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EXHIBIT 10.7(c)




SYNAPTICS INCORPORATED




 






CORRECTED AMENDED AND RESTATED

2001 EMPLOYEE STOCK PURCHASE PLAN

(As amended through January 23, 2007)




 









 








SYNAPTICS INCORPORATED





 






CORRECTED AMENDED AND RESTATED

2001 EMPLOYEE STOCK PURCHASE PLAN




	 	 	 	 	 
	1. Purpose
	 	 	1	 
	2. Definitions
	 	 	1	 
	3. Eligibility
	 	 	3	 
	4. Offering Periods
	 	 	3	 
	5. Election to Participate
	 	 	4	 
	6. Plan Contributions
	 	 	5	 
	7. Grant of Option
	 	 	6	 
	8. Exercise Price
	 	 	7	 
	9. Exercise of Options
	 	 	7	 
	10. Delivery
	 	 	7	 
	11. Withdrawal; Termination of Employment
	 	 	7	 
	12. Stock
	 	 	8	 
	13. Administration
	 	 	8	 
	14. Designation of Beneficiary
	 	 	9	 
	15. Transferability
	 	 	9	 
	16. Participant Accounts
	 	 	9	 
	17. Adjustments Upon Changes in Capitalization; Corporate Transactions
	 	 	10	 
	18. Amendment of the Plan
	 	 	10	 
	19. Termination of the Plan
	 	 	11	 
	20. Notices
	 	 	11	 
	21. Effective Date
	 	 	11	 
	22. Conditions Upon Issuance of Shares
	 	 	11	 
	23. Expenses of the Plan
	 	 	11	 
	24. No Employment Rights
	 	 	11	 
	25. Applicable Law
	 	 	11	 
	26. Additional Restrictions of Rule 16b-3
	 	 	12	 







 









 








SYNAPTICS INCORPORATED




 






CORRECTED AMENDED AND RESTATED

2001 EMPLOYEE STOCK PURCHASE PLAN




     1. Purpose. The purpose of the Plan is to provide incentive for present and future
employees of the Company and any Designated Subsidiary to acquire a proprietary interest (or
increase an existing proprietary interest) in the Company through the purchase of Common Stock. It
is the Company’s intention that the Plan qualify as an “employee stock purchase plan” under Section
423 of the Code. Accordingly, the provisions of the Plan shall be administered, interpreted and
construed in a manner consistent with the requirements of that section of the Code.



     2. Definitions.



          (a) “Applicable Percentage” means the percentage specified in Section 8, subject to
adjustment by the Committee as provided in Section 8.




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




          (c) “Code” means the Internal Revenue Code of 1986, as amended, and any successor
thereto.




          (d) “Committee” means the committee appointed by the Board to administer the Plan as
described in Section 13 of the Plan or, if no such Committee is appointed, the Board.




          (e) “Common Stock” means the Company’s common stock, par value $.001 per share.




          (f) “Company” means Synaptics Incorporated, a Delaware corporation.




          (g) “Compensation” means, with respect to each Participant for each pay period, the
full base salary and overtime paid to such Participant by the Company or a Designated Subsidiary.
Except as otherwise determined by the Committee, “Compensation” does not include: (i) bonuses or
commissions; (ii) any amounts contributed by the Company or a Designated Subsidiary to any pension
plan; (iii) any automobile or relocation allowances (or reimbursement for any such expenses); (iv)
any amounts paid as a starting bonus or finder’s fee; (v) any amounts realized from the exercise of
any stock options or incentive awards; (vi) any amounts paid by the Company or a Designated
Subsidiary for other fringe benefits, such as health and welfare, hospitalization and group life
insurance benefits, or perquisites, or paid in lieu of such benefits, or; (vii) other similar forms
of extraordinary compensation.




          (h) “Continuous Status as an Employee” means the absence of any interruption or
termination of service as an Employee. Continuous Status as an Employee shall not be considered
interrupted in the case of a leave of absence agreed to in writing by the Company or the Designated
Subsidiary that employs the Employee, provided that such leave is for a period of not more than 90
days or reemployment upon the expiration of such leave is guaranteed by contract or statute.




 









 








          (i) “Designated Subsidiaries” means the Subsidiaries that have been designated by the
Board from time to time in its sole discretion as eligible to participate in the Plan.




          (j) “Employee” means any person, including an Officer, whose customary employment with
the Company or one of its Designated Subsidiaries is at least twenty (20) hours per week and more
than five (5) months in any calendar year.




          (k) “Entry Date” means the first day of each Exercise Period.




          (l) “Exchange Act” means the Securities Exchange Act of 1934, as amended.




          (m) “Exercise Date” means the last Trading Day ending on or before each June 30 and
December 31.




          (n) “Exercise Period” means, for any Offering Period, each period commencing on the
Offering Date and on the day after each Exercise Date, and terminating on the immediately following
Exercise Date.




          (o) “Exercise Price” means the price per share of Common Stock offered in a given
Offering Period determined as provided in Section 8.




          (p) “Fair Market Value” means, with respect to a share of Common Stock, the Fair
Market Value as determined under Section 7(b).




          (q) “First Offering Date” means the commencement date of the initial public offering
contemplated by the Registration Statement on Form S-1 filed by the Company with the Securities and
Exchange Commission.




          (r) “Offering Date” means the first Trading Day of each Offering Period;
provided, that in the case of an individual who becomes eligible to become a Participant
under Section 3 after the first Trading Day of an Offering Period, the term “Offering Date” shall
mean the first Trading Day of the Exercise Period coinciding with or next succeeding the day on
which that individual becomes eligible to become a Participant. Options granted after the first
day of an Offering Period will be subject to the same terms as the options granted on the first
Trading Day of such Offering Period except that they will have a different grant date (thus,
potentially, a different exercise price) and, because they expire at the same time as the options
granted on the first Trading Day of such Offering Period, a shorter term.




          (s) “Offering Period” means, subject to adjustment as provided in Section 4, (i) with
respect to the first Offering Period, the period beginning on the First Offering Date and ending on
December 31, 2003, and (ii) with respect to each Offering Period thereafter, the period beginning
on the January 1 immediately following the end of the previous Offering Period and ending on the
December 31 which is 24 months thereafter.




          (t) “Officer” means a person who is an officer of the Company within the meaning of
Section 16 under the Exchange Act and the rules and regulations promulgated thereunder.




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          (u) “Participant” means an Employee automatically enrolled in the Plan pursuant to
Section 5(a) hereof, or an Employee who has elected to participate in the Plan by filing an
enrollment agreement with the Company as provided in Section 5(b) hereof.




          (v) “Plan” shall mean this Amended and Restated Synaptics Incorporated 2001 Employee
Stock Purchase Plan.




          (w) “Plan Contributions” means, with respect to each Participant, the lump sum cash
transfers, if any, made by the Participant to the Plan pursuant to Section 5(a) hereof, plus the
after-tax payroll deductions, if any, withheld from the Compensation of the Participant and
contributed to the Plan for the Participant as provided in Section 6 hereof, and any other amounts
contributed to the Plan for the Participant in accordance with the terms of the Plan.




          (x) “Subsidiary” shall mean any corporation, domestic or foreign, of which the Company
owns, directly or indirectly, 50% or more of the total combined voting power of all classes of
stock, and that otherwise qualifies as a “subsidiary corporation” within the meaning of Section
424(f) of the Code.




          (y) “Trading Day” shall mean a day on which the national stock exchanges and the
Nasdaq system are open for trading.




     3. Eligibility.



          (a) Any Employee who has completed at least three (3) months of employment with the Company or
any Designated Subsidiary and who is an Employee as of the Offering Date of a given Offering Period
shall be eligible to become a Participant as of any Entry Date within that Offering Period under
the Plan, subject to the requirements of Section 5(a) and the limitations imposed by Section 423(b)
of the Code; provided, however, that any Employee who is an Employee as of the First Offering Date
shall be eligible to become a Participant as of such First Offering Date.




          (b) Notwithstanding any provision of the Plan to the contrary, no Participant shall be granted
an option under the Plan (i) to the extent that if, immediately after the grant, such Employee (or
any other person whose stock would be attributed to such Employee pursuant to Section 424(d) of the
Code) would own stock and/or hold outstanding options to purchase stock possessing 5% or more of
the total combined voting power or value of all classes of stock of the Company or of any
Subsidiary of the Company, or (ii) to the extent that his or her rights to purchase stock under all
employee stock purchase plans of the Company and its Subsidiaries intended to qualify under Section
423 of the Code to accrue at a rate which exceeds $25,000 of fair market value of stock (determined
at the time such option is granted) for each calendar year in which such option is outstanding at
any time.




     4. Offering Periods. The Plan shall generally be implemented by a series of Offering
Periods. The first Offering Period shall commence on the First Offering Date and end on December
31, 2003, and succeeding Offering Periods shall commence on the January 1 immediately following the
end of the previous Offering Period and end on the December 31 which is 24 months thereafter. If,
however, the Fair Market Value of a share of Common Stock on any Exercise Date (except the final
scheduled Exercise Date of any Offering Period) is lower than the Fair Market Value of a share of
Common Stock on the Offering Date, then the Offering Period in progress shall end immediately
following the close of trading on such Exercise Date, and a new Offering Period shall begin on the



3









 







next subsequent January 1 or July 1, as applicable, and shall extend for a 24 month period
ending on December 31 or June 30, as applicable. Subsequent Offering Periods shall commence on the
January 1 or July 1, as applicable, immediately following the end of the previous Offering Period
and shall extend for a 24 month period ending on December 31 or June 30, as applicable. The
Committee shall have the power to make other changes to the duration and/or the frequency of
Offering Periods with respect to future offerings if such change is announced at least five (5)
days prior to the scheduled beginning of the first Offering Period to be affected.



     5. Participation.



          (a) All Employees who are eligible Employees as of the First Offering Date shall automatically
become Participants in the Plan as of the First Offering Date, and shall be eligible to purchase
shares of the Common Stock on the Exercise Date of the first Exercise Period of the initial
Offering Period in an amount equal to the lesser of (i) the aggregate purchase price for one
thousand five hundred (1,500) shares of Common Stock or (ii) fifteen (15%) percent of the
Compensation that the Participant receives during the first Exercise Period of the initial Offering
Period (subject to the restrictions contained in Section 3(b) hereof), unless the Participant
elects a lower level of participation as provided under Section 5(c) hereof. Such purchase shall
be made by a direct lump sum cash transfer by the Participant to the Plan, unless the Participant
files a payroll deduction election in accordance with Section 5(c), or withdraws from the Plan
pursuant to Section 11 hereof. No enrollment agreement or payroll deduction election need be filed
by a Participant with the Company in order to participate in the initial Offering Period.




          (b) Employees meeting the eligibility requirements of Section 3 hereof after the First
Offering Date may elect to participate in the Plan commencing on any Entry Date by completing an
enrollment agreement on the form provided by the Company and filing the enrollment agreement with
the Company on or prior to such Entry Date, unless a later time for filing the enrollment agreement
is set by the Committee for all eligible Employees with respect to a given offering. The
enrollment agreement shall contain a payroll deduction election setting forth the percentage of the
Participant’s Compensation that is to be withheld by payroll deduction pursuant to the Plan.




          (c) No payroll deductions shall be made (and no payroll deduction elections shall be accepted)
by the Company for Participants during the first Exercise Period of the initial Offering Period
prior to the time that a registration statement with respect to the shares of Common Stock being
offered under the Plan has been filed with the Securities Exchange Commission on Form S-8, and is
effective. Once the Form S-8 is effective, a Participant may, but need not, make a payroll
deduction election with respect to the first Exercise Period of the initial Offering Period by
filing an enrollment agreement containing the payroll deduction election with the Company. A
Participant may elect a lower level of participation than that provided in Section 5(a) hereof with
respect to the first Exercise Period of the initial Offering Period at that time. If a payroll
deduction is elected under this Section 5(c), payroll deductions may commence as early as with the
first pay period beginning after the First Offering Date. Subject to the participation level
specified in Section 5(a), the rate of payroll deduction during the first Exercise Period of the
initial Offering Period may exceed the maximum permitted rate under Section 6(a) hereof to make up
for the payroll deductions, if any, which would otherwise have been made prior to the effectiveness
of the Form S-8 with respect to the Plan. If a payroll deduction election is made under this
Section 5(c), payroll deductions shall continue at the rate elected by the Participant under
Section 6(a) for subsequent Exercise Periods,




4









 







unless the Participant makes a change permitted under Section 6(b), or withdraws from the Plan
under Section 11.




          (d) For all Exercise Periods subsequent to the first Exercise Period of the initial Offering
Period, purchases generally must be made via payroll deduction. Participants in the first Exercise
Period of the initial Offering Period who do not make a payroll deduction election pursuant to
Section 5(c) must file an enrollment form containing a payroll deduction election with respect to
subsequent Exercise Periods with the Company prior to the commencement of a subsequent Exercise
Period (unless a later time for filing is set by the Administrator for all Participants) in order
to make further purchases under the Plan. Payroll deductions for Participants required to file a
payroll deduction election under this Section 5(d) shall commence on the first payroll of the
subsequent Exercise Period and shall end on the last payroll in the Offering Period, unless sooner
terminated by the Participant as provided in Section 11.




          (e) Except as otherwise determined by the Committee under rules applicable to all
Participants, payroll deductions for Participants enrolling in the Plan after the First Offering
Date under Section 5(b) shall commence on the first payroll following the Entry Date on which the
Participant files an enrollment agreement in accordance with Section 5(b) and shall end on the last
payroll in the Offering Period, unless sooner terminated by the Participant as provided in Section
11.




          (f) Unless a Participant elects otherwise prior to the last Exercise Date of an Offering
Period, including the last Exercise Date prior to termination in the case of an Offering Period
terminated by operation of the rule contained in Section 4 hereof, such Participant shall be deemed
(i) to have elected to participate in the immediately succeeding Offering Period (and, for purposes
of such Offering Period such Participant’s “Entry Date” shall be deemed to be the first day of such
Offering Period) and (ii) to have authorized the same payroll deduction for such immediately
succeeding Offering Period as was in effect for such Participant immediately prior to the
commencement of such succeeding Offering Period.




     6. Plan Contributions.



          (a) Except with respect to the first Exercise Period of the initial Offering Period, and
except as otherwise authorized by the Committee pursuant to Section 6(d) below, all contributions
to the Plan shall be made only by payroll deductions. At the time a Participant files the
enrollment agreement with respect to an Offering Period, the Participant may authorize payroll
deductions to be made on each payroll date during the portion of the Offering Period that he or she
is a Participant in an amount not less than 1% and not more than 15% of the Participant’s
Compensation on each payroll date during the portion of the Offering Period that he or she is a
Participant (or subsequent Offering Periods as provided in Section 5(f)). The amount of payroll
deductions shall be a whole percentage (i.e., 1%, 2%, 3%, etc.) of the Participant’s Compensation.




          (b) A Participant may discontinue his or her participation in the Plan as provided in Section
11, or may decrease or increase the rate or amount of his or her payroll deductions during such
Offering Period (within the limitations of Section 5(c) and 6(a) above) by completing and filing
with the Company a new enrollment agreement authorizing a change in the rate or amount of payroll
deductions; provided, that a Participant may not change the rate or amount of his or her
payroll deductions more than once in any Exercise Period. The change in rate or amount shall be
effective with the first full payroll period following ten (10) business days after the Company’s
receipt of the new enrollment agreement.




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          (c) Notwithstanding the foregoing, to the extent necessary to comply with Section 423(b)(8) of
the Code and Section 3(b) hereof, a Participant’s payroll deductions may be decreased to 0% at such
time during any Exercise Period which is scheduled to end during the current calendar year that the
aggregate of all payroll deductions accumulated with respect to such Exercise Period and any other
Exercise Period ending within the same calendar year are equal to the product of $25,000 multiplied
by the Applicable Percentage for the calendar year. Payroll deductions shall recommence at the
rate provided in the Participant’s enrollment agreement at the beginning of the following Exercise
Period which is scheduled to end in the following calendar year, unless terminated by the
Participant as provided in Section 11.




          (d) Notwithstanding anything to the contrary in the foregoing, but subject to the limitations
set forth in Section 3(b), the Committee may permit Participants to make after-tax contributions to
the Plan at such times and subject to such terms and conditions as the Committee may in its
discretion determine. All such additional contributions shall be made in a manner consistent with
the provisions of Section 423 of the Code or any successor thereto, and shall be held in
Participants’ accounts and applied to the purchase of shares of Common Stock pursuant to options
granted under this Plan in the same manner as payroll deductions contributed to the Plan as
provided above.




          (e) All Plan Contributions made for a Participant shall be deposited in the Company’s general
corporate account and shall be credited to the Participant’s account under the Plan. No interest
shall accrue or be credited with respect to a Participant’s Plan Contributions. All Plan
Contributions received or held by the Company may be used by the Company for any corporate purpose,
and the Company shall not be obligated to segregate or otherwise set apart such Plan Contributions
from any other corporate funds.




     7. Grant of Option.



          (a) On a Participant’s Entry Date, subject to the limitations set forth in Sections 3(b) and
12(a), the Participant shall be granted an option to purchase on each subsequent Exercise Date
during the Offering Period in which such Entry Date occurs (at the Exercise Price determined as
provided in Section 8 below) up to a number of shares of Common Stock determined by dividing such
Participant’s Plan Contributions accumulated prior to such Exercise Date and retained in the
Participant’s account as of such Exercise Date by the Exercise Price; provided, that the
maximum number of shares a Participant may purchase during any Exercise Period shall be One
Thousand Five Hundred (1,500) shares. The Fair Market Value of a share of Common Stock shall be
determined as provided in Section 7(b).




          (b) The Fair Market Value of a share of Common Stock on a given date shall be determined by
the Committee in its discretion; provided, that if there is a public market for the Common
Stock, the Fair Market Value per share shall be either (i) the closing price of the Common Stock on
such date (or, in the event that the Common Stock is not traded on such date, on the immediately
preceding trading date), as reported by the National Association of Securities Dealers Automated
Quotation (Nasdaq) National Market System, (ii) if such price is not reported, the average of the
bid and asked prices for the Common Stock on such date (or, in the event that the Common Stock is
not traded on such date, on the immediately preceding trading date), as reported by Nasdaq, (iii)
in the event the Common Stock is listed on a stock exchange, the closing price of the Common Stock
on such exchange on such date (or, in the event that the Common Stock is not traded on such date,
on the immediately preceding trading date), as reported in The Wall Street Journal, or (iv) if no




6









 







such quotations are available for a date within a reasonable time prior to the valuation date,
the value of the Common Stock as determined by the Committee using any reasonable means. For
purposes of the First Offering Date, the Fair Market Value of a share of Common Stock shall be the
Price to Public as set forth in the final prospectus filed by the Company with the Securities and
Exchange Commission pursuant to Rule 424 under the Securities Act of 1933, as amended.




     8. Exercise Price. The Exercise Price per share of Common Stock offered to each
Participant in a given Offering Period shall be the lower of: (i) the Applicable Percentage of the
greater of (A) the Fair Market Value of a share of Common Stock on the Offering Date or (B) the
Fair Market Value of a share of Common Stock on the Entry Date on which the Employee elects to
become a Participant within the Offering Period or (ii) the Applicable Percentage of the Fair
Market Value of a share of Common Stock on the Exercise Date. The Applicable Percentage with
respect to each Offering Period shall be 85%, unless and until such Applicable Percentage is
increased by the Committee, in its sole discretion, provided that any such increase in the
Applicable Percentage with respect to a given Offering Period must be established not less than
fifteen (15) days prior to the Offering Date thereof.



     9. Exercise of Options. Unless the Participant withdraws from the Plan as provided in
Section 11, the Participant’s option for the purchase of shares will be exercised automatically on
each Exercise Date, and the maximum number of full shares subject to such option shall be purchased
for the Participant at the applicable Exercise Price with the accumulated Plan Contributions then
credited the Participant’s account under the Plan. During a Participant’s lifetime, a
Participant’s option to purchase shares hereunder is exercisable only by the Participant.



     10. Delivery. As promptly as practicable after each Exercise Date, the Company shall
arrange for the delivery to each Participant (or the Participant’s beneficiary), as appropriate, or
to a custodial account for the benefit of each Participant (or the Participant’s beneficiary) as
appropriate, of a certificate representing the shares purchased upon exercise of such Participant’s
option. Any amount remaining to the credit of a Participant’s account after the purchase of shares
by such Participant on an Exercise Date, or which is insufficient to purchase a full share of
Common Stock, shall be carried over to the next Exercise Period if the Participant continues to
participate in the Plan or, if the Participant does not continue to participate, shall be returned
to the Participant.



     11. Withdrawal; Termination of Employment.



          (a) A Participant may withdraw from the Plan at any time after the Company’s registration
statement on Form S-8 with respect to the Plan is effective by giving written notice to the
Company. All of the Plan Contributions credited to the Participant’s account, if any, and not yet
invested in Common Stock will be paid to the Participant as soon as administratively practicable
after receipt of the Participant’s notice of withdrawal, the Participant’s option to purchase
shares pursuant to the Plan automatically will be terminated, and no further payroll deductions, if
any have been authorized, for the purchase of shares will be made for the Participant’s account.
Payroll deductions will not resume on behalf of a Participant who has withdrawn from the Plan (a
“Former Participant”) unless the Former Participant enrolls in a subsequent Offering Period in
accordance with Section 5(b).




          (b) Upon termination of the Participant’s Continuous Status as an Employee prior to any
Exercise Date for any reason, including retirement or death, the Plan Contributions credited to the
Participant’s account and not yet invested in Common Stock will be returned to the Participant or,




7









 







in the case of death, to the Participant’s beneficiary as determined pursuant to Section 14,
and the Participant’s option to purchase shares under the Plan will automatically terminate.




          (c) A Participant’s withdrawal from an Offering Period will not have any effect upon the
Participant’s eligibility to participate in succeeding Offering Periods or in any similar plan
which may hereafter be adopted by the Company.




          (d) A Participant may elect at any time within the first thirty (30) days of any Exercise
Period to receive a distribution of cash from the Plan equal to all or any portion of any amount
credited to the Participant’s account as a carry over, pursuant to Section 10 of the Plan, of any
remaining amounts from the immediately preceding Exercise Period. A Participant who makes such
election shall not be treated as having withdrawn from the Plan solely by reason of that election,
and thus shall not as a result of that election be precluded from participating in the Plan for the
Offering Period in which the election is made or in any subsequent Offering Period.




     12. Stock.



          (a) Subject to adjustment as provided in Section 17, the maximum number of shares of the
Company’s Common Stock that shall be made available for sale under the Plan shall be One Million
(1,000,000) shares, plus an automatic annual increase on the first day of each of the Company’s
fiscal years beginning in 2002 and ending in 2011 equal to the lesser of (i) Five Hundred Thousand
(500,000) shares, (ii) 1% of all shares of Common Stock outstanding on the last day of the
immediately preceding fiscal year, or (iii) a lesser amount determined by the Board. Shares of
Common Stock subject to the Plan may be newly issued shares or shares reacquired in private
transactions or open market purchases. If and to the extent that any right to purchase reserved
shares shall not be exercised by any Participant for any reason or if such right to purchase shall
terminate as provided herein, shares that have not been so purchased hereunder shall again become
available for the purpose of the Plan unless the Plan shall have been terminated, but all shares
sold under the Plan, regardless of source, shall be counted against the limitation set forth above.




          (b) A Participant will have no interest or voting right in shares covered by his option until
such option has been exercised.




          (c) Shares 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, as requested by the
Participant.




     13. Administration.



          (a) The Plan shall be administered by the Committee. The Committee shall have the authority
to interpret the Plan, to prescribe, amend and rescind rules and regulations relating to the Plan,
and to make all other determinations necessary or advisable for the administration of the Plan.
The administration, interpretation, or application of the Plan by the Committee shall be final,
conclusive and binding upon all persons.




          (b) Notwithstanding the provisions of Subsection (a) of this Section 13, in the event that
Rule 16b-3 promulgated under the Exchange Act or any successor provision thereto (“Rule 16b-3”)
provides specific requirements for the administrators of plans of this type, the Plan shall only be
administered by such body and in such a manner as shall comply with the applicable requirements




8









 







of Rule 16b-3. Unless permitted by Rule 16b-3, no discretion concerning decisions regarding
the Plan shall be afforded to any person that is not “disinterested” as that term is used in Rule
16b-3.




          (c) The Committee may adopt rules or procedures relating to the operation and administration
of the Plan to accommodate the specific requirements of local laws and procedures. Without
limiting the generality of the foregoing, the Committee is specifically authorized to adopt rules
and procedures regarding handling of payroll deductions, payment of interest, conversion of local
currency, payroll tax, withholding procedures and handling of stock certificates which vary with
local requirements.




          (d) The Committee may also adopt sub-plans applicable to particular Subsidiaries or locations,
which sub-plans may be designed to be outside the scope of Code Section 423. The rules of such
sub-plans may take precedence over other provisions of this Plan, with the exception of Section
12(a), but unless otherwise superceded by the terms of such sub-plan, the provisions of this Plan
shall govern the operation of such sub-plan.




     14. Designation of Beneficiary.



          (a) A Participant may file a written designation of a beneficiary who is to receive any shares
and cash, if any, from the Participant’s account under the Plan in the event of the Participant’s
death subsequent to an Exercise Date on which the Participant’s option hereunder is exercised but
prior to delivery to the Participant of such shares and cash. In addition, a Participant may file
a written designation of a beneficiary who is to receive any cash from the Participant’s account
under the Plan in the event of the Participant’s death prior to the exercise of the option.




          (b) A Participant’s beneficiary designation may be changed by the Participant at any time by
written notice. 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 shall 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.




     15. Transferability. Neither Plan Contributions credited to a Participant’s account
nor any rights to exercise any option or receive shares of Common Stock under the Plan may be
assigned, transferred, pledged or otherwise disposed of in any way (other than by will or the laws
of descent and distribution, or as provided in Section 14). Any attempted assignment, transfer,
pledge or other distribution shall be without effect, except that the Company may treat such act as
an election to withdraw funds in accordance with Section 11.



     16. Participant Accounts. Individual accounts will be maintained for each Participant
in the Plan to account for the balance of his Plan Contributions and options issued and shares
purchased under the Plan. Statements of account will be given to Participants semi-annually in due
course following each Exercise Date, which statements will set forth the amounts of payroll
deductions, the per share purchase price, the number of shares purchased and the remaining cash
balance, if any.



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     17. Adjustments Upon Changes in Capitalization; Corporate Transactions.




          (a) If the outstanding shares of Common Stock are increased or decreased, or are changed into
or are exchanged for a different number or kind of shares, as a result of one or more
reorganizations, restructurings, recapitalizations, reclassifications, stock splits, reverse stock
splits, stock dividends, other extraordinary dividends (including
dividends paid in cash or other property) or the like, the Committee
shall make appropriate equitable adjustments in the number
and/or kind of shares, and the per-share option price thereof, which may be issued in the aggregate
and to any Participant upon exercise of options granted under the Plan.





          (b) In the event of the proposed dissolution or liquidation of the Company, the Offering
Period will terminate immediately prior to the consummation of such proposed action, unless
otherwise provided by the Committee. In the event of a proposed sale of all or substantially all
of the Company’s assets, or the merger of the Company with or into another corporation (each, a
“Sale Transaction”), each option under the Plan shall be assumed or an equivalent option shall be
substituted by such successor corporation or a parent or subsidiary of such successor corporation,
unless the Committee determines, in the exercise of its sole discretion and in lieu of such
assumption or substitution, to shorten the Exercise Period then in progress by setting a new
Exercise Date (the “New Exercise Date”). If the Committee shortens the Exercise Period then in
progress in lieu of assumption or substitution in the event of a Sale Transaction, the Committee
shall notify each Participant in writing, at least ten (10) days prior to the New Exercise Date,
that the exercise date for such Participant’s option has been changed to the New Exercise Date and
that such Participant’s option will be exercised automatically on the New Exercise Date, unless
prior to such date the Participant has withdrawn from the Plan as provided in Section 11. For
purposes of this Section 17(b), an option granted under the Plan shall be deemed to have been
assumed if, following the Sale Transaction, the option confers the right to purchase, for each
share of option stock subject to the option immediately prior to the Sale Transaction, the
consideration (whether stock, cash or other securities or property) received in the Sale
Transaction by holders of Common Stock for each share of Common Stock held on the effective date of
the Sale Transaction (and if such holders were offered a choice of consideration, the type of
consideration chosen by the holders of a majority of the outstanding shares of Common Stock);
provided, that if the consideration received in the Sale Transaction was not solely common
stock of the successor corporation or its parent (as defined in Section 424(e) of the Code), the
Committee may, with the consent of the successor corporation and the Participant, provide for the
consideration to be received upon exercise of the option to be solely common stock of the successor
corporation or its parent equal in fair market value to the per share consideration received by the
holders of Common Stock in the Sale Transaction.




          (c) Unless otherwise specified, the Committee shall have sole discretion to exercise any of
the powers and authority provided under this Section 17, and the Committee’s actions hereunder
shall be final and binding on all Participants. No fractional shares of stock shall be issued
under the Plan pursuant to any adjustment authorized under the provisions of this Section 17.




     18. Amendment of the Plan. The Board or the Committee may at any time, or from time
to time, amend the Plan in any respect; provided, that (i) no such amendment may make any
change in any option theretofore granted which adversely affects the rights of any Participant and
(ii) the Plan may not be amended in any way that will cause rights issued under the Plan to fail to
meet the requirements for employee stock purchase plans as defined in Section 423 of the Code or
any successor thereto. To the extent necessary to comply with Rule 16b-3 under the Exchange Act,
Section 423 of the Code, or any other applicable law or regulation), the Company shall obtain
shareholder approval of any such amendment.



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     19. Termination of the Plan.



     The Plan and all rights of Employees hereunder shall terminate on the earliest of:



          (a) the Exercise Date that Participants become entitled to purchase a number of shares greater
than the number of reserved shares remaining available for purchase under the Plan;




          (b) such date as is determined by the Board in its discretion; or




          (c) the last Exercise Date immediately preceding the tenth (10th) anniversary of the Plan’s
effective date.




     In the event that the Plan terminates under circumstances described in Section 19(a) above,
reserved shares remaining as of the termination date shall be sold to Participants on a pro rata
basis.



     20. 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.



     21. Effective Date. Subject to adoption of the Plan by the Board, the Plan shall
become effective on the First Offering Date. The Board shall submit the Plan to the shareholders
of the Company for approval within twelve months after the date the Plan is adopted by the Board.



     22. Conditions Upon Issuance of Shares.



          (a) The Plan, the grant and exercise of options to purchase shares under the Plan, and the
Company’s obligation to sell and deliver shares upon the exercise of options to purchase shares
shall be subject to compliance with all applicable federal, state and foreign laws, rules and
regulations and the requirements of any stock exchange on which the shares may then be listed.




          (b) The Company may make such provisions as it deems appropriate for withholding by the
Company pursuant to federal or state tax laws of such amounts as the Company determines it is
required to withhold in connection with the purchase or sale by a Participant of any Common Stock
acquired pursuant to the Plan. The Company may require a Participant to satisfy any relevant tax
requirements before authorizing any issuance of Common Stock to such Participant.




     23. Expenses of the Plan. All costs and expenses incurred in administering the Plan
shall be paid by the Company, except that any stamp duties or transfer taxes applicable to
participation in the Plan may be charged to the account of such Participant by the Company.



     24. No Employment Rights. The Plan does not, directly or indirectly, create any right
for the benefit of any employee or class of employees to purchase any shares under the Plan, or
create in any employee or class of employees any right with respect to continuation of employment
by the Company, and it shall not be deemed to interfere in any way with the Company’s right to
terminate, or otherwise modify, an employee’s employment at any time.



     25. Applicable Law. The laws of the State of California shall govern all matter
relating to this Plan except to the extent (if any) superseded by the laws of the United States.



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     26. Additional Restrictions of Rule 16b-3. The terms and conditions of options
granted hereunder to, and the purchase of shares by, persons subject to Section 16 of the Exchange
Act shall comply with the applicable provisions of Rule 16b-3. This Plan shall be deemed to
contain, and such options shall contain, and the shares issued upon exercise thereof shall be
subject to, such additional conditions and restrictions as may be required by Rule 16b-3 to qualify
for the maximum exemption from Section 16 of the Exchange Act with respect to Plan transactions.




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