Exhibit 10.35

 

OMNIVISION TECHNOLOGIES, INC.

 

2009 EMPLOYEE STOCK PURCHASE PLAN

 

(as amended July 29, 2013)

 

1.                                      Purpose.  The purpose of the Plan is to
provide employees of the Company and its Designated Subsidiaries with an
opportunity to purchase Common Stock through accumulated payroll deductions. 
This Plan includes two components: a Code Section 423 Plan Component and a
Non-423 Plan Component.  The Company’s intention is to have the Code Section 423
Plan Component qualify as an “employee stock purchase plan” under Section 423 of
the Code, (although the Company makes no undertaking or representation to
maintain such qualification).  The provisions of the Code Section 423 Plan
Component, accordingly, will be construed so as to extend and limit
participation in a uniform and nondiscriminatory basis consistent with the
requirements of Section 423 of the Code.  In addition, this Plan authorizes the
grant of options under the Non-423 Plan Component that do not qualify under
Section 423 of the Code, pursuant to rules, procedures or sub-plans adopted by
the Administrator that are designed to achieve tax, securities laws or other
objectives for Eligible Employees and/or the Company.  Except as otherwise
indicated, the Non-423 Plan Component will operate and be administered in the
same manner as the Code Section 423 Plan Component.

 

2.                                      Definitions.

 

(a)                                 “Administrator” means the Board or any
Committee designated by the Board to administer the Plan pursuant to Section 14.

 

(b)                                 “Applicable Laws” means the requirements
relating to the administration of equity-based awards under U.S. state corporate
laws, U.S. federal and state securities laws, the Code, any stock exchange or
quotation system on which the Common Stock is listed or quoted and the
applicable laws of any foreign country or jurisdiction where options are, or
will be, granted under the Plan.

 

(c)                                  “Board” means the Board of Directors of the
Company.

 

(d)                                 “Change in Control” means the occurrence of
any of the following events:

 

(i)                                     Change in Ownership of the Company.  A
change in the ownership of the Company which occurs on the date that any one
person, or more than one person acting as a group (“Person”), acquires ownership
of the stock of the Company that, together with the stock held by such Person,
constitutes more than 50% of the total voting power of the stock of the Company;
or

 

(ii)                                  Change in Effective Control of the
Company.  If the Company has a class of securities registered pursuant to
Section 12 of the Exchange Act, a change in the effective control of the Company
which occurs on the date that a majority of members of the Board is replaced
during any 12 month period by Directors whose appointment or election is not
endorsed by a majority of the members of the Board prior to the date of the
appointment or election.  For purposes of this clause (ii), if any Person is
considered to be in effective control of the Company, the

 

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acquisition of additional control of the Company by the same Person will not be
considered a Change in Control; or

 

(iii)                               Change in Ownership of a Substantial Portion
of the Company’s Assets.  A change in the ownership of a substantial portion of
the Company’s assets which occurs on the date that any Person acquires (or has
acquired during the 12 month period ending on the date of the most recent
acquisition by such person or persons) assets from the Company that have a total
gross fair market value equal to or more than 50% of the total gross fair market
value of all of the assets of the Company immediately prior to such acquisition
or acquisitions.  For purposes of this subsection (iii), gross fair market value
means the value of the assets of the Company, or the value of the assets being
disposed of, determined without regard to any liabilities associated with such
assets.

 

For purposes of this Section 2(d), persons will be considered to be acting as a
group if they are owners of a corporation that enters into a merger,
consolidation, purchase or acquisition of stock, or similar business transaction
with the Company.

 

Notwithstanding the foregoing, a transaction will not be deemed a Change in
Control unless the transaction qualifies as a change in control event within the
meaning of Code Section 409A, as it has been and may be amended from time to
time, and any proposed or final Treasury Regulations and Internal Revenue
Service guidance that has been promulgated or may be promulgated thereunder from
time to time.

 

Further and for the avoidance of doubt, a transaction will not constitute a
Change in Control if: (i) its sole purpose is to change the state of the
Company’s incorporation, or (ii) its sole purpose is to create a holding company
that will be owned in substantially the same proportions by the persons who held
the Company’s securities immediately before such transaction.

 

(e)                                  “Code” means the Internal Revenue Code of
1986, as amended.  Reference to a specific section of the Code or Treasury
Regulation thereunder will include such section or regulation, any valid
regulation or other official applicable guidance promulgated under such section,
and any comparable provision of any future legislation or regulation amending,
supplementing or superseding such section or regulation.

 

(f)                                   “Code Section 423 Plan Component” means
the component of this Plan that is intended to meet the requirements set forth
in Section 423(b) of the Code, as amended.  The provisions of the Code
Section 423 Plan Component shall be construed, administered and enforced in
accordance with Section 423(b).

 

(g)                                  “Committee” means a committee of the Board
appointed in accordance with Section 14 hereof.

 

(h)                                 “Common Stock” means the common stock of the
Company.

 

(i)                                     “Company” means Omnivision
Technologies, Inc., a Delaware corporation, or any successor thereto.

 

(j)                                    “Compensation” means all cash
compensation reportable on Form W-2, including without limitation base straight
time gross earnings, sales commissions, payments for

 

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overtime, shift premiums, incentive compensation, incentive payments, bonuses
and other compensation, but does not include any non-cash compensation.

 

(k)                                 “Designated Subsidiary” means any Subsidiary
that has been designated by the Administrator from time to time in its sole
discretion as eligible to participate in the Plan. The Administrator will
determine whether employees of any Designated Subsidiary shall participate in
the Code Section 423 Plan Component or the Non-423 Plan Component.

 

(l)                                     “Director” means a member of the Board.

 

(m)                             “Eligible Employee” means any individual who is
a common law employee of the Company or a Designated Subsidiary and is
customarily employed for more than five (5) months in any calendar year by the
Employer, other than an employee of a Designated Subsidiary under the Non-423
Plan Component, who, as of the Enrollment Date, resides in a country that has
been excluded from participation in the Plan or who, as of the Enrollment Date,
is otherwise determined ineligible for participation in the Non-423 Plan
Component, at the discretion of the Administrator.  For purposes of the Plan,
the employment relationship will be treated as continuing intact while the
individual is on sick leave or other leave of absence that the Employer
approves.  Where the period of leave exceeds three (3) months and the
individual’s right to reemployment is not guaranteed either by statute or by
contract, the employment relationship will be deemed to have terminated three
(3) months and one (1) day following the commencement of such leave.  The
Administrator, in its discretion, from time to time may, prior to an Enrollment
Date for all options to be granted on such Enrollment Date, determine (on a
uniform and nondiscriminatory basis for employees who may participate in the
Code Section 423 Plan Component) that the definition of Eligible Employee will
or will not include an individual if he or she: (i) has not completed at least
two (2) years of service since his or her last hire date (or such lesser period
of time as may be determined by the Administrator in its discretion),
(ii) customarily works not more than twenty (20) hours per week (or such lesser
period of time as may be determined by the Administrator in its discretion),
(iii) customarily works not more than five (5) months per calendar year (or such
lesser period of time as may be determined by the Administrator in its
discretion), or (iv) is a highly compensated employee within the meaning of
Section 414(q) of the Code with compensation above a certain level or is an
officer or subject to the disclosure requirements of Section 16(a) of the
Exchange Act, provided the exclusion is applied with respect to all options to
be granted on an Enrollment Date in an identical manner to all highly
compensated individuals of the Employer whose Eligible Employees are
participating in the Offering Period.  Notwithstanding the foregoing, for
options granted under the Non-423 Plan Component, Eligible Employee shall also
mean any other employee of a Designated Subsidiary to the extent that local law
requires participation in the Plan to be extended to such employee, as
determined by the Administrator.

 

(n)                                 “Employer” means the employer of the
applicable Eligible Employee(s).

 

(o)                                 “Enrollment Date” means the first Trading
Day of each Offering Period.

 

(p)                                 “Exchange Act” means the Securities Exchange
Act of 1934, as amended, including the rules and regulations promulgated
thereunder.

 

(q)                                 “Exercise Date” means the last Trading Day
of each Purchase Period.

 

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(r)                                    “Fair Market Value” means, as of any date
and unless the Administrator determines otherwise, the value of Common Stock
determined as follows:

 

(i)                                     If the Common Stock is listed on any
established stock exchange or a national market system, including without
limitation the Nasdaq Global Select Market, the Nasdaq Global Market or the
Nasdaq Capital Market of The Nasdaq Stock Market, its Fair Market Value will be
the closing sales price for such stock (or the closing bid, if no sales were
reported) as quoted on such exchange or system on the date of determination (or
on the last preceding Trading Day if the date of determination is not a Trading
Day), as reported in The Wall Street Journal or such other source as the
Administrator deems reliable;

 

(ii)                                  If the Common Stock is regularly quoted by
a recognized securities dealer but selling prices are not reported, its Fair
Market Value will be the mean between the high bid and low asked prices for the
Common Stock on the date of determination (or on the last preceding Trading Day
if the date of determination is not a Trading Day), as reported in The Wall
Street Journal or such other source as the Administrator deems reliable; or

 

(iii)                               In the absence of an established market for
the Common Stock, the Fair Market Value thereof will be determined in good faith
by the Administrator.

 

(s)                                   “Fiscal Year” means the fiscal year of the
Company.

 

(t)                                    “New Exercise Date” means a new Exercise
Date if the Administrator shortens any Offering Period then in progress.

 

(u)                                 “Non-423 Plan Component” means a component
of this Plan that is not intended to meet the requirements set forth in
Section 423(b) of the Code, as amended.

 

(v)                                 “Offering Periods” means the periods of
approximately twenty-four (24) months during which an option granted pursuant to
the Plan may be exercised, commencing on the first Trading Day on or after
June 1 and December 1 of each year and terminating on the last Trading Day in
the periods ending twenty-four (24) months later.  The duration and timing of
Offering Periods may be changed pursuant to Sections 4 and 20.

 

(w)                               “Parent” means a “parent corporation,” whether
now or hereafter existing, as defined in Section 424(e) of the Code.

 

(x)                                 “Participant” means an Eligible Employee
that participates in the Plan.

 

(y)                                 “Plan” means this Omnivision
Technologies, Inc. 2009 Employee Stock Purchase Plan, which includes a Code
Section 423 Plan Component and a Non-423 Plan Component.

 

(z)                                  “Purchase Period” means the approximately
six (6) month period commencing after one Exercise Date and ending with the next
Exercise Date, except that the first Purchase Period of any Offering Period will
commence on the Enrollment Date and end with the next Exercise Date.

 

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(aa)                          “Purchase Price” means an amount equal to
eighty-five percent (85%) of the Fair Market Value of a share of Common Stock on
the Enrollment Date or on the Exercise Date, whichever is lower; provided
however, that the Purchase Price may be determined for subsequent Offering
Periods by the Administrator subject to compliance with Section 423 of the Code
(or any successor rule or provision or any other applicable law, regulation or
stock exchange rule) or pursuant to Section 20.

 

(bb)                          “Subsidiary” means a “subsidiary corporation,”
whether now or hereafter existing, as defined in Section 424(f) of the Code.

 

(cc)                            “Trading Day” means a day on which the national
stock exchange upon which the Common Stock is listed is open for trading.

 

3.                                      Eligibility.

 

(a)                                 Offering Periods.  Any Eligible Employee on
a given Enrollment Date will be eligible to participate in the Plan, subject to
the requirements of Section 5.

 

(b)                                 Limitations.  Any provisions of the Plan to
the contrary notwithstanding, no Eligible Employee will be granted an option
under the Plan (i) to the extent that, immediately after the grant, such
Eligible Employee (or any other person whose stock would be attributed to such
Eligible Employee pursuant to Section 424(d) of the Code) would own capital
stock of the Company or any Parent or Subsidiary of the Company and/or hold
outstanding options to purchase such stock possessing five percent (5%) or more
of the total combined voting power or value of all classes of the capital stock
of the Company or of any Parent or Subsidiary of the Company, or (ii) to the
extent that his or her rights to purchase stock under all employee stock
purchase plans (as defined in Section 423 of the Code) of the Company or any
Parent or Subsidiary of the Company accrues at a rate, which exceeds twenty-five
thousand dollars ($25,000) worth of stock (determined at the Fair Market Value
of the stock at the time such option is granted) for each calendar year in which
such option is outstanding at any time, as determined in accordance with
Section 423 of the Code and the regulations thereunder.

 

4.                                      Offering Periods.  The Plan will be
implemented by consecutive, overlapping Offering Periods with a new Offering
Period commencing on the first Trading Day on or after June 1 and December 1
each year, or on such other date as the Administrator will determine.  The
Administrator will have the power to change the duration of Offering Periods
(including the commencement dates thereof) with respect to future offerings
without stockholder approval if such change is announced prior to the scheduled
beginning of the first Offering Period to be affected thereafter.

 

5.                                      Participation.  An Eligible Employee may
participate in the Plan by (i) submitting to the Company’s stock administration
office (or its designee), on or before a date determined by the Administrator
prior to an applicable Enrollment Date, a properly completed subscription
agreement authorizing payroll deductions in the form provided by the
Administrator for such purpose, or (ii) following an electronic or other
enrollment procedure determined by the Administrator.

 

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6.                                      Payroll Deductions.

 

(a)                                 At the time a Participant enrolls in the
Plan pursuant to Section 5, he or she will elect to have payroll deductions made
on each pay day during the Offering Period in an amount not exceeding fifteen
percent (15%) of the Compensation, which he or she receives on each pay day
during the Offering Period; provided, however, that should a pay day occur on an
Exercise Date, a Participant will have the payroll deductions made on such day
applied to his or her account under the subsequent Purchase Period or Offering
Period.  A Participant’s subscription agreement will remain in effect for
successive Offering Periods unless terminated as provided in Section 10 hereof.

 

(b)                                 Payroll deductions for a Participant will
commence on the first pay day following the Enrollment Date and will end on the
last pay day prior to the Exercise Date of such Offering Period to which such
authorization is applicable, unless sooner terminated by the Participant as
provided in Section 10 hereof.

 

(c)                                  All payroll deductions made for a
Participant will be credited to his or her account under the Plan and will be
withheld in whole percentages only.  A Participant may not make any additional
payments into such account.

 

(d)                                 A Participant may discontinue his or her
participation in the Plan as provided in Section 10, or may increase or decrease
the rate of his or her payroll deductions during the Offering Period by
(i) properly completing and submitting to the Company’s stock administration
office (or its designee), on or before a date determined by the Administrator
prior to an applicable Exercise Date, a new subscription agreement authorizing
the change in payroll deduction rate in the form provided by the Administrator
for such purpose, or (ii) following an electronic or other procedure prescribed
by the Administrator; provided, however, that a Participant may only make one
payroll deduction change during each month of the Offering Period.  If a
Participant has not followed such procedures to change the rate of payroll
deductions, the rate of his or her payroll deductions will continue at the
originally elected rate throughout the Offering Period and future Offering
Periods (unless terminated as provided in Section 10).  The Administrator may,
in its sole discretion, limit the nature and/or number of payroll deduction rate
changes that may be made by Participants during any Offering Period, and may
establish such other conditions or limitations as it deems appropriate for Plan
administration.  Any change in payroll deduction rate made pursuant to this
Section 6(d) will be effective as of the first full payroll period following
five (5) business days after the date on which the change is made by the
Participant (unless the Administrator, in its sole discretion, elects to process
a given change in payroll deduction rate more quickly).

 

(e)                                  Notwithstanding the foregoing, to the
extent necessary to comply with Section 423(b)(8) of the Code and Section 3(b),
a Participant’s payroll deductions may be decreased to zero percent (0%) at any
time during a Purchase Period.  Subject to Section 423(b)(8) of the Code and
Section 3(b) hereof, payroll deductions will recommence at the rate originally
elected by the Participant effective as of the beginning of the first Purchase
Period scheduled to end in the following calendar year, unless terminated by the
Participant as provided in Section 10.

 

(f)                                   Notwithstanding any provisions to the
contrary in the Plan, the Administrator may allow Eligible Employees to
participate in the Plan via cash contributions instead of payroll deductions if
(i) payroll deductions are not permitted under applicable local law, and
(ii) the Eligible Employee is participating in the Non-423 Plan Component or the
Administrator determines that cash contributions are permissible under
Section 423 of the Code.

 

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(g)                                  At the time the option is exercised, in
whole or in part, or at the time some or all of the Common Stock issued under
the Plan is disposed of, the Participant must make adequate provision for the
Company’s or Employer’s federal, state, or any other tax liability payable to
any authority including taxes imposed by jurisdictions outside of the United
States, national insurance, social security or other tax withholding
obligations, if any, which arise upon the exercise of the option or the
disposition of the Common Stock.  At any time, the Company or the Employer may,
but will not be obligated to, withhold from the Participant’s compensation the
amount necessary for the Company or the Employer to meet applicable withholding
obligations, including any withholding required to make available to the Company
or the Employer any tax deductions or benefits attributable to sale or early
disposition of Common Stock by the Eligible Employee. In addition, the Company
or the Employer may, but will not be obligated to, withhold from the proceeds of
the sale of Common Stock or any other method of withholding the Company or the
Employer deems appropriate.

 

7.                                      Grant of Option.  On the Enrollment Date
of each Offering Period, each Eligible Employee participating in such Offering
Period will be granted an option to purchase on each Exercise Date during such
Offering Period (at the applicable Purchase Price) up to a number of shares of
Common Stock determined by dividing such Eligible Employee’s payroll deductions
accumulated prior to such Exercise Date and retained in the Eligible Employee’s
account as of the Exercise Date by the applicable Purchase Price; provided that
in no event will an Eligible Employee be permitted to purchase during each
Purchase Period more than a number of shares determined by dividing $12,500 by
the Fair Market Value of a share of the Company’s Common Stock (subject to any
adjustment pursuant to Section 19) on the Enrollment Date, and provided further
that such purchase will be subject to the limitations set forth in Sections
3(b) and 13.  The Eligible Employee may accept the grant of such option with
respect to an Offering Period by electing to participate in the Plan in
accordance with the requirements of Section 5.  The Administrator may, for
future Offering Periods, increase or decrease, in its absolute discretion, the
maximum number of shares of Common Stock that an Eligible Employee may purchase
during each Purchase Period of an Offering Period.  Exercise of the option will
occur as provided in Section 8, unless the Participant has withdrawn pursuant to
Section 10.  The option will expire on the last day of the Offering Period.

 

8.                                      Exercise of Option.

 

(a)                                 Unless a Participant withdraws from the Plan
as provided in Section 10, his or her option for the purchase of shares of
Common Stock will be exercised automatically on the Exercise Date, and the
maximum number of full shares subject to the option will be purchased for such
Participant at the applicable Purchase Price with the accumulated payroll
deductions from his or her account.  No fractional shares of Common Stock will
be purchased; any payroll deductions accumulated in a Participant’s account,
which are not sufficient to purchase a full share will be retained in the
Participant’s account for the subsequent Purchase Period or Offering Period,
subject to earlier withdrawal by the Participant as provided in Section 10.  Any
other funds left over in a Participant’s account after the Exercise Date will be
returned to the Participant.  During a Participant’s lifetime, a Participant’s
option to purchase shares hereunder is exercisable only by him or her.

 

(b)                                 If the Administrator determines that, on a
given Exercise Date, the number of shares of Common Stock with respect to which
options are to be exercised may exceed (i) the

 

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number of shares of Common Stock that were available for sale under the Plan on
the Enrollment Date of the applicable Offering Period, or (ii) the number of
shares of Common Stock available for sale under the Plan on such Exercise Date,
the Administrator may in its sole discretion (x) provide that the Company will
make a pro rata allocation of the shares of Common Stock available for purchase
on such Enrollment Date or Exercise Date, as applicable, in as uniform a manner
as will be practicable and as it will determine in its sole discretion to be
equitable among all Participants exercising options to purchase Common Stock on
such Exercise Date, and continue all Offering Periods then in effect or
(y) provide that the Company will make a pro rata allocation of the shares
available for purchase on such Enrollment Date or Exercise Date, as applicable,
in as uniform a manner as will be practicable and as it will determine in its
sole discretion to be equitable among all participants exercising options to
purchase Common Stock on such Exercise Date, and terminate any or all Offering
Periods then in effect pursuant to Section 20.  The Company may make a pro rata
allocation of the shares available on the Enrollment Date of any applicable
Offering Period pursuant to the preceding sentence, notwithstanding any
authorization of additional shares for issuance under the Plan by the Company’s
stockholders subsequent to such Enrollment Date.

 

9.                                      Delivery.  As soon as reasonably
practicable after each Exercise Date on which a purchase of shares of Common
Stock occurs, the Company will arrange the delivery to each Participant the
shares purchased upon exercise of his or her option in a form determined by the
Administrator (in its sole discretion) and pursuant to rules established by the
Administrator.  The Company may permit or require that shares be deposited
directly with a broker designated by the Company or to a designated agent of the
Company, and the Company may utilize electronic or automated methods of share
transfer.  The Company may require that shares be retained with such broker or
agent for a designated period of time and/or may establish other procedures to
permit tracking of disqualifying dispositions of such shares.  No Participant
will have any voting, dividend, or other stockholder rights with respect to
shares of Common Stock subject to any option granted under the Plan until such
shares have been purchased and delivered to the Participant as provided in this
Section 9.

 

10.                               Withdrawal.

 

(a)                                 A Participant may withdraw all but not less
than all the payroll deductions credited to his or her account and not yet used
to exercise his or her option under the Plan at any time by (i) submitting to
the Company’s stock administration office (or its designee) a written notice of
withdrawal in the form determined by the Administrator for such purpose, or
(ii) following an electronic or other withdrawal procedure determined by the
Administrator.  All of the Participant’s payroll deductions credited to his or
her account will be paid to such Participant promptly after receipt of notice of
withdrawal and such Participant’s option for the Offering Period will be
automatically terminated, and no further payroll deductions for the purchase of
shares will be made for such Offering Period.  If a Participant withdraws from
an Offering Period, payroll deductions will not resume at the beginning of the
succeeding Offering Period, unless the Participant re-enrolls in the Plan in
accordance with the provisions of Section 5.

 

(b)                                 A Participant’s withdrawal from an Offering
Period will not have any effect upon his or her eligibility to participate in
any similar plan that may hereafter be adopted by the Company or in succeeding
Offering Periods that commence after the termination of the Offering Period from
which the Participant withdraws.

 

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11.                               Termination of Employment.  Upon a
Participant’s ceasing to be an Eligible Employee, for any reason, he or she will
be deemed to have elected to withdraw from the Plan and the payroll deductions
credited to such Participant’s account during the Offering Period but not yet
used to purchase shares of Common Stock under the Plan will be returned to such
Participant or, in the case of his or her death, to the person or persons
entitled thereto under Section 15, and such Participant’s option will be
automatically terminated.

 

12.                               Interest.  No interest will accrue on the
payroll deductions of a participant in the Plan, except as may be required by
applicable law, as determined by the Company, for Participants in the Non-423
Plan Component (or the Code Section 423 Plan Component if permitted under Code
Section 423).

 

13.                               Stock.

 

(a)                                 Subject to adjustment upon changes in
capitalization of the Company as provided in Section 19 hereof, the maximum
number of shares of Common Stock that will be made available for sale under the
Plan will be 5,000,000 shares of Common Stock.

 

(b)                                 Until the shares are issued (as evidenced by
the appropriate entry on the books of the Company or of a duly authorized
transfer agent of the Company), a Participant will only have the rights of an
unsecured creditor with respect to such shares, and no right to vote or receive
dividends or any other rights as a stockholder will exist with respect to such
shares.

 

(c)                                  Shares of Common Stock to be delivered to a
Participant under the Plan will be registered in the name of the Participant or
in the name of the Participant and his or her spouse.

 

14.                               Administration.  The Plan will be administered
by the Board or a Committee appointed by the Board, which Committee will be
constituted to comply with Applicable Laws.  The Administrator will have full
and exclusive discretionary authority to construe, interpret and apply the terms
of the Plan, to determine eligibility and to adjudicate all disputed claims
filed under the Plan.  Every finding, decision and determination made by the
Administrator will, to the full extent permitted by law, be final and binding
upon all parties.  Notwithstanding any provision to the contrary in this Plan,
the Administrator may adopt rules or procedures relating to the operation and
administration of the Non-423 Plan Component to accommodate the specific
requirements of local laws and procedures for jurisdictions outside of the
United States.  Without limiting the generality of the foregoing, the
Administrator is specifically authorized to adopt rules and procedures regarding
eligibility to participate, the definition of Compensation, handling of payroll
deductions, making of contributions to the Plan (including, without limitation,
in forms other than payroll deductions), establishment of bank or trust accounts
to hold payroll deductions, payment of interest, conversion of local currency,
obligations to pay payroll tax, determination of beneficiary designation
requirements, withholding procedures and handling of stock certificates that
vary with local requirements.  Further, the Administrator is authorized to adopt
sub-plans applicable to particular Designated Subsidiaries or locations under
the Non-423 Plan Component.  The rules of such sub-plans may take precedence
over other provisions of this Plan, with the exception of Section 13(a) hereof,
but unless otherwise superseded by the terms of such sub-plan, the provisions of
this Plan shall govern the operation of such sub-plan.

 

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15.                               Designation of Beneficiary.

 

(a)                                 If permitted by the Administrator, a
Participant may file a designation of a beneficiary who is to receive any shares
of Common Stock and cash, if any, from the Participant’s account under the Plan
in the event of such Participant’s death subsequent to an Exercise Date on which
the option is exercised but prior to delivery to such Participant of such shares
and cash.  In addition, if permitted by the Administrator, a Participant may
file a designation of a beneficiary who is to receive any cash from the
Participant’s account under the Plan in the event of such Participant’s death
prior to exercise of the option.  If a Participant is married and the designated
beneficiary is not the spouse, spousal consent will be required for such
designation to be effective.

 

(b)                                 Such designation of beneficiary may be
changed by the Participant at any time by notice in a form determined by the
Administrator.  In the event of the death of a Participant and in the absence of
a beneficiary validly designated under the Plan who is living at the time of
such Participant’s death, the Company will deliver such shares and/or cash to
the executor or administrator of the estate of the Participant, or if no such
executor or administrator has been appointed (to the knowledge of the Company),
the Company, in its discretion, may deliver such shares and/or cash to the
spouse or to any one or more dependents or relatives of the Participant, or if
no spouse, dependent or relative is known to the Company, then to such other
person as the Company may designate.

 

(c)                                  All beneficiary designations will be in
such form and manner as the Administrator may designate from time to time.

 

16.                               Transferability.  Neither payroll deductions
credited to a Participant’s account nor any rights with regard to the exercise
of an option or to receive shares of Common Stock under the Plan may be
assigned, transferred, pledged or otherwise disposed of in any way (other than
by will, the laws of descent and distribution or as provided in Section 15
hereof) by the Participant.  Any such attempt at assignment, transfer, pledge or
other disposition will be without effect, except that the Company may treat such
act as an election to withdraw funds from an Offering Period in accordance with
Section 10 hereof.

 

17.                               Use of Funds.  The Company may use all payroll
deductions received or held by it under the Plan for any corporate purpose, and
the Company will not be obligated to segregate such payroll deductions unless
otherwise required under local law, as determined by the Administrator (in which
case, the affected options will be granted under the Non-423 Plan Component, if
necessary).  Until shares of Common Stock are issued, Participants will only
have the rights of an unsecured creditor with respect to such shares.

 

18.                               Reports.  Individual accounts will be
maintained for each Participant in the Plan.  Statements of account will be
given to participating Eligible Employees at least annually, which statements
will set forth the amounts of payroll deductions, the Purchase Price, the number
of shares of Common Stock purchased and the remaining cash balance, if any.

 

19.                               Adjustments, Dissolution, Liquidation, Merger
or Change in Control.

 

(a)                                 Adjustments.  In the event that any dividend
or other distribution (whether in the form of cash, Common Stock, other
securities, or other property), recapitalization, stock split,

 

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reverse stock split, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase, or exchange of Common Stock or other securities of the
Company, or other change in the corporate structure of the Company affecting the
Common Stock occurs, the Administrator, in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available
under the Plan, will, in such manner as it may deem equitable, adjust the number
and class of Common Stock that may be delivered under the Plan, the Purchase
Price per share and the number of shares of Common Stock covered by each option
under the Plan that has not yet been exercised, and the numerical limits of
Sections 7 and 13.

 

(b)                                 Dissolution or Liquidation.  In the event of
the proposed dissolution or liquidation of the Company, any Offering Period then
in progress will be shortened by setting a New Exercise Date, and will terminate
immediately prior to the consummation of such proposed dissolution or
liquidation, unless provided otherwise by the Administrator.  The New Exercise
Date will be before the date of the Company’s proposed dissolution or
liquidation.  The Administrator will notify each Participant in writing, at
least ten (10) business days prior to the New Exercise Date, that the Exercise
Date for the Participant’s option has been changed to the New Exercise Date and
that the Participant’s option will be exercised automatically on the New
Exercise Date, unless prior to such date the Participant has withdrawn from the
Offering Period as provided in Section 10 hereof.

 

(c)                                  Merger or Change in Control.  In the event
of a merger or Change in Control, each outstanding option will be assumed or an
equivalent option substituted by the successor corporation or a Parent or
Subsidiary of the successor corporation.  In the event that the successor
corporation refuses to assume or substitute for the option, the Offering Period
with respect to which such option relates will be shortened by setting a New
Exercise Date on which such Offering Period shall end.  The New Exercise Date
will occur before the date of the Company’s proposed merger or Change in
Control.  The Administrator will notify each Participant in writing prior to the
New Exercise Date, that the Exercise Date for the Participant’s option has been
changed to the New Exercise Date and that the Participant’s option will be
exercised automatically on the New Exercise Date, unless prior to such date the
Participant has withdrawn from the Offering Period as provided in Section 10
hereof.

 

20.                               Amendment or Termination.

 

(a)                                 The Administrator, in its sole discretion,
may amend, suspend, or terminate the Plan, or any part thereof, at any time and
for any reason.  If the Plan is terminated, the Administrator, in its
discretion, may elect to terminate all outstanding Offering Periods either
immediately or upon completion of the purchase of shares of Common Stock on the
next Exercise Date (which may be sooner than originally scheduled, if determined
by the Administrator in its discretion), or may elect to permit Offering Periods
to expire in accordance with their terms (and subject to any adjustment pursuant
to Section 19).  If the Offering Periods are terminated prior to expiration, all
amounts then credited to Participants’ accounts that have not been used to
purchase shares of Common Stock will be returned to the Participants (without
interest thereon, except as otherwise required under local laws, as further set
forth in Section 12 hereof) as soon as administratively practicable.

 

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(b)                                 Without stockholder consent and without
limiting Section 20(a), the Administrator will be entitled to change the
Offering Periods, limit the frequency and/or number of changes in the amount
withheld during an Offering Period, establish the exchange ratio applicable to
amounts withheld in a currency other than U.S. dollars, permit payroll
withholding in excess of the amount designated by a Participant in order to
adjust for delays or mistakes in the Company’s processing of properly completed
withholding elections, establish reasonable waiting and adjustment periods
and/or accounting and crediting procedures to ensure that amounts applied toward
the purchase of Common Stock for each Participant properly correspond with
amounts withheld from the Participant’s Compensation, and establish such other
limitations or procedures as the Administrator determines in its sole discretion
advisable that are consistent with the Plan.

 

(c)                                  In the event the Administrator determines
that the ongoing operation of the Plan may result in unfavorable financial
accounting consequences, the Administrator may, in its discretion and, to the
extent necessary or desirable, modify, amend or terminate the Plan to reduce or
eliminate such accounting consequence including, but not limited to:

 

(i)                                     amending the Plan to conform with the
safe harbor definition under Statement of Financial Accounting Standards 123(R),
including with respect to an Offering Period underway at the time;

 

(ii)                                  altering the Purchase Price for any
Offering Period including an Offering Period underway at the time of the change
in Purchase Price;

 

(iii)                               shortening any Offering Period by setting a
New Exercise Date, including an Offering Period underway at the time of the
Administrator action;

 

(iv)                              reducing the maximum percentage of
Compensation a Participant may elect to set aside as payroll deductions; and

 

(v)                                 reducing the maximum number of Shares a
Participant may purchase during any Offering Period or Purchase Period.

 

Such modifications or amendments will not require stockholder approval or the
consent of any Plan Participants.

 

21.                               Notices.  All notices or other communications
by a Participant to the Company under or in connection with the Plan will be
deemed to have been duly given when received in the form and manner specified by
the Company at the location, or by the person, designated by the Company for the
receipt thereof.

 

22.                               Conditions Upon Issuance of Shares.  Shares of
Common Stock will not be issued with respect to an option unless the exercise of
such option and the issuance and delivery of such shares pursuant thereto will
comply with all applicable provisions of law, domestic or foreign, including,
without limitation, the Securities Act of 1933, as amended, the Exchange Act,
the rules and regulations promulgated thereunder, and the requirements of any
stock exchange upon which the shares may then be listed, and will be further
subject to the approval of counsel for the Company with respect to such
compliance.

 

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As a condition to the exercise of an option, the Company may require the person
exercising such option to represent and warrant at the time of any such exercise
that the shares are being purchased only for investment and without any present
intention to sell or distribute such shares if, in the opinion of counsel for
the Company, such a representation is required by any of the aforementioned
applicable provisions of law.

 

23.                               Code Section 409A.  The Code Section 423 Plan
Component is exempt from the application of Code Section 409A.  The Non-423 Plan
Component is intended to be exempt from Code Section 409A under the short-term
deferral exception and any ambiguities in the Plan shall be construed and
interpreted in accordance with such intent.  In furtherance of the foregoing and
notwithstanding any provision in the Plan to the contrary, if the Administrator
determines that an option granted under the Plan may be subject to Code
Section 409A or that any provision in the Plan would cause an option under the
Plan to be subject to Code Section 409A, the Administrator may amend the terms
of the Plan and/or of an outstanding option granted under the Plan, or take such
other action the Administrator determines is necessary or appropriate, in each
case, without the Participant’s consent, to exempt any outstanding option or
future option that may be granted under the Plan from or to allow any such
options to comply with Code Section 409A, but only to the extent any such
amendments or action by the Administrator would not violate Code Section 409A. 
Notwithstanding the foregoing, the Company shall have no liability to a
Participant or any other party if the option to purchase Common Stock under the
Plan that is intended to be exempt from or compliant with Code Section 409A is
not so exempt or compliant or for any action taken by the Administrator with
respect thereto.  The Company makes no representation that the option to
purchase Common Stock under the Plan is compliant with Code Section 409A.

 

24.                               Stockholder Approval.  The Plan will be
subject to approval by the stockholders of the Company within twelve (12) months
after the date the Plan is adopted by the Board.  Such stockholder approval will
be obtained in the manner and to the degree required under Applicable Laws.

 

25.                               Governing Law. The Plan shall be governed by,
and construed in accordance with, the laws of the State of California (except
its choice-of-law provisions).

 

26.                               Severability.  If any provision of the Plan is
or becomes or is deemed to be invalid, illegal, or unenforceable for any reason
in any jurisdiction or as to any Participant, such invalidity, illegality or
unenforceability shall not affect the remaining parts of the Plan, and the Plan
shall be construed and enforced as to such jurisdiction or Participant as if the
invalid, illegal or unenforceable provision had not been included.

 

27.                               Automatic Transfer to Low Price Offering
Period.  To the extent permitted by Applicable Laws, if the Fair Market Value of
the Common Stock on any Exercise Date in an Offering Period is lower than the
Fair Market Value of the Common Stock on the Enrollment Date of such Offering
Period, then all participants in such Offering Period will be automatically
withdrawn from such Offering Period immediately after the exercise of their
option on such Exercise Date and automatically re-enrolled in the immediately
following Offering Period as of the first day thereof.

 

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