Document:

exv10w12

 

Exhibit 10.12

THIS DOCUMENT CONSTITUTES PART OF THE PROSPECTUS COVERING THESE SECURITIES,

WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.

The date of this document is June 30, 2003

DIONEX CORPORATION

STOCK OPTION PLAN

To Our Optionees:

     We are pleased with this opportunity to provide you with information regarding
our Stock Option Plan, referred to in these materials as the “Option Plan.” We
believe the Option Plan is an important part of the benefits provided to our
employees and consultants. Please take the time to carefully review this
information.

     Dionex Corporation (the “Company”) adopted the Option Plan in order to provide
you with an opportunity to share in the Company’s growth. The Company believes
the Option Plan assists it in hiring qualified employees and consultants and in
building a satisfying long-term relationship with existing employees and
consultants through recognition of their contribution to the Company.

     We have divided our discussion of the Option Plan into three parts. The first
part of this document describes the terms of the Option Plan, which provides
for the grant of what are called incentive stock options (tax-advantaged
options) and nonqualified stock options (options that do not have special tax
advantages). The second and third parts of this document describe the tax
consequences relating to your participation in the Option Plan.

     The following information is intended to be a summary. It may not answer all
the questions you have about the Option Plan or your option and is not intended
to go into every detail of the Option Plan or your option. In addition, please
be aware that the terms of options are not required to be the same for every
optionee. Please be sure to carefully review your option grant to be sure that
you understand its specific terms and conditions. A copy of the Option Plan or
your option(s) can be obtained from the Controller, at the Company’s principal
offices at 501 Mercury Drive, Sunnyvale, California 94088, telephone (408)
737-0700, ext. 1406. The Chief Financial Officer and the Controller are also
available to answer further questions you may have.

     If you wish to exercise an option you will need to complete the option exercise
form provided with your option grant. You may always obtain extra copies of
the option exercise form from Investor Relations, Dionex Corporation, 501
Mercury Drive, Sunnyvale, California 94088, telephone (408) 737-0700, ext.
1405.

1.

 

Information About Dionex Corporation

     An important part of your participation in the Option Plan is understanding the
Company, its products, operations and financial condition. Like any
stockholder of the Company, you can keep
yourself informed about the Company by reviewing reports and other documents
that the Company prepares for stockholders and the general public. If you
become a stockholder of the Company, you will be entitled to attend stockholder
meetings and to vote in the election of directors and other matters brought
before the stockholders.

     If you have not already received a copy of the Company’s most recent annual
report containing audited financial statements, a copy of the annual report
should be delivered to you with these materials. Additional copies are
available from Investor Relations, Dionex Corporation, 501 Mercury Drive,
Sunnyvale, California 94088, telephone (408) 737-0700, ext. 1405.
Alternatively, the Company’s most annual report on Form 10-K is available
through the Company’s filings with the Securities and Exchange Commission (the
“Commission”) located at the following web site: www.sec.gov.

     The federal securities laws require the Company to provide information about
its business and financial status in annual reports, commonly known as “10-Ks”
and quarterly reports, commonly known as “10-Qs.” These reports are filed with
the Securities and Exchange Commission. In addition, it certain important
corporate events occur during the year, the Company may file reports commonly
known as “8-Ks.” The Company also prepares and files with the Commission a
proxy statement in connection with its annual meeting of stockholders. The
proxy statement provides further information about the Company and its
officers, directors and major stockholders. From time to time the Company may
also file other documents with the Securities and Exchange Commission. as
required by Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act
of 1934 (the “Exchange Act”).

     All of these documents constitute part of the information required by
securities laws to be provided or made available to you in connection with your
purchase of stock under the Option Plan; that is, these documents are
incorporated by reference into these materials, which constitute the prospectus
for the Option Plan.

     For a copy of these documents, all of which are available without charge and
upon written or oral request, please contact Investor Relations, Dionex
Corporation, 501 Mercury Drive, Sunnyvale, California 94088, telephone (408)
737-0700, ext. 1405.

     If you are already a stockholder of the Company, you should receive copies of
the Company’s proxy statement, reports to stockholders and other stockholder
communications. You may always request copies of this information, which can
be obtained without charge from Investor Relations.

2.

 

Questions Index

	 	 	 	 	 	 	 
	Question	 	Page
	Part I Terms of the Option Plan	 	 	1	 
	1.

	 	Who determines whether I receive an option and the terms of my option? How many shares of common stock will my option cover?
	 	 	1	 
	2.

	 	Will my stock option be an incentive stock option or a nonstatutory stock option? What is the difference?
	 	 	2	 
	3.

	 	How is the exercise price of an option determined?
	 	 	2	 
	4.

	 	When can I exercise my option?
	 	 	3	 
	5.

	 	How do I exercise my option?
	 	 	3	 
	6.

	 	How do I pay the exercise price?
	 	 	3	 
	7.

	 	I have heard about cashless exercise programs through brokers. How do these work?
	 	 	3	 
	8.

	 	Will I continue to receive options as long as I stay with the Company?
	 	 	4	 
	9.

	 	Can the terms of the Option Plan be changed and, if so, do those changes affect options I received before the changes?
	 	 	4	 
	10.

	 	What happens if I leave the Company or go on a leave of absence?
	 	 	4	 
	11.

	 	What if I leave the Company because of disability?
	 	 	5	 
	12.

	 	What are the rights of my heirs upon my death?
	 	 	5	 
	13.

	 	Can a relative or friend exercise my option?
	 	 	5	 
	14.

	 	Can I sell the stock I receive from exercising my option right away?
	 	 	5	 
	15.

	 	If I am aware of important non-public information, can I sell my stock before this news is disclosed to the public? For example, if I know the Company is
having significant problems in developing an important product that previously was announced or that the Company is about to acquire a competitor, can I sell
my stock before the Company puts out a press release?
	 	 	6	 
	16.

	 	Do I have to pay a commission when I exercise my option or when I sell the stock?
	 	 	6	 
	17.

	 	How can I make a gift of the stock I receive upon exercising an option?
	 	 	6	 
	18.

	 	Does the Company pay dividends on its Common Stock?
	 	 	7	 
	19.

	 	Does the Option Plan have any of the same benefits as a qualified retirement plan (including a 401(k) plan) and will my participation in the Option Plan
affect my participation in the Company’s 401(k) plan?
	 	 	7	 
	20.

	 	Do special rules apply to me if I am an officer or director of the Company?
	 	 	7	 
	Part II Tax Issues Relating to Your Participation in the Option Plan	 	 	8	 
	21.

	 	Do I have to pay tax when I receive a nonstatutory stock option or exercise the nonstatutory stock option?
	 	 	9	 

i.

 

Questions Index
(CONTINUED)

	 	 	 	 	 	 	 
	Question	 	Page
	22.

	 	Will the Company withhold the amount of taxes due on exercise of a nonstatutory stock option?
	 	 	9	 
	23.

	 	How much tax do I pay when I sell stock received pursuant to the exercise of a nonstatutory stock option?
	 	 	9	 
	24.

	 	What is the difference between ordinary income and capital gains and losses for federal tax purposes?
	 	 	9	 
	25.

	 	Do I have to pay tax when I receive or exercise an incentive stock option?
	 	 	10	 
	26.

	 	How is my profit taxed when I do dispose of the stock received on exercise of an incentive stock option? What if I lose money?
	 	 	10	 
	27.

	 	Is there any withholding on the exercise of my incentive stock option or the sale of the stock acquired on exercise?
	 	 	11	 
	28.

	 	Do I have to notify the Company after I sell my stock?
	 	 	11	 
	29.

	 	What are the tax consequences if I use shares I already own to pay the exercise price of a nonstatutory stock option?
	 	 	11	 
	30.

	 	What are the tax consequences if I use shares I already own to pay the exercise price of an incentive stock option?
	 	 	12	 
	31.

	 	What are the tax consequences of my exercise of options if I am subject to the alternative minimum tax?
	 	 	12	 
	Part III Examples	 	 	13	 

ii.

 

Part I

Terms of the Option Plan

     Part I of this document provides general information about the Option Plan.
Parts II and III of this document describe the various tax consequences to you
of your participation in the Option Plan.

     The following table should help you locate particular questions you may have
with regard to participation in the Option Plan.

	 	 	 
	 	 	Relevant Questions and
	Type of Information
	 	Answers

	For information regarding participation in the
Option Plan
	 	8, 9, 19
	For information regarding the terms of options
	 	1, 2, 3
	For information regarding the exercise of options
	 	4, 5, 6, 7, 12, 13
	For information regarding the disposition (e.g.
sale) of stock received upon exercise of options
	 	14, 15, 16, 17, 20
	For information regarding the status of options
if your employment is terminated or you take a
leave of absence
	 	10, 11, 12

	1.	 	Who determines whether I receive an option and the terms of my option? How
many shares of common stock will my option cover?

     The decision to grant an option to any particular individual is made by
the Board of Directors of the Company (the “Board”). The Board may delegate
administration of the Option Plan to a committee (the “Compensation
Committee”). The Compensation Committee is composed of at least two
non-employee members of the Board. The Option Plan currently provides for the
grant of options to employees and consultants covering an aggregate of
7,650,000 shares of the Company’s common stock. When the Board or Compensation
Committee grants an option, it has the discretion to determine the terms of the
option, including the number of shares the option will cover. There are
certain tax restrictions on the number of incentive stock options that can be
granted. In addition, no person is eligible to receive options in any 12-month
period covering more than 400,000 shares of the Company’s common stock.

     The Board or Compensation Committee also administers the Option Plan and has
the power to interpret the Plan. Information about the current members of the
Board is provided in the Company’s proxy statement for its last annual meeting.
You may obtain additional information about the administration of the Option
Plan by calling the Company’s Controller at (408) 737-0700, ext. 1406, or the
Chief Financial Officer at (408) 737-0700, ext. 1407.

1.

 

     If administration of the Option Plan has been delegated to a Compensation
Committee, the Board retains the right to revert authority to construe and
interpret the Option Plan back to itself. References to the Board in this
document should be
construed as references to the Compensation Committee, as applicable.

	2.	 	Will my stock option be an incentive stock option or a nonstatutory stock
option? What is the difference?

     At the time the Board grants you an option, the Board will determine
whether the option is an incentive stock option or a nonstatutory stock option.
This determination generally is based on the Board’s understanding of the
relative tax benefits to you and the Company in granting incentive stock
options versus nonstatutory stock options. In general, potentially favorable
tax treatment is provided to the holders of stock options that qualify as
incentive stock options under the Internal Revenue code.

     Upon the exercise of an incentive stock option, an optionee is typically not
subject to tax except for the possible imposition of alternative minimum tax.
(See Question 25.) Upon the exercise of a nonstatutory stock option, however,
an optionee generally is taxed based on the difference between the exercise
price of the option and the fair market value of the stock on the date of
exercise. (See Question 21.) This deferral of the recognition of tax until
the time of sale of the stock, as well as the possible treatment of the
“spread” as capital gain, are the principal advantages of incentive stock
options. However, incentive stock options have certain limitations on their
exercise price, terms, transferability and duration.

     In addition, the tax regulations restrict the Board’s ability to grant
incentive stock options under certain circumstances. For example, if the
aggregate value of the shares under all incentive stock options held by you
that were granted after 1986 and that become exercisable for the first time
during any calendar year is greater than $100,000, then that number of those
shares with a value over $100,000 will be treated as nonstatutory stock
options.

     The rules governing the tax effects of incentive stock options and nonstatutory
stock options are complex and you should carefully read the tax information
provided below in this prospectus.

	3.	 	How is the exercise price of an option determined?

     The Internal Revenue Code requires that the exercise price of an incentive
stock option be at least 100% of the fair market value of the Company’s common
stock on the date the option is granted. The Board typically will determine
the fair market value by reference to prices of the Company’s common stock as
quoted by NASDAQ at the time of grant. We will refer to this price as the
“market price.” Special rules apply to the exercise price of incentive stock
options granted to anyone who owns 10% or more of the voting power of the
Company or its affiliates. You should speak with Investor Relations if you
believe these rules might apply to you.

     The Option Plan provides that the Board may set the exercise price for a
nonstatutory stock option at any price not less than 85% of the fair market
value of the Company’s common stock at the time of grant.

2.

 

	4.	 	When can I exercise my option?

     When the Board grants an option, the Board also determines certain terms of the
option, including the date or dates after which the option may be exercised.
Currently it is the general policy of the Board to grant options subject to
four-year vesting. This means that 25% of your option will vest on each
anniversary of the date of grant of your option until the option is completely
vested. Although you can exercise your option at any time once a portion of
the option has vested, you may exercise your option only for the number of
shares that have actually vested at the time of exercise. In addition, the
Board has the authority to accelerate the vesting schedule of any outstanding
option under the Option Plan. Options granted by the Board generally have a
term of ten years, so you must exercise your option before it expires at the
end of the ten-year period. For example, if your option was granted on January
15, 2003, it will expire on January 14, 2013.

	5.	 	How do I exercise my option?

     You exercise your option by completing an option exercise form and delivering
the form, together with payment of the exercise price (see Question 6 below) to
Investor Relations, Dionex Corporation, 501 Mercury Drive, Sunnyvale,
California 94088, telephone (408) 737-0700, ext. 1405. You should receive a
copy of the option exercise form with your option grant. You can obtain
additional copies of the form from Investor Relations.

	6.	 	How do I pay the exercise price?

     Generally, you pay the exercise price with cash unless the Board
determines, at the time it grants an option, that the exercise price may be
paid either (a) by delivery to the Company of other common stock of the Company
with a value equal to the aggregate option exercise price, or (b) in any other
form of legal consideration that may be acceptable to the Board.

     You may be able to do a broker-assisted exercise. See Question 7 below.

	7.	 	I have heard about cashless exercise programs through brokers. How do
these work?

     Cashless exercise programs involve the delivery to a broker of a copy of your
signed and completed option exercise form and your irrevocable instructions to
the Company to deliver stock to be received upon exercise of the option to the
broker rather than to you. You can obtain an instruction form for your broker
from Investor Relations. The broker can then deliver cash to the Company in
payment of the exercise price, and, in some cases, withholding taxes. The
Company then delivers the stock certificate to the broker. After the stock is
delivered to the broker, the stock can be maintained as margin stock in an
account designated by you or sold pursuant to your instructions. However, the
Company will not participate in any such program that causes stock certificates
to be delivered to the broker before payment for the exercise price or an
irrevocable guarantee of payment from the sales proceeds has been provided to
the
Company. You should contact Investor Relations to determine if such a program
is available.

     If you are a director or executive officer of the Company, see Question 20.

3.

 

	8.	 	Will I continue to receive options as long as I stay with the Company?

     Whether or not you receive stock options will depend on many factors, such as
your performance, the Company’s overall performance, the Board’s then current
policy and the number of shares remaining in the Option Plan. Furthermore, the
Board has the authority to stop granting options and to terminate the Option
Plan at any time. The Option Plan, by its terms, and therefore the Board’s
authority to grant options under the Option Plan, terminate on July 27, 2009
unless the Board determines to terminate the Option Plan earlier. Any
termination of the Plan would not affect your rights under your outstanding
options without your consent, and your options would continue in full force and
effect until they expire in accordance with the terms of the options. You
should note that your receipt of options under the Option Plan does not alter
the Company’s right to terminate your employment or engagement as a consultant
at any time and for any reason, with or without cause.

	9.	 	Can the terms of the Option Plan be changed and, if so, do those changes
affect options I received before the changes?

     Generally, the Board decides whether to change the terms of the Option Plan.
Usually the Option Plan is amended to increase the number of shares available
under the Plan or to take into account changes in the tax or securities laws.
These changes may be presented to the stockholders of the Company for approval
at the Company’s annual meeting if tax, securities or other laws require
stockholder approval of the changes.

     Any changes to the Option Plan would not affect your rights under your
outstanding options without your consent. If certain changes occur to the
Company’s capitalization, e.g., a stock split or reverse stock split of its
common stock, the Board will appropriately adjust the exercise price and number
of shares subject to your options. In the event of (a) a dissolution,
liquidation or sale of substantially all of the assets of the Company, (b) a
merger or consolidation in which the Company is not the surviving corporation,
or (c) a reverse merger in which the Company is the surviving corporation but
the shares of the Company’s common stock outstanding immediately prior to the
merger are converted by virtue of the merger into other property, then (i) any
surviving corporation shall assume any options outstanding under the Option
Plan or shall substitute similar options for those outstanding under the Option
Plan, or (ii) such options shall continue in full force and effect. If any
surviving corporation refuses to assume or continue such options, or to
substitute similar options for those outstanding under the Option Plan, then,
with respect to options held by persons then performing services as employees
or as consultants for the Company, the time during which such options may be
exercised shall be accelerated such that the options are immediately
exercisable in full and will terminate if not exercised prior to such event.

	10.	 	What happens if I leave the Company or go on a leave of absence?

     Whether you leave the Company voluntarily or your employment or engagement as a
consultant is terminated by the Company for any reason, your right to exercise
any vested portion of your option generally will terminate 30 days after your
last day of employment or consulting with the Company. However, the terms of
your option may provide that it will

4.

 

terminate sooner than 30 days after
termination of employment or your engagement as a consultant or that it may be
exercised more than 30 days after such termination. (If the option is an
incentive stock option, it generally must be exercised within three months of
the date of termination or else it will become a nonstatutory stock option.)

     Usually, you will not be able to exercise any unvested portion of your option
once you have left the Company or terminated your engagement as a consultant.

     If you take a leave of absence, the Board has the unilateral right to determine
whether such leave of absence will be treated as a termination of your
employment or consulting relationship with the Company. Alternatively, the
Board may determine to suspend or otherwise delay the time or times at which
shares subject to your option vest during your leave.

	11.	 	What if I leave the Company because of disability?

     Your option may, but need not, provide that it can be exercised at any time
within one year of termination of employment or engagement as a consultant due
to a permanent and total disability. Because disability, for these purposes,
has a specific meaning found in the Internal Revenue Code, you should ask the
Controller or Chief Financial Officer of the Company if you have any questions
regarding what constitutes permanent and total disability.

	12.	 	What are the rights of my heirs upon my death?

     Your estate or persons having rights to your option by will or by the laws of
descent and distribution have the right to exercise your option as to any
vested portion if you were still employed by the Company or engaged as a
consultant at the time of death, or if so provided in your option, you died
within a specified period after your employment or engagement as a consultant
was terminated for any reason. Your option will specify the date by which the
option must be exercised. The option may, but need not, provide that it may be
exercised within eighteen months after your death.

	13.	 	Can a relative or friend exercise my option?

     An option may only be exercised by the holder of the option. An incentive
stock option may not be transferred, and thus may only be exercised by you,
during your lifetime. In the case of a nonstatutory stock option, unless it
specifically provides for further transferability, it may be transferred during
your lifetime only pursuant to a qualified domestic relations order
(generally issued by a state court pursuant to a dissolution of marriage). You
can provide for the transfer of an incentive or nonstatutory option upon your
death, either (i) in your will, or (ii) by submitting a beneficiary designation
on a form approved by the Company to become effective upon your death. Under
certain circumstances, your spouse may have community property rights in the
option.

	14.	 	Can I sell the stock I receive from exercising my option right away?

     Generally, yes. The stock you receive upon exercise of your option is freely
tradable in most cases. If you exercise an incentive stock option, an
immediate sale may have certain tax

5.

 

consequences, see Question 26. (See
Question 20 if you are an officer or director of the Company.)

	15.	 	If I am aware of important non-public information, can I sell my stock
before this news is disclosed to the public? For example, if I know the
Company is having significant problems in developing an important product
that previously was announced or that the Company is about to acquire a
competitor, can I sell my stock before the Company puts out a press
release?

     No. If you are aware of important inside information, you may not sell shares
of the Company’s stock, whether received upon exercise of an option or
otherwise, before dissemination of the information to the public. Basically,
“inside information” is information that is both very important (material) and
nonpublic (not disclosed through press releases, newspaper articles or
otherwise to the public that buys and sells securities). Whether information
is material will depend on the specific circumstances. A general test is
whether dissemination of the information to the public would be likely to
affect the market price of the Company’s stock or would be likely to be
considered important by people who are considering whether to buy or sell the
Company’s stock. Certainly if the information makes you want to buy or sell,
it would probably have the same effect on others. Material information may
include projections, estimates or proposals.

     If you are contemplating selling your stock and think you might have “inside
information” you should discuss your possible sale with the Chief Financial
Officer of the Company. If, after this discussion, it is determined that the
information is in fact inside information, you must wait to sell your stock
until after the information has been made public.

	16.	 	Do I have to pay a commission when I exercise my option or when I sell the
stock?

     You pay no commission on exercise of options. Generally, to sell your stock,
you must take the stock certificate to a stock broker who can arrange for its
sale. You can expect to be charged a fee or commission if you use a stock
broker. The Company will not buy from you or sell on your behalf, or assist
you in selling, stock that you have purchased under the Option Plan. Officers
and directors are subject to restrictions on the sale of their stock. See
Question 20 below.

	17.	 	How can I make a gift of the stock I receive upon exercising an option?

     You may make a gift of stock by delivering the stock certificate, with the
transfer block on the back filled in and signed with the signature guaranteed
by a bank or stock broker (or by delivering the stock certificate together with
an “assignment separate from certificate” filled in, signed and the signature
similarly guaranteed) to the recipient of the gift. The recipient may then
send the certificate and associated paperwork to the Company’s transfer agent,
EquiServe Trust Company, N.A., 150 Royall Street, Canton, Massachusetts 02021,
to have the certificate transferred to the recipient’s name. If you have a
brokerage account, your broker will generally

6.

 

be willing to take care of the
mechanics of transfer. Please note that a gift of stock acquired upon exercise
of an incentive stock option may result in a “disqualifying disposition,” for
tax purposes. See Question 26.

	18.	 	Does the Company pay dividends on its Common Stock?

     The Company currently is not paying dividends on its Common Stock and presently
intends to continue this policy in order to retain earnings for use in its
business.

	19.	 	Does the Option Plan have any of the same benefits as a qualified retirement
plan (including a 401(k) plan) and will my participation in the Option
Plan affect my participation in the Company’s 401(k) plan?

     The Option Plan is not a qualified retirement plan and therefore does not have
the same tax deferral benefits, nor is the Option Plan subject to any
provisions of the Employee Retirement Income Security Act of 1974 (ERISA).
Your participation in the Option Plan does not affect your ability to
participate in the Company’s 401(k) plan.

	20.	 	Do special rules apply to me if I am an officer or director of the Company?

     Yes. If you are an officer or director of the Company you should be aware of
securities laws that apply to grants of options to you and to your transactions
in stock received upon the exercise of options. In addition, you must comply
with the Company’s policy permitting officers and directors to sell shares only
during certain “window” periods. Furthermore, you are expected to check with
the Chief Financial Officer of the Company before selling any shares. Your
sale also must be made in accordance with the applicable requirements of Rule
144 issued under the Securities Act of 1933 (i.e., selling through a broker,
possibly filing Form 144 with the Securities and Exchange Commission, and not
selling more shares than is permitted under the Rule).

     One of the laws that will apply to you as a director, and may apply to you if
you are an officer, are the short swing trading rules under Section 16 of the
Exchange Act. If you are an officer, the Company will have told you whether
you are subject to Section 16. If you are subject to Section 16 and need a
reminder about how Section 16 operates, you should review the Memorandum to
Officers and Directors, which you should have received, or ask the Controller
of the Company for another copy of the Memorandum.

     In general, when you are granted an option under the Option Plan, you are
deemed to have made a “purchase” on the grant date of the stock covered by the
option. However, this “purchase” is exempt from the application of Section 16
short-swing trading liability if the option was granted by the full Board or by
a committee composed of at least two non-employee directors. Generally, the
exercise of an option is not deemed to be the purchase of the stock. However,
the sale of stock you receive upon exercise of an option is a “sale” for
Section 16 purposes. If your sale of the stock acquired under the option occurs
within six months before or after any non-exempt purchase of Company stock by
you, then your sale could be matched with your non-exempt purchase. If your
sale of stock is subject to the short-swing trading rules of

7.

 

Section 16, your
profit (as determined under those rules) may have to be turned over to the
Company.

     Officers and directors should ensure that their broker-assisted exercises (see
Question 7) are properly structured with respect to timely settlement of such
exercises to avoid any violation of the prohibition against short sales found
in Section 16(c) of the Exchange Act and the prohibition on executive loans
under Section 402 of the Sarbanes-Oxley Act of 2002.

Part II

(Only Applicable For U.S. Employees)

Tax Issues Relating to Your Participation in the Option Plan

     The information in this Part II and the examples in Part III respond to
questions you may have about the federal tax consequences of participating in
the Option Plan. You should understand, however, that this tax information is
not complete. For example, it does not address state or local tax laws or the
application of laws if you are subject to tax laws in other countries.
Furthermore, because tax laws and regulations may change, and interpretations
of these laws and regulations can change the way the laws and regulations apply
to you, this information may need to be updated after the issuance of this
prospectus. Therefore, you should consult with a tax advisor if you have
questions relating to the tax consequences of participation in, and the sale of
shares received under, the Option Plan.

     The following table should help you locate particular questions you may have
with regard to the federal tax consequences of your participation in the Option
Plan.

	 	 	 
	Type of Information
	 	Relevant Questions and Answers

	For information regarding the tax
consequences associated with the
exercise of a nonstatutory stock
option and transfer of the acquired
stock
	 	21, 22, 23, 24
	For information regarding the tax
consequences associated with the
exercise of an incentive stock
option and transfer of the acquired
stock
	 	24, 25, 26, 27, 28
	For information regarding the tax
consequences of using shares of
stock already owned to pay the
exercise price of an option
	 	29, 30
	For information relating to the
alternative minimum tax
	 	31

8.

 

	21.	 	Do I have to pay tax when I receive a nonstatutory stock option or exercise
the nonstatutory stock option?

     You do not have to pay tax when you are granted a nonstatutory stock
option under the Option Plan.

     If you exercise a nonstatutory stock option when the market price of the stock
is higher than the exercise price of your option, you generally are required to
pay tax on the “profit”, that is, the difference between the exercise price and
the market price of the stock on the date of exercise. Your profit on the
exercise will be characterized as ordinary income.

	22.	 	Will the Company withhold the amount of taxes due on exercise of a
nonstatutory stock option?

     Generally, when you exercise a nonstatutory stock option, the Company is
required by the IRS to withhold federal income and employment taxes from your
profit or to otherwise ensure that the tax due will be paid to the IRS.
Additional amounts usually will be withheld for state taxes. Generally, the
Company can take a business expense deduction on the amount of the profit you
received upon exercise of your nonstatutory option. The Board may provide you
with the choice of paying your withholding obligation by withholding shares
valued at the withholding amount from the shares that would otherwise be
delivered to you on exercise of the option or permitting you to deliver shares
you already own that have a value equal to the withholding amount. You should
check the terms of your option.

	23.	 	How much tax do I pay when I sell stock received pursuant to the exercise of
a nonstatutory stock option?

     If you exercised your nonstatutory stock option when the exercise price was
lower than the market price, you generally should have paid tax on the “profit”
at the time of exercise. Upon the sale of your stock (or other taxable
transfer), you generally will recognize a gain or loss equal to the difference
between the sales price and the market price at the time of exercise. Your
gain or loss will be characterized as a long-term capital gain or loss if you
held the stock for more than one year from the date the option was exercised
and a short-term capital gain or loss if you held the stock for one year or
less.

	24.	 	What is the difference between ordinary income and capital gains and losses
for federal tax purposes?

     Ordinary income and capital gains rates vary with income level. Currently, the
maximum marginal tax rate applicable to ordinary
income and short-term capital gains is 35% (in 2003). The maximum marginal tax
rate is 15% for long-term capital gains (after May 5, 2003). Additionally,
capital gains and losses are subject to certain other provisions of the
Internal Revenue Code not applicable to ordinary income. Consult your tax
advisor for more information regarding the rates that apply to you.

9.

 

	25.	 	Do I have to pay tax when I receive or exercise an incentive stock option?

     You do not have to pay tax when you are granted an incentive stock option under
the Option Plans. Except for the possible application of the alternative
minimum tax (see Question 31), you pay no tax upon exercise of an incentive
stock option until you dispose of the stock you acquire.

	26.	 	How is my profit taxed when I do dispose of the stock received on exercise of
an incentive stock option? What if I lose money?

     How your profit or loss is characterized will depend on how much time passed
after both the date the incentive stock option was granted and the date you
exercised the option.

     You should be aware that transfer of legal title to the stock received upon
exercise of an incentive stock option in a transaction that is not a sale may
still be taxable as a disposition of the stock. Generally, such transfers
include gifts, but do not include a pledge of the stock as security for a loan,
a transfer into joint ownership with right of survivorship if you remain one of
the joint owners, or a transfer by bequest or inheritance, or certain transfers
to a spouse or former spouse incident to a divorce.

     If the date on which you dispose of the stock is more than two years from the
date on which the incentive stock option was granted and more than one year
from the date on which you exercised the option, your entire gain or loss is
characterized as long-term capital gain or loss.

     If you dispose of your stock within two years from the date on which the option
was granted or within one year from the date on which you exercised your
option, a portion of your profit will be characterized as ordinary income and
the transfer will be a “disqualifying disposition.” The portion of your profit
that is characterized as ordinary income upon a disqualifying disposition is
equal to the lesser of:

     (a) the difference between the market price of the stock on the date you
exercised the option and the exercise price of the option, or

     (b) the difference between the sales price and the exercise price of the
option.

     Please note that if the disqualifying disposition occurs pursuant to a
transaction in which a loss (if sustained) could not be recognized, the amount
of ordinary income is equal to the amount specified in clause (a) even if the
amount in clause (b) is lower.

     Any profit you make over the amount characterized as ordinary income is
characterized as capital gain, which will be long-term or short-term depending
on whether the stock was held for more than one year from the date of exercise.

     For an example of how these rules are applied, see Example A in Part III.

10.

 

     If you lose money on the sale of the stock you generally will be able to report
the loss as a capital loss, which will be long-term or short-term depending on
whether the stock was held for more than one year from the date of exercise.
However, in some instances the Internal Revenue Code provides exceptions to
this general rule that prohibit reporting a loss on the sale of your stock.
Some examples of exceptions to the general rule are: (a) selling your stock to
certain family members such as your spouse or your parents, and (b) selling
your stock within thirty days before or after purchasing other stock of the
Company. For example, if you sell your stock to your spouse, whether or not at
a loss, you will be taxed on the difference between the market price of the
stock on the date of exercise and the exercise price. These are only some
examples of the application of the Internal Revenue Code. You should consult
with your personal tax advisor for more information on how the Internal Revenue
Code and other tax laws apply to your situation. Also, see Question 31 for a
general discussion of the possible effects of a disposition of the stock on
liability for alternative minimum tax.

	27.	 	Is there any withholding on the exercise of my incentive stock option or the
sale of the stock acquired on exercise?

     Currently, there is no withholding required upon the exercise of an incentive
stock option or on the sale of stock acquired on exercise. The Company
generally is required to report to the IRS any ordinary income recognized by
you as a result of a sale that is a disqualifying disposition described in
Question 26.

	28.	 	Do I have to notify the Company after I sell my stock?

     Yes, in some cases. If you dispose of stock received pursuant to an
incentive stock option within two years after the date the option was granted
to you or within one year after you exercise your option, you should notify
Investor Relations of the number of shares sold, the sales price and the option
the shares came from within fifteen days of the date on which you disposed of
the stock

	29.	 	What are the tax consequences if I use shares I already own to pay the
exercise price of a nonstatutory stock option?

     If you pay the exercise price of a nonstatutory stock option with shares of the
Company that you already own, you will have a tax-free exchange of the
previously held shares of stock for an equivalent number of the shares of stock
received under the option. If you receive additional shares in the exchange,
you will pay taxes on ordinary income equal to the difference between the
market value on the date of exercise of such additional shares and the amount
of cash, if any, you paid upon exercise.

     The tax basis and capital gain holding period of the shares received under the
option in the tax-free exchange will be the same as the tax basis and holding
period of the shares used to pay the exercise price. The tax basis of the
additional shares you receive will equal the amount of ordinary income you had
to
report and the amount of any cash paid on exercise, and your holding period for
the additional shares will begin on the date of exercise.

     For an example of how these rules are applied, see Example B in Part III.

11.

 

	30.	 	What are the tax consequences if I use shares I already own to pay the
exercise price of an incentive stock option?

     Under IRS proposed regulations, the use of Company shares to pay the exercise
price of an option is a tax-free exchange with respect to the shares being
surrendered. Therefore, the tax basis and capital gains holding period of an
equal number of shares you receive upon the exercise of the option will be the
same as the tax basis and holding period of the shares you use to pay the
exercise price. In general, the tax basis of the additional shares you
receive, if any, will equal the amount of any ordinary income you must report
and the amount of any cash you pay on exercise, and your holding period for the
additional shares will begin on the date of exercise.

     Special tax rules apply, however, if the shares being surrendered to exercise a
stock option were acquired on the exercise of an incentive stock option (or
pursuant to a purchase right granted under an employee stock purchase plan that
meets the requirements of Section 423 of the Internal Revenue Code) and have
not been held more than one year from exercise and more than two years from the
date the option (or purchase right) was granted. In such event, the surrender
of such shares may not be a tax-free exchange. Also, special tax basis and
holding period rules apply when the stock option being exercised is an
incentive stock option.

     Because these tax consequences can be complicated, you should consult your tax
advisor if your option agreement permits you to use Company shares to exercise
your option and you wish to do so.

     For an example of how these rules might be applied, see Example C in Part III.

	31.	 	What are the tax consequences of my exercise of options if I am subject to the
alternative minimum tax?

     The alternative minimum tax is a separately computed tax equal to 26% of so
much of your “alternative minimum taxable income” up to $175,000 as exceeds a
specified exemption amount and 28% on additional alternative minimum taxable
income. The alternative minimum tax is imposed only if and to the extent you
would pay more tax if your taxes are computed pursuant to the alternative
minimum tax rules than the tax you would pay if computed in the regular manner.
The alternative minimum tax takes into account what are called tax preference
items and other adjustments that are not taken into account when calculating
taxes in the regular manner. One of the adjustments is the inclusion in
taxable income of the excess between the exercise price of an incentive stock
option and the market price of the stock on the date of such option’s exercise,
if that amount constitutes a profit. You can avoid such excess being included
in alternative minimum taxable income by selling that stock before the end of
that tax
year, but regular income tax may be due as a result. Any alternative minimum
tax paid entitles you to a possible credit against regular tax (but not
alternative minimum tax) in later tax years. When you sell your stock in a
later year than the year in which the option was exercised, you are allowed,
for purposes of calculating your alternative minimum tax in that later year of
sale, to increase your basis in your stock by the adjustment amount previously
included in your alternative minimum taxable income in the earlier year of
exercise.

12.

 

Part III

Examples

Example A — Disqualifying Dispositions (Question 26):

     Assume you were granted an incentive stock option on January 1, 2003 for 10
shares at an exercise price of $8.00 per share. You exercise the option on
January 1, 2004 when the market price is $10.00 per share and you sell the
stock on July 1, 2004 when the market price is $9.00 per share for a $10.00
aggregate gain. Because you did not hold the stock until a date that is more
than two years after the date of grant and more than one year from the date of
exercise, all or a portion of your gain is ordinary income. The amount of
ordinary income per share is equal to the lesser of (a) $10.00 (market price on
date of exercise) - $8.00 (exercise price) = $2.00 per share or (b) $9.00 (sale
price) - $8.00 (exercise price) = $1.00 per share. Therefore, the amount of
ordinary income is equal to $1.00 per share, or $100.00 in the aggregate.

Example B — Stock for Stock Exercise of a Nonstatutory Stock Option (Question
29):

     Assume that on January 1, 2003 you bought 10 shares of stock on the open market
when the market price was $6.00 per share. On January 1, 2004, when the market
price is $10.00 per share, you exercise a non-qualified stock option to
purchase 20 shares at an exercise price of $9.00 per share for an aggregate
exercise price of $180.00. Using all of your previously owned shares to pay
$100.00 of the exercise price (10 shares x $10.00 market price), you pay $80.00
cash for the remainder of the exercise price. On the date of exercise, you are
deemed to have a tax-free exchange of the 10 previously owned shares for 10
equivalent new shares. You will also recognize ordinary income of $20.00 equal
to the market price of the 10 additional new shares you receive, $100.00, minus
the amount of cash you paid on exercise, $80.00.

     If you sell all 20 shares that you received upon exercise of the option for
$11.00 per share on March 1, 2004, you will recognize a $5.00 per share gain on
the 10 equivalent new shares ($11.00 per share — $6.00 per share (purchase
price of original shares)), which will be long-term capital gain because you
are allowed to add the period which you held the original 10 shares to the
period you held the 10 equivalent new shares. You will also recognize a $10.00
aggregate gain on the 10 additional new shares, calculated as follows: $110.00
(10 shares x $11.00 market price) minus the sum of (a) $80.00 (the amount of
cash paid for the shares) and (b) $20.00 (the amount of income recognized upon
exercise of the option). This gain will be characterized as
short-term capital gain because you held the stock for only two months.

Example C — Stock for Stock Exercises of an Incentive Stock Option (Question
30):

     Assume you purchased 18 shares on the open market for $6.00 per share on
January 1, 2003. On February 1, 2004, when the market price is $10.00 per
share, you exercise an incentive stock option to purchase 20 shares at an
exercise price of $9.00 per share, for an aggregate exercise price of $180.00,
using all of your 18 previously-owned shares to pay the exercise price. On the
date of exercise, you are deemed to have made a tax-free exchange of the 18
previously owned shares for 18 equivalent new shares and to have acquired 2
additional new shares.

13.

 

     Because the shares delivered in payment of the exercise price were
previously-owned shares not acquired upon exercise of an incentive stock option
or under an employee stock purchase plan as defined in Section 423 of the Code,
no disqualifying disposition occurred in the exchange and no ordinary income
was recognized at the time of the exchange. However, you will recognize an
adjustment to your alternative minimum taxable income of $10.00 per additional
share or $20.00 for the 2 additional shares. Therefore the basis in the 18
equivalent new shares is the same as the basis of the original shares: $6.00
per share. However, for purposes of calculating ordinary income on a
disqualifying disposition, the amount treated as having been paid for such
equivalent new shares is equal to their fair market value on the date of
exercise ($10.00 per share). The basis in the 2 additional new shares is $0
per share.

     If you sell 15 of the shares on September 1, 2004 at $11.00 per share, such
shares are deemed to be sold in a disqualifying disposition because the
disposition is less than one year after the date of exercise. Since the
additional new shares have a lower basis ($0 per share) than the equivalent new
shares ($6.00 per share), they will be treated as having been disposed of
first. Therefore you will be considered to have sold the 2 additional new
shares and 13 of the equivalent new shares.

     You will recognize no ordinary income with respect to the equivalent new shares
since there is no difference between their fair market value on the date of
exercise and the amount treated as having been paid for such shares. However,
you will recognize capital gain with respect to the equivalent new shares in
the amount of $65.00 (13 shares times $5.00 per share ($11.00 sale price minus
$6.00 basis)). Such capital gain will be long-term since the holding period
for such equivalent new shares includes the holding period for the original
shares exchanged therefor and is, thus, 20 months.

     You will recognize ordinary income with respect to the additional new shares in
the amount of $20.00 (2 shares times $10.00 per share ($10 fair market value on
the date of exercise minus $0 basis in these shares)). You will recognize
capital gain on such additional new shares in the amount of $2.00 (2 shares
times $1.00 per share ($11.00 sale price minus $10.00 recognized as ordinary
income)). Such capital gain will be short-term since the holding period for
such additional new shares begins on the date of exercise and is therefore only
seven months.

14.exv10w13

 

Exhibit 10.13

Dionex Corporation

2003 Employee Stock Participation Plan

Adopted by the Board of Directors July 29, 2003

Approved by stockholders October 24, 2003

	1.	 	Purpose.

     (a) The purpose of the Plan is to provide a means by which Employees of
the Company and certain designated Related Corporations may be given an
opportunity to purchase shares of the Common Stock of the Company.

     (b) The Company, by means of the Plan, seeks to retain the services of
such Employees, to secure and retain the services of new Employees and to
provide incentives for such persons to exert maximum efforts for the success of
the Company and its Related Corporations.

     (c) The Company intends that the Purchase Rights be considered options
issued under an Employee Stock Purchase Plan.

	2.	 	Definitions.

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

     (b) “Code” means the Internal Revenue Code of 1986, as amended.

     (c) “Committee” means a committee appointed by the Board in accordance
with Section 3(c) of the Plan.

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

     (e) “Company” means Dionex Corporation, a Delaware corporation.

     (f) “Contributions” means the payroll deductions, and other additional
payments specifically provided for in the Offering, that a Participant
contributes to fund the exercise of a Purchase Right. A Participant may make
additional payments into his or her account, if specifically provided for in
the Offering, and then only if the Participant has not already had the maximum
permitted amount through payroll deductions withheld during the Offering.

     (g) “Corporate Transaction” means the occurrence, in a single transaction
or in a series of related transactions, of any one or more of the following
events:

               (i) a sale, lease, license or other disposition of all or substantially
all of the consolidated assets of the Company;

               (ii) a sale or other disposition of at least fifty percent (50%) of the
outstanding securities of the Company;

1.

 

               (iii) a merger, consolidation or similar transaction following which the
Company is not the surviving corporation; or

               (iv) a merger, consolidation or similar transaction following which the
Company is the surviving corporation but the shares of Common Stock outstanding
immediately preceding the merger, consolidation or similar transaction are
converted or exchanged by virtue of the merger, consolidation or similar
transaction into other property, whether in the form of securities, cash or
otherwise.

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

     (i) “Eligible Employee” means an Employee who meets the requirements set
forth in the Offering for eligibility to participate in the Offering, provided
that such Employee also meets the requirements for eligibility to participate
set forth in the Plan.

     (j) “Employee” means any person, including Officers and Directors, who is
employed for purposes of Section 423(b)(4) of the Code by the Company or a
Related Corporation. Neither service as a Director nor payment of a director’s
fee shall be sufficient to make an individual an Employee of the Company or a
Related Corporation.

     (k) “Employee Stock Purchase Plan” means a plan that grants Purchase
Rights intended to be options issued under an “employee stock purchase plan,”
as that term is defined in Section 423(b) of the Code.

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

     (m) “Fair Market Value” means the value of a security, as determined in
good faith by the Board. If the security is listed on any established stock
exchange or traded on the Nasdaq National Market or the Nasdaq SmallCap Market,
the Fair Market Value of the security, unless otherwise determined by the
Board, shall be the closing sales price (rounded up where necessary to the
nearest whole cent) for such security (or the closing bid, if no sales were
reported) as quoted on such exchange or market (or the exchange or market with
the greatest volume of trading in the relevant security of the Company) on the
Trading Day prior to the relevant determination date, as reported in The Wall
Street Journal or such other source as the Board deems reliable.

     (n) “Offering” means the grant of Purchase Rights to purchase shares of
Common Stock under the Plan to Eligible Employees.

     (o) “Offering Date” means a date selected by the Board for an Offering to
commence.

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

     (q) “Participant” means an Eligible Employee who holds an outstanding
Purchase Right granted pursuant to the Plan.

2.

 

     (r) “Plan” means this Dionex Corporation 2003 Employee Stock Participation
Plan.

     (s) “Purchase Date” means one or more dates during an Offering established
by the Board on which Purchase Rights shall be exercised and as of which
purchases of shares of Common Stock shall be carried out in accordance with
such Offering.

     (t) “Purchase Period” means a period of time specified within an Offering
beginning on the Offering Date or on the next day following a Purchase Date
within an Offering and ending on a Purchase Date. An Offering may consist of
one or more Purchase Periods.

     (u) “Purchase Right” means an option to purchase shares of Common Stock
granted pursuant to the Plan.

     (v) “Related Corporation” means any parent corporation or subsidiary
corporation, whether now or hereafter existing, as those terms are defined in
Sections 424(e) and (f), respectively, of the Code.

     (w) “Securities Act” means the Securities Act of 1933, as amended.

     (x) “Trading Day” means any day the exchange(s) or market(s) on which
shares of Common Stock are listed, whether it be any established stock
exchange, the Nasdaq National Market, the Nasdaq SmallCap Market or otherwise,
is open for trading.

	3.	 	Administration.

     (a) The Board shall administer the Plan unless and until the Board
delegates administration to a Committee, as provided in Section 3(c). Whether
or not the Board has delegated administration, the Board shall have the final
power to determine all questions of policy and expediency that may arise in the
administration of the Plan.

     (b) The Board (or the Committee) shall have the power, subject to, and
within the limitations of, the express provisions of the Plan:

               (i) To determine when and how Purchase Rights to purchase shares of Common
Stock shall be granted and the provisions of each Offering of such Purchase
Rights (which need not be identical).

               (ii) To designate from time to time which Related Corporations of the
Company shall be eligible to participate in the Plan.

               (iii) To construe and interpret the Plan and Purchase Rights, and to
establish, amend and revoke rules and regulations for the administration of the
Plan. The Board, in the exercise of this power, may correct any defect,
omission or inconsistency in the Plan, in a manner and to the extent it shall
deem necessary or expedient to make the Plan fully effective.

               (iv) To amend the Plan as provided Section 15.

3.

 

               (v) Generally, to exercise such powers and to perform such acts as it
deems necessary or expedient to promote the best interests of the Company and
its Related Corporations and to carry out the intent that the Plan be treated
as an Employee Stock Purchase Plan.

     (c) The Board may delegate administration of the Plan to a Committee of
the Board composed of not fewer than three (3) or more members of the Board.
If administration is delegated to a Committee, the Committee shall have, in
connection with the administration of the Plan, the powers theretofore
possessed by the Board, subject, however, to such resolutions, not inconsistent
with the provisions of the Plan, as may be adopted from time to time by the
Board. The Board may abolish the Committee at any time and revest in the Board
the administration of the Plan. If administration is delegated to a Committee,
references to the Board in this Plan and in the Offering document shall
thereafter be deemed to be to the Board or the Committee, as the case may be.

	4.	 	Shares of Common Stock Subject to the Plan.

     (a) Subject to the provisions of Section 14 relating to adjustments upon
changes in securities, the shares of Common Stock that may be sold pursuant to
Purchase Rights shall not exceed in the aggregate eight hundred thousand
(800,000) shares of Common Stock. If any Purchase Right granted under the Plan
shall for any reason terminate without having been exercised, the shares of
Common Stock not purchased under such Purchase Right shall again become
available for issuance under the Plan.

5. Grant of Purchase Rights; Offering.

     (a) The Board may from time to time grant or provide for the grant of
Purchase Rights to purchase shares of Common Stock under the Plan to Eligible
Employees in an Offering (consisting of one or more Purchase Periods) on an
Offering Date or Offering Dates selected by the Board. Each Offering shall be
in such form and shall contain such terms and conditions as the Board shall
deem appropriate, which shall comply with the requirement of Section 423(b)(5)
of the Code that all Employees granted Purchase Rights shall have the same
rights and privileges. The terms and conditions of an Offering shall be
incorporated by reference into the Plan and treated as part of the Plan. The
provisions of separate Offerings need not be identical, but each Offering shall
include (through incorporation of the provisions of this Plan by reference in
the document comprising the Offering or otherwise) the period during which the
Offering shall be effective, which period shall not exceed twenty-seven (27)
months beginning with the Offering Date, and the substance of the provisions
contained in Sections 6 through 9, inclusive.

     (b) If a Participant has more than one Purchase Right outstanding under
the Plan, unless he or she otherwise indicates in agreements or notices
delivered hereunder: (i) each agreement or notice delivered by that
Participant shall be deemed to apply to all of his or her Purchase Rights under
the Plan, and (ii) a Purchase Right with a lower exercise price (or an
earlier-granted Purchase Right, if different Purchase Rights have identical
exercise prices) shall be exercised to the fullest possible extent before a
Purchase Right with a higher exercise price (or a later-granted Purchase Right
if different Purchase Rights have identical exercise prices) shall be
exercised.

4.

 

	6.	 	Eligibility.

     (a) Purchase Rights may be granted only to Employees of the Company or, as
the Board may designate as provided in Section 3(b), to Employees of a Related
Corporation. Except as provided in Section 6(b), an Employee shall not be
eligible to be granted Purchase Rights under the Plan unless, on the Offering
Date, such Employee has been in the employ of the Company or the Related
Corporation, as the case may be, for such continuous period preceding such
Offering Date as the Board may require, but in no event shall the required
period of continuous employment be greater than two (2) years. In addition,
the Board may provide that no Employee shall be eligible to be granted Purchase
Rights under the Plan unless, on the Offering Date, such Employee’s customary
employment with the Company or the Related Corporation is more than twenty (20)
hours per week and more than five (5) months per calendar year.

     (b) The Board may provide that each person who, during the course of an
Offering, first becomes an Eligible Employee shall, on a date or dates
specified in the Offering which coincides with the day on which such person
becomes an Eligible Employee or which occurs thereafter, receive a Purchase
Right under that Offering, which Purchase Right shall thereafter be deemed to
be a part of that Offering. Such Purchase Right shall have the same
characteristics as any Purchase Rights originally granted under that Offering,
as described herein, except that:

               (i) the date on which such Purchase Right is granted shall be the
“Offering Date” of such Purchase Right for all purposes, including
determination of the exercise price of such Purchase Right;

               (ii) the period of the Offering with respect to such Purchase Right shall
begin on its Offering Date and end coincident with the end of such Offering;
and

               (iii) the Board may provide that if such person first becomes an Eligible
Employee within a specified period of time before the end of the Offering, he
or she shall not receive any Purchase Right under that Offering.

     (c) No Employee shall be eligible for the grant of any Purchase Rights
under the Plan if, immediately after any such Purchase Rights are granted, such
Employee owns 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 Related
Corporation. For purposes of this Section 6(c), the rules of Section 424(d) of
the Code shall apply in determining the stock ownership of any Employee, and
stock which such Employee may purchase under all outstanding Purchase Rights
and options shall be treated as stock owned by such Employee.

     (d) As specified by Section 423(b)(8) of the Code, an Eligible Employee
may be granted Purchase Rights under the Plan only if such Purchase Rights,
together with any other rights granted under all Employee Stock Purchase Plans
of the Company and any Related Corporations, do not permit such Eligible
Employee’s rights to purchase stock of the Company or any Related Corporation
to accrue at a rate which exceeds twenty-five thousand dollars ($25,000) of
Fair Market Value of such stock (determined at the time such rights are
granted, and

5.

 

which, with respect to the Plan, shall be determined as of their
respective Offering Dates) for each calendar year in which such rights are
outstanding at any time.

     (e) Officers of the Company and any designated Related Corporation, if
they are otherwise Eligible Employees, shall be eligible to participate in
Offerings under the Plan. Notwithstanding the foregoing, the Board may provide
in an Offering that Employees who are highly compensated Employees within the
meaning of Section 423(b)(4)(D) of the Code shall not be eligible to
participate.

7. Purchase Rights; Purchase Price.

     (a) On each Offering Date, each Eligible Employee, pursuant to an Offering
made under the Plan, shall be granted a Purchase Right to purchase up to that
number of shares of Common Stock purchasable either with a percentage or with a
maximum dollar amount, as designated by the Board, but in either case not
exceeding ten percent (10%) of such Employee’s Earnings (as defined by the
Board in each Offering) during the period that begins on the Offering Date (or
such later date as the Board determines for a particular Offering) and ends on
the date stated in the Offering, which date shall be no later than the end of
the Offering.

     (b) In connection with each Offering made under the Plan, the Board may
specify a maximum number of shares of Common Stock that may be purchased by any
Participant on any Purchase Date during such Offering. In connection with each
Offering made under the Plan, the Board may specify a maximum aggregate number
of shares of Common Stock that may be purchased by all Participants pursuant to
such Offering. In addition, in connection with each Offering that contains
more than one Purchase Date, the Board may specify a maximum aggregate number
of shares of Common Stock that may be purchased by all Participants on any
given Purchase Date under the Offering. If the aggregate purchase of shares of
Common Stock issuable upon exercise of Purchase Rights granted under the
Offering would exceed any such maximum aggregate number, then, in the absence
of any Board action otherwise, a pro rata allocation of the shares of Common
Stock available shall be made in as nearly a uniform manner as shall be
practicable and equitable.

     (c) The purchase price of shares of Common Stock acquired pursuant to
Purchase Rights shall be not less than the lesser of:

               (i) an amount equal to eighty-five percent (85%) of the Fair Market Value
of the shares of Common Stock on the Offering Date; or

               (ii) an amount equal to eighty-five percent (85%) of the Fair Market Value
of the shares of Common Stock on the applicable Purchase Date.

	8.	 	Participation; Withdrawal; Termination.

     (a) A Participant may elect to authorize payroll deductions pursuant to an
Offering under the Plan by completing and delivering to the Company, within the
time specified in the Offering, an enrollment form (in such form as the Company
may provide). Each such enrollment form shall authorize an amount of
Contributions expressed as a percentage of the submitting Participant’s
Earnings (as defined in each Offering) during the Offering (not to exceed the

6.

 

maximum percentage specified by the Board). Each Participant’s
Contributions shall be credited to a bookkeeping account for such Participant
under the Plan and shall be deposited with the general funds of the Company
except where applicable law requires that Contributions be deposited with a
third party. To the extent provided in the Offering, a Participant may begin
such Contributions after the beginning of the Offering. To the extent provided
in the Offering, a Participant may thereafter reduce (including to zero) or
increase his or her Contributions.

     (b) During an Offering, a Participant may cease making Contributions and
withdraw from the Offering by delivering to the Company a notice of withdrawal
in such form as the Company may provide. Such withdrawal may be elected at any
time prior to the end of the Offering, except as provided otherwise in the
Offering. Upon such withdrawal from the Offering by a Participant, the Company
shall distribute to such Participant all of his or her accumulated
Contributions (reduced to the extent, if any, such deductions have been used to
acquire shares of Common Stock for the Participant) under the Offering, without
interest, and such Participant’s Purchase Right in that Offering shall
thereupon terminate. A Participant’s withdrawal from an Offering shall have no
effect upon such Participant’s eligibility to participate in any other
Offerings under the Plan, but such Participant shall be required to deliver a
new enrollment form in order to participate in subsequent Offerings.

     (c) Purchase Rights granted pursuant to any Offering under the Plan shall
terminate immediately upon a Participant ceasing to be an Employee for any
reason or for no reason (subject to any post-employment participation period
required by law) or other lack of eligibility. The Company shall distribute to
such terminated or otherwise ineligible Employee all of his or her accumulated
Contributions (reduced to the extent, if any, such deductions have been used to
acquire shares of Common Stock for the terminated or otherwise ineligible
Employee) under the Offering.

     (d) Purchase Rights shall not be transferable by a Participant otherwise
than by will or the laws of descent and distribution[, or by a beneficiary
designation as provided in Section 13] and, during a Participant’s lifetime,
shall be exercisable only by such Participant.

	9.	 	Exercise.

     (a) On each Purchase Date during an Offering, each Participant’s
accumulated Contributions shall be applied to the purchase of shares of Common
Stock up to the maximum number of shares of Common Stock permitted pursuant to
the terms of the Plan and the applicable Offering, at the purchase price
specified in the Offering. No fractional shares shall be issued upon the
exercise of Purchase Rights unless specifically provided for in the Offering.

     (b) The amount, if any, of accumulated Contributions remaining in a
Participant’s account after the purchase of shares of Common Stock which is
less than the amount required to purchase one share of Common Stock on the
final Purchase Date of an Offering shall be held in such Participant’s account
for the purchase of shares of Common Stock under the next Offering under the
Plan, unless such Participant withdraws from such next Offering, as provided in
Section 8(b), or is not eligible to participate in such Offering, as provided
in Section 6, in which case such amount shall be distributed to such
Participant after the final Purchase Date, without interest. The amount, if
any, of Contributions remaining in a Participant’s account after the

7.

 

purchase of shares of Common Stock which is at least equal to the amount
required to purchase one (1) whole share of Common Stock on the final Purchase
Date of the Offering shall be distributed in full to such Participant at the
end of the Offering, without interest.

     (c) No Purchase Rights may be exercised to any extent unless the shares of
Common Stock to be issued upon such exercise under the Plan are covered by an
effective registration statement pursuant to the Securities Act and the Plan is
in material compliance with all applicable federal, state, foreign and other
securities and other laws applicable to the Plan. If on a Purchase Date during
any Offering hereunder the shares of Common Stock are not so registered or the
Plan is not in such compliance, no Purchase Rights or any Offering shall be
exercised on such Purchase Date, and the Purchase Date shall be delayed until
the shares of Common Stock are subject to such an effective registration
statement and the Plan is in such compliance, except that the Purchase Date
shall not be delayed more than twelve (12) months and the Purchase Date shall
in no event be more than twenty-seven (27) months from the Offering Date. If,
on the Purchase Date under any Offering hereunder, as delayed to the maximum
extent permissible, the shares of Common Stock are not registered and the Plan
is not in such compliance, no Purchase Rights or any Offering shall be
exercised and all Contributions accumulated during the Offering (reduced to the
extent, if any, such deductions have been used to acquire shares of Common
Stock) shall be distributed to the Participants.

	10.	 	Covenants of the Company.

     The Company shall seek to obtain from each federal, state, foreign or
other regulatory commission or agency having jurisdiction over the Plan such
authority as may be required to issue and sell shares of Common Stock upon
exercise of the Purchase Rights. If, after commercially reasonable efforts,
the Company is unable to obtain from any such regulatory commission or agency
the authority that counsel for the Company deems necessary for the lawful
issuance and sale of shares of Common Stock under the Plan, the Company shall
be relieved from any liability for failure to issue and sell shares of Common
Stock upon exercise of such Purchase Rights unless and until such authority is
obtained.

	11.	 	Use of Proceeds from Shares of Common Stock.

     Proceeds from the sale of shares of Common Stock pursuant to Purchase
Rights shall constitute general funds of the Company.

	12.	 	Rights as a stockholder.

     A Participant shall not be deemed to be the holder of, or to have any of
the rights of a holder with respect to, shares of Common Stock subject to
Purchase Rights unless and until the Participant’s shares of Common Stock
acquired upon exercise of Purchase Rights are recorded in the books of the
Company (or its transfer agent).

8.

 

	13.	 	Adjustments upon Changes in Securities; Corporate Transactions.

     (a) If any change is made in the shares of Common Stock, subject to the
Plan, or subject to any Purchase Right, without the receipt of consideration by
the Company (through merger, consolidation, reorganization, recapitalization,
reincorporation, stock dividend, dividend in property other than cash, stock
split, liquidating dividend, combination of shares, exchange of shares, change
in corporate structure or other transaction not involving the receipt of
consideration by the Company), the Plan shall be appropriately adjusted in the
type(s), class(es) and maximum number of shares of Common Stock subject to the
Plan pursuant to Section 4(a), and the outstanding Purchase Rights shall be
appropriately adjusted in the type(s), class(es), number of shares and purchase
limits of such outstanding Purchase Rights. The Board shall make such
adjustments, and its determination shall be final, binding and conclusive.
(The conversion of any convertible securities of the Company shall not be
treated as a “transaction not involving the receipt of consideration by the
Company.”)

     (b) In the event of a Corporate Transaction, then: (i) any surviving or
acquiring corporation may continue or assume Purchase Rights outstanding under
the Plan or may substitute similar rights (including a right to acquire the
same consideration paid to stockholders in the Corporate Transaction) for those
outstanding under the Plan, or (ii) if any surviving or acquiring corporation
does not continue or assume such Purchase Rights or does not substitute similar
rights for Purchase Rights outstanding under the Plan, then, the Participants’
accumulated Contributions shall be used to purchase shares of Common Stock
within five (5) business days prior to the Corporate Transaction under the
ongoing Offering, and the Participants’ Purchase Rights under the ongoing
Offering shall terminate immediately after such purchase.

     14. Amendment of the Plan.

     (a) The Board at any time, and from time to time, may amend the Plan.
However, except as provided Section 14 relating to adjustments upon changes in
securities, no amendment shall be effective unless approved by the stockholders
of the Company within twelve (12) months before or after the adoption of the
amendment, where the amendment will:

               (i) Increase the number of shares reserved for rights under the
Plan;

               (ii) Modify the provisions as to eligibility for participation in
the Plan (to the extent such modification requires stockholder approval
in order for the Plan to obtain employee stock purchase plan treatment
under Section 423 of the Code); or

               (iii) Modify the Plan in any other way if such modification requires
stockholder approval in order for the Plan to obtain employee stock
purchase plan treatment under Section 423 of the Code or to comply with
the requirements of Rule 16b-3.

It is expressly contemplated that the Board may amend the Plan in any respect
the Board deems necessary or advisable to provide Employees with the maximum
benefits provided or to be provided under the provisions of the Code and the
regulations promulgated thereunder relating to

9.

 

Employee Stock Purchase Plans and/or to bring the Plan and/or Purchase Rights
into compliance therewith.

     (b) The rights and obligations under any Purchase Rights granted before
amendment of the Plan shall not be impaired by any amendment of the Plan
except: (i) with the consent of the person to whom such Purchase Rights were
granted, or (ii) as necessary to comply with any laws or governmental
regulations (including, without limitation, the provisions of the Code and the
regulations promulgated thereunder relating to Employee Stock Purchase Plans).

	15.	 	Termination or Suspension of the Plan.

     (a) The Board in its discretion may suspend or terminate the Plan at any
time. Unless sooner terminated, the Plan shall terminate ten (10) years from
the date the Plan is adopted by the Board or approved by the stockholders of
the Company, whichever is earlier. No Purchase Rights may be granted under the
Plan while the Plan is suspended or after it is terminated.

     (b) Any benefits, privileges, entitlements and obligations under any
Purchase Rights while the Plan is in effect shall not be impaired by suspension
or termination of the Plan except (i) as expressly provided in the Plan or with
the consent of the person to whom such Purchase Rights were granted, (ii) as
necessary to comply with any laws, regulations, or listing requirements, or
(iii) as necessary to ensure that the Plan and/or Purchase Rights comply with
the requirements of Section 423 of the Code.

	16.	 	Effective Date of Plan.

     The Plan shall become effective as determined by the Board, but no
Purchase Rights shall be exercised unless and until the Plan has been approved
by the stockholders of the Company within twelve (12) months before or after
the date the Plan is adopted by the Board.

	17.	 	Miscellaneous Provisions.

     (a) The Plan and Offering do not constitute an employment contract.
Nothing in the Plan or in the Offering shall in any way alter the at will
nature of a Participant’s employment or be deemed to create in any way
whatsoever any obligation on the part of any Participant to continue in the
employ of the Company or a Related Corporation, or on the part of the Company
or a Related Corporation to continue the employment of a Participant.

     (b) The provisions of the Plan shall be governed by the laws of the State
of Delaware without resort to that state’s conflicts of laws rules.

10.

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