Change In Control Agreement

CHANGE IN CONTROL AGREEMENT


THIS CHANGE IN CONTROL AGREEMENT (the "Agreement") is entered into effective January 22, 1997, between ADFlex Solutions, Inc., a Delaware corporation (the "Company"), and Rolando C. Esteverena (the "Executive").


RECITALS


A. The Company is engaged in the business of designing, manufacturing and assembling flexible interconnects for the computer, computer peripherals and high-end consumer markets.


B. The Executive currently serves as the Chairman of the Board, President and Chief Executive Officer of the Company.


C. The Company and the Executive desire to embody the terms and conditions relating to compensation to the Executive upon his actual or constructive termination following a Change in Control (as hereinafter defined) in a written agreement, which will supersede the provisions of any and all prior agreements relating to the subject matter hereof, whether written or oral, pursuant to the terms and conditions hereinafter set forth.


TERMS AND CONDITIONS


NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:


1. Effective Date; Term. The Effective Date of this Agreement shall be the date first written above. The term of this Agreement shall commence on the Effective Date and shall continue, unless sooner terminated, for three years (the "Initial Term"). Thereafter, the term of this Agreement shall automatically be extended for successive one year periods ("Renewal Terms") unless either the Company's Board of Directors (the "Board") or the Executive gives written notice to the other at least 90 days prior to the end of the Initial Term or any Renewal Term, as the case may be, of its or his intention not to renew the term of this Agreement. The Initial Term and any Renewal Terms of this Agreement shall be collectively referred to as the "Term." This Agreement will terminate upon the first to occur of (a) the expiration of its Term, or (b) payment of all sums due by the Company to the Executive hereunder in the event of a Change in Control.


2. Definitions.


(a) Change in Control. A "Change in Control" shall mean a change in ownership or control of the Company effected through any of the following transactions:


(i) the direct or indirect acquisition by any person or related group of persons (other than a trustee or other fiduciary holding securities under an employee benefit plan of the Company or a corporation owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company) of beneficial ownership (within the meaning of Rule 13d-3 of the Securities Exchange Act of 1934, as amended (the "1934 Act")) of securities possessing more than 50% of the total combined voting power of the 2 Company's outstanding securities pursuant to a tender or exchange offer made directly to the Company's stockholders or any other transaction, in any case regardless of whether or not the Board recommends that the Company's stockholders accept;


(ii) a change in the composition of the Board over a period of 36 consecutive months or less such that a majority of the Board members (rounded up to the next whole number) ceases, by reason of one or more contested elections for Board membership, to be comprised of individuals who either (A) have been Board members continuously since the beginning of such period or (B) have been elected or nominated for election as Board members during such period by at least a majority of the Board members described in clause (A) who were still in office at the time such election or nomination was approved by the Board;


(iii) a merger or consolidation approved by the stockholders of the Company, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least 80% of the total voting power represented by the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation; or


(iv) the sale, transfer or other disposition (in one transaction or a series of transactions) of all or substantially all of the assets of the Company approved by the stockholders or the complete liquidation or dissolution of the Company approved by the stockholders.


(b) Good Reason. "Good Reason" shall mean any of the following if the same shall occur without the Executive's express prior written consent:


(i) a material change by the Company in the Executive's function, duties or responsibilities (including any requirement that the Executive report to a ...