Prepared by R.R. Donnelley Financial -- 1995 Employee Stock Purchase Plan



 Exhibit 10.20 
  
 PHOTON DYNAMICS, INC. 
  

1995 EMPLOYEE STOCK PURCHASE PLAN 
  
 The following constitute the provisions of the 1995 Employee Stock Purchase Plan of Photon Dynamics, Inc. 
  
 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 of the Company through accumulated payroll deductions. It is the intention of the Company to have the Plan qualify as an “Employee Stock Purchase Plan”
under Section 423 of the Code. The provisions of the Plan, accordingly, shall be construed so as to extend and limit participation in a manner consistent with the requirements of that section of the Code. 
  
 2. Definitions. 
  
 (a) “Accrual Period” shall mean a period of approximately
six months, commencing on February 1 and August 1 of each year and terminating on the next following July 31 or January 31, respectively; provided, however, that the first Accrual Period shall commence on the Effective Date and shall end on July 31,
1996. 
  
 (b) “Board” shall mean the Board of
Directors of the Company. 
  
 (c) “Code” shall
mean the Internal Revenue Code of 1986, as amended. 
  
 (d)
“Common Stock” shall mean the common stock of the Company. 
  
 (e) “Company” shall mean Photon Dynamics, Inc., a California corporation. 
  
 (f) “Compensation” shall mean an Employee’s base salary from the Company or one or more Designated Subsidiaries, including such
amounts of base salary as are deferred by the Employee (i) under a qualified cash or deferred arrangement described in Section 401(k) of the Code, or (ii) to a plan qualified under Section 125 of the Code. Compensation does not include overtime,
bonuses, reimbursements or other expense allowances, fringe benefits (cash or noncash), moving expenses, deferred compensation, and contributions (other than contributions described in the first sentence) made on the Employee’s behalf by the
Company or one or more Designated Subsidiaries under any employee benefit or welfare plan now or hereafter established. 
  
 (g) “Designated Subsidiaries” shall mean the Subsidiaries which have been designated by the Board from time to time in its sole
discretion as eligible to participate in the Plan. 







 (h) “Effective Date” shall mean the effective date of the Registration Statement
relating to the Company’s initial public offering of its Common Stock. However, should any Designated Subsidiary become a Participating Company in the Plan after such date, then such entity shall designate a separate Effective Date with respect
to its employee-participants. 
  
 (i) “Employee”
shall mean any individual who is engaged in the rendition of personal services to the Company or a Designated Subsidiary for Compensation. For purposes of the Plan, the employment relationship shall be treated as continuing intact while the
individual is on sick leave or other leave of absence approved by the Company. Where the period of leave exceeds 90 days and the individual’s right to reemployment is not guaranteed either by statute or by contact, the employment relationship
will be deemed to have terminated on the 91st day of such leave. 
  
 (j) “Enrollment Date” shall mean the first day of each Purchase Period. 
  
 (k) “Exercise Date” shall mean the last day of each Accrual Period. 
  
 (l) “Fair Market Value” shall mean, as of any date, the value of Common Stock determined as follows:

  
 (1) If the Common Stock is listed on any
established stock exchange or a national market system, including without limitation the National Market System of the National Association of Securities Dealers, Inc. Automated Quotation (“NASDAQ”) System, its Fair Market Value shall be
the closing selling price for such stock on the principal securities exchange or national market system on which the Common Stock is at the time listed for trading. If there are no sales of Common Stock on that date, then the closing selling price
for the Common Stock on the next preceding day for which such closing selling price is quoted shall be determinative of Fair Market Value; or, 
  
 (2) If the Common Stock is not traded on an exchange or a national market system, its Fair Market Value shall be determined in good faith
by the Board, and such determination shall be conclusive and binding on all persons. 
  
 (m) “Participant” means an Employee of the Company or Designated Subsidiary who is actively participating in the Plan. 
  
 (n) “Plan” shall mean this Employee Stock Purchase Plan. 
  
 (o) “Plan Administrator” shall mean either the Board or a
committee of the Board that is responsible for the administration of the Plan. 
  
 (p) “Purchase Period” shall mean a purchase period established pursuant to paragraph 4 hereof. 
  

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 (q) “Purchase Price” shall mean an amount equal to 85% of the Fair Market Value of a
share of Common Stock on the Enrollment Date or on the Exercise Date, whichever is lower. 
  
 (r) “Reserves” shall mean the number of shares of Common Stock covered by each option under the Plan which have not yet been exercised and the number of shares of Common Stock which have been
authorized for issuance under the Plan but not yet placed under option. 
  
 (s) “Subsidiary” shall mean a corporation, domestic or foreign, of which not less than 50% of the voting shares are held by the Company or a Subsidiary, whether or not such corporation now exists or is hereafter organized
or acquired by the Company or a Subsidiary. 
  
 3.
Eligibility. 
  
 (a) General. Any Employee who is
employed by the Company on a given Enrollment Date shall be eligible to participate in the Plan for the Purchase Period commencing with such Enrollment Date. 
  
 (b) Limitations on Grant and Accrual. Any provisions of the Plan to the contrary notwithstanding, no Employee shall be granted an option under the
Plan (i) if, immediately after the grant, such Employee (taking into account stock owned by 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 five percent (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) which permits his or her rights to purchase stock under all employee
stock purchase plans of the Company and its Subsidiaries to accrue at a rate which exceeds Twenty-Five Thousand Dollars ($25,000) worth of stock (determined at the Fair Market Value of the shares at the time such option is granted) for each calendar
year in which such option is outstanding at any time. The determination of the accrual of the right to purchase stock shall be made in accordance with Section 423(b)(8) of the Code and the regulations thereunder. 
  
 (c) Other Limits on Eligibility. Notwithstanding paragraph (a) above,
the following Employees, as defined in paragraph 2, shall not be eligible to participate in the Plan for any relevant Purchase Period: (i) employees whose customary employment is 20 hours or less per week; and (ii) employees whose customary
employment is for not more than 5 months in any calendar year. 
  
 4. Purchase Periods. 
  
 (a) The Plan shall be
implemented through overlapping or consecutive Purchase Periods until such time as (i) the maximum number of shares of Stock available for issuance under the Plan shall have been purchased or (ii) the Plan shall have been sooner terminated in
accordance with paragraph 19 hereof. The maximum duration of a Purchase Period shall be twenty-seven months. Initially, the Plan shall be implemented through overlapping Purchase Periods of twenty-four months’ duration commencing each February
1 and August 1 following 
  

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 the Effective Date (except that the initial Purchase Period shall commence on the Effective Date and shall end on January
31, 1998). The Plan Administrator shall have the authority to change the length of any Purchase Period subsequent to the initial Purchase Period by announcement at least thirty (30) days prior to the commencement of the Purchase Period and to
determine whether subsequent Purchase Periods shall be consecutive or overlapping. 
  
 (b) A Participant shall be granted a separate purchase right for each Purchase Period in which he/she participates. The purchase right shall be granted on the first day of the Purchase Period and shall be
automatically exercised in successive installments on the last day of each Accrual Period ending within the Purchase Period. 
  
 (c) An Employee may participate in only one Purchase Period at a time. Accordingly, except as provided in paragraph 4(d), an Employee who wishes to join a
new Purchase Period must withdraw from the current Purchase Period in which he/she is participating and must also enroll in the new Purchase Period prior to the commencement date for that period. 
  
 (d) If on the first day of any Accrual Period in a Purchase Period in which
an Employee is participating in the Plan, the Fair Market Value of the Company’s Common Stock is less than the Fair Market Value of the Company’s Common Stock on the first day of the first Accrual Period within the Purchase Period (after
taking into account any adjustment during the Purchase Period pursuant to paragraph 18(a)), the Purchase Period shall be terminated automatically and the Employee shall be enrolled automatically in the new Purchase Period which has its first Accrual
Period commencing on that date, provided the Employee is eligible to participate in the Plan on that date and has not elected to terminate participation in the Plan. 
  
 (e) Except as specifically provided herein, the acquisition of Common Stock through participation in the Plan for any
Purchase Period shall neither limit nor require the acquisition of Common Stock by a Participant in any subsequent Purchase Period. 
  
 5. Participation. 
  
 (a) An eligible Employee may become a Participant in the Plan by completing a subscription agreement authorizing payroll deductions in the form of Exhibit
A to this Plan and filing it with the Company’s payroll office at least fifteen (15) business days prior to the Enrollment Date for the Purchase Period in which such participation will commence, unless a later time for filing the subscription
agreement is set by the Board for all eligible Employees with respect to a given Purchase Period. 
  
 (b) Payroll deductions for a Participant shall commence with the first period payroll following the Enrollment Date and shall end on the last complete
payroll period during the Purchase Period, unless sooner terminated by the Participant as provided in paragraph 10. 
  

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 6. Payroll Deductions. 
  
 (a) At the time a Participant files his/her subscription agreement, he/she shall elect to have payroll deductions made on
each pay day during the Offering Period in an amount not exceeding ten percent (10%) of the Compensation which he/she receives on each pay day during the Offering Period. 
  
 (b) All payroll deductions made for a Participant shall be credited to his/her account under the Plan and will be withheld
in whole percentages only. A Participant may not make any additional payments into such account. 
  
 (c) A Participant may discontinue his or her participation in the Plan as provided in paragraph 10, or may decrease the rate of his/her payroll deductions
during the Purchase Period by completing or filing with the Company a new subscription agreement authorizing a decrease in payroll deduction rate. The decrease in rate shall be effective with the first full payroll period following ten (10) business
days after the Company’s receipt of the new subscription agreement unless the Company elects to process a given change in participation more quickly. A Participant may increase the rate of his/her payroll deductions for a future Purchase Period
by filing with the Company a new subscription agreement authorizing an increase in payroll deduction rate within ten (10) business days (unless the Company elects to process a given change in participation more quickly) before the commencement of
the upcoming Purchase Period. A Participant’s subscription agreement shall remain in effect for successive Purchase Periods unless terminated as provided in paragraph 10. The Board shall be authorized to limit the number of participation rate
changes during any Purchase Period. 
  
 (d) Notwithstanding the
foregoing, to the extent necessary to comply with Section 423(b)(8) of the Code and paragraph 3(b) herein, a Participant’s payroll deductions may be decreased to 0% at such time during any Accrual Period which is scheduled to end during the
current calendar year (the “Current Accrual Period”) that the aggregate of all payroll deductions which were previously used to purchase stock under the Plan in a prior Accrual Period which ended during that calendar year plus all payroll
deductions accumulated with respect to the Current Accrual Period equal $21,250. Payroll deductions shall recommence at the rate provided in such Participant’s subscription agreement at the beginning of the first Accrual Period which is
scheduled to end in the following calendar year, unless terminated by the Participant as provided in paragraph 10. 
  
 7. Grant of Option. On the first day of each Purchase Period, each eligible Employee participating in such Purchase Period shall be granted an
option to purchase on each Exercise Date of such Purchase Period (at the applicable Purchase Price) up to a number of shares of the Company’s Common Stock determined by dividing such Employee’s payroll deductions accumulated prior to such
Exercise Date and retained in the Participant’s account as of the Exercise Date by the applicable Purchase Price; provided (i) that such purchase shall be subject to the limitations set forth in paragraphs 3(b) and 12 hereof, and (ii) the
maximum number of shares of Common Stock an Employee shall be permitted to purchase in any Accrual Period shall be 5,000, subject to adjustment as provided in paragraph 18 hereof. Exercise of the option shall occur as provided in paragraph 8, unless
the Participant has withdrawn pursuant to paragraph 10, and the option, to the extent not exercised, shall expire on the last day of the Purchase Period. 
  

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 8. Exercise of Option. Unless a Participant withdraws from the Plan as provided in paragraph 10
below, his/her option for the purchase of shares will be exercised automatically on each Exercise Date, and the maximum number of full shares subject to option shall be purchased for such Participant at the applicable Purchase Price with the
accumulated payroll deductions in his/her account. No fractional shares will be purchased; any payroll deductions accumulated in a Participant’s account which are not sufficient to purchase a full share shall be carried over to the next
Purchase Period, if the Participant elects to participate in the next Purchase Period, or returned to the Participant. Any amount remaining in a Participant’s account following the purchase of shares on the Exercise Date which exceeds the cost
of one full share of Common Stock on the Exercise Date shall be returned to the Participant and shall not be carried over to the next Purchase Period. During a Participant’s lifetime, a Participant’s option to purchase shares hereunder is
exercisable only by him/her. 
  
 9. Delivery. Upon receipt
of a request from a Participant after each Exercise Date on which a purchase of shares occurs, the Company shall arrange the delivery to such Participant, as appropriate, of a certificate representing the shares purchased upon exercise of his/her
option. 
  
 10. Withdrawal; Termination of Employment.

  
 (a) A Participant may withdraw all but not less than all the
payroll deductions credited to his/her account and not yet used to exercise his/her option under the Plan at any time by giving written notice to the Company in the form of Exhibit B to this Plan. All of the Participant’s payroll deductions
credited to his/her account will be paid to such Participant promptly after receipt of notice of withdrawal, such Participant’s option for the Purchase Period will be automatically terminated, and no further payroll deductions for the purchase
of shares will be made during the Purchase Period. If a Participant withdraws from a Purchase Period, payroll deductions will not resume at the beginning of the succeeding Purchase Period unless the Participant delivers to the Company a new
subscription agreement. 
  
 (b) Upon a Participant’s ceasing
to be an Employee for any reason or upon termination of a Participant’s employment relationship (as described in paragraph 2(i)), the payroll deductions credited to such Participant’s account during the Purchase Period but not yet used to
exercise the option will be returned to such Participant or, in the case of his/her death, to the person or persons entitled thereto under paragraph 14, and such Participant’s option will be automatically terminated. 
  
 11. Interest. No interest shall accrue on the payroll deductions of a
Participant in the Plan. 
  

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 12. Stock. 
  
 (a) The maximum number of shares of the Company’s Common Stock which shall be made available for sale under the Plan
shall be 1,500,000, subject to adjustment upon changes in capitalization of the Company as provided in paragraph 18. If on a given Exercise Date the number of shares with respect to which options are to be exercised exceeds the number of shares then
available under the Plan, the Company shall make a pro rata allocation of the shares remaining available for purchase in as uniform a manner as shall be practicable and as it shall determine to be equitable. 
  
 (b) A Participant will have no interest or voting right in shares covered by
his/her option until such shares are actually purchased on the Participant’s behalf in accordance with the applicable provisions of the Plan. No adjustment shall be made for dividends, distributions or other rights for which the record date is
prior to the date of such purchase. 
  
 (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/her spouse. 
  
 13. Administration. 
  
 (a) Administrative Body. The Plan shall be administered by the Board of the Company or a committee of members of the Board appointed by the Board.
The Board or its committee shall 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 Board or its committee shall, to the full extent permitted by law, be final and binding upon all parties. Members of the Board who are eligible Employees are permitted to participate in the Plan except to the extent limited
by subparagraph (b) of this paragraph 13. 
  
 (b) Rule 16b-3
Limitations. Notwithstanding the provisions of subparagraph (a) of this paragraph 13, in the event that Rule 16b-3 promulgated under The Securities Exchange Act of 1934, as amended, or any successor provision (“Rule 16b-3”) provides
specific requirements for the administrators of plans of this type, the Plan shall be only administered by such a body and in such a manner as shall comply with the applicable requirements of Rule 16b-3. Unless permitted by Rule 16b-3, no discretion
concerning decisions regarding the Plan shall be afforded to any committee or person that is not “disinterested” as that term is used in Rule 16b-3. 
  

14. Designation of Beneficiary. 
  
 (a) Each Participant will 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 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, 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 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 shall be required for such designation to be effective. 
  

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 (b) Such designation of beneficiary may be changed by the Participant (and his or her spouse, if any) 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 payroll deductions credited to a Participant’s account nor any rights with regard
to the exercise of an option or to receive shares 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 paragraph 14 hereof) by the
Participant. Any such attempt at assignment, transfer, pledge or other disposition shall be without effect, except that the Company may treat such act as an election to withdraw funds from an Purchase Period in accordance with paragraph 10.

  
 16. Use of Funds. All payroll deductions received or
held by the Company under the Plan may be used by the Company for any corporate purpose, and the Company shall not be obligated to segregate such payroll deductions. 
  
 17. Reports. Individual accounts will be maintained for each Participant in the Plan. Statements of account will be
given to Participants at least annually, which statements will set forth the amounts of payroll deductions, the Purchase Price, the number of shares purchased and the remaining cash balance, if any. 
  
 18. Adjustments Upon Changes in Capitalization, Dissolution; or Merger or
Asset Sale. 
  
 (a) Changes in Capitalization. Subject
to any required action by the shareholders of the Company, the Reserves, as well as the price per share of Common Stock covered by each option under the Plan which has not yet been exercised, shall be proportionately adjusted for any increase or
decrease in the number of issued shares of Common Stock resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of the Common Stock, or any other increase or decrease in the number shares of Common Stock
effected without receipt of consideration by the Company; provided, however, that conversion of any convertible securities of the Company shall not be deemed to have been “effected without receipt of consideration.” Such adjustment shall
be made by the Board, whose determination in that respect shall be final, binding and conclusive. Except as expressly provided herein, no issue by the Company of shares of stock of any class, or securities convertible into shares of stock of any

  

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 class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares of
Common Stock subject to an option. The Board may, if it so determines in the exercise of its sole discretion, make provision for adjusting the Reserves, as well as the price per share of Common Stock covered by each outstanding option, in the event
the Company effects one or more reorganizations, recapitalizations, rights offerings or other increases or reductions of shares of its outstanding Common Stock. 
  

(b) Change in Ownership, Dissolution or Liquidation. In the event of a proposed sale of all or substantially all of the assets of the Company,
the merger of the Company with or into another corporation, in which the Company will not be the surviving corporation (other than a reorganization effectuated primarily to change the state in which the Company is incorporated), or a reverse merger
in which the Company is the surviving corporation but in which securities possessing more than fifty percent (50%) of the total combined voting power of the Company’s outstanding securities are transferred to a person or persons different from
the person or persons holding those securities immediately prior to the transfer, 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 Board determines, in the exercise of its sole discretion and in lieu of such assumption or substitution, to shorten the Purchase Period then in progress by setting a new Exercise Date (the “New Exercise Date”). If
the Board shortens the Purchase Period then in progress in lieu of assumption or substitution in the event of a merger or sale of assets, the Board shall notify each Participant in writing, at least ten (10) days prior to the New Exercise Date, that
the Exercise Date for his/her option has been changed to the New Exercise Date and that his/her option will be exercised automatically on the New Exercise Date, unless prior to such date he/she has withdrawn from the Purchase Period as provided in
paragraph 10. For purposes of this paragraph, an option granted under the Plan shall be deemed to be assumed if, following the sale of assets or merger, the option confers the right to purchase, for each share of option stock subject to the option
immediately prior to the sale of assets or merger, the consideration (whether stock, cash or other securities or property) received in the sale of assets or merger by holders of Common Stock for each share of Common stock held on the effective date
of the 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, however, that if such consideration received in the
sale of assets or merger was not solely common stock of the successor corporation or its parent (as defined in Section 424(e) of the Code), the Board 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 holders of Common Stock in the sale of assets or
merger. 
  
 19. Amendment or Termination. 
  
 (a) The Board of Directors of the Company may at any time and for any reason
terminate or amend the Plan. Except as provided in paragraph 18, no such termination can affect options previously granted, provided that a Purchase Period may be terminated by the Board of Directors on any Exercise Date if the Board determines that
the termination of the Plan is in the 
  

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 best interests of the Company and its shareholders. Except as provided in paragraph 18, no amendment may make any change
in any option theretofore granted which adversely affects the rights of any Participant. To the extent necessary to comply with Rule 16b-3 or Section 423 of the Code (or any successor rule or provision or any other applicable law or regulation), the
Company shall obtain shareholder approval in such a manner and to such a degree as required. 
  
 (b) Without shareholder consent and without regard to whether any Participant rights may be considered to have been “adversely affected,” the Board (or its committee) shall be entitled to change the Purchase
Periods, limit the frequency and/or number of changes in the amount withheld during Purchase Periods, 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 Board (or its
committee) determines in its sole discretion advisable which are consistent with the Plan. 
  
 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. Conditions Upon Issuance of Shares. Shares shall not be issued with respect to an option unless the exercise of such option and the issuance and delivery of such shares pursuant thereto shall comply with
all applicable provisions of law, domestic or foreign, including, without limitation, the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, the rules and regulations promulgated thereunder, and the requirements of
any stock exchange upon which the shares may then be listed, and shall be further subject to the approval of counsel for the Company with respect to such compliance. 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. In addition, no purchase rights shall be exercised or shares issued hereunder before the Plan shall have been approved by shareholders of the
Company as provided in paragraph 24. 
  
 22. Term of Plan.
The Plan shall become effective upon the earlier to occur of its adoption by the Board of Directors or its approval by the shareholders of the Company. It shall continue in effect for a term of ten (10) years unless sooner terminated under paragraph
19. 
  

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 23. 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, 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. 
  
 24. Shareholder Approval. Continuance of the Plan shall be subject to
approval by the shareholders of the Company within twelve (12) months before or after the date the Plan is adopted. If such shareholder approval is obtained at a duly held shareholders’ meeting, the Plan must be approved by a majority of the
votes cast at such shareholders’ meeting at which a quorum representing a majority of all outstanding voting stock of the Company is, either in person or by proxy, present and voting on the Plan. If such shareholder approval is obtained by
written consent, it must be obtained by the written consent of the holders of a majority of all outstanding voting stock of the Company. However, approval at a meeting or by written consent may be obtained by a lesser degree of shareholder approval
if the Board determines, in its discretion after consultation with the Company’s legal counsel, that such a lesser degree of shareholder approval will comply with all applicable laws and will not adversely affect the qualification of the Plan
under Section 423 of the Code. 
  
 25. 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. 
  
 26. Effect of Plan. The provisions of the Plan shall, in accordance
with its terms, be binding upon, and inure to the benefit of, all successors of each employee participating in the Plan, including, without limitation, such employee’s estate and the executors, administrators or trustees thereof, heirs and
legatees, and any receiver, trustee in bankruptcy or representative of creditors of such employee. 
  
 27. Applicable Law. The law of the State of California will govern all matters relating to this Plan except to the extent it is superseded by the
laws of the United States. 
  

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