Exhibit 99.1
FINISAR CORPORATION
2005 STOCK INCENTIVE PLAN
(As Amended and Restated Effective September 8, 2005)
1.
Establishment, Purpose and Term of Plan
.
1.1
Establishmen
t
.
The Finisar Corporation 1999
Stock Option Plan (the
Plan
) was
established effective as of April 20, 1999. The Plan is hereby amended and restated and renamed
the 2005 Stock Incentive Plan effective as of September 8, 2005.
1.2
Purpose
.
The purpose of the Plan is to advance the interests of the Participating Company
Group and its stockholders by providing an incentive to attract, retain and reward persons
performing services for the Participating Company Group and by motivating such persons to
contribute to the growth and profitability of the Participating Company Group.
1.3
Term of Plan.
The Plan shall continue in effect until the earliest of (i) August 30, 2015
or its earlier termination by the Board, (ii) the date on which all of the shares of Stock
available for issuance under the Plan have been issued as fully-vested shares or (iii) the
termination of all outstanding options, stock appreciation rights, restricted stock units and other
share right awards in connection with a Change in Control. Should the Plan terminate on August 30,
2015,
then all option grants, stock appreciation rights, unvested stock issuances,
restricted stock units and other share right awards outstanding at that time shall continue to have
force and effect in accordance with the provisions of the documents evidencing such grants,
issuances or awards.
2.
Definitions and Construction.
2.1
Definitions.
Whenever used herein, the following terms shall have their respective
meanings set forth below:
(a)
Award
means an Option, stock appreciation right, stock, restricted stock, restricted
stock unit or other stock based award under the Plan.
(b)
Award Agreement
means an agreement evidencing an Award under the Plan.
(c)
Board
means the Board of Directors of the Company. If one or more Committees have been
appointed by the Board to administer the Plan,
Board
also means such Committee(s).
(d)
Code
means the Internal Revenue Code of 1986, as amended, and any applicable regulations
promulgated thereunder.
(e)
Committee
means the Compensation Committee or other committee of the Board duly
appointed to administer the Plan and having such powers as shall
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be specified by the Board. Unless the powers of the Committee have been specifically limited,
the Committee shall have all of the powers of the Board granted herein, including, without
limitation, the power to amend or terminate the Plan at any time, subject to the terms of the Plan
and any applicable limitations imposed by law.
(f)
Company
means Finisar Corporation, a Delaware corporation, or any successor corporation
thereto.
(g)
Consultant
means a person engaged to provide consulting or advisory services (other than
as an Employee or a Director) to a Participating Company, provided that the identity of such
person, the nature of such services or the entity to which such services are provided would not
preclude the Company from offering or selling securities to such person pursuant to the Plan in
reliance on registration on a Form S-8 Registration Statement under the Securities Act.
(h)
Director
means a member of the Board or of the board of directors of any other
Participating Company.
(i)
Disability
means the inability of the Optionee, in the opinion of a qualified physician
acceptable to the Company, to perform the major duties of the Optionees position with the
Participating Company Group because of the sickness or injury of the Optionee.
(j)
Employee
means any person treated as an employee (including an officer or a Director who
is also treated as an employee) in the records of a Participating Company and, with respect to any
Incentive Stock Option granted to such person, who is an employee for purposes of Section 422 of
the Code; provided, however, that neither service as a Director nor payment of a directors fee
shall be sufficient to constitute employment for purposes of the Plan.
(k)
Exchange Act
means the Securities Exchange Act of 1934, as amended.
(l)
Fair Market Value
means, as of any date, the value of a share of Stock or other property
as determined by the Board, in its discretion, or by the Company, in its discretion, if such
determination is expressly allocated to the Company herein, subject to the following:
(i) If, on such date, the Stock is listed on a national or regional securities exchange or
market system, the Fair Market Value of a share of Stock shall be the closing price of a share of
Stock (or the mean of the closing bid and asked prices of a share of Stock if the Stock is so
quoted instead) as quoted on the Nasdaq National Market, The Nasdaq SmallCap Market or such other
national or regional securities exchange or market system constituting the primary market for the
Stock, as reported in
The Wall Street Journal
or such other source as the Company deems
reliable. If the relevant date does not fall on a day on which the Stock has traded on such
securities exchange or market system, the date on which the Fair
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Market Value shall be established shall be the last day on which the Stock was so traded prior
to the relevant date, or such other appropriate day as shall be determined by the Board, in its
discretion.
(ii) If, on such date, the Stock is not listed on a national or regional securities exchange
or market system, the Fair Market Value of a share of Stock shall be as determined by the Board in
good faith without regard to any restriction other than a restriction which, by its terms, will
never lapse.
(m)
Incentive Stock Option
means an Option intended to be (as set forth in the Option
Agreement) and which qualifies as an incentive stock option within the meaning of Section 422(b) of
the Code.
(n)
Insider
means an officer or a Director of the Company or any other person whose
transactions in Stock are subject to Section 16 of the Exchange Act.
(o)
Nonstatutory Stock Option
means an Option not intended to be (as set forth in the Option
Agreement) or which does not qualify as an Incentive Stock Option.
(p)
Option
means a right to purchase Stock (subject to adjustment as provided in Section
4.2) pursuant to the terms and conditions of the Plan. An Option may be either an Incentive Stock
Option or a Nonstatutory Stock Option.
(q)
Option Agreement
means a written agreement between the Company and an Optionee setting
forth the terms, conditions and restrictions of the Option granted to the Optionee and any shares
acquired upon the exercise thereof. An Option Agreement may consist of a form of Notice of Grant
of Stock Option and a form of Stock Option Agreement incorporated therein by reference, or such
other form or forms as the Board may approve from time to time.
(r)
Optionee
means a person who has been granted one or more Options.
(s)
Parent Corporation
means any present or future parent corporation of the Company, as
defined in Section 424(e) of the Code.
(t)
Participant
means a person who has been issued shares of Stock or restricted stock units
or other stock-based awards under Section 9.
(u)
Participating Company
means the Company or any Parent Corporation or Subsidiary
Corporation.
(v)
Participating Company Group
means, at any point in time, all corporations collectively
which are then Participating Companies.
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(w)
Rule 16b-3
means Rule 16b-3 under the Exchange Act, as amended from time to time, or any
successor rule or regulation.
(x)
Section 162(m)
means Section 162(m) of the Code.
(y)
Securities Act
means the Securities Act of 1933, as amended.
(z)
Service
means a persons employment or service with the Participating Company Group,
whether in the capacity of an Employee, a Director or a Consultant. A persons Service shall not
be deemed to have terminated merely because of a change in the capacity in which the person renders
Service to the Participating Company Group or a change in the Participating Company for which the
person renders such Service, provided that there is no interruption or termination of the persons
Service. Furthermore, a persons Service with the Participating Company Group shall not be deemed
to have terminated if the person takes any military leave, sick leave, or other bona fide leave of
absence approved by the Company; provided, however, that if any such leave exceeds three (3) months
and the Optionees right to return to Service with the Participating Company Group is not
guaranteed by statute or contract, any Incentive Stock Option held by the person and not exercised
within the six (6)-month period measured from the start date of such leave shall cease to be
treated as an Incentive Stock Option and instead shall be treated thereafter as a Nonstatutory
Stock Option. Notwithstanding the foregoing, unless otherwise designated by the Company or
required by law, a leave of absence shall not be treated as Service for purposes of determining
vesting under any Award. The persons Service shall be deemed to have terminated either upon an
actual termination of Service or upon the corporation for which the person performs Service ceasing
to be a Participating Company. Subject to the foregoing, the Company, in its discretion, shall
determine whether the persons Service has terminated and the effective date of such termination.
(aa)
Stock
means the common stock of the Company, as adjusted from time to time in
accordance with Section 4.2.
(bb)
Stock Issuance Agreement
means a written agreement between the Company and a
Participant setting forth the terms, conditions and restrictions of the issuance of Stock or the
grant of other Awards to the Participant pursuant to Section 9.
(cc)
Subsidiary Corporation
means any present or future subsidiary corporation of the
Company, as defined in Section 424(f) of the Code.
(dd)
Ten Percent Owner Optionee
means an Optionee who, at the time an Option is granted to
the Optionee, owns stock possessing more than ten percent (10%) of the total combined voting power
of all classes of stock of a Participating Company within the meaning of Section 422(b)(6) of the
Code.
2.2
Construction.
Captions and titles contained herein are for convenience only and shall not
affect the meaning or interpretation of any provision of the Plan. Except when otherwise indicated
by the context, the singular shall include the plural and the plural shall
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include the singular. Use of the term or is not intended to be exclusive, unless the
context clearly requires otherwise.
3.
Administration
.
3.1
Administration by the Board.
The Plan shall be administered by the Board. All questions
of interpretation of the Plan or of any Award shall be determined by the Board, and such
determinations shall be final and binding upon all persons having an interest in the Plan or such
Award.
3.2
Authority of Officers.
Any officer of a Participating Company shall have the authority to
act on behalf of the Company with respect to any matter, right, obligation, determination or
election which is the responsibility of or which is allocated to the Company herein, provided the
officer has apparent authority with respect to such matter, right, obligation, determination or
election.
3.3
Powers of the Board
.
In addition to any other powers set forth in the Plan and subject to
the provisions of the Plan, the Board shall have the full and final power and authority, in its
discretion:
(a) to determine, with respect to the grant of Options or stock appreciation rights, which
eligible persons are to receive such grants, the time or times when those grants are to be made,
the number of shares to be covered by each such grant, the status of a granted option as either an
Incentive Stock Option or a Nonstatutory Option, the exercise or base price of each such grant, the
method of payment of the exercise price of a granted option, the time or times when each option or
stock appreciation right is to become exercisable, the vesting schedule (if any) applicable to the
grant, the maximum term for which the grant is to remain outstanding, the method for satisfaction
of any tax withholding obligation arising in connection with the Option or stock appreciation right
or the shares acquired thereunder (including by the withholding or delivery of shares of stock),
the effect of the persons termination of Service with the Participating Company Group on any
outstanding Option or stock appreciation right and all other terms, conditions and restrictions
applicable to the Option or stock appreciation right not inconsistent with the terms of the Plan;
(b) to designate, with respect to direct stock issuances or other stock-based awards, which
eligible persons are to receive such issuances or awards, the time or times when the issuances or
awards are to be made, the number of shares subject to each such issuance or award, the vesting
schedule (if any) applicable to the shares subject to such issuance or award and the consideration
for such shares, the method for satisfaction of any tax withholding obligation arising in
connection with the award or such shares (including by the withholding or delivery of shares of
stock), the effect of the persons termination of Service with the Participating Company Group on
any outstanding award or shares and all other terms, conditions and restrictions applicable to the
award or shares not inconsistent with the terms of the Plan;
(c) to determine the Fair Market Value of shares of Stock or other property;
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(d) to approve one or more forms of Award Agreement;
(e) to amend, modify, extend, cancel or renew any Option or to waive any restrictions or
conditions applicable to any Option or any shares acquired upon the exercise thereof;
(f) to accelerate, continue, extend or defer the exercisability or vesting of any Award or the
vesting of any shares acquired thereunder, including with respect to the period following a
persons termination of Service with the Participating Company Group;
(g) to prescribe, amend or rescind rules, guidelines and policies relating to the Plan, or to
adopt supplements to, or alternative versions of, the Plan, including, without limitation, as the
Board deems necessary or desirable to comply with the laws of, or to accommodate the tax policy or
custom of, foreign jurisdictions whose citizens may be granted Awards; and
(h) to correct any defect, supply any omission or reconcile any inconsistency in the Plan or
any Award Agreement and to make all other determinations and take such other actions with respect
to the Plan or any Award as the Board may deem advisable to the extent not inconsistent with the
provisions of the Plan or applicable law.
3.4
Administration with Respect to Insiders.
With respect to participation by Insiders in the
Plan, at any time that any class of equity security of the Company is registered pursuant to
Section 12 of the Exchange Act, the Plan shall be administered in compliance with the requirements,
if any, of Rule 16b-3.
3.5
Committee Complying with Section 162(m).
If the Company is a publicly held corporation
within the meaning of Section 162(m), the Board may establish a Committee of outside directors
within the meaning of Section 162(m) to approve the grant of any Award which might reasonably be
anticipated to result in the payment of employee remuneration that would otherwise exceed the limit
on employee remuneration deductible for income tax purposes pursuant to Section 162(m).
3.6
Indemnification.
In addition to such other rights of indemnification as they may have as
members of the Board or officers or employees of the Participating Company Group, members of the
Board and any officers or employees of the Participating Company Group to whom authority to act for
the Board or the Company is delegated shall be indemnified by the Company against all reasonable
expenses, including attorneys fees, actually and necessarily incurred in connection with the
defense of any action, suit or proceeding, or in connection with any appeal therein, to which they
or any of them may be a party by reason of any action taken or failure to act under or in
connection with the Plan, or any right granted hereunder, 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, except in relation to matters as to which it
shall be adjudged in such action, suit or proceeding that such person is liable for gross
negligence, bad faith or intentional misconduct in duties; provided, however, that within
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sixty (60) days after the institution of such action, suit or proceeding, such person shall offer to the
Company, in writing, the opportunity at its own expense to handle and defend the same.
4.
Shares Subject to Plan
.
4.1
Maximum Number of Shares Issuable.
Subject to adjustment as provided in Section 4.2, the
maximum aggregate number of shares of Stock that may be issued under the Plan shall be twenty-one
million (21,000,000), cumulatively increased on May 1, 2001 and each May 1 thereafter by a number
of shares (the
Annual Increase
) equal to five percent (5%) of the number of shares of Stock
issued and outstanding on the immediately preceding April 30, and shall consist of authorized but
unissued or reacquired shares of Stock or any combination thereof. Notwithstanding the foregoing,
except as adjusted pursuant to Section 4.2, the maximum aggregate number of shares of Stock that
may be issued pursuant to the exercise of Incentive Stock Options
(the
ISO Share Limit
) shall not
exceed twenty-one million (21,000,000), cumulatively increased on May 1, 2001 and each May 1
thereafter until and including May 1, 2008 by that portion of the Annual Increase effective on such
date which does not exceed 7,500,000 shares
.
Shares of Stock subject to outstanding Awards made
under the Plan shall be available for subsequent issuance under the Plan to the extent (i) those
Awards expire or terminate for any reason prior to the issuance of the shares of Stock subject to
those Awards or (ii) the awards are cancelled in accordance with the cancellation-regrant
provisions of Section 8. Unvested shares issued under the Plan and subsequently cancelled or
repurchased by the Company at the original exercise or issue price paid per share pursuant to the
Companys repurchase rights under the Plan shall be added back to the number of shares of Stock
reserved for issuance under the Plan and shall accordingly be available for subsequent reissuance
under the Plan. In addition, should the exercise price of an Option under the Plan be paid with
shares of Stock, the authorized reserve of Stock under the Plan shall be reduced only by the net
number of shares issued under the exercised Option. Should shares of Stock otherwise issuable
under the Plan be withheld by the Company in satisfaction of the withholding taxes incurred in
connection with the exercise of an Option or stock appreciation right or the issuance of
fully-vested shares, the number of shares of Stock available for issuance under the Plan shall be
reduced only by the net number of shares issued under the exercised Option or stock appreciation
right or the net number of fully-vested shares issued under the Plan. Such withholding shall in
effect constitute a cash bonus under the Plan, payable directly to the applicable taxing
authorities on behalf of the individual concerned, in an amount equal to the Fair Market Value of
the withheld shares, and shall not be treated as an issuance and immediate repurchase of those
shares.
4.2
Adjustments for Changes in Capital Structure
.
In the event of any stock dividend, stock
split, reverse stock split, recapitalization, combination, reclassification or similar change in
the capital structure of the Company, appropriate adjustments shall be (i) the maximum number
and/or class of securities issuable under the Plan, (ii) the maximum number and/or class of
securities which may be issued pursuant to the exercise of Incentive Stock Options, (iii) the
maximum number and/or class of securities for which any one person may be
granted Options, stand-alone stock appreciation rights, direct stock issuances and other
stock-based awards under the Plan per fiscal year, (iv) the number and/or class of securities and
the exercise or base price per share in effect under each outstanding Option or stock appreciation
right under the Plan and (v) the number and/or class of securities subject to each outstanding
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restricted stock unit or other stock-based award under the Plan and the consideration (if any)
payable per share thereunder. If a majority of the shares which are of the same class as the
shares that are subject to outstanding Awards are exchanged for, converted into, or otherwise
become (whether or not pursuant to an Ownership Change Event, as defined in Section 10.1) shares of
another corporation (the
New Shares
), the Board may unilaterally amend the outstanding Awards to
provide that New Shares will be issued upon the exercise or vesting of the Awards. In the event of
any such amendment, the number of shares subject to, and the purchase price per share of, the
outstanding Awards shall be adjusted in a fair and equitable manner as determined by the Board, in
its discretion. Notwithstanding the foregoing, any fractional share resulting from an adjustment
pursuant to this Section 4.2 shall be rounded down to the nearest whole number, and in no event may
the exercise price of any Option be decreased to an amount less than the par value, if any, of the
stock subject to the Option. The adjustments determined by the Board pursuant to this Section 4.2
shall be final, binding and conclusive.
4.3
Section 162(m) Grant Limit.
Subject to adjustment as provided in Section 4.2, no
Employee
shall be granted within any fiscal year of the Company one or more Options, stand-alone stock
appreciation rights, direct stock issuances (whether vested or unvested) and other stock-based
awards which in the aggregate are for more than twelve million (12,000,000) shares.
5.
Eligibility
.
Persons Eligible for Awards
.
Awards may be granted only to Employees, Consultants, and
Directors. Eligible persons may be granted more than one (1) Award.
6.
Terms and Conditions of Options
.
Options shall be evidenced by Option Agreements specifying the number of shares of Stock
covered thereby, in such form as the Board shall from time to time establish
. No Option or
purported Option shall be a valid and binding obligation of the Company unless evidenced by a fully
executed Option Agreement.
Option Agreements may incorporate all or any of the terms of the Plan
by reference and shall comply with and be subject to the following terms and conditions:
6.1
Option Grant Restrictions
.
Any person who is not an Employee on the effective date of the
grant of an Option to such person may be granted only a Nonstatutory Stock Option.
6.2
Exercise Price
.
The exercise price for each Option shall be established in the discretion
of the Board; provided, however, that (a) the exercise price per share for an Incentive Stock
Option shall be not less than the Fair Market Value of a share of Stock on the
effective date of grant of the Option and (b) no Incentive Stock Option granted to a Ten
Percent Owner Optionee shall have an exercise price per share less than one hundred ten percent
(110%) of the Fair Market Value of a share of Stock on the effective date of grant of the Option.
Notwithstanding the foregoing, an Option (whether an Incentive Stock Option or a Nonstatutory Stock
Option) may be granted with an exercise price lower than the minimum exercise price set
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forth above if such Option is granted pursuant to an assumption or substitution for another option in a manner
qualifying under the provisions of Section 424(a) of the Code.
6.3
Exercisability and Term of Options
.
Options shall be exercisable at such time or times,
or upon such event or events, and subject to such terms, conditions, performance criteria and
restrictions as shall be determined by the Board and set forth in the Option Agreement evidencing
such Option; provided, however, that (a) no Option shall be exercisable after the expiration of ten
(10) years after the effective date of grant of such Option and (b) no Incentive Stock Option
granted to a Ten Percent Owner Optionee shall be exercisable after the expiration of five (5) years
after the effective date of grant of such Option. Subject to the foregoing, unless otherwise
specified by the Board in the grant of an Option, any Option granted hereunder shall terminate ten
(10) years after the effective date of grant of the Option, unless earlier terminated in accordance
with its provisions.
6.4
Payment of Exercise Price.
(a)
Forms of Consideration Authorized.
Except as otherwise provided below, payment of the
exercise price for the number of shares of Stock being purchased pursuant to any Option shall be
made (i) in cash, by check or cash equivalent, (ii) by tender to the Company, or attestation to the
ownership, of shares of Stock owned by the Optionee having a Fair Market Value (as determined by
the Company without regard to any restrictions on transferability applicable to such stock by
reason of federal or state securities laws or agreements with an underwriter for the Company) on
the Option exercise date not less than the exercise price, (iii) by delivery of a properly executed
notice together with irrevocable instructions to a broker providing for the assignment to the
Company of the proceeds of a sale or loan with respect to some or all of the shares being acquired
upon the exercise of the Option (including, without limitation, through an exercise complying with
the provisions of Regulation T as promulgated from time to time by the Board of Governors of the
Federal Reserve System) (a
"
Cashless Exercise
"
), (iv) by such other consideration as may be
approved by the Board from time to time to the extent permitted by applicable law, or (v) by any
combination thereof. The Board may at any time or from time to time, by approval of or by
amendment to the standard forms of Option Agreement described in Section 6.9, or by other means,
grant Options which do not permit all of the foregoing forms of consideration to be used in payment
of the exercise price or which otherwise restrict one or more forms of consideration.
(b)
Limitations on Forms of Consideration.
(i)
Tender of Stock.
Notwithstanding the foregoing, an Option may not be exercised by tender
to the Company, or attestation to the ownership, of shares of Stock to the extent such tender or
attestation would constitute a violation of the provisions of
any law, regulation or agreement restricting the redemption of the Companys stock. Unless
otherwise provided by the Board, an Option may not be exercised by tender to the Company, or
attestation to the ownership, of shares of Stock unless such shares either have been owned by the
Optionee for more than six (6) months (or such other period necessary to award a charge to the
Companys earnings for financial reporting purposes) or were not acquired, directly or indirectly,
from the Company.
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(ii)
Cashless Exercise.
The Company reserves, at any and all times, the right, in the
Companys sole and absolute discretion, to establish, decline to approve or terminate any program
or procedures for the exercise of Options by means of a Cashless Exercise.
6.5
Fair Market Value Limitation
.
To the extent that options designated as Incentive Stock
Options (granted under all stock option plans of the Participating Company Group, including the
Plan) become exercisable by an Optionee for the first time during any calendar year for stock
having a Fair Market Value greater than One Hundred Thousand Dollars ($100,000), the portions of
such options which exceed such amount shall be treated as Nonstatutory Stock Options. To the
extent the Optionee holds two (2) or more options designated as Incentive Stock Options which
become exercisable for the first time in the same calendar year, then for purposes of this Section
6.5, such options shall be taken into account in the order in which they were granted except to the
extent otherwise provided under applicable law or regulation, and the Fair Market Value of stock
shall be determined as of the time the option with respect to such stock is granted. If the Code
is amended to provide for a different limitation from that set forth in this Section 6.5, such
different limitation shall be deemed incorporated herein effective as of the date and with respect
to such Options as required or permitted by such amendment to the Code. If an Option is treated as
an Incentive Stock Option in part and as a Nonstatutory Stock Option in part by reason of the
limitation set forth in this Section 6.5, the Optionee may designate which portion of such Option
the Optionee is exercising. In the absence of such designation, the Optionee shall be deemed to
have exercised the Incentive Stock Option portion of the Option first. Separate certificates
representing each such portion shall be issued upon the exercise of the Option.
6.6
Repurchase Rights
.
Shares issued under the Plan may be subject to a right of first
refusal, one or more repurchase options, or other conditions and restrictions as determined by the
Board in its discretion at the time the Option is granted. The Company shall have the right to
assign at any time any repurchase right it may have, whether or not such right is then exercisable,
to one or more persons as may be selected by the Company. Upon request by the Company, each
Optionee shall execute any agreement evidencing such transfer restrictions prior to the receipt of
shares of Stock hereunder and shall promptly present to the Company any and all certificates
representing shares of Stock acquired hereunder for the placement on such certificates of
appropriate legends evidencing any such transfer restrictions.
6.7
Effect of Termination of Service.
(a)
Option Exercisability
.
Subject to earlier termination of the Option as otherwise provided
herein and unless otherwise provided by the Board in the grant of an Option and set forth in the
Option Agreement, an Option shall be exercisable after an Optionees termination of Service only
during the applicable time period determined in accordance with this Section 6.7 and thereafter
shall terminate:
(i)
Disability.
If the Optionees Service with the Participating Company Group terminates
because of the Disability of the Optionee, the Option, to the extent
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unexercised and exercisable on
the date on which the Optionees Service terminated, may be exercised by the Optionee (or the
Optionees guardian or legal representative) at any time prior to the expiration of twelve (12)
months after the date on which the Optionees Service terminated, but in any event no later than
the date of expiration of the Options term as set forth in the Option Agreement evidencing such
Option (the
Option Expiration Date
).
(ii)
Death.
If the Optionees Service with the Participating Company Group terminates because
of the death of the Optionee, the Option, to the extent unexercised and exercisable on the date on
which the Optionees Service terminated, may be exercised by the Optionees legal representative or
other person who acquired the right to exercise the Option by reason of the Optionees death at any
time prior to the expiration of twelve (12) months after the date on which the Optionees Service
terminated, but in any event no later than the Option Expiration Date. The Optionees Service
shall be deemed to have terminated on account of death if the Optionee dies within thirty (30) days
(or such longer period of time as determined by the Board, in its discretion) after the Optionees
termination of Service.
(iii)
Termination After Change in Control.
The Board may, in its discretion, provide in any
Option Agreement that if the Optionees Service with the Participating Company Group ceases as a
result of Termination After Change in Control (as defined in such Option Agreement), then (1) the
Option, to the extent unexercised and exercisable on the date on which the Optionees Service
terminated, may be exercised by the Optionee (or the Optionees guardian or legal representative)
at any time prior to the expiration of six (6) months (or such longer period of time as determined
by the Board, in its discretion) after the date on which the Optionees Service terminated, but in
any event no later than the Option Expiration Date, and (2) the exercisability and vesting of the
Option and any shares acquired upon the exercise thereof shall be accelerated effective as of the
date on which the Optionees Service terminated to such extent, if any, as shall have been
determined by the Board, in its discretion, and set forth in the Option Agreement
(iv)
Other Termination of Service.
If the Optionees Service with the Participating Company
Group terminates for any reason, except Disability, death or Termination After Change in Control,
the Option, to the extent unexercised and exercisable by the Optionee on the date on which the
Optionees Service terminated, may be exercised by the Optionee at any time prior to the expiration
of sixty (60) days (or such longer period of time as
determined by the Board, in its discretion) after the date on which the Optionees Service
terminated, but in any event no later than the Option Expiration Date.
(b)
Extension if Exercise Prevented by Law
.
Notwithstanding the foregoing, if the exercise of
an Option within the applicable time periods set forth in Section 6.7(a) is prevented by the
provisions of Section 12 below, the Option shall remain exercisable until thirty (30) days (or such
longer period of time as determined by the Board, in its discretion) after the date the Optionee is
notified by the Company that the Option is exercisable, but in any event no later than the Option
Expiration Date.
(c)
Extension if Optionee Subject to Section 16(b
).
Notwithstanding the foregoing, if a sale
within the applicable time periods set forth in Section 6.7(a) of shares
11
acquired upon the exercise of the Option would subject the Optionee to suit under Section 16(b) of the Exchange Act, the
Option shall remain exercisable until the earliest to occur of (i) the tenth (10th) day following
the date on which a sale of such shares by the Optionee would no longer be subject to such suit,
(ii) the one hundred and ninetieth (190th) day after the Optionees termination of Service, or
(iii) the Option Expiration Date.
6.8
Transferability of Options.
During the lifetime of the Optionee, an Option shall be
exercisable only by the Optionee or the Optionees guardian or legal representative. No Option
shall be assignable or transferable by the Optionee, except by will or by the laws of descent and
distribution. Notwithstanding the foregoing, to the extent permitted by the Board, in its
discretion, and set forth in the Option Agreement evidencing such Option, a Nonstatutory Stock
Option shall be assignable or transferable subject to the applicable limitations, if any, described
in the General Instructions to the Form S-8 Registration Statement under the Securities Act.
6.9
Option Agreement
.
Unless otherwise provided by the Board at the time the Option is
granted, an Option shall comply with and be subject to the terms and conditions set forth in the
appropriate form of Option Agreement approved by the Board concurrently with its adoption of the
Plan and as amended from time to time.
6.10
Authority to Vary Terms
.
The Board shall have the authority from time to time to vary
the terms of any standard form of Option Agreement described in Section 6.9 either in connection
with the grant or amendment of an individual Option or in connection with the authorization of a
new standard form or forms; provided, however, that the terms and conditions of any such new,
revised or amended standard form or forms of Option Agreement are not inconsistent with the terms
of the Plan.
7.
Terms and Conditions of Stock Appreciation Rights.
7.1
Types
. Two types of stock appreciation rights shall be authorized for issuance under this
Section 7: (i) tandem stock appreciation rights (Tandem Rights) and (ii) stand-alone stock
appreciation rights (Stand-alone Rights).
7.2 .
Tandem Rights
. The following terms and conditions shall govern the grant and exercise
of Tandem Rights:
(a) One or more Optionees may be granted a Tandem Right, exercisable upon such terms and
conditions as the Board may establish, to elect between the exercise of the underlying stock option
for shares of Stock or the surrender of that option in exchange for a distribution from the Company
in an amount equal to the excess of (i) the Fair Market Value (on the option surrender date) of the
number of shares in which the Optionee is at the time vested under the surrendered option (or
surrendered portion thereof) over (ii) the aggregate exercise price payable for such vested shares.
(b) No such option surrender shall be effective unless it is approved by the Board, either at
the time of the actual option surrender or at any earlier time. If the surrender
12
is so approved, then the distribution to which the Optionee shall accordingly become entitled under this Section
7.2 may be made in shares of Stock valued at Fair Market Value on the option surrender date, in
cash, or partly in shares and partly in cash, as the Board shall in its sole discretion deem
appropriate.
(c) If the surrender of an option is not approved by the Plan Administrator, then the Optionee
shall retain whatever rights the Optionee had under the surrendered option (or surrendered portion
thereof) on the option surrender date and may exercise such rights at any time prior to the
later
of (i) five (5) business days after the receipt of the rejection notice or (ii) the last day on
which the option is otherwise exercisable in accordance with the terms of the instrument evidencing
such option, but in no event may such rights be exercised more than ten (10) years after the date
of the option grant.
7.3
Stand-Alone Rights
. The following terms and conditions shall govern the grant and
exercise of Stand-alone Rights:
(a) One or more individuals eligible to participate in the Plan may be granted a Stand-alone
Right not tied to any underlying Option. The Stand-alone Right shall relate to a specified number
of shares of Stock and shall be exercisable upon such terms and conditions as the Board may
establish. In no event, however, may the Stand-alone Right have a maximum term in excess of ten
(10) years measured from the grant date. Upon exercise of the Stand-alone Right, the holder shall
be entitled to receive a distribution from the Company in an amount equal to the excess of (i) the
aggregate Fair Market Value (on the exercise date) of the shares of Stock underlying the exercised
right over (ii) the aggregate base price in effect for those shares.
(b) The number of shares of Stock underlying each Stand-alone Right and the base price in
effect for those shares shall be determined by the Board in its sole discretion at the time the
Stand-alone Right is granted.
(c) Stand-alone Rights shall be subject to the same transferability restrictions applicable to
Nonstatutory Options.
(d) The distribution with respect to an exercised Stand-alone Right may be made in shares of
Stock valued at Fair Market Value on the exercise date, in cash, or partly in shares and partly in
cash, as the Board shall in its sole discretion deem appropriate.
(e) The holder of a Stand-alone Right shall have no shareholder rights with respect to the
shares subject to the Stand-alone Right unless and until such person shall have exercised the
Stand-alone Right and become a holder of record of shares of Stock issued upon the exercise of such
Stand-alone Right.
7.4
Post-Service Exercise
. The provisions governing the exercise of Tandem and Stand-alone
Rights following the cessation of the recipients Service shall be substantially the same as those
set forth in Section 6.7 for the Options granted under the Plan.
13
8.
Exchange/Repricing Programs
.
(a) The Board shall have the authority to effect, at any time and from time to time, with the
consent of the affected holders, the cancellation of any or all outstanding Options or stock
appreciation rights under the Plan and to grant in exchange one or more of the following: (i) new
options or stock appreciation rights covering the same or a different number of shares of Stock but
with an exercise or base price per share based on the Fair Market Value per share of Stock on the
new grant date or (ii) cash or shares of Stock, whether vested or unvested, equal in value to the
value of the cancelled options or stock appreciation rights.
(b) The Board shall also have the authority, exercisable at any time and from time to time,
with the consent of the affected holders, to reduce the exercise or base price of one or more
outstanding stock options or stock appreciation rights or issue new stock options or stock
appreciation rights with a lower exercise or base price in immediate cancellation of outstanding
stock options or stock appreciation rights with a higher exercise or base price.
9.
Terms and Conditions of Stock Issuances
.
9.1
Issuances
. Shares of Stock may be issued under the Plan through direct and immediate
issuances without any intervening option grants. Shares of Stock may also be issued under the Plan
pursuant to share right awards or restricted stock units that entitle the recipients to receive the
shares underlying those awards or units upon the attainment of designated performance goals or the
satisfaction of specified Service requirements or upon the expiration of a designated time period
following the vesting of those awards or units. Each such stock issuance, share right award or
restricted stock unit shall be evidenced by a Stock Issuance Agreement that complies with the terms
specified below.
9.2
Consideration
.
(a) Shares of Stock may be issued under this Section 9 for any of the following items of
consideration that the Board may deem appropriate in each individual instance:
(i) cash or check made payable to the Company;
(ii) past services rendered to a Participating Company; or
(iii) any other valid form of consideration permissible under the Delaware General Corporation
Law at the time such shares are issued.
9.3
Vesting Provisions
.
(a) Shares of Stock issued under this Section 9 may, in the discretion of the Board, be fully
and immediately vested upon issuance or may vest in one or more installments over the Participants
period of Service or upon attainment of specified performance objectives. Shares of Stock may also
be issued under this Section 9 pursuant to share right
14
awards or restricted stock units that
entitle the recipients to receive the shares underlying those awards or units upon the attainment
of designated performance goals or the satisfaction of specified Service requirements or upon the
expiration of a designated time period following the vesting of those awards or units, including
(without limitation) a deferred distribution date following the termination of the Participants
Service. The elements of the vesting schedule applicable to any unvested shares of Stock issued
hereunder or share right award or restricted stock units granted hereunder shall be determined by
the Board and incorporated into the Stock Issuance Agreement.
(b) Any new, substituted or additional securities or other property (including money paid
other than as a regular cash dividend) that the Participant may have the right to receive with
respect to the Participants unvested shares of Stock by reason of any stock dividend, stock split,
recapitalization, combination of shares, exchange of shares or other change affecting the
outstanding Stock as a class without the Companys receipt of consideration shall be issued subject
to (i) the same vesting requirements applicable to the Participants unvested shares of Stock and
(ii) such escrow arrangements as the Board shall deem appropriate.
(c) The Participant shall have full shareholder rights with respect to any shares of Stock
issued to the Participant under this Section 9, whether or not the Participants interest in those
shares is vested. Accordingly, the Participant shall have the right to vote such shares and to
receive any regular cash dividends paid on such shares. The Participant shall not have any
shareholder rights with respect to the shares of Stock subject to a restricted stock unit or share
right award until that award vests and the shares of Stock are actually issued thereunder.
However, dividend-equivalent units may be paid or credited, either in cash or in actual or phantom
shares of Stock, on outstanding restricted stock unit or share right awards, subject to such terms
and conditions as the Board may deem appropriate.
(d) Should the Participant cease to remain in Service while holding one or more unvested
shares of Stock issued under this Section 9 or should the performance objectives not be attained
with respect to one or more such unvested shares of Stock, then those shares shall be immediately
surrendered to the Company for cancellation, and the Participant shall have no further shareholder
rights with respect to those shares. To the extent the surrendered shares were previously issued
to the Participant for consideration paid in cash, cash equivalent or otherwise, the Company shall
repay to the Participant the same form of consideration as the Participant paid for the surrendered
shares.
(e) The Board may in its discretion waive the surrender and cancellation of one or more
unvested shares of Stock that would otherwise occur upon the cessation of the Participants Service
or the non-attainment of the performance objectives
applicable to those shares. Any such waiver shall result in the immediate vesting of the
Participants interest in the shares of Stock as to which the waiver applies. Such waiver may be
effected at any time, whether before or after the Participants cessation of Service or the
attainment or non-attainment of the applicable performance objectives.
(f) Outstanding share right awards or restricted stock units under this Section 9 shall
automatically terminate, and no shares of Stock shall actually be issued in
15
satisfaction of those
awards or units, if the performance goals or Service requirements established for such awards or
units are not attained or satisfied. The Board, however, shall have the discretionary authority to
issue vested shares of Stock under one or more outstanding share right awards or restricted stock
units as to which the designated performance goals or Service requirements have not been attained
or satisfied.
10.
Change in Control
.
10.1
Definitions.
(a) An
Ownership Change Event
shall be deemed to have occurred if any of the following
occurs with respect to the Company: (i) the direct or indirect sale or exchange in a single or
series of related transactions by the stockholders of the Company of more than fifty percent (50%)
of the voting stock of the Company; (ii) a merger or consolidation in which the Company is a party;
(iii) the sale, exchange, or transfer of all or substantially all of the assets of the Company; or
(iv) a liquidation or dissolution of the Company.
(b) A
Change in Control
shall mean an Ownership Change Event or a series of related
Ownership Change Events (collectively, a
Transaction
) wherein the stockholders of the Company
immediately before the Transaction do not retain immediately after the Transaction, in
substantially the same proportions as their ownership of shares of the Companys voting stock
immediately before the Transaction, direct or indirect beneficial ownership of more than fifty
percent (50%) of the total combined voting power of the outstanding voting stock of the Company or
the corporation or corporations to which the assets of the Company were transferred (the
Transferee Corporation(s)
), as the case may be. For purposes of the preceding sentence, indirect
beneficial ownership shall include, without limitation, an interest resulting from ownership of the
voting stock of one or more corporations which, as a result of the Transaction, own the Company or
the Transferee Corporation(s), as the case may be, either directly or through one or more
subsidiary corporations. The Board shall have the right to determine whether multiple sales or
exchanges of the voting stock of the Company or multiple Ownership Change Events are related, and
its determination shall be final, binding and conclusive.
10.2
Effect of Change in Control on Options and Stock Appreciation Rights
.
In the event of a
Change in Control, the surviving, continuing, successor, or purchasing corporation or parent
corporation thereof, as the case may be (the
Acquiring Corporation
), may either assume the
Companys rights and obligations under outstanding
Options and stock appreciation rights or substitute for outstanding Options and stock
appreciation rights substantially equivalent options or stock appreciation rights for the Acquiring
Corporations stock. In the event the Acquiring Corporation elects not to assume or substitute for
outstanding Options and stock appreciation rights in connection with a Change in Control, any
unexercisable or unvested portions of outstanding Options and stock appreciation rights (and any
shares acquired upon the exercise thereof) granted to persons whose Service has not terminated
prior to such date shall be immediately exercisable and vested in full as of the date ten (10) days
prior to the date of the Change in Control. The exercise or vesting of any Option or stock
appreciation right and any shares acquired upon the exercise thereof that was permissible solely by
reason of
16
this Section 10.2 shall be conditioned upon the consummation of the Change in Control.
Any Options or stock appreciation rights which are neither assumed or substituted for by the
Acquiring Corporation in connection with the Change in Control nor exercised as of the date of the
Change in Control shall terminate and cease to be outstanding effective as of the date of the
Change in Control. Notwithstanding the foregoing, shares acquired upon exercise of an Option or
stock appreciation right prior to the Change in Control and any consideration received pursuant to
the Change in Control with respect to such shares shall continue to be subject to all applicable
provisions of the Award Agreement evidencing such Option or stock appreciation right except as
otherwise provided in such Award Agreement. Furthermore, notwithstanding the foregoing, if the
corporation the stock of which is subject to the outstanding Options and stock appreciation rights
immediately prior to an Ownership Change Event described in Section 10.1(a)(i) constituting a
Change in Control is the surviving or continuing corporation and immediately after such Ownership
Change Event less than fifty percent (50%) of the total combined voting power of its voting stock
is held by another corporation or by other corporations that are members of an affiliated group
within the meaning of Section 1504(a) of the Code without regard to the provisions of Section
1504(b) of the Code, the outstanding Options and stock appreciation rights shall not terminate
unless the Board otherwise provides in its discretion.
10.3 Effect of Change in Control on Stock Issuances, Restricted Stock Units and Share Rights
Awards.
(a) All of the Companys outstanding repurchase rights under Section 9 shall terminate
automatically, and all the shares of Stock subject to those terminated rights shall immediately
vest in full, in the event of any Change in Control, except to the extent those repurchase rights
are to be assigned to the Acquiring Corporation or otherwise continued in full force and effect.
(b) In the event the Acquiring Corporation assumes the Companys rights and obligations with
respect to outstanding restricted stock units or share right awards assumed in connection with a
Change in Control, then such units and awards shall be adjusted immediately after the consummation
of that Change in Control to apply to the number and class of securities into which the shares of
Stock subject to the unit or award immediately prior to the Change in Control would have been
converted in consummation of such Change in Control had those shares actually been outstanding at
that time, and appropriate adjustments shall also be made to the consideration (if any) payable per
share thereunder, provided the aggregate amount of such consideration shall remain the same. If any
such restricted stock unit or share
right award is not so assumed or substituted with a substantially equivalent award for the
Acquiring Corporations stock, then such unit or award shall vest, and the shares of Stock subject
to that unit or award shall be issued as fully-vested shares, immediately prior to the consummation
of the Change in Control.
(c) The Board shall have the discretionary authority to structure one or more unvested stock
issuances or one or more restricted stock unit or other share right awards so that the shares of
Stock subject to those issuances or awards shall automatically vest (or vest and become issuable)
in whole or in part immediately upon the occurrence of a Change in Control or
17
upon the subsequent
Termination after Change in Control (as defined in Stock Issuance Agreement).
11.
Tax Withholding
.
The Companys obligation to deliver shares of Stock upon the exercise of Options or stock
appreciation rights or the issuance or vesting of shares under the Plan shall be subject to the
satisfaction of all applicable federal, state, local and foreign tax and other withholding
requirements (Withholding Taxes). The Company shall have the right, but not the obligation, to
deduct from the shares of Stock issuable upon the exercise of an Option or stock appreciation right
or upon the issuance of fully-vested shares, or to accept from the holder of he Award the tender
of, a number of whole shares of Stock, having a Fair Market Value, as determined by the Company,
equal to all or any part of the Withholding Taxes. Alternatively or in addition, in its
discretion, the Company shall have the right to require the holder of the Award, through payroll
withholding, cash payment or otherwise, including by means of a Cashless Exercise, to make adequate
provision for any such Withholding Taxes. The Fair Market Value of any shares of Stock withheld or
tendered to satisfy any such tax withholding obligations shall not exceed the amount determined by
the applicable minimum statutory withholding rates. The Company shall have no obligation to
deliver shares of Stock or to release shares of Stock from an escrow established pursuant to any
Award until the Participating Company Groups tax withholding obligations have been satisfied.
12.
Compliance with Securities Law
.
The grant of Awards and the issuance of shares of Stock thereunder shall be subject to
compliance with all applicable requirements of federal, state and foreign law with respect to such
securities. Options and stock appreciation rights may not be exercised if the issuance of shares
of Stock upon such exercise would constitute a violation of any applicable federal, state or
foreign securities laws or other law or regulations or the requirements of any stock exchange or
market system upon which the Stock may then be listed. In addition, no shares of Stock may be
issued under the Plan unless (a) a registration statement under the Securities Act shall be in
effect at the time of such issuances with respect to shares issuable under the Plan or (b) in the
opinion of legal counsel to the Company, the shares issuable under the Plan may be issued in
accordance with the terms of an applicable exemption from the registration requirements of the
Securities Act. The inability of the Company to obtain from any regulatory body having
jurisdiction the authority, if any, deemed by the Companys legal counsel
to be necessary to the lawful issuance and sale of any shares hereunder shall relieve the Company
of any liability in respect of the failure to issue or sell such shares as to which such requisite
authority shall not have been obtained. As a condition to the issuance of shares pursuant to any
Award, the Company may require the holder to satisfy any qualifications that may be necessary or
appropriate, to evidence compliance with any applicable law or regulation and to make any
representation or warranty with respect thereto as may be requested by the Company.
18
13.
Termination or Amendment of Plan
.
The Board may terminate or amend the Plan at any time. However, subject to changes in
applicable law, regulations or rules that would permit otherwise, stockholder approval will be
required for any amendment to the Plan that (i) materially increases the number of shares of Stock
available for issuance under the Plan, (ii) materially expands the class of individuals eligible to
receive option grants or other awards under the Plan, (iii) materially increases the benefits
accruing to the participants under the Plan or materially reduces the price at which shares of
Stock may be issued or purchased under the Plan, (iv) materially extends the term of the Plan or
(v) expands the types of awards available for issuance under the Plan. No termination or amendment
of the Plan shall affect any then outstanding Award unless expressly provided by the Board. In any
event, no termination or amendment of the Plan may adversely affect any then outstanding Award
without the consent of the holder, unless such termination or amendment is required to enable an
Option designated as an Incentive Stock Option to qualify as an Incentive Stock Option or is
necessary to comply with any applicable law, regulation or rule.
IN WITNESS WHEREOF, the undersigned Secretary of the Company certifies that the foregoing sets
forth the Finisar Corporation 2005 Stock Incentive Plan as duly adopted by the Board on April 20,
1999 and amended and restated through September 8, 2005.
19
PLAN HISTORY
|
|
|
April 20, 1999
|
|
Board of Finisar Corporation, a California corporation
(Finisar California), adopts Plan, with an initial
reserve of 7,000,000 shares.
|
|
|
|
October 20, 1999
|
|
Shareholders of Finisar California approve Plan, with an
initial reserve of 7,000,000 shares.
|
|
|
|
September 9, 1999
|
|
Board of Finisar California amends Plan effective as of
the initial registration of Stock under Section 12 of
the Exchange Act to provide for (i) a cumulative
increase in the share reserve each May 1 beginning May
1, 2001 equal to 5% of the shares of Stock outstanding
on the immediately preceding April 30 (Annual
Increase), (ii) an ISO Share Limit equal to 7,000,000
shares, cumulatively increased on each May 1 from May 1,
2001 through May 1, 2008 by that portion of the Annual
Increase not exceeding 2,500,000 shares, and (iii)
elimination of certain restrictions under California
regulations no longer applicable following the Companys
initial public offering.
|
|
|
|
September 9, 1999
|
|
Board of Finisar Delaware Corporation, a Delaware
corporation (Company), approves assumption of the Plan
effective upon Finisar Californias reincorporation in
Delaware.
|
|
|
|
November 3, 1999
|
|
Shareholders of Finisar California approve the foregoing
amendments.
|
|
|
|
November 8, 1999
|
|
Effective date of merger of Finisar California into the
Company to effect a reincorporation of Finisar
California in the State of Delaware and in connection
with which the Company assumed the Plan and options
outstanding thereunder.
|
|
|
|
November 11, 1999
|
|
Effective date of initial registration of Stock under
Section 12 of the Exchange Act.
|
|
|
|
April 12, 2000
|
|
Pro rata adjustments of the fixed portion of the share
reserve to 21,000,000 and the ISO Share Limit for the
three-for-one stock split in the form of a 200% stock
dividend paid on April 12, 2000.
|
|
|
|
August 16, 2000
|
|
To assure the availability of sufficient shares for
issuance pursuant to a plan of reorganization, Board
voluntarily reduces (i) the portion of the shares
authorized by the Companys Certificate of Incorporation
which are reserved for issuance under the fixed
portion of the Plans share reserve to 15,500,000 shares and
(ii) the
|
i
|
|
|
|
|
portion of the shares authorized by the Companys
Certificate of Incorporation which are reserved for issuance
under the Annual Increase to zero, until such time, if any,
the Board restores the shares authorized by the Companys
Certificate of Incorporation which are reserved for issuance
under the Plan to the extent previously authorized by the
stockholders.
|
|
May 1, 2001
|
|
Annual Increase under Section 4.1 is 9,274,200 shares
(representing 5% of the 185,483,994 shares of Stock issued and
outstanding as of April 30, 2001), which is limited to
7,500,000 shares with respect to the annual increase in the
ISO Share Limit. The resulting aggregate share reserve under
Section 4.1 and the ISO Share Limit under Section 4.1 are as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
Aggregate Share
|
|
|
|
|
Reserve
|
|
ISO Share Limit
|
Fixed portion
|
|
|
21,000,000
|
|
|
|
21,000,000
|
|
May 1, 2001 Annual
Increase
|
|
|
9,274,200
|
|
|
|
7,500,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
30,274,200
|
|
|
|
28,500,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 19, 2001
|
|
Stockholders approve amendment to Certificate of
Incorporation of the Company to increase the number of
authorized shares of Common Stock from 200,000,000 to
500,000,000.
|
|
August 27, 2001
|
|
Board restores (i) the number of shares authorized by the
Companys Certificate of Incorporation which are reserved
for issuance under the fixed portion of the Plans share
reserve from 15,500,000 shares to 21,000,000 shares (as
adjusted for the three-for-one stock split in the form of
a 200% stock dividend paid on April 12, 2000) and (ii) the
number of shares authorized by the Companys Certificate
of Incorporation which are reserved for issuance under the
Annual Increase from zero to the number called for under
the Annual Increase formula, all as previously approved by
the stockholders.
|
ii
|
|
|
May 1, 2002
|
|
Annual Increase under Section 4.1 is 9,819,018 shares
(representing 5% of the 196,380,369 shares of Stock issued
and outstanding as of April 30, 2002), which is limited to
7,500,000 shares with respect to the annual increase in
the ISO Share Limit. The resulting aggregate share
reserve under Section 4.1 and the ISO Share Limit under
Section 4.1 are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
Aggregate Share
|
|
|
|
|
Reserve
|
|
ISO Share Limit
|
Fixed portion
|
|
|
21,000,000
|
|
|
|
21,000,000
|
|
May 1, 2001 Annual
Increase
|
|
|
9,274,200
|
|
|
|
7,500,000
|
|
May 1, 2002 Annual
Increase
|
|
|
9,819,018
|
|
|
|
7,500,000
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
40,093,218
|
|
|
|
36,000,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
May 1, 2003
|
|
Annual Increase under Section 4.1 is 10,408,514 shares
(representing 5% of the 208,170,287 shares of Stock issued and
outstanding as of April 30, 2003), which is limited to
7,500,000 shares with respect to the annual increase in the
ISO Share Limit. The resulting aggregate share reserve under
Section 4.1 and the ISO Share Limit under Section 4.1 are as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
Aggregate Share
|
|
|
|
|
Reserve
|
|
ISO Share Limit
|
Fixed portion
|
|
|
21,000,000
|
|
|
|
21,000,000
|
|
May 1, 2001 Annual
Increase
|
|
|
9,274,200
|
|
|
|
7,500,000
|
|
May 1, 2002 Annual
Increase
|
|
|
9,819,018
|
|
|
|
7,500,000
|
|
May 1, 2003 Annual
Increase
|
|
|
10,408,514
|
|
|
|
7,500,000
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
50,501,732
|
|
|
|
43,500,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOTE: Due to a discrepancy in advice regarding the number
of shares outstanding on 4/30/01, only 9,207,890 shares
(rather than 9,274,200 shares) were registered on the Form
S-8 filed 7/18/01. The correct number of shares to have
been registered was 9,274,200. The 66,310 shares not
registered in July 2001 should be added to the
registration statement for the evergreen share reserve
increase effective 5/1/03.
|
|
|
|
August 27, 2003
|
|
Board approves amendment of Plan, subject to stockholder
approval, to add Section 5.4 establishing a Section 162(m)
grant limit of 12,000,000 shares per employee per fiscal
year.
|
|
|
|
October 1, 2003
|
|
Stockholders certain provisions of Plan, including the
Section 162(m) grant to preserve the Companys ability to
deduct stock option compensation in full.
|
|
|
|
May 1, 2004
|
|
Annual Increase under Section 4.1 is 11,142,516 shares
(representing 5% of the 222,850,320 shares of Stock issued
and outstanding as of April 30, 2004), which is limited to
7,500,000
|
iii
|
|
|
|
|
shares with respect to the annual increase in
the ISO Share Limit. The resulting aggregate share
reserve under Section 4.1 and the ISO Share Limit under
Section 4.1 are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
Aggregate Share
|
|
|
|
|
Reserve
|
|
ISO Share Limit
|
Fixed portion
|
|
|
21,000,000
|
|
|
|
21,000,000
|
|
May 1, 2001 Annual
Increase
|
|
|
9,274,200
|
|
|
|
7,500,000
|
|
May 1, 2002 Annual
Increase
|
|
|
9,819,018
|
|
|
|
7,500,000
|
|
May 1, 2003 Annual
Increase
|
|
|
10,408,514
|
|
|
|
7,500,000
|
|
May 1, 2004 Annual
Increase
|
|
|
11,142,516
|
|
|
|
7,500,000
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
61,644,248
|
|
|
|
51,000,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
May 1, 2005
|
|
Annual Increase under Section 4.1 is 12,946,564 shares
(representing 5% of the 258,931,278 shares of Stock issued and
outstanding as of April 30, 2005), which is limited to
7,500,000 shares with respect to the annual increase in the
ISO Share Limit. The resulting aggregate share reserve under
Section 4.1 and the ISO Share Limit under Section 4.1 are as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
Aggregate Share
|
|
|
|
|
Reserve
|
|
ISO Share Limit
|
Fixed portion
|
|
|
21,000,000
|
|
|
|
21,000,000
|
|
May 1, 2001 Annual Increase
|
|
|
9,274,200
|
|
|
|
7,500,000
|
|
May 1, 2002 Annual Increase
|
|
|
9,819,018
|
|
|
|
7,500,000
|
|
May 1, 2003 Annual Increase
|
|
|
10,408,514
|
|
|
|
7,500,000
|
|
May 1, 2004 Annual Increase
|
|
|
11,142,516
|
|
|
|
7,500,000
|
|
May 1, 2005 Annual Increase
|
|
|
12,946,564
|
|
|
|
7,500,000
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
74,590,812
|
|
|
|
58,500,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 8, 2005
|
|
Board amends and restates the Plan to effect the
following changes: (i) expand the types of stock-based
awards available under the Plan; (ii) establish a net
counting procedure so that the share reserve is reduced
only by the actual number of shares issued under the
Plan, and not by the gross number of shares subject to
the awards made thereunder
;
(iii) effect various
technical revisions to facilitate Plan administration
and maintain its compliance with applicable laws and
regulations; (v) eliminate the ability of individuals to
exercise their options or otherwise acquire shares under
the Plan by delivering promissory notes; and (vi) extend
the term of the Plan to August 30, 2015.
|
iv
FINISAR
CORPORATION
1999 EMPLOYEE STOCK PURCHASE PLAN
AS AMENDED AND RESTATED EFFECTIVE MARCH 2, 2005
1.
Establishment,
Purpose and Term of Plan.
1.1
Establishment.
The Finisar
Corporation 1999 Employee Stock Purchase Plan (the
Plan
) became effective on the
effective date of the initial registration by the Company of its
Stock under Section 12 of the Securities Exchange Act of
1934, as amended (the
Effective Date
)
and is hereby amended and restated in its entirety on
March 2, 2005.
1.2
Purpose.
The purpose of the
Plan is to advance the interests of Company and its stockholders
by providing an incentive to attract, retain and reward Eligible
Employees of the Participating Company Group and by motivating
such persons to contribute to the growth and profitability of
the Participating Company Group. The Plan provides such Eligible
Employees with an opportunity to acquire a proprietary interest
in the Company through the purchase of Stock. The Company
intends that the Plan qualify as an employee stock
purchase plan under Section 423 of the Code
(including any amendments or replacements of such section), and
the Plan shall be so construed.
1.3
Term of Plan.
The Plan shall
continue in effect until the earlier of its termination by the
Board or the date on which all of the shares of Stock available
for issuance under the Plan have been issued.
2.
Definitions
and Construction.
2.1
Definitions.
Any term not
expressly defined in the Plan but defined for purposes of
Section 423 of the Code shall have the same definition
herein. Whenever used herein, the following terms shall have
their respective meanings set forth below:
(a)
Board
means the Board of
Directors of the Company. If one or more Committees have been
appointed by the Board to administer the Plan, Board
also means such Committee(s).
(b)
Code
means the Internal
Revenue Code of 1986, as amended, and any applicable regulations
promulgated thereunder.
(c)
Committee
means a committee
of the Board duly appointed to administer the Plan and having
such powers as specified by the Board. Unless the powers of the
Committee have been specifically limited, the Committee shall
have all of the powers of the Board granted herein, including,
without limitation, the power to amend or terminate the Plan at
any time, subject to the terms of the Plan and any applicable
limitations imposed by law.
(d)
Company
means Finisar
Corporation, a Delaware corporation, or any successor
corporation thereto.
(e)
Compensation
means, with
respect to any Offering Period, base wages or salary, overtime
pay, bonuses, commissions, shift differentials, payments for
paid time off, payments in lieu of notice, and any of such
compensation deferred under any program or plan established by a
Participating Company, including, without limitation, pursuant
to Section 401(k) or Section 125 of the Code.
Compensation shall be limited to amounts actually payable in
cash directly to the Participant or deferred by the Participant
during the Offering Period. However, notwithstanding the
foregoing, Compensation shall not include sign-on bonuses,
profit sharing, payments pursuant to a severance agreement,
termination pay, moving allowances, relocation payments, expense
reimbursements, the cost of employee benefits paid by a
Participating Company, tuition reimbursements, imputed income
arising under any benefit program, contributions made by a
Participating Company under any employee benefit plan, income
directly or indirectly received pursuant to the Plan or any
other stock purchase or stock option plan, or any other
compensation not included above.
A-1
(f)
Eligible Employee
means an
Employee who meets the requirements set forth in Section 5
for eligibility to participate in the Plan.
(g)
Employee
means a person
treated as an employee of a Participating Company for purposes
of Section 423 of the Code. A Participant shall be deemed
to have ceased to be an Employee either upon an actual
termination of employment or upon the corporation employing the
Participant ceasing to be a Participating Company. For purposes
of the Plan, an individual shall not be deemed to have ceased to
be an Employee while on any military leave, sick leave, or other
bona fide leave of absence approved by the Company of ninety
(90) days or less. If an individuals leave of absence
exceeds ninety (90) days, the individual shall be deemed to
have ceased to be an Employee on the ninety-first (91st) day of
such leave unless the individuals right to reemployment
with the Participating Company Group is guaranteed either by
statute or by contract. The Company shall determine in good
faith and in the exercise of its discretion whether an
individual has become or has ceased to be an Employee and the
effective date of such individuals employment or
termination of employment, as the case may be. For purposes of
an individuals participation in or other rights, if any,
under the Plan as of the time of the Companys
determination, all such determinations by the Company shall be
final, binding and conclusive, notwithstanding that the Company
or any governmental agency subsequently makes a contrary
determination.
(h)
Fair Market Value
means, as
of any date:
(i) If the Stock is then listed on a national or regional
securities exchange or market system or is regularly quoted by a
recognized securities dealer, the closing sale price of a share
of Stock (or the mean of the closing bid and asked prices if the
Stock is so quoted instead) as quoted on the Nasdaq National
Market, the Nasdaq SmallCap Market or such other national or
regional securities exchange or market system constituting the
primary market for the Stock, or by such recognized securities
dealer, as reported in
The Wall Street Journal
or such
other source as the Company deems reliable. If the relevant date
does not fall on a day on which the Stock has traded on such
securities exchange or market system or has been quoted by such
securities dealer, the date on which the Fair Market Value is
established shall be the last day on which the Stock was so
traded or quoted prior to the relevant date, or such other
appropriate day as determined by the Board, in its discretion.
(ii) If, on the relevant date, the Stock is not then listed
on a national or regional securities exchange or market system
or regularly quoted by a recognized securities dealer, the Fair
Market Value of a share of Stock shall be as determined in good
faith by the Board.
(i)
Offering
means an offering of
Stock as provided in Section 6.
(j)
Offering Date
means, for any
Offering, the first day of the Offering Period.
(k)
Offering Period
means a
period established in accordance with Section 6.1.
(l)
Parent Corporation
means any
present or future parent corporation of the Company,
as defined in Section 424(e) of the Code.
(m)
Participant
means an Eligible
Employee who has become a participant in an Offering Period in
accordance with Section 7 and remains a participant in
accordance with the Plan.
(n)
Participating Company
means
the Company or any Parent Corporation or Subsidiary Corporation
designated by the Board as a corporation the Employees of which
may, if Eligible Employees, participate in the Plan. The Board
shall have the sole and absolute discretion to determine from
time to time which Parent Corporations or Subsidiary
Corporations shall be Participating Companies.
(o)
Participating Company Group
means, at any point in time, the Company and all other
corporations collectively which are then Participating Companies.
(p)
Purchase Date
means, for any
Purchase Period, the last day of such period.
(q)
Purchase Period
means a
period established in accordance with Section 6.2.
A-2
(r)
Purchase Price
means the
price at which a share of Stock may be purchased under the Plan,
as determined in accordance with Section 9.
(s)
Purchase Right
means an
option granted to a Participant pursuant to the Plan to purchase
such shares of Stock as provided in Section 8, which the
Participant may or may not exercise during the Offering Period
in which such option is outstanding. Such option arises from the
right of a Participant to withdraw any accumulated payroll
deductions of the Participant not previously applied to the
purchase of Stock under the Plan and to terminate participation
in the Plan at any time during an Offering Period.
(t)
Stock
means the common stock
of the Company, as adjusted from time to time in accordance with
Section 4.2.
(u)
Subscription Agreement
means
a written agreement in such form as specified by the Company,
stating an Employees election to participate in the Plan
and authorizing payroll deductions under the Plan from the
Employees Compensation.
(v)
Subscription Date
means the
last business day prior to the Offering Date of an Offering
Period or such earlier date as the Company shall establish.
(w)
Subsidiary Corporation
means
any present or future subsidiary corporation of the
Company, as defined in Section 424(f) of the Code.
2.2
Construction.
Captions and
titles contained herein are for convenience only and shall not
affect the meaning or interpretation of any provision of the
Plan. Except when otherwise indicated by the context, the
singular shall include the plural and the plural shall include
the singular. Use of the term or is not intended to
be exclusive, unless the context clearly requires otherwise.
3.
Administration.
3.1
Administration by the
Board.
The Plan shall be administered by the
Board. All questions of interpretation of the Plan, of any form
of agreement or other document employed by the Company in the
administration of the Plan, or of any Purchase Right shall be
determined by the Board and shall be final and binding upon all
persons having an interest in the Plan or the Purchase Right.
Subject to the provisions of the Plan, the Board shall determine
all of the relevant terms and conditions of Purchase Rights;
provided, however, that all Participants granted Purchase Rights
pursuant to an Offering shall have the same rights and
privileges within the meaning of Section 423(b)(5) of the
Code. All expenses incurred in connection with the
administration of the Plan shall be paid by the Company.
3.2
Authority of Officers.
Any
officer of the Company shall have the authority to act on behalf
of the Company with respect to any matter, right, obligation,
determination or election that is the responsibility of or that
is allocated to the Company herein, provided that the officer
has apparent authority with respect to such matter, right,
obligation, determination or election.
3.3
Policies and Procedures Established by the
Company.
The Company may, from time to time,
consistent with the Plan and the requirements of
Section 423 of the Code, establish, change or terminate
such rules, guidelines, policies, procedures, limitations, or
adjustments as deemed advisable by the Company, in its
discretion, for the proper administration of the Plan,
including, without limitation, (a) a minimum payroll
deduction amount required for participation in an Offering,
(b) a limitation on the frequency or number of changes
permitted in the rate of payroll deduction during an Offering,
(c) an exchange ratio applicable to amounts withheld in a
currency other than United States dollars, (d) a payroll
deduction greater than or less than the amount designated by a
Participant in order to adjust for the Companys delay or
mistake in processing a Subscription Agreement or in otherwise
effecting a Participants election under the Plan or as
advisable to comply with the requirements of Section 423 of
the Code, and (e) determination of the date and manner by
which the Fair Market Value of a share of Stock is determined
for purposes of administration of the Plan.
3.4
Indemnification.
In addition to
such other rights of indemnification as they may have as members
of the Board or officers or employees of the Participating
Company Group, members of the Board and any officers or
employees of the Participating Company Group to whom authority
to act for the Board or the Company is delegated
A-3
shall be indemnified by the Company against all reasonable
expenses, including attorneys fees, actually and
necessarily incurred in connection with the defense of any
action, suit or proceeding, or in connection with any appeal
therein, to which they or any of them may be a party by reason
of any action taken or failure to act under or in connection
with the Plan, or any right granted hereunder, 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, except in relation to
matters as to which it shall be adjudged in such action, suit or
proceeding that such person is liable for gross negligence, bad
faith or intentional misconduct in duties; provided, however,
that within sixty (60) days after the institution of such
action, suit or proceeding, such person shall offer to the
Company, in writing, the opportunity at its own expense to
handle and defend the same.
4.
Shares
Subject to Plan.
4.1
Maximum Number of Shares
Issuable.
Subject to adjustment as provided in
Section 4.2, the maximum aggregate number of shares of
Stock that may be issued under the Plan shall be thirteen
million seven hundred fifty thousand
(13,750,000)
1
,
cumulatively increased on May 1 of each year commencing on
May 1, 2005 and ending May 1, 2010 by one million
(1,000,000)
shares
2
(the Annual Increase), and shall consist of
authorized but unissued or reacquired shares of Stock, or any
combination thereof. If an outstanding Purchase Right for any
reason expires or is terminated or canceled, the shares of Stock
allocable to the unexercised portion of that Purchase Right
shall again be available for issuance under the Plan.
4.2
Adjustments for Changes in Capital
Structure.
In the event of any stock dividend,
stock split, reverse stock split, recapitalization, combination,
reclassification or similar change in the capital structure of
the Company, or in the event of any merger (including a merger
effected for the purpose of changing the Companys
domicile), sale of assets or other reorganization in which the
Company is a party, appropriate adjustments shall be made in the
number and class of shares subject to the Plan, the Annual
Increase and each Purchase Right, and in the Purchase Price. If
a majority of the shares of the same class as the shares subject
to outstanding Purchase Rights are exchanged for, converted
into, or otherwise become (whether or not pursuant to an
Ownership Change Event) shares of another corporation (the
New Shares
), the Board may
unilaterally amend the outstanding Purchase Rights to provide
that such Purchase Rights are exercisable for New Shares. In the
event of any such amendment, the number of shares subject to,
and the Purchase Price of, the outstanding Purchase Rights shall
be adjusted in a fair and equitable manner, as determined by the
Board, in its discretion. Notwithstanding the foregoing, any
fractional share resulting from an adjustment pursuant to this
Section 4.2 shall be rounded down to the nearest whole
number, and in no event may the Purchase Price be decreased to
an amount less than the par value, if any, of the stock subject
to the Purchase Right. The adjustments determined by the Board
pursuant to this Section 4.2 shall be final, binding and
conclusive.
5.
Eligibility.
5.1
Employees Eligible to
Participate.
Each Employee of a Participating
Company is eligible to participate in the Plan and shall be
deemed an Eligible Employee, except any Employee who is either:
(a) customarily employed by the Participating Company Group
for twenty (20) hours or less per week or
(b) customarily employed by the Participating Company Group
for not more than five (5) months in any calendar year.
5.2
Exclusion of Certain
Stockholders.
Notwithstanding any provision of
the Plan to the contrary, no Employee shall be granted a
Purchase Right under the Plan if, immediately after such grant,
the Employee would own or hold options to purchase stock of the
Company or of any Parent Corporation or Subsidiary Corporation
possessing five percent (5%) or more of the total combined
voting power or value of all classes of stock of such
1
Comprised
of (i) the initial reserve of 750,000 shares,
(ii) the annual increases of 750,000 shares on May 1
of each year commencing 2001 through 2004 and (iii) the
10,000,000-share increase approved by the Board in March 2005
subject to approval by the stockholders at the 2005 Annual
Meeting.
2
The
annual increase of 1 million shares per year is subject to
stockholder approval at the 2005 Annual Meeting.
A-4
corporation, as determined in accordance with
Section 423(b)(3) of the Code. For purposes of this
Section 5.2, the attribution rules of Section 424(d)
of the Code shall apply in determining the stock ownership of
such Employee.
6.
Offerings.
6.1
Offering Periods.
Except as
otherwise set forth below, the Plan shall be implemented by two
series of Offerings. One series shall be of sequential Offerings
of approximately twelve (12) months duration or such other
duration as the Board shall determine (an
Annual
Offering Period
). The second series shall be of
Offerings of approximately six (6) months duration or such
other duration as the Board shall determine (a
Half-Year Offering Period
). Prior to
December 2004, Annual Offering Periods shall commence on or
about December 1 of each year and end on or about the first
November 30 occurring thereafter, and Half-Year Offering Periods
shall commence on or about June 1 of each year and end on or
about the first November 30 occurring thereafter. However, an
initial Offering (the
Initial Offering
Period
) shall commence on the Effective Date and
end on or about November 30, 2000. Commencing in December
2004, Annual Offering Periods shall commence on or about
December 16 of each year and end on or about the first December
15 occurring thereafter, and Half-Year Offering Periods shall
commence on or about June 16 of each year and end on or about
the first December 15 occurring thereafter. Notwithstanding the
foregoing, the Board may establish a different duration for one
or more Offering Periods or different commencing or ending dates
for such Offering Periods; provided, however, that no Offering
Period may have a duration exceeding twenty-seven
(27) months. If the first or last day of an Offering Period
is not a day on which the national securities exchanges or
Nasdaq Stock Market are open for trading, the Company shall
specify the trading day that will be deemed the first or last
day, as the case may be, of the Offering Period.
6.2
Purchase Periods.
Each Annual
Offering Period shall consist of two (2) consecutive
Purchase Periods of approximately six (6) months duration,
or such other number or duration as the Board determines. Prior
to December 2004, (a) a Purchase Period commencing on or
about December 1 shall end on or about the next May 31, and
a Purchase Period commencing on or about June 1 shall end on or
about the next November 30; and (b) each Half-Year Offering
Period shall consist of a single Purchase Period of
approximately six (6) months duration coterminous with such
Offering Period. However, the Initial Offering Period shall
consist of two (2) consecutive Purchase Periods ending on
or about May 31, 2000 and November 30, 2000,
respectively. Commencing in December 2004, (a) a Purchase
Period commencing on or about December 16 shall end on or about
the next June 15, and a Purchase Period commencing on or
about June 16 shall end on or about the next December 15; and
(b) each Half-Year Offering Period shall consist of a
single Purchase Period of approximately six (6) months
duration coterminous with such Offering Period. Notwithstanding
the foregoing, the Board may establish a different duration for
one or more Purchase Periods or different commencing or ending
dates for such Purchase Periods. If the first or last day of a
Purchase Period is not a day on which the national securities
exchanges or Nasdaq Stock Market are open for trading, the
Company shall specify the trading day that will be deemed the
first or last day, as the case may be, of the Purchase Period.
7.
Participation
in the Plan.
7.1
Initial Participation.
An
Eligible Employee may become a Participant in an Offering Period
by delivering a properly completed Subscription Agreement to the
office designated by the Company not later than the close of
business for such office on the Subscription Date established by
the Company for that Offering Period. An Eligible Employee who
does not deliver a properly completed Subscription Agreement to
the Companys designated office on or before the
Subscription Date for an Offering Period shall not participate
in the Plan for that Offering Period or for any subsequent
Offering Period unless the Eligible Employee subsequently
delivers a properly completed Subscription Agreement to the
appropriate office of the Company on or before the Subscription
Date for such subsequent Offering Period. An Employee who
becomes an Eligible Employee after the Offering Date of an
Offering Period shall not be eligible to participate in that
Offering Period but may participate in any subsequent Offering
Period provided the Employee is still an Eligible Employee as of
the Offering Date of such subsequent Offering Period.
7.2
Continued Participation.
A
Participant shall automatically participate in the next Offering
Period commencing immediately after the final Purchase Date of
each Offering Period in which the Participant participates
provided that the Participant remains an Eligible Employee on
the Offering Date of the new Offering Period and has
A-5
not either (a) withdrawn from the Plan pursuant to
Section 12.1 or (b) terminated employment as provided
in Section 13. A Participant who may automatically
participate in a subsequent Offering Period, as provided in this
Section, is not required to deliver any additional Subscription
Agreement for the subsequent Offering Period in order to
continue participation in the Plan. However, a Participant may
deliver a new Subscription Agreement for a subsequent Offering
Period in accordance with the procedures set forth in
Section 7.1 if the Participant desires to change any of the
elections contained in the Participants then effective
Subscription Agreement.
8.
Right
to Purchase Shares.
8.1
Grant of Purchase Right.
Except
as set forth below, on the Offering Date of each Offering
Period, each Participant in that Offering Period shall be
granted automatically a Purchase Right determined as follows:
(a)
Annual Offering Period.
Each
Purchase Right granted on the Offering Date of an Annual
Offering Period shall consist of an option to purchase that
number of whole shares of Stock determined by dividing
Twenty-Five Thousand Dollars ($25,000) by the Fair Market Value
of a share of Stock on the Offering Date.
(b)
Half-Year Offering
Period.
Each Purchase Right granted on the
Offering Date of a Half-Year Offering Period shall consist of an
option to purchase that number of whole shares of Stock
determined by dividing Twelve Thousand Five Hundred Dollars
($12,500) by the Fair Market Value of a share of Stock on the
Offering Date.
8.2
Pro Rata Adjustment of Purchase
Right.
If the Board establishes an Offering
Period of any duration other than twelve months or six months,
then the number of shares of Stock subject to each Purchase
Right granted on the Offering Date of such Offering Period shall
be determined as provided in Section 8.1, except that the
applicable dollar amount shall be determined by multiplying
$2,083.33 by the number of months (rounded to the nearest whole
month) in the Offering Period and rounding to the nearest whole
dollar.
8.3
Calendar Year Purchase
Limitation.
Notwithstanding any provision of the
Plan to the contrary, no Participant shall be granted a Purchase
Right which permits his or her right to purchase shares of Stock
under the Plan to accrue at a rate which, when aggregated with
such Participants rights to purchase shares under all
other employee stock purchase plans of a Participating Company
intended to meet the requirements of Section 423 of the
Code, exceeds Twenty-Five Thousand Dollars ($25,000) in Fair
Market Value (or such other limit, if any, as may be imposed by
the Code) for each calendar year in which such Purchase Right is
outstanding at any time. For purposes of the preceding sentence,
the Fair Market Value of shares purchased during a given
Offering Period shall be determined as of the Offering Date for
such Offering Period. The limitation described in this Section
shall be applied in conformance with applicable regulations
under Section 423(b)(8) of the Code.
9.
Purchase
Price.
The Purchase Price at which each share of Stock may be acquired
in an Offering Period upon the exercise of all or any portion of
a Purchase Right shall be established by the Board; provided,
however, that the Purchase Price on each Purchase Date shall not
be less than eighty-five percent (85%) of the lesser of
(a) the Fair Market Value of a share of Stock on the
Offering Date of the Offering Period or (b) the Fair Market
Value of a share of Stock on the Purchase Date. Unless otherwise
provided by the Board prior to the commencement of an Offering
Period, the Purchase Price on each Purchase Date during that
Offering Period shall be eighty-five percent (85%) of the lesser
of (a) the Fair Market Value of a share of Stock on the
Offering Date of the Offering Period, or (b) the Fair
Market Value of a share of Stock on the Purchase Date.
10.
Accumulation
of Purchase Price through Payroll Deduction.
Shares of Stock acquired pursuant to the exercise of all or any
portion of a Purchase Right may be paid for only by means of
payroll deductions from the Participants Compensation
accumulated during the Offering Period for which such Purchase
Right was granted, subject to the following:
10.1
Amount of Payroll
Deductions.
Except as otherwise provided herein,
the amount to be deducted under the Plan from a
Participants Compensation on each payday during an
Offering Period shall be determined by the Participants
Subscription Agreement. The Subscription Agreement shall set
forth the percentage of the
A-6
Participants Compensation to be deducted on each payday
during an Offering Period in whole percentages of not less than
one percent (1%) (except as a result of an election pursuant to
Section 10.3 to stop payroll deductions) or more than
twenty percent (20%); provided, however, that in no event may a
Participants payroll deductions on any payday for the
purchase of shares under the Plan and all other employee stock
purchase plans of a Participating Company intended to meet the
requirements of Section 423 of the Code exceed twenty
percent (20%) of the Participants Compensation on such
payday. The Board may change the foregoing limits on payroll
deductions effective as of any Offering Date.
10.2
Commencement of Payroll
Deductions.
Payroll deductions shall commence on
the first payday following the Offering Date and shall continue
to the end of the Offering Period unless sooner altered or
terminated as provided herein.
10.3
Election to Change or Stop Payroll
Deductions.
During an Offering Period, a
Participant may elect to increase or decrease the rate of or to
stop deductions from his or her Compensation by delivering to
the Companys designated office an amended Subscription
Agreement authorizing such change on or before the Change Notice
Date, as defined below. A Participant who elects, effective
following the first payday of an Offering Period, to decrease
the rate of his or her payroll deductions to zero percent (0%)
shall nevertheless remain a Participant in the current Offering
Period unless such Participant withdraws from the Plan as
provided in Section 12.1. The
Change Notice
Date
shall be the day immediately prior to the
beginning of the first pay period for which such election is to
be effective, unless a different date is established by the
Company and announced to the Participants.
10.4
Administrative Suspension of Payroll
Deductions.
The Company may, in its sole
discretion, suspend a Participants payroll deductions
under the Plan as the Company deems advisable to avoid
accumulating payroll deductions in excess of the amount that
could reasonably be anticipated to purchase the maximum number
of shares of Stock permitted (a) under the
Participants Purchase Right or (b) during a calendar
year under the limit set forth in Section 8.3. Payroll
deductions shall be resumed at the rate specified in the
Participants then effective Subscription Agreement at the
beginning, respectively, of (a) the next Offering Period,
provided that the individual is a Participant in such Offering
Period or (b) the next Purchase Period the Purchase Date of
which falls in the following calendar year, unless the
Participant has either withdrawn from the Plan as provided in
Section 12.1 or has ceased to be an Eligible Employee.
10.5
Participant
Accounts.
Individual bookkeeping accounts shall
be maintained for each Participant. All payroll deductions from
a Participants Compensation shall be credited to such
Participants Plan account and shall be deposited with the
general funds of the Company. All payroll deductions received or
held by the Company may be used by the Company for any corporate
purpose.
10.6
No Interest Paid.
Interest
shall not be paid on sums deducted from a Participants
Compensation pursuant to the Plan.
10.7
Voluntary Withdrawal from Plan
Account.
A Participant may withdraw all or any
portion of the payroll deductions credited to his or her Plan
account and not previously applied toward the purchase of Stock
by delivering to the Companys designated office a written
notice on a form provided by the Company for such purpose. A
Participant who withdraws the entire remaining balance credited
to his or her Plan account shall be deemed to have withdrawn
from the Plan in accordance with Section 12.1. Amounts
withdrawn shall be returned to the Participant as soon as
practicable after the Companys receipt of the notice of
withdrawal and may not be applied to the purchase of shares in
any Offering under the Plan. The Company may from time to time
establish or change limitations on the frequency of withdrawals
permitted under this Section, establish a minimum dollar amount
that must be retained in the Participants Plan account, or
terminate the withdrawal right provided by this Section.
11.
Purchase
of Shares.
11.1
Exercise of Purchase Right.
On
each Purchase Date of an Offering Period, each Participant who
has not withdrawn from the Plan and whose participation in the
Offering has not otherwise terminated before such Purchase Date
shall automatically acquire pursuant to the exercise of the
Participants Purchase Right the number of whole shares of
Stock determined by dividing (a) the total amount of the
Participants payroll deductions
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accumulated in the Participants Plan account during the
Offering Period and not previously applied toward the purchase
of Stock by (b) the Purchase Price. However, in no event
shall the number of shares purchased by the Participant during
an Offering Period exceed the number of shares subject to the
Participants Purchase Right. No shares of Stock shall be
purchased on a Purchase Date on behalf of a Participant whose
participation in the Offering or the Plan has terminated before
such Purchase Date.
11.2
Pro Rata Allocation of
Shares.
If the number of shares of Stock which
might be purchased by all Participants in the Plan on a Purchase
Date exceeds the number of shares of Stock available in the Plan
as provided in Section 4.1, the Company shall make a pro
rata allocation of the remaining shares in as uniform a manner
as practicable and as the Company determines to be equitable.
Any fractional share resulting from such pro rata allocation to
any Participant shall be disregarded.
11.3
Delivery of Certificates.
As
soon as practicable after each Purchase Date, the Company shall
arrange the delivery to each Participant of a certificate
representing the shares acquired by the Participant on such
Purchase Date; provided that the Company may deliver such shares
to a broker designated by the Company that will hold such shares
for the benefit of the Participant. Shares to be delivered to a
Participant under the Plan shall be registered in the name of
the Participant, or, if requested by the Participant, in the
name of the Participant and his or her spouse, or, if
applicable, in the names of the heirs of the Participant.
11.4
Return of Cash Balance.
Any
cash balance remaining in a Participants Plan account
following any Purchase Date shall be refunded to the Participant
as soon as practicable after such Purchase Date. However, if the
cash balance to be returned to a Participant pursuant to the
preceding sentence is less than the amount that would have been
necessary to purchase an additional whole share of Stock on such
Purchase Date, the Company may retain the cash balance in the
Participants Plan account to be applied toward the
purchase of shares of Stock in the subsequent Purchase Period or
Offering Period, as the case may be.
11.5
Tax Withholding.
At the time a
Participants Purchase Right is exercised, in whole or in
part, or at the time a Participant disposes of some or all of
the shares of Stock he or she acquires under the Plan, the
Participant shall make adequate provision for the federal,
state, local and foreign tax withholding obligations, if any, of
the Participating Company Group which arise upon exercise of the
Purchase Right or upon such disposition of shares, respectively.
The Participating Company Group may, but shall not be obligated
to, withhold from the Participants compensation the amount
necessary to meet such withholding obligations.
11.6
Expiration of Purchase
Right.
Any portion of a Participants
Purchase Right remaining unexercised after the end of the
Offering Period to which the Purchase Right relates shall expire
immediately upon the end of the Offering Period.
11.7
Provision of Reports and Stockholder
Information to Participants.
Each Participant who
has exercised all or part of his or her Purchase Right shall
receive, as soon as practicable after the Purchase Date, a
report of such Participants Plan account setting forth the
total payroll deductions accumulated prior to such exercise, the
number of shares of Stock purchased, the Purchase Price for such
shares, the date of purchase and the cash balance, if any,
remaining immediately after such purchase that is to be refunded
or retained in the Participants Plan account pursuant to
Section 11.4. The report required by this Section may be
delivered in such form and by such means, including by
electronic transmission, as the Company may determine. In
addition, each Participant shall be provided information
concerning the Company equivalent to that information provided
generally to the Companys common stockholders.
12.
Withdrawal
from Offering or Plan.
12.1
Voluntary Withdrawal.
A
Participant may withdraw from the Plan or any Offering by
signing and delivering to the Companys designated office a
written notice of withdrawal on a form provided by the Company
for this purpose. Such withdrawal may be elected at any time
prior to the end of an Offering Period; provided, however, that
if a Participant withdraws from the Plan or an Offering after a
Purchase Date, the withdrawal shall not affect shares of Stock
acquired by the Participant on such Purchase Date. A Participant
who voluntarily withdraws from the Plan or an Offering is
prohibited from resuming participation in the Plan in the same
Offering from which he or she withdrew, but may participate in
any subsequent Offering by again satisfying the requirements of
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Sections 5 and 7.1. The Company may impose, from time to
time, a requirement that the notice of withdrawal be on file
with the Companys designated office for a reasonable
period prior to the effectiveness of the Participants
withdrawal.
12.2
Return of Payroll
Deductions.
Upon a Participants voluntary
withdrawal from the Plan or an Offering pursuant to
Section 12.1, the Participants accumulated payroll
deductions which have not been applied toward the purchase of
shares shall be refunded to the Participant as soon as
practicable after the withdrawal, without the payment of any
interest, and the Participants interest in the Plan or the
Offering, as applicable, shall terminate. Such accumulated
payroll deductions to be refunded in accordance with this
Section may not be applied to any other Offering under the Plan.
13.
Termination
of Employment or Eligibility.
Upon a Participants ceasing, prior to a Purchase Date, to
be an Employee of the Participating Company Group for any
reason, including retirement, disability or death, or upon the
failure of a Participant to remain an Eligible Employee, the
Participants participation in the Plan shall terminate
immediately. In such event, the Participants accumulated
payroll deductions which have not been applied toward the
purchase of shares shall, as soon as practicable, be returned to
the Participant or, in the case of the Participants death,
to the Participants beneficiary designated in accordance
with Section 20, if any, or legal representative, and all
of the Participants rights under the Plan shall terminate.
Interest shall not be paid on sums returned pursuant to this
Section 13. A Participant whose participation has been so
terminated may again become eligible to participate in the Plan
by satisfying the requirements of Sections 5 and 7.1.
14.
Change
in Control.
14.1
Definitions.
(a) An
Ownership Change
Event
shall be deemed to have occurred if any of
the following occurs with respect to the Company: (i) the
direct or indirect sale or exchange in a single or series of
related transactions by the stockholders of the Company of more
than fifty percent (50%) of the voting stock of the Company;
(ii) a merger or consolidation in which the Company is a
party; (iii) the sale, exchange, or transfer of all or
substantially all of the assets of the Company; or (iv) a
liquidation or dissolution of the Company.
(b) A
Change in Control
shall mean an Ownership Change Event or a series of related
Ownership Change Events (collectively, the
Transaction
) wherein the stockholders
of the Company immediately before the Transaction do not retain
immediately after the Transaction, in substantially the same
proportions as their ownership of shares of the Companys
voting stock immediately before the Transaction, direct or
indirect beneficial ownership of more than fifty percent (50%)
of the total combined voting power of the outstanding voting
stock of the Company or the corporation or corporations to which
the assets of the Company were transferred (the
Transferee Corporation(s)
), as the
case may be. For purposes of the preceding sentence, indirect
beneficial ownership shall include, without limitation, an
interest resulting from ownership of the voting stock of one or
more corporations which, as a result of the Transaction, own the
Company or the Transferee Corporation(s), as the case may be,
either directly or through one or more subsidiary corporations.
The Board shall have the right to determine whether multiple
sales or exchanges of the voting stock of the Company or
multiple Ownership Change Events are related, and its
determination shall be final, binding and conclusive.
14.2
Effect of Change in Control on Purchase
Rights.
In the event of a Change in Control, the
surviving, continuing, successor, or purchasing corporation or
parent corporation thereof, as the case may be (the
Acquiring Corporation
), may assume the
Companys rights and obligations under the Plan. If the
Acquiring Corporation elects not to assume the Companys
rights and obligations under outstanding Purchase Rights, the
Purchase Date of the then current Purchase Period shall be
accelerated to a date before the date of the Change in Control
specified by the Board, but the number of shares of Stock
subject to outstanding Purchase Rights shall not be adjusted.
All Purchase Rights which are neither assumed by the Acquiring
Corporation in connection with the Change in Control nor
exercised as of the date of the Change in Control shall
terminate and cease to be outstanding effective as of the date
of the Change in Control.
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15.
Nontransferability
of Purchase Rights.
Neither payroll deductions credited to a Participants Plan
account nor a Participants Purchase Right may be assigned,
transferred, pledged or otherwise disposed of in any manner
other than as provided by the Plan or by will or the laws of
descent and distribution. (A beneficiary designation pursuant to
Section 20 shall not be treated as a disposition for this
purpose.) Any such attempted assignment, transfer, pledge or
other disposition shall be without effect, except that the
Company may treat such act as an election to withdraw from the
Plan as provided in Section 12.1. A Purchase Right shall be
exercisable during the lifetime of the Participant only by the
Participant.
16.
Compliance
with Securities Law.
The issuance of shares under the Plan shall be subject to
compliance with all applicable requirements of federal, state
and foreign law with respect to such securities. A Purchase
Right may not be exercised if the issuance of shares upon such
exercise would constitute a violation of any applicable federal,
state or foreign securities laws or other law or regulations or
the requirements of any securities exchange or market system
upon which the Stock may then be listed. In addition, no
Purchase Right may be exercised unless (a) a registration
statement under the Securities Act of 1933, as amended, shall at
the time of exercise of the Purchase Right be in effect with
respect to the shares issuable upon exercise of the Purchase
Right, or (b) in the opinion of legal counsel to the
Company, the shares issuable upon exercise of the Purchase Right
may be issued in accordance with the terms of an applicable
exemption from the registration requirements of said Act. The
inability of the Company to obtain from any regulatory body
having jurisdiction the authority, if any, deemed by the
Companys legal counsel to be necessary to the lawful
issuance and sale of any shares under the Plan shall relieve the
Company of any liability in respect of the failure to issue or
sell such shares as to which such requisite authority shall not
have been obtained. As a condition to the exercise of a Purchase
Right, the Company may require the Participant to satisfy any
qualifications that may be necessary or appropriate, to evidence
compliance with any applicable law or regulation, and to make
any representation or warranty with respect thereto as may be
requested by the Company.
17.
Rights
as a Stockholder and Employee.
A Participant shall have no rights as a stockholder by virtue of
the Participants participation in the Plan until the date
of the issuance of a certificate for the shares purchased
pursuant to the exercise of the Participants Purchase
Right (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company).
No adjustment shall be made for dividends, distributions or
other rights for which the record date is prior to the date such
certificate is issued, except as provided in Section 4.2.
Nothing herein shall confer upon a Participant any right to
continue in the employ of the Participating Company Group or
interfere in any way with any right of the Participating Company
Group to terminate the Participants employment at any time.
18.
Legends.
The Company may at any time place legends or other identifying
symbols referencing any applicable federal, state or foreign
securities law restrictions or any provision convenient in the
administration of the Plan on some or all of the certificates
representing shares of Stock issued under the Plan. The
Participant shall, at the request of the Company, promptly
present to the Company any and all certificates representing
shares acquired pursuant to a Purchase Right in the possession
of the Participant in order to carry out the provisions of this
Section. Unless otherwise specified by the Company, legends
placed on such certificates may include but shall not be limited
to the following:
THE SHARES EVIDENCED BY THIS CERTIFICATE WERE ISSUED BY
THE CORPORATION TO THE REGISTERED HOLDER UPON THE PURCHASE OF
SHARES UNDER AN EMPLOYEE STOCK PURCHASE PLAN AS DEFINED IN
SECTION 423 OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED. THE TRANSFER AGENT FOR THE SHARES EVIDENCED HEREBY
SHALL NOTIFY THE CORPORATION IMMEDIATELY OF ANY TRANSFER OF THE
SHARES BY THE REGISTERED HOLDER HEREOF. THE REGISTERED HOLDER
SHALL HOLD ALL SHARES PURCHASED UNDER THE PLAN IN THE REGISTERED
HOLDERS NAME (AND NOT IN THE NAME OF ANY NOMINEE).
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19.
Notification
of Disposition of Shares.
The Company may require the Participant to give the Company
prompt notice of any disposition of shares acquired by exercise
of a Purchase Right. The Company may require that until such
time as a Participant disposes of shares acquired upon exercise
of a Purchase Right, the Participant shall hold all such shares
in the Participants name (or, if elected by the
Participant, in the name of the Participant and his or her
spouse but not in the name of any nominee) until the later of
two years after the date of grant of such Purchase Right or one
year after the date of exercise of such Purchase Right. The
Company may direct that the certificates evidencing shares
acquired by exercise of a Purchase Right refer to such
requirement to give prompt notice of disposition.
20.
Designation
of Beneficiary.
20.1
Designation Procedure.
A
Participant may file a written designation of a beneficiary who
is to receive (a) shares and cash, if any, from the
Participants Plan account if the Participant dies
subsequent to a Purchase Date but prior to delivery to the
Participant of such shares and cash or (b) cash, if any,
from the Participants Plan account if the Participant dies
prior to the exercise of the Participants Purchase Right.
If a married Participant designates a beneficiary other than the
Participants spouse, the effectiveness of such designation
shall be subject to the consent of the Participants
spouse. A Participant may change his or her beneficiary
designation at any time by written notice to the Company.
20.2
Absence of Beneficiary
Designation.
If a Participant dies without an
effective designation pursuant to Section 20.1 of a
beneficiary who is living at the time of the Participants
death, the Company shall deliver any shares or cash credited to
the Participants Plan account to the Participants
legal representative.
21.
Notices.
All notices or other communications by a Participant to the
Company under or in connection with the Plan shall be deemed to
have been duly given when received in the form specified by the
Company at the location, or by the person, designated by the
Company for the receipt thereof.
22.
Amendment
or Termination of the Plan.
The Board may at any time amend or terminate the Plan, except
that (a) no such amendment or termination shall affect
Purchase Rights previously granted under the Plan unless
expressly provided by the Board and (b) no such amendment
or termination may adversely affect a Purchase Right previously
granted under the Plan without the consent of the Participant,
except to the extent permitted by the Plan or as may be
necessary to qualify the Plan as an employee stock purchase plan
pursuant to Section 423 of the Code or to comply with any
applicable law, regulation or rule. Notwithstanding the
foregoing, any purchase right granted on or after March 2,
2005 may be amended or terminated immediately upon Board
action, should the financial accounting rules applicable to the
Plan as of March 2, 2005 be subsequently revised so as to
require the Company to recognize compensation cost in connection
with the shares of Stock offered for purchase under the such
right. Any amendment to the Plan that would authorize the sale
of more shares than are then authorized for issuance under the
Plan or would change the definition of the corporations that may
be designated by the Board as Participating Companies must be
approved by the stockholders of the Company within twelve
(12) months of the adoption of such amendment.
IN WITNESS WHEREOF, the undersigned Secretary of the Company
certifies that the foregoing sets forth the Finisar Corporation
1999 Employee Stock Purchase Plan, as amended and restated
through March 2, 2005, subject to the approval of the
stockholders at the 2004 Annual Meeting.
Secretary
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AMENDMENT
TO
1999 EMPLOYEE STOCK PURCHASE PLAN
The Finisar Corporation 1999 Employee Stock Purchase Plan as
amended and restated effective March 5, 2005 (the
Plan
) is hereby amended, effective
September 9, 2009, as follows:
1. There is hereby added after the first sentence of
Section 4.1 of the Plan the following new sentence:
In addition, subject to stockholder approval at the 2009 Annual
Meeting, an additional 250,000 shares of Stock shall be
available for issuance under Purchase Rights to be exercised on
the December 15, 2009 Purchase Date.
2. Except as modified by this Plan Amendment, all the
terms and provisions of the Plan as in effect immediately prior
to such amendment shall continue in full force and effect.
IN WITNESS WHEREOF,
Finisar Corporation has caused this
Plan Amendment to be executed on its behalf by its
duly-authorized officer on the date indicated below.
FINISAR CORPORATION
Dated: ,
2009
A-12
FINISAR
CORPORATION
2009 EMPLOYEE STOCK PURCHASE PLAN
1.
Establishment
and Purpose of Plan.
1.1
Establishment.
The Finisar
Corporation 2009 Employee Stock Purchase Plan (the
Plan
) was adopted by the Board on
September 9, 2009 and shall become effective upon approval
by the stockholders of the Company at the 2009 Annual Meeting.
1.2
Purpose.
The purpose of the
Plan is to advance the interests of Company and its stockholders
by providing an incentive to attract, retain and reward Eligible
Employees of the Participating Company Group and by motivating
such persons to contribute to the growth and profitability of
the Participating Company Group. The Plan provides such Eligible
Employees with an opportunity to acquire a proprietary interest
in the Company through the purchase of Stock. The Company
intends that the Plan qualify as an employee stock
purchase plan under Section 423 of the Code
(including any amendments or replacements of such section), and
the Plan shall be so construed.
2.
Definitions
and Construction.
2.1
Definitions.
Any term not
expressly defined in the Plan but defined for purposes of
Section 423 of the Code shall have the same definition
herein. Whenever used herein, the following terms shall have
their respective meanings set forth below:
(a)
Board
means the Board of
Directors of the Company. If one or more Committees have been
appointed by the Board to administer the Plan, Board
also means such Committee(s).
(b)
Code
means the Internal
Revenue Code of 1986, as amended, and any applicable regulations
promulgated thereunder.
(c)
Committee
means a committee
of the Board duly appointed to administer the Plan and having
such powers as specified by the Board. Unless the powers of the
Committee have been specifically limited, the Committee shall
have all of the powers of the Board granted herein, including,
without limitation, the power to amend or terminate the Plan at
any time, subject to the terms of the Plan and any applicable
limitations imposed by law.
(d)
Company
means Finisar
Corporation, a Delaware corporation, or any successor
corporation thereto.
(e)
Compensation
means, with
respect to any Offering Period, base wages or salary, overtime
pay, bonuses, commissions, shift differentials, payments for
paid time off, payments in lieu of notice, and any of such
compensation deferred under any program or plan established by a
Participating Company, including, without limitation, pursuant
to Section 401(k) or Section 125 of the Code.
Compensation shall be limited to amounts actually payable in
cash directly to the Participant or deferred by the Participant
during the Offering Period. However, notwithstanding the
foregoing, Compensation shall not include sign-on bonuses,
profit sharing, payments pursuant to a severance agreement,
termination pay, moving allowances, relocation payments, expense
reimbursements, the cost of employee benefits paid by a
Participating Company, tuition reimbursements, imputed income
arising under any benefit program, contributions made by a
Participating Company under any employee benefit plan, income
directly or indirectly received pursuant to the Plan or any
other stock purchase or stock option plan, or any other
compensation not included above.
(f)
Eligible Employee
means an
Employee who meets the requirements set forth in Section 5
for eligibility to participate in the Plan.
(g)
Employee
means a person
treated as an employee of a Participating Company for purposes
of Section 423 of the Code. A Participant shall be deemed
to have ceased to be an Employee either upon an actual
termination of employment or upon the corporation employing the
Participant ceasing to be a Participating
B-1
Company. For purposes of the Plan, an individual shall not be
deemed to have ceased to be an Employee while on any military
leave, sick leave, or other bona fide leave of absence approved
by the Company of ninety (90) days or less. If an
individuals leave of absence exceeds ninety
(90) days, the individual shall be deemed to have ceased to
be an Employee on the ninety-first (91st) day of such leave
unless the individuals right to reemployment with the
Participating Company Group is guaranteed either by statute or
by contract. The Company shall determine in good faith and in
the exercise of its discretion whether an individual has become
or has ceased to be an Employee and the effective date of such
individuals employment or termination of employment, as
the case may be. All such determinations by the Company shall be
final, binding and conclusive, notwithstanding that the Company
or any governmental agency subsequently makes a contrary
determination.
(h)
Fair Market Value
means, as
of any date:
(i) If the Stock is then listed on a national or regional
securities exchange or market system or is regularly quoted by a
recognized securities dealer, the closing sale price of a share
of Stock (or the mean of the closing bid and asked prices if the
Stock is so quoted instead) as quoted on the Nasdaq National
Market, the Nasdaq SmallCap Market or such other national or
regional securities exchange or market system constituting the
primary market for the Stock, or by such recognized securities
dealer, as reported in
The Wall Street Journal
or such
other source as the Company deems reliable. If the relevant date
does not fall on a day on which the Stock has traded on such
securities exchange or market system or has been quoted by such
securities dealer, the date on which the Fair Market Value is
established shall be the last day on which the Stock was so
traded or quoted prior to the relevant date, or such other
appropriate day as determined by the Board, in its discretion.
(ii) If, on the relevant date, the Stock is not then listed
on a national or regional securities exchange or market system
or regularly quoted by a recognized securities dealer, the Fair
Market Value of a share of Stock shall be as determined in good
faith by the Board.
(i)
International Plan
means the
Finisar Corporation 2009 International Employee Stock Purchase
Plan.
(j)
Offering
means an offering of
Stock as provided in Section 6.
(k)
Offering Date
means, for any
Offering, the first day of the Offering Period.
(l)
Offering Period
means a
period established in accordance with Section 6.1.
(m)
Parent Corporation
means any
present or future parent corporation of the Company,
as defined in Section 424(e) of the Code.
(n)
Participant
means an Eligible
Employee who has become a participant in an Offering Period in
accordance with Section 7 and remains a participant in
accordance with the Plan.
(o)
Participating Company
means
the Company or any Parent Corporation or Subsidiary Corporation
designated by the Board as a corporation the Employees of which
may, if Eligible Employees, participate in the Plan. The Board
shall have the sole and absolute discretion to determine from
time to time which Parent Corporations or Subsidiary
Corporations shall be Participating Companies.
(p)
Participating Company Group
means, at any point in time, the Company and all other
corporations collectively which are then Participating Companies.
(q)
Purchase Date
means, for any
Purchase Period, the last day of such period.
(r)
Purchase Period
means a
period established in accordance with Section 6.2.
(s)
Purchase Price
means the
price at which a share of Stock may be purchased under the Plan,
as determined in accordance with Section 9.
(t)
Purchase Right
means an
option granted to a Participant pursuant to the Plan to purchase
such shares of Stock as provided in Section 8, which the
Participant may or may not exercise during the Offering
B-2
Period in which such option is outstanding. Such option arises
from the right of a Participant to withdraw any accumulated
payroll deductions of the Participant not previously applied to
the purchase of Stock under the Plan and to terminate
participation in the Plan at any time during an Offering Period.
(u)
Stock
means the common stock
of the Company, as adjusted from time to time in accordance with
Section 4.2.
(v)
Subscription Agreement
means
a written agreement in such form as specified by the Company,
stating an Employees election to participate in the Plan
and authorizing payroll deductions under the Plan from the
Employees Compensation.
(w)
Subscription Date
means the
last business day prior to the Offering Date of an Offering
Period or such earlier date as the Company shall establish.
(x)
Subsidiary Corporation
means
any present or future subsidiary corporation of the
Company, as defined in Section 424(f) of the Code.
2.2
Construction.
Captions and
titles contained herein are for convenience only and shall not
affect the meaning or interpretation of any provision of the
Plan. Except when otherwise indicated by the context, the
singular shall include the plural and the plural shall include
the singular. Use of the term or is not intended to
be exclusive, unless the context clearly requires otherwise.
3.
Administration.
3.1
Administration by the
Board.
The Plan shall be administered by the
Board. All questions of interpretation of the Plan, of any form
of agreement or other document employed by the Company in the
administration of the Plan, or of any Purchase Right shall be
determined by the Board and shall be final and binding upon all
persons having an interest in the Plan or the Purchase Right.
Subject to the provisions of the Plan, the Board shall determine
all of the relevant terms and conditions of Purchase Rights;
provided, however, that all Participants granted Purchase Rights
pursuant to an Offering shall have the same rights and
privileges within the meaning of Section 423(b)(5) of the
Code. All expenses incurred in connection with the
administration of the Plan shall be paid by the Company.
3.2
Authority of Officers.
Any
officer of the Company shall have the authority to act on behalf
of the Company with respect to any matter, right, obligation,
determination or election that is the responsibility of or that
is allocated to the Company herein, provided that the officer
has apparent authority with respect to such matter, right,
obligation, determination or election.
3.3
Policies and Procedures Established by the
Company.
The Company may, from time to time,
consistent with the Plan and the requirements of
Section 423 of the Code, establish, change or terminate
such rules, guidelines, policies, procedures, limitations, or
adjustments as deemed advisable by the Company, in its
discretion, for the proper administration of the Plan,
including, without limitation, (a) a minimum payroll
deduction amount required for participation in an Offering,
(b) a limitation on the frequency or number of changes
permitted in the rate of payroll deduction during an Offering,
(c) an exchange ratio applicable to amounts withheld in a
currency other than United States dollars, (d) a payroll
deduction greater than or less than the amount designated by a
Participant in order to adjust for the Companys delay or
mistake in processing a Subscription Agreement or in otherwise
effecting a Participants election under the Plan or as
advisable to comply with the requirements of Section 423 of
the Code, and (e) determination of the date and manner by
which the Fair Market Value of a share of Stock is determined
for purposes of administration of the Plan.
3.4
Indemnification.
In addition to
such other rights of indemnification as they may have as members
of the Board or officers or employees of the Participating
Company Group, members of the Board and any officers or
employees of the Participating Company Group to whom authority
to act for the Board or the Company is delegated shall be
indemnified by the Company against all reasonable expenses,
including attorneys fees, actually and necessarily
incurred in connection with the defense of any action, suit or
proceeding, or in connection with any appeal therein, to which
they or any of them may be a party by reason of any action taken
or failure to act under or in connection with the Plan, or any
right granted hereunder, and against all amounts paid by them in
settlement thereof
B-3
(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, except in
relation to matters as to which it shall be adjudged in such
action, suit or proceeding that such person is liable for gross
negligence, bad faith or intentional misconduct in duties;
provided, however, that within sixty (60) days after the
institution of such action, suit or proceeding, such person
shall offer to the Company, in writing, the opportunity at its
own expense to handle and defend the same.
4.
Shares
Subject to Plan.
4.1
Maximum Number of Shares
Issuable.
Subject to adjustment as provided in
Section 4.2, the maximum aggregate number of shares of
Stock that may be issued under the Plan and the International
Plan shall be twenty million (20,000,000), cumulatively
increased on May 1 of each year commencing on May 1, 2010
and ending May 1, 2015 by one million (1,000,000) shares
(the
Annual Increase
), and shall
consist of authorized but unissued or reacquired shares of
Stock, or any combination thereof. Any shares issued under the
Plan shall reduce on a share-for-share basis the number of
shares of Stock available for subsequent issuance under the
International Plan. If an outstanding Purchase Right for any
reason expires or is terminated or canceled, the shares of Stock
allocable to the unexercised portion of that Purchase Right
shall again be available for issuance under the Plan.
4.2
Adjustments for Changes in Capital
Structure.
In the event of any stock dividend,
stock split, reverse stock split, recapitalization, combination,
reclassification or similar change in the capital structure of
the Company, or in the event of any merger (including a merger
effected for the purpose of changing the Companys
domicile), sale of assets or other reorganization in which the
Company is a party, appropriate adjustments shall be made in the
number and class of shares available for issuance in the
aggregate under the Plan and the International Plan, the Annual
Increase and each Purchase Right, and in the Purchase Price. If
a majority of the shares of the same class as the shares subject
to outstanding Purchase Rights are exchanged for, converted
into, or otherwise become (whether or not pursuant to an
Ownership Change Event) shares of another corporation (the
New Shares
), the Board may
unilaterally amend the outstanding Purchase Rights to provide
that such Purchase Rights are exercisable for New Shares. In the
event of any such amendment, the number of shares subject to,
and the Purchase Price of, the outstanding Purchase Rights shall
be adjusted in a fair and equitable manner, as determined by the
Board, in its discretion. Notwithstanding the foregoing, any
fractional share resulting from an adjustment pursuant to this
Section 4.2 shall be rounded down to the nearest whole
number, and in no event may the Purchase Price be decreased to
an amount less than the par value, if any, of the stock subject
to the Purchase Right. The adjustments determined by the Board
pursuant to this Section 4.2 shall be made in such a manner
to prevent the dilution or enlargement of benefits under the
Plan and the outstanding Purchase Rights thereunder, and such
adjustments shall be final, binding and conclusive.
5.
Eligibility.
5.1
Employees Eligible to
Participate.
Each Employee of a Participating
Company is eligible to participate in the Plan and shall be
deemed an Eligible Employee, except any Employee who is either:
(a) customarily employed by the Participating Company Group
for twenty (20) hours or less per week or
(b) customarily employed by the Participating Company Group
for not more than five (5) months in any calendar year.
5.2
Exclusion of Certain
Stockholders.
Notwithstanding any provision of
the Plan to the contrary, no Employee shall be granted a
Purchase Right under the Plan if, immediately after such grant,
the Employee would own or hold options to purchase stock of the
Company or of any Parent Corporation or Subsidiary Corporation
possessing five percent (5%) or more of the total combined
voting power or value of all classes of stock of such
corporation, as determined in accordance with
Section 423(b)(3) of the Code. For purposes of this
Section 5.2, the attribution rules of Section 424(d)
of the Code shall apply in determining the stock ownership of
such Employee.
6.
Offerings.
6.1
Offering Periods.
Except as
otherwise set forth below, the Plan shall be implemented by two
series of Offerings. One series shall be of sequential Offerings
of approximately twelve (12) months duration or such other
B-4
duration as the Board shall determine (an
Annual
Offering Period
). The second series shall be of
Offerings of approximately six (6) months duration or such
other duration as the Board shall determine (a
Half-Year Offering Period
). Annual
Offering Periods shall commence on or about December 16 of each
year and end on or about the first December 15 occurring
thereafter. The first Annual Offering Period shall commence on
December 16, 2009 and end on December 15, 2010.
Half-Year Offering Periods shall commence on or about June 16 of
each year and end on or about the first December 15 occurring
thereafter. Notwithstanding the foregoing, the Board may
establish a different duration for one or more Offering Periods
or different commencing or ending dates for such Offering
Periods; provided, however, that no Offering Period may have a
duration exceeding twenty-seven (27) months. If the first
or last day of an Offering Period is not a day on which the
national securities exchanges or Nasdaq Stock Market are open
for trading, the Company shall specify the trading day that will
be deemed the first or last day, as the case may be, of the
Offering Period.
6.2
Purchase Periods.
Each Annual
Offering Period shall consist of two (2) consecutive
Purchase Periods of approximately six (6) months duration,
or such other number or duration as the Board determines. A
Purchase Period commencing on or about December 16 shall end on
or about the next June 15, and a Purchase Period commencing
on or about June 16 shall end on or about the next
December 15. Each Half-Year Offering Period shall consist
of a single Purchase Period of approximately six (6) months
duration coterminous with such Offering Period. Notwithstanding
the foregoing, the Board may establish a different duration for
one or more Purchase Periods or different commencing or ending
dates for such Purchase Periods. If the first or last day of a
Purchase Period is not a day on which the national securities
exchanges or Nasdaq Stock Market are open for trading, the
Company shall specify the trading day that will be deemed the
first or last day, as the case may be, of the Purchase Period.
7.
Participation
in the Plan.
7.1
Initial Participation.
An
Eligible Employee may become a Participant in an Offering Period
by delivering a properly completed Subscription Agreement to the
office designated by the Company not later than the close of
business for such office on the Subscription Date established by
the Company for that Offering Period. An Eligible Employee who
does not deliver a properly completed Subscription Agreement to
the Companys designated office on or before the
Subscription Date for an Offering Period shall not participate
in the Plan for that Offering Period or for any subsequent
Offering Period unless the Eligible Employee subsequently
delivers a properly completed Subscription Agreement to the
appropriate office of the Company on or before the Subscription
Date for such subsequent Offering Period. An Employee who
becomes an Eligible Employee after the Offering Date of an
Offering Period shall not be eligible to participate in that
Offering Period but may participate in any subsequent Offering
Period provided the Employee is still an Eligible Employee as of
the Offering Date of such subsequent Offering Period.
7.2
Continued Participation.
A
Participant shall automatically participate in the next Offering
Period commencing immediately after the final Purchase Date of
each Offering Period in which the Participant participates
provided that the Participant remains an Eligible Employee on
the Offering Date of the new Offering Period and has not either
(a) withdrawn from the Plan pursuant to Section 13.1
or (b) terminated employment as provided in
Section 14. A Participant who may automatically participate
in a subsequent Offering Period, as provided in this Section, is
not required to deliver any additional Subscription Agreement
for the subsequent Offering Period in order to continue
participation in the Plan. However, a Participant may deliver a
new Subscription Agreement for a subsequent Offering Period in
accordance with the procedures set forth in Section 7.1 if
the Participant desires to change any of the elections contained
in the Participants then effective Subscription Agreement.
8.
Right
to Purchase Shares.
8.1
Grant of Purchase Right.
Except
as set forth below, on the Offering Date of each Offering
Period, each Participant in that Offering Period shall be
granted automatically a Purchase Right determined as follows:
(a)
Annual Offering Period.
Each
Purchase Right granted on the Offering Date of an Annual
Offering Period shall consist of an option to purchase that
number of whole shares of Stock determined by dividing
Twenty-Five Thousand Dollars ($25,000) by the Fair Market Value
of a share of Stock on the Offering Date.
B-5
(b)
Half-Year Offering
Period.
Each Purchase Right granted on the
Offering Date of a Half-Year Offering Period shall consist of an
option to purchase that number of whole shares of Stock
determined by dividing Twelve Thousand Five Hundred Dollars
($12,500) by the Fair Market Value of a share of Stock on the
Offering Date.
8.2
Pro Rata Adjustment of Purchase
Right.
If the Board establishes an Offering
Period of any duration other than twelve months or six months,
then the number of shares of Stock subject to each Purchase
Right granted on the Offering Date of such Offering Period shall
be determined as provided in Section 8.1, except that the
applicable dollar amount shall be determined by multiplying
$2,083.33 by the number of months (rounded to the nearest whole
month) in the Offering Period and rounding to the nearest whole
dollar.
8.3
Calendar Year Purchase
Limitation.
Notwithstanding any provision of the
Plan to the contrary, no Participant shall be granted a Purchase
Right which permits his or her right to purchase shares of Stock
under the Plan to accrue at a rate which, when aggregated with
such Participants rights to purchase shares under all
other employee stock purchase plans of a Participating Company
intended to meet the requirements of Section 423 of the
Code, exceeds Twenty-Five Thousand Dollars ($25,000) in Fair
Market Value (or such other limit, if any, as may be imposed by
the Code) for each calendar year in which such Purchase Right is
outstanding at any time. For purposes of the preceding sentence,
the Fair Market Value of shares purchased during a given
Offering Period shall be determined as of the Offering Date for
such Offering Period. The limitation described in this Section
shall be applied in conformance with applicable regulations
under Section 423(b)(8) of the Code.
8.4
Maximum Number of Shares Purchasable by All
Participants.
Notwithstanding any provision of
the Plan to the contrary, the maximum number of shares
purchasable in total by all Participants in this Plan and the
International Plan on any one Purchase Date shall not exceed
one-half of one percent (0.5%) of that number of shares of Stock
outstanding on the immediately preceding May 1 of the calendar
year in which such Purchase Date occurs. However, the Board
shall have the discretionary authority, exercisable prior to the
start of any Offering Period, to increase or decrease the
limitation to be in effect for the number of shares purchasable
in total by all Participants on each Purchase Date during that
Offering Period.
9.
Purchase
Price.
The Purchase Price at which each share of Stock may be acquired
in an Offering Period upon the exercise of all or any portion of
a Purchase Right shall be established by the Board; provided,
however, that the Purchase Price on each Purchase Date shall not
be less than eighty-five percent (85%) of the lesser of
(a) the Fair Market Value of a share of Stock on the
Offering Date of the Offering Period or (b) the Fair Market
Value of a share of Stock on the Purchase Date. Unless otherwise
provided by the Board prior to the commencement of an Offering
Period, the Purchase Price on each Purchase Date during that
Offering Period shall be eighty-five percent (85%) of the lesser
of (a) the Fair Market Value of a share of Stock on the
Offering Date of the Offering Period, or (b) the Fair
Market Value of a share of Stock on the Purchase Date.
10.
Accumulation
of Purchase Price through Payroll Deduction.
Shares of Stock acquired pursuant to the exercise of all or any
portion of a Purchase Right may be paid for only by means of
payroll deductions from the Participants Compensation
accumulated during the Offering Period for which such Purchase
Right was granted, subject to the following:
10.1
Amount of Payroll
Deductions.
Except as otherwise provided herein,
the amount to be deducted under the Plan from a
Participants Compensation on each payday during an
Offering Period shall be determined by the Participants
Subscription Agreement. The Subscription Agreement shall set
forth the percentage of the Participants Compensation to
be deducted on each payday during an Offering Period in whole
percentages of not less than one percent (1%) (except as a
result of an election pursuant to Section 10.3 to stop
payroll deductions) or more than twenty percent (20%); provided,
however, that in no event may a Participants payroll
deductions on any payday for the purchase of shares under the
Plan and all other employee stock purchase plans of a
Participating Company intended to meet the requirements of
Section 423 of the Code exceed twenty percent (20%) of the
Participants Compensation on such payday. The Board may
change the foregoing limits on payroll deductions effective as
of any Offering Date.
B-6
10.2
Commencement of Payroll
Deductions.
Payroll deductions shall commence on
the first payday following the Offering Date and shall continue
to the end of the Offering Period unless sooner altered or
terminated as provided herein.
10.3
Election to Change or Stop Payroll
Deductions.
During an Offering Period, a
Participant may elect to increase or decrease the rate of or to
stop deductions from his or her Compensation by delivering to
the Companys designated office an amended Subscription
Agreement authorizing such change on or before the Change Notice
Date, as defined below. A Participant who elects, effective
following the first payday of an Offering Period, to decrease
the rate of his or her payroll deductions to zero percent (0%)
shall nevertheless remain a Participant in the current Offering
Period unless such Participant withdraws from the Plan as
provided in Section 13.1. The
Change Notice
Date
shall be the day immediately prior to the
beginning of the first pay period for which such election is to
be effective, unless a different date is established by the
Company and announced to the Participants.
10.4
Administrative Suspension of Payroll
Deductions.
The Company may, in its sole
discretion, suspend a Participants payroll deductions
under the Plan as the Company deems advisable to avoid
accumulating payroll deductions in excess of the amount that
could reasonably be anticipated to purchase the maximum number
of shares of Stock permitted (a) under the
Participants Purchase Right or (b) during a calendar
year under the limit set forth in Section 8.3. Payroll
deductions shall be resumed at the rate specified in the
Participants then effective Subscription Agreement at the
beginning, respectively, of (a) the next Offering Period,
provided that the individual is a Participant in such Offering
Period or (b) the next Purchase Period the Purchase Date of
which falls in the following calendar year, unless the
Participant has either withdrawn from the Plan as provided in
Section 13.1 or has ceased to be an Eligible Employee.
10.5
Participant
Accounts.
Individual bookkeeping accounts shall
be maintained for each Participant. All payroll deductions from
a Participants Compensation shall be credited to such
Participants Plan account and shall be deposited with the
general funds of the Company. All payroll deductions received or
held by the Company may be used by the Company for any corporate
purpose.
10.6
No Interest Paid.
Interest
shall not be paid on sums deducted from a Participants
Compensation pursuant to the Plan.
10.7
Voluntary Withdrawal from Plan
Account.
A Participant may withdraw all or any
portion of the payroll deductions credited to his or her Plan
account and not previously applied toward the purchase of Stock
by delivering to the Companys designated office a written
notice on a form provided by the Company for such purpose. A
Participant who withdraws the entire remaining balance credited
to his or her Plan account shall be deemed to have withdrawn
from the Plan in accordance with Section 13.1. Amounts
withdrawn shall be returned to the Participant as soon as
practicable after the Companys receipt of the notice of
withdrawal and may not be applied to the purchase of shares in
any Offering under the Plan. The Company may from time to time
establish or change limitations on the frequency of withdrawals
permitted under this Section, establish a minimum dollar amount
that must be retained in the Participants Plan account, or
terminate the withdrawal right provided by this Section.
11.
Purchase
of Shares.
11.1
Exercise of Purchase Right.
On
each Purchase Date of an Offering Period, each Participant who
has not withdrawn from the Plan and whose participation in the
Offering has not otherwise terminated before such Purchase Date
shall automatically acquire pursuant to the exercise of the
Participants Purchase Right the number of whole shares of
Stock determined by dividing (a) the total amount of the
Participants payroll deductions accumulated in the
Participants Plan account during the Offering Period and
not previously applied toward the purchase of Stock by
(b) the Purchase Price. However, in no event shall the
number of shares purchased by the Participant during an Offering
Period exceed the number of shares subject to the
Participants Purchase Right. No shares of Stock shall be
purchased on a Purchase Date on behalf of a Participant whose
participation in the Offering or the Plan has terminated before
such Purchase Date.
11.2
Pro Rata Allocation of
Shares.
If the number of shares of Stock which
might be purchased by all Participants in the Plan on a Purchase
Date exceeds the number of shares of Stock available in the Plan
as provided
B-7
in Section 4.1 or the maximum number of shares purchasable
in total by all Participants in the Plan and the International
Plan on any one Purchase Date as provided in Section 8.4,
the Company shall make a pro rata allocation of the remaining
shares in as uniform a manner as practicable and as the Company
determines to be equitable. Any fractional share resulting from
such pro rata allocation to any Participant shall be disregarded.
11.3
Delivery of Certificates.
As
soon as practicable after each Purchase Date, the Company shall
arrange the delivery to each Participant of a certificate
representing the shares acquired by the Participant on such
Purchase Date; provided that the Company may deliver such shares
to a broker designated by the Company that will hold such shares
for the benefit of the Participant. Shares to be delivered to a
Participant under the Plan shall be registered in the name of
the Participant, or, if requested by the Participant, in the
name of the Participant and his or her spouse, or, if
applicable, in the names of the heirs of the Participant.
11.4
Return of Cash Balance.
Any
cash balance remaining in a Participants Plan account
following any Purchase Date shall be refunded to the Participant
as soon as practicable after such Purchase Date. However, if the
cash balance to be returned to a Participant pursuant to the
preceding sentence is less than the amount that would have been
necessary to purchase an additional whole share of Stock on such
Purchase Date, the Company may retain the cash balance in the
Participants Plan account to be applied toward the
purchase of shares of Stock in the subsequent Purchase Period or
Offering Period, as the case may be.
11.5
Tax Withholding.
At the time a
Participants Purchase Right is exercised, in whole or in
part, or at the time a Participant disposes of some or all of
the shares of Stock he or she acquires under the Plan, the
Participant shall make adequate provision for the federal,
state, local and foreign tax withholding obligations, if any, of
the Participating Company Group which arise upon exercise of the
Purchase Right or upon such disposition of shares, respectively.
The Participating Company Group may, but shall not be obligated
to, withhold from the Participants compensation the amount
necessary to meet such withholding obligations.
11.6
Expiration of Purchase
Right.
Any portion of a Participants
Purchase Right remaining unexercised after the end of the
Offering Period to which the Purchase Right relates shall expire
immediately upon the end of the Offering Period.
11.7
Provision of Reports and Stockholder
Information to Participants.
Each Participant who has
exercised all or part of his or her Purchase Right shall
receive, as soon as practicable after the Purchase Date, a
report of such Participants Plan account setting forth the
total payroll deductions accumulated prior to such exercise, the
number of shares of Stock purchased, the Purchase Price for such
shares, the date of purchase and the cash balance, if any,
remaining immediately after such purchase that is to be refunded
or retained in the Participants Plan account pursuant to
Section 11.4. The report required by this Section may be
delivered in such form and by such means, including by
electronic transmission, as the Company may determine. In
addition, each Participant shall be provided information
concerning the Company equivalent to that information provided
generally to the Companys common stockholders.
12.
ESPP
Brokerage
Account.
12.1 The Company may require that the shares
purchased on behalf of each Participant shall be deposited
directly into a brokerage account which the Company shall
establish for the Participant at a Company-designated brokerage
firm. The account will be known as the ESPP Brokerage Account.
The following policies and procedures shall be in place for any
shares deposited into the Participants ESPP Broker Account
until those shares have been held for the requisite period
necessary to avoid a disqualifying disposition under the federal
tax laws. Accordingly, the shares must be held in the ESPP
Brokerage Account until the later of the following two periods:
(i) the end of the two (2)-year period measured from the
start date of the Offering Period in which the shares were
purchased and (ii) the end of the one (1)-year measured
from the actual Purchase Date of those shares.
12.2 The deposited shares shall not be transferable
(either electronically or in certificate form) from the ESPP
Brokerage Account until the required holding period for those
shares is satisfied. Such limitation shall apply both to
transfers to different accounts with the same ESPP broker and to
transfers to other brokerage firms. Any shares held for the
required holding period may be transferred (either
electronically or in certificate form) to other accounts or to
other brokerage firms.
B-8
12.3
The foregoing procedures shall not in any
way limit when the Participant may sell his or her
shares.
Those procedures are designed solely
to assure that any sale of shares prior to the satisfaction of
the required holding period is made through the ESPP Brokerage
Account. In addition, the Participant may request a stock
certificate or share transfer from his or her ESPP Brokerage
Account prior to the satisfaction of the required holding period
should the Participant wish to make a gift of any shares held in
that account. However, shares may not be transferred (either
electronically or in certificate form) from the ESPP Brokerage
Account for use as collateral for a loan, unless those shares
have been held for the required holding period.
12.4 To the extent the Board requires that shares be
deposited in the ESPP Brokerage Account, the foregoing
procedures shall apply to all shares purchased by the
Participant under the Plan, whether or not the Participant
continues to be an Employee.
13.
Withdrawal
from Offering or Plan.
13.1
Voluntary Withdrawal.
A
Participant may withdraw from the Plan or any Offering by
signing and delivering to the Companys designated office a
written notice of withdrawal on a form provided by the Company
for this purpose. Such withdrawal may be elected at any time
prior to the end of an Offering Period; provided, however, that
if a Participant withdraws from the Plan or an Offering after a
Purchase Date, the withdrawal shall not affect shares of Stock
acquired by the Participant on such Purchase Date. A Participant
who voluntarily withdraws from the Plan or an Offering is
prohibited from resuming participation in the Plan in the same
Offering from which he or she withdrew, but may participate in
any subsequent Offering by again satisfying the requirements of
Sections 5 and 7.1. The Company may impose, from time to
time, a requirement that the notice of withdrawal be on file
with the Companys designated office for a reasonable
period prior to the effectiveness of the Participants
withdrawal.
13.2
Return of Payroll
Deductions.
Upon a Participants voluntary
withdrawal from the Plan or an Offering pursuant to
Section 13.1, the Participants accumulated payroll
deductions which have not been applied toward the purchase of
shares shall be refunded to the Participant as soon as
practicable after the withdrawal, without the payment of any
interest, and the Participants interest in the Plan or the
Offering, as applicable, shall terminate. Such accumulated
payroll deductions to be refunded in accordance with this
Section may not be applied to any other Offering under the Plan.
14.
Termination
of Employment or Eligibility.
Upon a Participants ceasing, prior to a Purchase Date, to
be an Employee of the Participating Company Group for any
reason, including retirement, disability or death, or upon the
failure of a Participant to remain an Eligible Employee, the
Participants participation in the Plan shall terminate
immediately. In such event, the Participants accumulated
payroll deductions which have not been applied toward the
purchase of shares shall, as soon as practicable, be returned to
the Participant or, in the case of the Participants death,
to the Participants beneficiary designated in accordance
with Section 21, if any, or legal representative, and all
of the Participants rights under the Plan shall terminate.
Interest shall not be paid on sums returned pursuant to this
Section 14. A Participant whose participation has been so
terminated may again become eligible to participate in the Plan
by satisfying the requirements of Sections 5 and 7.1.
15.
Change
in Control.
15.1
Definitions.
(a) An
Ownership Change
Event
shall be deemed to have occurred
if any of the following occurs with respect to the Company:
(i) the direct or indirect sale or exchange in a single or
series of related transactions by the stockholders of the
Company of more than fifty percent (50%) of the voting stock of
the Company; (ii) a merger or consolidation in which the
Company is a party; (iii) the sale, exchange, or transfer
of all or substantially all of the assets of the Company; or
(iv) a liquidation or dissolution of the Company.
(b) A
Change in
Control
shall mean an Ownership Change
Event or a series of related Ownership Change Events
(collectively, the
Transaction
)
wherein the stockholders of the Company immediately
B-9
before the Transaction do not retain immediately after the
Transaction, in substantially the same proportions as their
ownership of shares of the Companys voting stock
immediately before the Transaction, direct or indirect
beneficial ownership of more than fifty percent (50%) of the
total combined voting power of the outstanding voting stock of
the Company or the corporation or corporations to which the
assets of the Company were transferred (the
Transferee Corporation(s)
), as the
case may be. For purposes of the preceding sentence, indirect
beneficial ownership shall include, without limitation, an
interest resulting from ownership of the voting stock of one or
more corporations which, as a result of the Transaction, own the
Company or the Transferee Corporation(s), as the case may be,
either directly or through one or more subsidiary corporations.
The Board shall have the right to determine whether multiple
sales or exchanges of the voting stock of the Company or
multiple Ownership Change Events are related, and its
determination shall be final, binding and conclusive.
15.2
Effect of Change in Control on Purchase
Rights.
In the event of a Change in Control, the
surviving, continuing, successor, or purchasing corporation or
parent corporation thereof, as the case may be (the
Acquiring Corporation
), may assume the
Companys rights and obligations under the Plan. If the
Acquiring Corporation elects not to assume the Companys
rights and obligations under outstanding Purchase Rights, the
Purchase Date of the then current Purchase Period shall be
accelerated to a date before the date of the Change in Control
specified by the Board, but the number of shares of Stock
subject to outstanding Purchase Rights shall not be adjusted.
All Purchase Rights which are neither assumed by the Acquiring
Corporation in connection with the Change in Control nor
exercised as of the date of the Change in Control shall
terminate and cease to be outstanding effective as of the date
of the Change in Control.
16.
Nontransferability
of Purchase Rights.
Neither payroll deductions credited to a Participants Plan
account nor a Participants Purchase Right may be assigned,
transferred, pledged or otherwise disposed of in any manner
other than as provided by the Plan or by will or the laws of
descent and distribution. (A beneficiary designation pursuant to
Section 21 shall not be treated as a disposition for this
purpose.) Any such attempted assignment, transfer, pledge or
other disposition shall be without effect, except that the
Company may treat such act as an election to withdraw from the
Plan as provided in Section 13.1. A Purchase Right shall be
exercisable during the lifetime of the Participant only by the
Participant.
17.
Compliance
with Securities Law.
The issuance of shares under the Plan shall be subject to
compliance with all applicable requirements of federal, state
and foreign law with respect to such securities. A Purchase
Right may not be exercised if the issuance of shares upon such
exercise would constitute a violation of any applicable federal,
state or foreign securities laws or other law or regulations or
the requirements of any securities exchange or market system
upon which the Stock may then be listed. In addition, no
Purchase Right may be exercised unless (a) a registration
statement under the Securities Act of 1933, as amended, shall at
the time of exercise of the Purchase Right be in effect with
respect to the shares issuable upon exercise of the Purchase
Right, or (b) in the opinion of legal counsel to the
Company, the shares issuable upon exercise of the Purchase Right
may be issued in accordance with the terms of an applicable
exemption from the registration requirements of said Act. The
inability of the Company to obtain from any regulatory body
having jurisdiction the authority, if any, deemed by the
Companys legal counsel to be necessary to the lawful
issuance and sale of any shares under the Plan shall relieve the
Company of any liability in respect of the failure to issue or
sell such shares as to which such requisite authority shall not
have been obtained. As a condition to the exercise of a Purchase
Right, the Company may require the Participant to satisfy any
qualifications that may be necessary or appropriate, to evidence
compliance with any applicable law or regulation, and to make
any representation or warranty with respect thereto as may be
requested by the Company.
18.
Rights
as a Stockholder and Employee.
A Participant shall have no rights as a stockholder by virtue of
the Participants participation in the Plan until the date
of the issuance of a certificate for the shares purchased
pursuant to the exercise of the Participants Purchase
Right (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company).
No adjustment shall be made for dividends, distributions or
other rights for which the record date is
B-10
prior to the date such certificate is issued, except as provided
in Section 4.2. Nothing herein shall confer upon a
Participant any right to continue in the employ of the
Participating Company Group or interfere in any way with any
right of the Participating Company Group to terminate the
Participants employment at any time.
19.
Legends.
The Company may at any time place legends or other identifying
symbols referencing any applicable federal, state or foreign
securities law restrictions or any provision convenient in the
administration of the Plan on some or all of the certificates
representing shares of Stock issued under the Plan. The
Participant shall, at the request of the Company, promptly
present to the Company any and all certificates representing
shares acquired pursuant to a Purchase Right in the possession
of the Participant in order to carry out the provisions of this
Section. Unless otherwise specified by the Company, legends
placed on such certificates may include but shall not be limited
to the following:
THE SHARES EVIDENCED BY THIS CERTIFICATE WERE ISSUED BY
THE CORPORATION TO THE REGISTERED HOLDER UPON THE PURCHASE OF
SHARES UNDER AN EMPLOYEE STOCK PURCHASE PLAN AS DEFINED IN
SECTION 423 OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED. THE TRANSFER AGENT FOR THE SHARES EVIDENCED HEREBY
SHALL NOTIFY THE CORPORATION IMMEDIATELY OF ANY TRANSFER OF THE
SHARES BY THE REGISTERED HOLDER HEREOF. THE REGISTERED HOLDER
SHALL HOLD ALL SHARES PURCHASED UNDER THE PLAN IN THE REGISTERED
HOLDERS NAME (AND NOT IN THE NAME OF ANY NOMINEE).
20.
Notification
of Disposition of Shares.
To the extent the Company does not require that shares be
deposited into an ESPP Brokerage Account pursuant to
Section 12, the Company may require the Participant to give
the Company prompt notice of any disposition of shares acquired
by exercise of a Purchase Right. The Company may require that
until such time as a Participant disposes of shares acquired
upon exercise of a Purchase Right, the Participant shall hold
all such shares in the Participants name (or, if elected
by the Participant, in the name of the Participant and his or
her spouse but not in the name of any nominee) until the later
of two years after the date of grant of such Purchase Right or
one year after the date of exercise of such Purchase Right. The
Company may direct that the certificates evidencing shares
acquired by exercise of a Purchase Right refer to such
requirement to give prompt notice of disposition.
21.
Designation
of Beneficiary.
21.1
Designation Procedure.
A
Participant may file a written designation of a beneficiary who
is to receive (a) shares and cash, if any, from the
Participants Plan account if the Participant dies
subsequent to a Purchase Date but prior to delivery to the
Participant of such shares and cash or (b) cash, if any,
from the Participants Plan account if the Participant dies
prior to the exercise of the Participants Purchase Right.
If a married Participant designates a beneficiary other than the
Participants spouse, the effectiveness of such designation
shall be subject to the consent of the Participants
spouse. A Participant may change his or her beneficiary
designation at any time by written notice to the Company.
21.2
Absence of Beneficiary
Designation.
If a Participant dies without an
effective designation pursuant to Section 21.1 of a
beneficiary who is living at the time of the Participants
death, the Company shall deliver any shares or cash credited to
the Participants Plan account to the Participants
legal representative.
22.
Notices.
All notices or other communications by a Participant to the
Company under or in connection with the Plan shall be deemed to
have been duly given when received in the form specified by the
Company at the location, or by the person, designated by the
Company for the receipt thereof.
B-11
23.
Amendment
or Termination of the Plan.
23.1 The Board may at any time amend or terminate the Plan,
except that (a) no such amendment or termination shall
affect Purchase Rights previously granted under the Plan unless
expressly provided by the Board and (b) no such amendment
or termination may adversely affect a Purchase Right previously
granted under the Plan without the consent of the Participant,
except to the extent permitted by the Plan or as may be
necessary to qualify the Plan as an employee stock purchase plan
pursuant to Section 423 of the Code or to comply with any
applicable law, regulation or rule. Any amendment to the Plan
that would authorize the sale of more shares than are then
authorized for issuance under the Plan or would change the
definition of the corporations that may be designated by the
Board as Participating Companies must be approved by the
stockholders of the Company within twelve (12) months of
the adoption of such amendment.
23.2 Unless sooner terminated by the Board, the Plan shall
terminate upon the earliest of (i) December 15, 2019,
(ii) the date on which all shares available for issuance in
the aggregate under the Plan and the International Plan shall
have been sold pursuant to purchase rights exercised under the
Plan and the International Plan or (iii) the date on which
all Purchase Rights are exercised in connection with a Change in
Control. No further purchase rights shall be granted or
exercised, and no further payroll deductions shall be collected,
under the Plan following such termination.
IN WITNESS WHEREOF, the undersigned Secretary of the Company
certifies that the foregoing sets forth the Finisar Corporation
2009 Employee Stock Purchase Plan, subject to the approval of
the stockholders at the 2009 Annual Meeting.
Secretary
B-12
Exhibit 99.4
FINISAR CORPORATION
2009 INTERNATIONAL EMPLOYEE
STOCK PURCHASE PLAN
1.
Establishment and Purpose of Plan
.
1.1
Establishment
. The Finisar Corporation International Employee Stock Purchase Plan (the
Plan
) was adopted by the Board on September 9, 2009 and shall become effective upon approval by
the stockholders of the Company at the 2009 Annual Meeting.
1.2
Purpose.
The purpose of the Plan is to advance the interests of Company and its
stockholders by providing an incentive to attract, retain and reward Eligible Employees of the
Participating Company Group and by motivating such persons to contribute to the growth and
profitability of the Company and the Participating Company Group. The Plan provides such Eligible
Employees with an opportunity to acquire a proprietary interest in the Company through the purchase
of Stock.
2.
Definitions and Construction
.
2.1
Definitions.
Any term not expressly defined in the Plan but defined for purposes of
Section 423 of the Code shall have the same definition herein. Whenever used herein, the following
terms shall have their respective meanings set forth below:
(a)
Board
means the Board of Directors of the Company. If one or more Committees have been
appointed by the Board to administer the Plan, Board also means such Committee(s).
(b)
Code
means the U.S. Internal Revenue Code of 1986, as amended, and any applicable
regulations promulgated thereunder.
(c)
Committee
means a committee of the Board duly appointed to administer the Plan and
having such powers as specified by the Board. Unless the powers of the Committee have been
specifically limited, the Committee shall have all of the powers of the Board granted herein,
including, without limitation, the power to amend or terminate the Plan at any time, subject to the
terms of the Plan and any applicable limitations imposed by law.
(d)
Company
means Finisar Corporation, a Delaware corporation, or any successor corporation
thereto.
(e)
Compensation
means, with respect to any Offering Period, base wages or salary, overtime
pay, bonuses, commissions, shift differentials, payments for paid time off, payments in lieu of
notice, and any of such compensation deferred under any program or plan established by a
Participating Company. Compensation shall be limited to amounts actually payable in cash directly
to the Participant or deferred by the Participant during the Offering Period. However,
notwithstanding the foregoing, Compensation shall not include sign-on
1
bonuses, profit sharing, payments pursuant to a severance agreement, termination pay, moving
allowances, relocation payments, car, housing or transportation allowances, expense reimbursements,
the cost of employee benefits paid by a Participating Company, tuition reimbursements, imputed
income arising under any benefit program, contributions made by a Participating Company under any
employee benefit plan, income directly or indirectly received pursuant to the Plan or any other
stock purchase or stock option plan, or any other compensation not included above.
(f)
Eligible Employee
means an Employee who meets the requirements set forth in Section 5
for eligibility to participate in the Plan.
(g)
Employee
means a person treated as an employee of a Participating Company for purposes
of Section 423 of the Code. A Participant shall be deemed to have ceased to be an Employee either
upon an actual termination of employment or upon the corporation employing the Participant ceasing
to be a Participating Company. For purposes of the Plan, an individual shall not be deemed to have
ceased to be an Employee while on any military leave, sick leave, or other bona fide leave of
absence approved by the Company of ninety (90) days or less. If an individuals leave of absence
exceeds ninety (90) days, the individual shall be deemed to have ceased to be an Employee on the
ninety-first (91st) day of such leave unless the individuals right to reemployment with the
Participating Company Group is guaranteed either by statute or by contract. The Company shall
determine in good faith and in the exercise of its discretion whether an individual has become or
has ceased to be an Employee and the effective date of such individuals employment or termination
of employment, as the case may be. All such determinations by the Company shall be final, binding
and conclusive, notwithstanding that the Company or any governmental agency subsequently makes a
contrary determination.
(h)
Fair Market Value
means, as of any date:
(i) If the Stock is then listed on a national or regional securities exchange or market system
or is regularly quoted by a recognized securities dealer, the closing sale price of a share of
Stock (or the mean of the closing bid and asked prices if the Stock is so quoted instead) as quoted
on the Nasdaq National Market, the Nasdaq SmallCap Market or such other national or regional
securities exchange or market system constituting the primary market for the Stock, or by such
recognized securities dealer, as reported in
The Wall Street Journal
or such other source
as the Company deems reliable. If the relevant date does not fall on a day on which the Stock has
traded on such securities exchange or market system or has been quoted by such securities dealer,
the date on which the Fair Market Value is established shall be the last day on which the Stock was
so traded or quoted prior to the relevant date, or such other appropriate day as determined by the
Board, in its discretion.
(ii) If, on the relevant date, the Stock is not then listed on a national or regional
securities exchange or market system or regularly quoted by a recognized securities dealer, the
Fair Market Value of a share of Stock shall be as determined in good faith by the Board.
2
(i)
Offering
means an offering of Stock as provided in Section 6.
(j)
Offering Date
means, for any Offering, the first day of the Offering Period.
(k)
Offering Period
means a period established in accordance with Section 6.1.
(l)
Parent Corporation
means any present or future parent corporation of the Company, as
defined in Section 424(e) of the Code.
(m)
Participant
means an Eligible Employee who has become a participant in an Offering
Period in accordance with Section 7 and remains a participant in accordance with the Plan.
(n)
Participating Company
means any Parent Corporation or Subsidiary Corporation with
non-U.S. Employees designated by the Board as a corporation the Employees of which may, if Eligible
Employees, participate in the Plan. The Board shall have the sole and absolute discretion to
determine from time to time which Parent Corporations or Subsidiary Corporations shall be
Participating Companies.
(o)
Participating Company Group
means, at any point in time, all of the corporations which
are then Participating Companies.
(p)
Purchase Date
means, for any Purchase Period, the last day of such period.
(q)
Purchase Period
means a period established in accordance with Section 6.2.
(r)
Purchase Price
means the price in U.S. dollars at which a share of Stock may be
purchased under the Plan, as determined in accordance with Section 9.
(s)
Purchase Right
means an option granted to a Participant pursuant to the Plan to purchase
such shares of Stock as provided in Section 8, which the Participant may or may not exercise during
the Offering Period in which such option is outstanding. Such option arises from the right of a
Participant to withdraw any accumulated payroll deductions of the Participant not previously
applied to the purchase of Stock under the Plan and to terminate participation in the Plan at any
time during an Offering Period.
(t)
Stock
means the common stock of the Company, as adjusted from time to time in accordance
with Section 4.2.
(u)
Subscription Agreement
means a written agreement in such form as specified by the
Company, stating an Employees election to participate in the Plan and authorizing payroll
deductions under the Plan from the Employees Compensation.
3
(v)
Subscription Date
means the last U.S. business day prior to the Offering Date of an
Offering Period or such earlier date as the Company shall establish.
(w)
Subsidiary Corporation
means any present or future subsidiary corporation of the
Company, as defined in Section 424(f) of the Code.
(x)
U.S. Plan
means the Companys 1999 Employee Stock Purchase Plan, as such plan may be
amended from time to time.
2.2
Construction.
Captions and titles contained herein are for convenience only and shall not
affect the meaning or interpretation of any provision of the Plan. Except when otherwise indicated
by the context, the singular shall include the plural and the plural shall include the singular.
Use of the term or is not intended to be exclusive, unless the context clearly requires
otherwise.
3.
Administration
.
3.1
Administration by the Board.
The Plan shall be administered by the Board. All questions
of interpretation of the Plan, of any form of agreement or other document employed by the Company
in the administration of the Plan, or of any Purchase Right shall be determined by the Board and
shall be final and binding upon all persons having an interest in the Plan or the Purchase Right.
Subject to the provisions of the Plan, the Board shall determine all of the relevant terms and
conditions of Purchase Rights. All expenses incurred in connection with the administration of the
Plan shall be paid by the Company or the Participating Company.
3.2
Authority of Officers.
Any officer of the Company shall have the authority to act on
behalf of the Company with respect to any matter, right, obligation, determination or election that
is the responsibility of or that is allocated to the Company herein, provided that the officer has
apparent authority with respect to such matter, right, obligation, determination or election.
3.3
Policies and Procedures Established by the Company.
The Company may, from time to time,
consistent with the Plan, establish, change or terminate such rules, guidelines, policies,
procedures, limitations, or adjustments as deemed advisable by the Company, in its discretion, for
the proper administration of the Plan, including, without limitation, (a) a minimum payroll
deduction amount required for participation in an Offering, (b) a limitation on the frequency or
number of changes permitted in the rate of payroll deduction during an Offering, (c) an exchange
ratio applicable to amounts withheld in a currency other than U.S. dollars, (d) a payroll deduction
greater than or less than the amount designated by a Participant in order to adjust for the
Companys delay or mistake in processing a Subscription Agreement or in otherwise effecting a
Participants election under the Plan and (e) determination of the date and manner by which the
Fair Market Value of a share of Stock is determined for purposes of administration of the Plan.
4
3.4
Indemnification.
In addition to such other rights of indemnification as they may have as
members of the Board or officers or employees of the Company or the Participating Company Group,
members of the Board and any officers or employees of the Company or the Participating Company
Group to whom authority to act for the Board or the Company or the Participating Company Group is
delegated shall be indemnified by the Company against all reasonable expenses, including attorneys
fees, actually and necessarily incurred in connection with the defense of any action, suit or
proceeding, or in connection with any appeal therein, to which they or any of them may be a party
by reason of any action taken or failure to act under or in connection with the Plan, or any right
granted hereunder, 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, except in relation to matters as
to which it shall be adjudged in such action, suit or proceeding that such person is liable for
gross negligence, bad faith or intentional misconduct in duties; provided, however, that within
sixty (60) days after the institution of such action, suit or proceeding, such person shall offer
to the Company, in writing, the opportunity at its own expense to handle and defend the same.
4.
Shares Subject to Plan
.
4.1
Maximum Number of Shares Issuable.
Subject to adjustment as provided in Section 4.2, the
maximum aggregate number of shares of Stock that may be issued under the Plan and the U.S. Plan
shall be twenty million (20,000,000), cumulatively increased on May 1 of each year commencing on
May 1, 2010 and ending May 1, 2015 by one million
(1,000,000) shares (the
Annual Increase
), and
shall consist of authorized but unissued or reacquired shares of Stock, or any combination thereof.
Any shares issued under the Plan shall reduce on a share-for-share basis the number of shares of
Stock available for subsequent issuance under the U.S. Plan. If an outstanding Purchase Right for
any reason expires or is terminated or canceled, the shares of Stock allocable to the unexercised
portion of that Purchase Right shall again be available for issuance under the Plan.
4.2
Adjustments for Changes in Capital Structure.
In the event of any stock dividend, stock
split, reverse stock split, recapitalization, combination, reclassification or similar change in
the capital structure of the Company, or in the event of any merger (including a merger effected
for the purpose of changing the Companys domicile), sale of assets or other reorganization in
which the Company is a party, appropriate adjustments shall be made in the number and class of
shares available for issuance in the aggregate under the Plan and the U.S. Plan, the Annual
Increase and each Purchase Right, and in the Purchase Price. If a majority of the shares of the
same class as the shares subject to outstanding Purchase Rights are exchanged for, converted into,
or otherwise become (whether or not pursuant to an Ownership Change Event) shares of another
corporation (the
New Shares
), the Board may unilaterally amend the outstanding Purchase Rights to
provide that such Purchase Rights are exercisable for New Shares. In the event of any such
amendment, the number of shares subject to, and the Purchase Price of, the outstanding Purchase
Rights shall be adjusted in a fair and equitable manner, as determined by the Board, in its
discretion. Notwithstanding the foregoing, any fractional share resulting from an adjustment
pursuant to this Section 4.2 shall be rounded down to the nearest whole number, and in no event may
the Purchase Price be decreased to an amount less than the
5
par value, if any, of the stock subject to the Purchase Right. The adjustments determined by
the Board pursuant to this Section 4.2 shall be made in such a manner to prevent the dilution or
enlargement of benefits under the Plan and the outstanding Purchase Rights thereunder, and such
adjustments shall be final, binding and conclusive.
5.
Eligibility
.
5.1
Employees Eligible to Participate.
Each Employee of a Participating Company is eligible
to participate in the Plan and shall be deemed an Eligible Employee, except to the extent
prohibited by local law, any Employee who is either: (a) customarily employed by the Participating
Company Group for twenty (20) hours or less per week or (b) customarily employed by the
Participating Company Group for not more than five (5) months in any calendar year.
5.2
Exclusion of Certain Stockholders.
Notwithstanding any provision of the Plan to the
contrary, no Employee shall be granted a Purchase Right under the Plan if, immediately after such
grant, the Employee would own or hold options to purchase stock of the Company or of any Parent
Corporation or Subsidiary Corporation possessing five percent (5%) or more of the total combined
voting power or value of all classes of stock of such corporation, as determined in accordance with
Section 423(b)(3) of the Code. For purposes of this Section 5.2, the attribution rules of Section
424(d) of the Code shall apply in determining the stock ownership of such Employee.
6.
Offerings
.
6.1
Offering Periods.
Except as otherwise set forth below, the Plan shall be implemented by
two series of Offerings. One series shall be of sequential Offerings of approximately twelve (12)
months duration or such other duration as the Board shall determine
(an
Annual Offering Period
).
The second series shall be of Offerings of approximately six (6) months duration or such other
duration as the Board shall determine (a
Half-Year
Offering Period
). Annual Offering Periods
shall commence on or about December 16 of each year and end on or about the first December 15
occurring thereafter. The first Annual Offering Period shall commence on December 16, 2009 and end
on December 15, 2010. Half-Year Offering Periods shall commence on or about June 16 of each year
and end on or about the first December 15 occurring thereafter. Notwithstanding the foregoing, the
Board may establish a different duration for one or more Offering Periods or different commencing
or ending dates for such Offering Periods; provided, however, that no Offering Period may have a
duration exceeding twenty-seven (27) months. If the first or last day of an Offering Period is not
a day on which the national securities exchanges of the United States or the Nasdaq Stock Market
are open for trading, the Company shall specify the trading day that will be deemed the first or
last day, as the case may be, of the Offering Period.
6.2
Purchase Periods.
Each Annual Offering Period shall consist of two (2) consecutive
Purchase Periods of approximately six (6) months duration, or such other number or duration as the
Board determines. A Purchase Period commencing on or about December 16 shall end on or about the
next June 15 and a Purchase Period commencing on or about June 16
6
shall end on or about the next December 15. Each Half-Year Offering Period shall consist of a
single Purchase Period of approximately six (6) months duration coterminous with such Offering
Period. Notwithstanding the foregoing, the Board may establish a different duration for one or
more Purchase Periods or different commencing or ending dates for such Purchase Periods. If the
first or last day of a Purchase Period is not a day on which the national securities exchanges of
the United States or the Nasdaq Stock Market are open for trading, the Company shall specify the
trading day that will be deemed the first or last day, as the case may be, of the Purchase Period.
7.
Participation in the Plan
.
7.1
Initial Participation.
An Eligible Employee may become a Participant in an Offering
Period by delivering a properly completed Subscription Agreement to the office designated by the
Company not later than the close of business for such office on the Subscription Date established
by the Company for that Offering Period. An Eligible Employee who does not deliver a properly
completed Subscription Agreement to the Companys designated office on or before the Subscription
Date for an Offering Period shall not participate in the Plan for that Offering Period or for any
subsequent Offering Period unless the Eligible Employee subsequently delivers a properly completed
Subscription Agreement to the appropriate office of the Company on or before the Subscription Date
for such subsequent Offering Period. An Employee who becomes an Eligible Employee after the
Offering Date of an Offering Period shall not be eligible to participate in that Offering Period
but may participate in any subsequent Offering Period provided the Employee is still an Eligible
Employee as of the Offering Date of such subsequent Offering Period.
7.2
Continued Participation.
A Participant shall automatically participate in the next
Offering Period commencing immediately after the final Purchase Date of each Offering Period in
which the Participant participates provided that the Participant remains an Eligible Employee on
the Offering Date of the new Offering Period and has not either (a) withdrawn from the Plan
pursuant to Section 13.1 or (b) terminated employment as provided in Section 14. A Participant who
may automatically participate in a subsequent Offering Period, as provided in this Section, is not
required to deliver any additional Subscription Agreement for the subsequent Offering Period in
order to continue participation in the Plan. However, a Participant may deliver a new Subscription
Agreement for a subsequent Offering Period in accordance with the procedures set forth in Section
7.1 if the Participant desires to change any of the elections contained in the Participants then
effective Subscription Agreement.
8.
Right to Purchase Shares
.
8.1
Grant of Purchase Right.
Except as set forth below, on the Offering Date of each Offering
Period, each Participant in that Offering Period shall be granted automatically a Purchase Right
determined as follows:
(a)
Annual Offering Period.
Each Purchase Right granted on the Offering Date of an Annual
Offering Period shall consist of an option to purchase that number of
7
whole shares of Stock determined by dividing Twenty-Five Thousand U.S. Dollars (US$25,000) by
the Fair Market Value of a share of Stock on the Offering Date.
(b)
Half-Year Offering Period.
Each Purchase Right granted on the Offering Date of a
Half-Year Offering Period shall consist of an option to purchase that number of whole shares of
Stock determined by dividing Twelve Thousand Five Hundred U.S. Dollars (US$12,500) by the Fair
Market Value of a share of Stock on the Offering Date.
8.2
Pro Rata Adjustment of Purchase Right.
If the Board establishes an Offering Period of any
duration other than twelve months or six months, then the number of shares of Stock subject to each
Purchase Right granted on the Offering Date of such Offering Period shall be determined as provided
in Section 8.1, except that the applicable dollar amount shall be determined by multiplying
US$2,083.33 by the number of months (rounded to the nearest whole month) in the Offering Period and
rounding to the nearest whole dollar.
8.3
Calendar Year Purchase Limitation.
Notwithstanding any provision of the Plan to the
contrary, no Participant shall be granted a Purchase Right which permits his or her right to
purchase shares of Stock under the Plan to accrue at a rate which, when aggregated with such
Participants rights to purchase shares under all other employee stock purchase plans of the
Company and the Participating Company Group, exceeds Twenty-Five Thousand U.S. Dollars (US$25,000)
in Fair Market Value (or such other comparable limit, if any, as may be established under Section
423 of the Code) for each calendar year in which such Purchase Right is outstanding at any time.
For purposes of the preceding sentence, the Fair Market Value of shares purchased during a given
Offering Period shall be determined as of the Offering Date for such Offering Period. The
limitation described in this Section shall be applied in conformance with the regulations under
Section 423(b)(8) of the Code.
8.4
Maximum Number of Shares Purchasable by All Participants
. Notwithstanding any provision
of the Plan to the contrary, the maximum number of shares purchasable in total by all Participants
in this Plan and the U.S. Plan on any one Purchase Date shall not exceed one-half of one percent
(0.5%) of that number of shares of Stock outstanding on the immediately preceding May 1 of the
calendar year in which such Purchase Date occurs. However, the Board shall have the discretionary
authority, exercisable prior to the start of any Offering Period, to increase or decrease the
limitation to be in effect for the number of shares purchasable in total by all Participants on
each Purchase Date during that Offering Period.
9.
Purchase Price
.
The Purchase Price at which each share of Stock may be acquired in an Offering Period upon the
exercise of all or any portion of a Purchase Right shall be established by the Board; provided,
however, that the Purchase Price on each Purchase Date shall not be less than eighty-five percent
(85%) of the lesser of (a) the Fair Market Value of a share of Stock on the Offering Date of the
Offering Period or (b) the Fair Market Value of a share of Stock on the Purchase Date. Unless
otherwise provided by the Board prior to the commencement of an Offering Period, the Purchase Price
on each Purchase Date during that Offering Period shall be eighty-five percent (85%) of the lesser
of (a) the Fair Market Value of a share of Stock on the
8
Offering Date of the Offering Period, or (b) the Fair Market Value of a share of Stock on the
Purchase Date.
10.
Accumulation of Purchase Price through Payroll Deduction
.
Unless otherwise approved by the Board in its sole discretion, shares of Stock acquired
pursuant to the exercise of all or any portion of a Purchase Right may be paid for only by means of
payroll deductions from the Participants Compensation accumulated during the Offering Period for
which such Purchase Right was granted, subject to the following:
10.1
Amount of Payroll Deductions.
Except as otherwise provided herein, the amount to be
deducted under the Plan from a Participants Compensation on each payday during an Offering Period
shall be determined by the Participants Subscription Agreement. The Subscription Agreement shall
set forth the percentage of the Participants Compensation to be deducted on each payday during an
Offering Period in whole percentages of not less than one percent (1%) (except as a result of an
election pursuant to Section 10.3 to stop payroll deductions) or more than twenty percent (20%);
provided, however, that in no event may a Participants payroll deductions on any payday for the
purchase of shares under the Plan and all other employee stock purchase plans of the Company or a
Participating Company exceed twenty percent (20%) of the Participants Compensation on such payday.
The Board may change the foregoing limits on payroll deductions effective as of any Offering Date.
10.2
Commencement of Payroll Deductions.
Payroll deductions shall commence on the first
payday following the Offering Date and shall continue to the end of the Offering Period unless
sooner altered or terminated as provided herein.
10.3
Election to Change or Stop Payroll Deductions.
During an Offering Period, a Participant
may elect to increase or decrease the rate of or to stop deductions from his or her Compensation by
delivering to the Companys designated office an amended Subscription Agreement authorizing such
change on or before the Change Notice Date, as defined below. A Participant who elects, effective
following the first payday of an Offering Period, to decrease the rate of his or her payroll
deductions to zero percent (0%) shall nevertheless remain a Participant in the current Offering
Period unless such Participant withdraws from the Plan as provided in Section 13.1. The
Change
Notice Date
shall be the day immediately prior to the beginning of the first pay period for which
such election is to be effective, unless a different date is established by the Company and
announced to the Participants.
10.4
Administrative Suspension of Payroll Deductions.
The Company may, in its sole
discretion, suspend a Participants payroll deductions under the Plan as the Company deems
advisable to avoid accumulating payroll deductions in excess of the amount that could reasonably be
anticipated to purchase the maximum number of shares of Stock permitted (a) under the Participants
Purchase Right or (b) during a calendar year under the limit set forth in Section 8.3. Payroll
deductions shall be resumed at the rate specified in the Participants then effective Subscription
Agreement at the beginning, respectively, of (a) the next Offering Period, provided that the
individual is a Participant in such Offering Period or (b) the next Purchase Period the Purchase
Date of which falls in the following calendar year, unless the Participant has
9
either withdrawn from the Plan as provided in Section 13.1 or has ceased to be an Eligible
Employee.
10.5
Participant Accounts.
Individual bookkeeping accounts shall be maintained for each
Participant. All payroll deductions from a Participants Compensation shall initially be credited
to such Participants Plan account in the currency in which paid by the Participating Company until
converted into U.S. dollars. Except as otherwise required by law, all payroll deductions may be
deposited with the general funds of the Company or the Participating Company and may be used for
any corporate purpose.
10.6
Conversion into U.S. Dollars
. For purposes of determining the number of shares
purchasable by a Participant, the payroll deductions credited to each Participants bookkeeping
account during each Purchase Period shall be converted into U.S. dollars on the Purchase Date for
that Purchase Period on the basis of the exchange rate in effect on such date. The Board shall
have the absolute discretion to determine the applicable exchange rate to be in effect for each
Purchase Date by any reasonable method (including, without limitation, the exchange rate actually
used by the Company for its intra-Company financial transactions for the month of such transfer).
Any changes or fluctuations in the exchange rate at which the payroll deductions collected on the
Participants behalf are converted into U.S. dollars on each Purchase Date shall be borne solely by
the Participant.
10.7
No Interest Paid.
Interest shall not be paid on sums deducted from a Participants
Compensation pursuant to the Plan.
10.8
Voluntary Withdrawal from Plan Account.
A Participant may withdraw all or any portion of
the payroll deductions credited to his or her Plan account and not previously applied toward the
purchase of Stock by delivering to the Companys designated office a written notice on a form
provided by the Company for such purpose. A Participant who withdraws the entire remaining balance
credited to his or her Plan account shall be deemed to have withdrawn from the Plan in accordance
with Section 13.1. Amounts withdrawn shall be returned to the Participant as soon as practicable
after the Companys receipt of the notice of withdrawal and may not be applied to the purchase of
shares in any Offering under the Plan. The Company may from time to time establish or change
limitations on the frequency of withdrawals permitted under this Section, establish a minimum
amount that must be retained in the Participants Plan account, or terminate the withdrawal right
provided by this Section.
11.
Purchase of Shares
.
11.1
Exercise of Purchase Right.
On each Purchase Date of an Offering Period, each
Participant who has not withdrawn from the Plan and whose participation in the Offering has not
otherwise terminated before such Purchase Date shall automatically acquire pursuant to the exercise
of the Participants Purchase Right the number of whole shares of Stock determined by dividing (a)
the total amount of the Participants payroll deductions, as converted into U.S. dollars,
accumulated in the Participants Plan account during the Offering Period and not previously applied
toward the purchase of Stock by (b) the Purchase Price. However, in no event shall the number of
shares purchased by the Participant during an Offering Period exceed
10
the number of shares subject to the Participants Purchase Right. No shares of Stock shall be
purchased on a Purchase Date on behalf of a Participant whose participation in the Offering or the
Plan has terminated before such Purchase Date.
11.2
Pro Rata Allocation of Shares.
If the aggregate number of shares of Stock to be
purchased by all Participants in the Plan and the U.S. Plan on a Purchase Date exceeds the number
of shares of Stock available in the Plan as provided in Section 4.1 or the maximum number of shares
purchasable in total by all Participants in the Plan and the U.S. Plan on any one Purchase Date as
provided in Section 8.4, the Company shall make a pro rata allocation of the remaining shares in as
uniform a manner as practicable and as the Company determines to be equitable. Any fractional
share resulting from such pro rata allocation to any Participant shall be disregarded.
11.3
Delivery of Certificates.
As soon as practicable after each Purchase Date, the Company
shall arrange the delivery to each Participant of a certificate representing the shares acquired by
the Participant on such Purchase Date; provided that the Company may deliver such shares to a
broker designated by the Company that will hold such shares for the benefit of the Participant.
Shares to be delivered to a Participant under the Plan shall be registered in the name of the
Participant, or, if requested by the Participant, in the name of the Participant and his or her
spouse, or, if applicable, in the names of the heirs of the Participant.
11.4
Return of Cash Balance.
Any cash balance remaining in a Participants Plan account
following any Purchase Date shall be refunded, in the currency in which collected by the
Participating Company, to the Participant as soon as practicable after such Purchase Date.
However, if the cash balance to be returned to a Participant pursuant to the preceding sentence is
less than the amount that would have been necessary to purchase an additional whole share of Stock
on such Purchase Date, the Company may retain the cash balance in the Participants Plan account to
be applied toward the purchase of shares of Stock in the subsequent Purchase Period or Offering
Period, as the case may be.
11.5
Tax Withholding.
At the time a Participants Purchase Right is granted or exercised, in
whole or in part, or at the time a Participant disposes of some or all of the shares of Stock he or
she acquires under the Plan, the Participant shall make adequate provision for the federal, state,
local and foreign tax withholding obligations, if any, of the Participating Company Group which
arise upon exercise of the Purchase Right or upon such disposition of shares, respectively. The
Participating Company Group may, but shall not be obligated to, withhold from the Participants
compensation the amount necessary to meet such withholding obligations.
11.6
Expiration of Purchase Right.
Any portion of a Participants Purchase Right remaining
unexercised after the end of the Offering Period to which the Purchase Right relates shall expire
immediately upon the end of the Offering Period.
11.7
Provision of Reports and Stockholder Information to Participants.
Each Participant who
has exercised all or part of his or her Purchase Right shall receive, as soon as practicable after
the Purchase Date, a report of such Participants Plan account setting forth the total payroll
deductions accumulated prior to such exercise, the number of shares of Stock
11
purchased, the Purchase Price (in U.S. dollars) for such shares, the date of purchase and the
cash balance, if any, remaining immediately after such purchase that is to be refunded or retained
in the Participants Plan account pursuant to Section 11.4. The report required by this Section
may be delivered in such form and by such means, including by electronic transmission, as the
Company may determine. In addition, each Participant shall be provided information concerning the
Company equivalent to that information provided generally to the Companys common stockholders.
12.
ESPP Brokerage Account
12.1 The Company may require that the shares purchased on behalf of each Participant shall be
deposited directly into a brokerage account which the Company shall establish for the Participant
at a Company-designated brokerage firm. The account will be known as the ESPP Brokerage Account.
The following policies and procedures shall be in place for any shares deposited into the
Participants ESPP Broker Account until those shares have been held for the requisite period
necessary to avoid a disqualifying disposition under the federal tax laws. Accordingly, the shares
must be held in the ESPP Brokerage Account until the later of the following two periods: (i) the
end of the two (2)-year period measured from the start date of the Offering Period in which the
shares were purchased and (ii) the end of the one (1)-year measured from the actual Purchase Date
of those shares.
12.2 The deposited shares shall not be transferable (either electronically or in certificate
form) from the ESPP Brokerage Account until the required holding period for those shares is
satisfied. Such limitation shall apply both to transfers to different accounts with the same ESPP
broker and to transfers to other brokerage firms. Any shares held for the required holding period
may be transferred (either electronically or in certificate form) to other accounts or to other
brokerage firms.
12.3
The foregoing procedures shall not in any way limit when the Participant may sell his or
her shares
. Those procedures are designed solely to assure that any sale of shares prior to the
satisfaction of the required holding period is made through the ESPP Brokerage Account. In
addition, the Participant may request a stock certificate or share transfer from his or her ESPP
Brokerage Account prior to the satisfaction of the required holding period should the Participant
wish to make a gift of any shares held in that account. However, shares may not be transferred
(either electronically or in certificate form) from the ESPP Brokerage Account for use as
collateral for a loan, unless those shares have been held for the required holding period.
12.4 To the extent the Board requires that shares be deposited in the ESPP Brokerage Account,
the foregoing procedures shall apply to all shares purchased by the Participant under the Plan,
whether or not the Participant continues to be an Employee.
13.
Withdrawal from Offering or Plan
.
13.1
Voluntary Withdrawal.
A Participant may withdraw from the Plan or any Offering by
signing and delivering to the Companys designated office a written notice of
12
withdrawal on a form provided by the Company for this purpose. Such withdrawal may be elected
at any time prior to the end of an Offering Period; provided, however, that if a Participant
withdraws from the Plan or an Offering after a Purchase Date, the withdrawal shall not affect
shares of Stock acquired by the Participant on such Purchase Date. A Participant who voluntarily
withdraws from the Plan or an Offering is prohibited from resuming participation in the Plan in the
same Offering from which he or she withdrew, but may participate in any subsequent Offering by
again satisfying the requirements of Sections 5 and 7.1. The Company may impose, from time to
time, a requirement that the notice of withdrawal be on file with the Companys designated office
for a reasonable period prior to the effectiveness of the Participants withdrawal.
13.2
Return of Payroll Deductions.
Upon a Participants voluntary withdrawal from the Plan or
an Offering pursuant to Section 13.1, the Participants accumulated payroll deductions which have
not been applied toward the purchase of shares shall be refunded, in the currency in which
collected by the Participating Company, to the Participant as soon as practicable after the
withdrawal, without the payment of any interest, and the Participants interest in the Plan or the
Offering, as applicable, shall terminate. Such accumulated payroll deductions to be refunded in
accordance with this Section may not be applied to any other Offering under the Plan.
14.
termination of employment or eligibility/transfer of employment
14.1
Termination of Employment or Eligibility
. Upon a Participants ceasing, prior to
a Purchase Date, to be an Employee of the Participating Company Group for any reason, including
retirement, disability or death, or upon the failure of a Participant to remain an Eligible
Employee, the Participants participation in the Plan shall terminate immediately. In such event,
the Participants accumulated payroll deductions which have not been applied toward the purchase of
shares shall, as soon as practicable, be returned, in the currency in which collected by the
Participating Company, to the Participant or, in the case of the Participants death, to the
Participants beneficiary designated in accordance with Section 21, if any, or legal
representative, and all of the Participants rights under the Plan shall terminate. Interest shall
not be paid on sums returned pursuant to this Section 14.1. A Participant whose participation has
been so terminated may again become eligible to participate in the Plan by satisfying the
requirements of Sections 5 and 7.1.
14.2
Transfer of Employment
. In the event that a Participant who is an Employee of a
Participating Company is transferred and becomes an Employee of the Company during a purchase
period under the Plan, such individual shall continue to remain a Participant in the Plan, and
payroll deductions shall continue to be collected until the final Purchase Date of the ongoing
Offering Period as if the Participant had remained an Employee of the Participating Company.
In the event that an Employee of the Company who is a participant in the U.S. Plan is
transferred and becomes an Employee of a Participating Company during a purchase period in effect
under the U.S. Plan, such individual shall automatically become a Participant under the Plan for
the duration of the Offering Period in effect at that time under the Plan and the
13
balance in such individuals book account maintained under the U.S. Plan shall be transferred as a
balance to a book account opened for such individual under the Plan. Such balance, together with
all other payroll deductions collected from such individual by the Participating Company for the
remainder of the Purchase Period under the Plan (as converted into U.S. Dollars), shall be applied
on the next Purchase Date to the purchase of Stock under the Plan.
15.
Change in Control
.
15.1
Definitions.
(a) An
Ownership Change Event
shall be deemed to have occurred if any of the following
occurs with respect to the Company: (i) the direct or indirect sale or exchange in a single or
series of related transactions by the stockholders of the Company of more than fifty percent (50%)
of the voting stock of the Company; (ii) a merger or consolidation in which the Company is a party;
(iii) the sale, exchange, or transfer of all or substantially all of the assets of the Company; or
(iv) a liquidation or dissolution of the Company.
(b) A
Change in Control
shall mean an Ownership Change Event or a series of related
Ownership Change Events (collectively, the
Transaction
) wherein the stockholders of the Company
immediately before the Transaction do not retain immediately after the Transaction, in
substantially the same proportions as their ownership of shares of the Companys voting stock
immediately before the Transaction, direct or indirect beneficial ownership of more than fifty
percent (50%) of the total combined voting power of the outstanding voting stock of the Company or
the corporation or corporations to which the assets of the Company were transferred (the
Transferee Corporation(s)
), as the case may be. For purposes of the preceding sentence, indirect
beneficial ownership shall include, without limitation, an interest resulting from ownership of the
voting stock of one or more corporations which, as a result of the Transaction, own the Company or
the Transferee Corporation(s), as the case may be, either directly or through one or more
subsidiary corporations. The Board shall have the right to determine whether multiple sales or
exchanges of the voting stock of the Company or multiple Ownership Change Events are related, and
its determination shall be final, binding and conclusive.
15.2
Effect of Change in Control on Purchase Rights.
In the event of a Change in Control, the
surviving, continuing, successor, or purchasing corporation or parent corporation thereof, as the
case may be (the
Acquiring
Corporation
), may assume the Companys rights and obligations under
the Plan. If the Acquiring Corporation elects not to assume the Companys rights and obligations
under outstanding Purchase Rights, the Purchase Date of the then current Purchase Period shall be
accelerated to a date before the date of the Change in Control specified by the Board, but the
number of shares of Stock subject to outstanding Purchase Rights shall not be adjusted. All
Purchase Rights which are neither assumed by the Acquiring Corporation in connection with the
Change in Control nor exercised as of the date of the Change in Control shall terminate and cease
to be outstanding effective as of the date of the Change in Control.
14
16.
Nontransferability of Purchase Rights
.
Neither payroll deductions credited to a Participants Plan account nor a Participants
Purchase Right may be assigned, transferred, pledged or otherwise disposed of in any manner other
than as provided by the Plan or by will or the laws of descent and distribution. (A beneficiary
designation pursuant to Section 21 shall not be treated as a disposition for this purpose.) Any
such attempted assignment, transfer, pledge or other disposition shall be without effect, except
that the Company may treat such act as an election to withdraw from the Plan as provided in Section
13.1. A Purchase Right shall be exercisable during the lifetime of the Participant only by the
Participant.
17.
Compliance with Securities Law
.
The issuance of shares under the Plan shall be subject to compliance with all applicable
requirements of federal, state and foreign law with respect to such securities. A Purchase Right
may not be exercised if the issuance of shares upon such exercise would constitute a violation of
any applicable federal, state or foreign securities laws or other law or regulations or the
requirements of any securities exchange or market system upon which the Stock may then be listed.
In addition, no Purchase Right may be exercised unless (a) a registration statement under the
Securities Act of 1933, as amended, shall at the time of exercise of the Purchase Right be in
effect with respect to the shares issuable upon exercise of the Purchase Right, or (b) in the
opinion of legal counsel to the Company, the shares issuable upon exercise of the Purchase Right
may be issued in accordance with the terms of an applicable exemption from the registration
requirements of said Act. The inability of the Company to obtain from any regulatory body having
jurisdiction the authority, if any, deemed by the Companys legal counsel to be necessary to the
lawful issuance and sale of any shares under the Plan shall relieve the Company of any liability in
respect of the failure to issue or sell such shares as to which such requisite authority shall not
have been obtained. As a condition to the exercise of a Purchase Right, the Company may require
the Participant to satisfy any qualifications that may be necessary or appropriate, to evidence
compliance with any applicable law or regulation, and to make any representation or warranty with
respect thereto as may be requested by the Company.
15
18.
Rights as a Stockholder and Employee
.
A Participant shall have no rights as a stockholder by virtue of the Participants
participation in the Plan until the date of the issuance of a certificate for the shares purchased
pursuant to the exercise of the Participants Purchase Right (as evidenced by the appropriate entry
on the books of the Company or of a duly authorized transfer agent of the Company). No adjustment
shall be made for dividends, distributions or other rights for which the record date is prior to
the date such certificate is issued, except as provided in Section 4.2. Nothing herein shall
confer upon a Participant any right to continue in the employ of the Company or the Participating
Company Group or interfere in any way with any right of the Company or the Participating Company
Group to terminate the Participants employment at any time.
19.
Legends
.
The Company may at any time place legends or other identifying symbols referencing any
applicable federal, state or foreign securities law restrictions or any provision convenient in the
administration of the Plan on some or all of the certificates representing shares of Stock issued
under the Plan. The Participant shall, at the request of the Company, promptly present to the
Company any and all certificates representing shares acquired pursuant to a Purchase Right in the
possession of the Participant in order to carry out the provisions of this Section. Unless
otherwise specified by the Company, legends placed on such certificates may include but shall not
be limited to the following:
THE SHARES EVIDENCED BY THIS CERTIFICATE WERE ISSUED BY THE CORPORATION TO THE REGISTERED
HOLDER UPON THE PURCHASE OF SHARES UNDER AN EMPLOYEE STOCK PURCHASE PLAN. THE TRANSFER AGENT FOR
THE SHARES EVIDENCED HEREBY SHALL NOTIFY THE CORPORATION IMMEDIATELY OF ANY TRANSFER OF THE SHARES
BY THE REGISTERED HOLDER HEREOF. THE REGISTERED HOLDER SHALL HOLD ALL SHARES PURCHASED UNDER THE
PLAN IN THE REGISTERED HOLDERS NAME (AND NOT IN THE NAME OF ANY NOMINEE).
20.
Notification of Disposition of Shares
.
To the extent the Company does not require that shares be deposited into an ESPP Brokerage
Account pursuant to Section 12, the Company may require the Participant to give the Company prompt
notice of any disposition of shares acquired by exercise of a Purchase Right. The Company may
require that until such time as a Participant disposes of shares acquired upon exercise of a
Purchase Right, the Participant shall hold all such shares in the Participants name (or, if
elected by the Participant, in the name of the Participant and his or her spouse but not in the
name of any nominee) until the later of two years after the date of grant of such Purchase Right or
one year after the date of exercise of such Purchase Right. The Company may direct that the
certificates evidencing shares acquired by exercise of a Purchase Right refer to such requirement
to give prompt notice of disposition.
16
21.
Designation of Beneficiary
.
21.1
Designation Procedure.
If permitted by the Board, a Participant may file a written
designation of a beneficiary who is to receive (a) shares and cash, if any, from the Participants
Plan account if the Participant dies subsequent to a Purchase Date but prior to delivery to the
Participant of such shares and cash or (b) cash, if any, from the Participants Plan account if the
Participant dies prior to the exercise of the Participants Purchase Right. If a married
Participant designates a beneficiary other than the Participants spouse, the effectiveness of such
designation shall be subject to the consent of the Participants spouse. A Participant may change
his or her beneficiary designation at any time by written notice to the Company.
21.2
Absence of Beneficiary Designation.
If a Participant dies without an effective
designation pursuant to Section 21.1 of a beneficiary who is living at the time of the
Participants death, the Company shall deliver any shares or cash credited to the Participants
Plan account to the Participants legal representative.
22.
Notices
.
All notices or other communications by a Participant to the Company under or in connection
with the Plan shall be deemed to have been duly given when received in the form specified by the
Company at the location, or by the person, designated by the Company for the receipt thereof.
23.
Amendment or Termination of the Plan
.
23.1 The Board may at any time amend or terminate the Plan, except that (a) no such amendment
or termination shall affect Purchase Rights previously granted under the Plan unless expressly
provided by the Board and (b) no such amendment or termination may adversely affect a Purchase
Right previously granted under the Plan without the consent of the Participant, except to the
extent permitted by the Plan or to comply with any applicable law, regulation or rule. Any
amendment to the Plan that would authorize the sale of more shares than are then authorized for
issuance under the Plan or would change the definition of the corporations that may be designated
by the Board as Participating Companies must be approved by the stockholders of the Company within
twelve (12) months of the adoption of such amendment.
23.2 Unless sooner terminated by the Board, the Plan shall terminate upon the earliest of (i)
December 15, 2019, (ii) the date on which all shares available for issuance in the aggregate under
the Plan and the U.S. Plan shall have been sold pursuant to purchase rights exercised under the
Plan and the U.S. Plan or (iii) the date on which all Purchase Rights are exercised in connection
with a Change in Control. No further purchase rights shall be granted or exercised, and no further
payroll deductions shall be collected, under the Plan following such termination.
24.
Miscellaneous
.
17
Additional or different provisions for individual Participating Companies may be incorporated
in one or more Addenda to the Plan. Such Addenda shall have full force and effect with respect to
the Participating Company to which they apply. In the event of a conflict between the provisions
of such an Addendum and one or more other provisions of the Plan, other than the provisions of
Section 8, the provisions of the Addendum shall be controlling.
IN WITNESS WHEREOF, the undersigned Secretary of the Company certifies that the foregoing
Finisar Corporation 2009 International Employee Stock Purchase Plan was duly adopted by the Board
of Directors of the Company on September 9, 2009, subject to the approval of the stockholders at
the 2009 Annual Meeting.
18
PLAN HISTORY
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September 9, 2009
|
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Board of Finisar Corporation, a Delaware corporation
adopts Plan, effective as of the Annual Offering Period
commencing on December 16, 2009, with an aggregate of
20,000,000 shares reserved for issuance under the Plan
and the Finisar Corporation 2009 Employee Stock Purchase
Plan, to be cumulatively increased on May 1, 2010 and
each May 1 thereafter until and including May 1, 2014 by
an additional 1,000,000 shares.
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November
18, 2009
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Stockholders of Finisar Corporation approve the Plan.
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Schedule A
Foreign Subsidiaries Participating in the
International Employee Stock Purchase Plan