Post-Merger)
Optionee Shares Exercise Price
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1 4 5
