EXHIBIT 10.23
HARMONIC INC.
2002 EMPLOYEE STOCK PURCHASE PLAN
The following constitute the provisions of the 2002 Employee Stock Purchase
Plan (the "Plan") of Harmonic 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 uniform and
nondiscriminatory basis consistent with the requirements of Section 423.
2. Definitions.
a). "Administrator" shall mean the Board or any Committee designated
by the Board to administer the Plan pursuant to Section 14.
b). "Board" shall mean the Board of Directors of the Company.
c). "Change-of-Control" shall mean the occurrence of any of the
following events:
(i) any "person" (as such term is used in Sections 13(d) and 14(d)
of the Exchange Act) becomes the "beneficial owner" (as defined in Rule
13d-3 of the Exchange Act), directly or indirectly, of securities of the
Company representing fifty percent (50%) or more of the total voting
power represented by the Company's then outstanding voting securities;
or
(ii) the consummation of the sale or disposition by the Company of
all or substantially all of the Company's assets; or
(iii) the consummation of a merger or consolidation of the Company,
with any other corporation, other than a merger or consolidation which
would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the
surviving entity or its parent) at least fifty percent (50%) of the
total voting power represented by the voting securities of the Company,
or such surviving entity or its parent outstanding immediately after
such merger or consolidation;
(iv) a change in the composition of the Board, as a result of which
fewer than a majority of the Directors are Incumbent Directors.
"Incumbent Directors" shall mean Directors who either (A) are Directors
of the Company, as applicable, as of the date hereof, or (B) are
elected, or nominated for election, to the Board with the affirmative
votes of at least a majority of those Directors whose election or
nomination was not in connection with any transaction described in
subsections (i), (ii) or (iii) or in connection with an actual or
threatened proxy contest relating to the election of Directors of the
Company.
d). "Code" shall mean the Internal Revenue Code of 1986, as amended.
e). "Committee" means a committee of the Board appointed by the Board
in accordance with Section 14 hereof.
f). "Common Stock" shall mean the common stock of the Company.
g). "Company" shall mean Harmonic Inc., a Delaware corporation and
any Designated Subsidiary of the Company.
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h). "Compensation" shall mean all base straight time gross earnings,
including commissions and payments for overtime and shift premiums, but
exclusive of payments for incentive compensation, incentive payments,
bonuses and other compensation.
i). "Designated Subsidiary" shall mean any Subsidiary selected by the
Administrator as eligible to participate in the Plan.
j). "Director" shall mean a member of the Board.
k). "Eligible Employee" shall mean any individual who is a common law
employee of the Company or any Designated Subsidiary and whose customary
employment with the Company or Designated Subsidiary is at least twenty
(20) hours per week and more than five (5) months in any calendar year. 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 contract, the employment relationship shall be deemed to have
terminated on the 91st day of such leave.
l). "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
m). "Exercise Date" shall mean the first Trading Day on or after July
1 and January 1 of each year. The first Exercise Date under the Plan shall
be on January 1, 2003.
n). "Fair Market Value" shall mean, as of any date, the value of
Common Stock determined as follows:
(i) if the Common Stock is listed on any established stock exchange
or a national market system, including without limitation the Nasdaq
National Market or The Nasdaq SmallCap Market of The Nasdaq Stock
Market, its Fair Market Value shall be the closing sales price for such
stock (or the closing bid, if no sales were reported) as quoted on such
exchange or system on the date of determination, as reported in The Wall
Street Journal or such other source as the Board deems reliable;
(ii) if the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, its Fair Market
Value shall be the mean of the closing bid and asked prices for the
Common Stock on the date of determination, as reported in The Wall
Street Journal or such other source as the Board deems reliable;
(iii) in the absence of an established market for the Common Stock,
the Fair Market Value thereof shall be determined in good faith by the
Board.
o). "Offering Date" shall mean the first Trading Day of each Offering
Period.
p). "Offering Periods" shall mean the periods of approximately 24
(twenty-four) months during which an option granted pursuant to the Plan
may be exercised, commencing on the first Trading Day on or after July 1
and January 1 of each year and terminating on the first Trading Day on or
after the January 1 and July 1 Offering Period commencement date
approximately 24 (twenty-four) months later. The duration and timing of
Offering Periods may be changed pursuant to Section 4 of this Plan.
q). "Plan" shall mean this 2002 Employee Stock Purchase Plan.
r). "Purchase Period" shall mean the approximately six (6) month
period commencing on one Exercise Date and ending with the next Exercise
Date, except that the first Purchase Period of any Offering Period shall
commence on the Offering Date and end with the next Exercise Date.
s). "Purchase Price" shall mean 85% (eighty-five percent) of the Fair
Market Value of a share of Common Stock on the Offering Date or on the
Exercise Date, whichever is lower;
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provided however, that the Purchase Price may be adjusted by the
Administrator pursuant to Section 20.
t). "Subsidiary" shall mean a "subsidiary corporation," whether now
or hereafter existing, as defined in Section 424(f) of the Code.
u). "Trading Day" shall mean a day on which national stock exchanges
and the Nasdaq System are open for trading.
3. Eligibility.
a). Offering Periods. Any Eligible Employee on a given Offering Date
shall be eligible to participate in the Plan.
b). Limitations. Any provisions of the Plan to the contrary
notwithstanding, no Eligible Employee shall be granted an option under the
Plan (i) to the extent that, immediately after the grant, such Eligible
Employee (or any other person whose stock would be attributed to such
Eligible Employee pursuant to Section 424(d) of the Code) would own capital
stock of the Company and/or hold outstanding options to purchase such stock
possessing 5% (five percent) or more of the total combined voting power or
value of all classes of the capital stock of the Company or of any
Subsidiary, or (ii) to the extent that his or her rights to purchase stock
under all employee stock purchase plans of the Company and its subsidiaries
accrues at a rate which exceeds $25,000 (twenty-five thousand dollars)
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.
4. Offering Periods. The Plan shall be implemented by consecutive,
overlapping Offering Periods with a new Offering Period commencing on the first
Trading Day on or after July 1 and January 1 each year, or on such other date as
the Board shall determine, and continuing thereafter until terminated in
accordance with Section 20 hereof. The Board shall have the power to change the
duration of Offering Periods (including the commencement dates thereof) with
respect to future offerings without stockholder approval if such change is
announced prior to the scheduled beginning of the first Offering Period to be
affected thereafter.
5. Participation.
a). Offering Periods. An Eligible Employee may become a participant
in the Plan by completing a subscription agreement authorizing payroll
deductions in the form of Exhibit 1 to this Plan and filing it with the
Company's payroll office at least 5 (five) days prior to the applicable
Offering Date or as otherwise determined by the Administrator.
b). Payroll Deductions. Payroll deductions for a participant shall
commence on the first payroll following the first day of the applicable
Offering Period and shall end on the last payroll in the Offering Period to
which such authorization is applicable, unless sooner terminated by the
participant as provided in Section 10 hereof.
6. Payroll Deductions.
a). At the time a participant files his or her subscription
agreement, he or she shall elect to have payroll deductions made on each
pay day during the Offering Period in an amount not exceeding 10% (ten
percent) of the Compensation which he or she receives on each pay day
during the Offering Period; provided, however, that should a pay day occur
on an Exercise Date, a participant shall have the payroll deductions made
on such day applied to his or her account under the new Offering Period or
Purchase Period, as the case may be. A participant's subscription agreement
shall remain in effect for successive Offering Periods unless terminated as
provided in Section 10 hereof.
b). Payroll deductions for a participant shall commence on the first
payday following the Offering Date and shall end on the last payday in the
Offering Period to which such
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authorization is applicable, unless sooner terminated by the participant as
provided in Section 10 hereof, for any Offering Period as determined.
c). All payroll deductions made for a participant shall be credited
to his or her account under the Plan and shall be withheld in whole
percentages only. A participant may not make any additional payments into
such account.
d). A participant may discontinue his or her participation in the
Plan as provided in Section 10 hereof, or may increase or decrease the rate
of his or her payroll deductions during the Offering Period by completing
or filing with the Company a new subscription agreement authorizing a
change in payroll deduction rate. The Administrator may, in its discretion,
limit the nature and/or number of participation rate changes during any
Offering Period. The change in rate shall be effective with the first full
payroll period following 5 (five) 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.
e). Notwithstanding the foregoing, to the extent necessary to comply
with Section 423(b)(8) of the Code and Section 3(b) hereof, a participant's
payroll deductions may be decreased to zero percent (0%) at any time during
a Purchase Period. Payroll deductions shall recommence at the rate provided
in such participant's subscription agreement at the beginning of the first
Purchase Period which is scheduled to end in the following calendar year,
unless terminated by the participant as provided in Section 10 hereof.
f). At the time the option is exercised, in whole or in part, or at
the time some or all of the Company's Common Stock issued under the Plan is
disposed of, the participant must make adequate provision for the Company's
federal, state, or other tax withholding obligations, if any, which arise
upon the exercise of the option or the disposition of the Common Stock. At
any time, the Company may, but shall not be obligated to, withhold from the
participant's compensation the amount necessary for the Company to meet
applicable withholding obligations, including any withholding required to
make available to the Company any tax deductions or benefits attributable
to sale or early disposition of Common Stock by the Eligible Employee.
7. Grant of Option. On the Offering Date of each Offering Period, each
Eligible Employee participating in such Offering Period shall be granted an
option to purchase on each Exercise Date during such Offering Period (at the
applicable Purchase Price) up to a number of shares of the Company's Common
Stock determined by dividing such Eligible 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 that
in no event shall an Eligible Employee be permitted to purchase during each
Purchase Period more than 3,000 shares of the Company's Common Stock (subject to
any adjustment pursuant to Section 19), and provided further that such purchase
shall be subject to the limitations set forth in Sections 3(b), 7 and 12 hereof.
The Eligible Employee may accept the grant of such option by turning in a
completed Subscription Agreement (attached hereto as Exhibit 1) to the Company
at least 5 (five) days prior to an Offering Date or as otherwise determined by
the Administrator. The Administrator may, for future Offering Periods, increase
or decrease, in its absolute discretion, the maximum number of shares of the
Company's Common Stock an Eligible Employee may purchase during each Purchase
Period of such Offering Period. Exercise of the option shall occur as provided
in Section 8 hereof, unless the participant has withdrawn pursuant to Section 10
hereof. The option shall expire on the last day of the Offering Period.
8. Exercise of Option.
a). Unless a participant withdraws from the Plan as provided in
Section 10 hereof, his or her option for the purchase of shares shall be
exercised automatically on the 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 or her account. No
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fractional shares shall be purchased; any payroll deductions accumulated in
a participant's account which are not sufficient to purchase a full share
shall be retained in the participant's account for the subsequent Purchase
Period or Offering Period, subject to earlier withdrawal by the participant
as provided in Section 10 hereof. Any other funds left over in a
participant's account after the Exercise Date shall be returned to the
participant. During a participant's lifetime, a participant's option to
purchase shares hereunder is exercisable only by him or her.
b). If the Administrator determines that, on a given Exercise Date,
the number of shares with respect to which options are to be exercised may
exceed (i) the number of shares of Common Stock that were available for
sale under the Plan on the Offering Date of the applicable Offering Period,
or (ii) the number of shares available for sale under the Plan on such
Exercise Date, the Administrator may in its sole discretion (x) provide
that the Company shall make a pro rata allocation of the shares of Common
Stock available for purchase on such Offering Date or Exercise Date, as
applicable, in as uniform a manner as shall be practicable and as it shall
determine in its sole discretion to be equitable among all participants
exercising options to purchase Common Stock on such Exercise Date, and
continue all Offering Periods then in effect, or (y) provide that the
Company shall make a pro rata allocation of the shares available for
purchase on such Offering Date or Exercise Date, as applicable, in as
uniform a manner as shall be practicable and as it shall determine in its
sole discretion to be equitable among all participants exercising options
to purchase Common Stock on such Exercise Date, and terminate any or all
Offering Periods then in effect pursuant to Section 20 hereof. The Company
may make pro rata allocation of the shares available on the Offering Date
of any applicable Offering Period pursuant to the preceding sentence,
notwithstanding any authorization of additional shares for issuance under
the Plan by the Company's stockholders subsequent to such Offering Date.
9. Delivery. As soon as reasonably practicable after each Exercise Date
on which a purchase of shares occurs, the Company shall arrange the delivery to
each participant the shares purchased upon exercise of his or her option in a
form determined by the Administrator.
10. Withdrawal.
a). A participant may withdraw all but not less than all the payroll
deductions credited to his or her account and not yet used to exercise his
or her option under the Plan at any time by giving written notice to the
Company in the form of Exhibit 2 to this Plan. All of the participant's
payroll deductions credited to his or her account shall be paid to such
participant as promptly as practicable after receipt of notice of
withdrawal and such participant's option for the Offering Period shall be
automatically terminated, and no further payroll deductions for the
purchase of shares shall be made for such Offering Period. If a participant
withdraws from an Offering Period, payroll deductions shall not resume at
the beginning of the succeeding Offering Period unless the participant
delivers to the Company a new subscription agreement.
b). A participant's withdrawal from an Offering Period shall not have
any effect upon his or her eligibility to participate in any similar plan
that may hereafter be adopted by the Company or in succeeding Offering
Periods which commence after the termination of the Offering Period from
which the participant withdraws.
11. Termination of Employment. In the event a participant ceases to be an
Eligible Employee of the Company or any Designated Subsidiary, as applicable, he
or she will be deemed to have elected to withdraw from the Plan and the payroll
deductions credited to such participant's account during the Offering Period but
not yet used to exercise the option will be returned to such participant or, in
the case of his or her death, to the person or persons entitled thereto under
Section 15 hereof, and such participant's option will be automatically
terminated. The preceding sentence notwithstanding, a participant who receives
payment in lieu of notice of termination of employment shall be treated as
continuing to be an Employee for the participant's customary
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number of hours per week of employment during the period in which the
participant is subject to such payment in lieu of notice.
12. Interest. No interest shall accrue on the payroll deductions of a
participant in the Plan.
13. Stock.
a). Subject to adjustment upon changes in capitalization of the
Company as provided in Section 19 hereof, the maximum number of shares of
the Company's Common Stock which shall be made available for sale under the
Plan shall be 1,500,000 shares.
b). Until the shares are issued (as evidenced by the appropriate
entry on the books of the Company or of a duly authorized transfer agent of
the Company), a participant shall only have the rights of an unsecured
creditor with respect to such shares, and no right to vote or receive
dividends or any other rights as a stockholder shall exist with respect to
such shares.
c). Shares to be delivered to a participant under the Plan shall be
registered in the name of the participant or in the name of the participant
and his or her spouse.
14. Administration. The Administrator shall administer the Plan and 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 Administrator shall, to the full extent permitted by law, be final and
binding upon all parties.
15. Designation of Beneficiary.
a). A participant may file a written designation of a beneficiary who
is to receive any shares and cash, if any, from the participant's account
under the Plan in the event of 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.
b). Such designation of beneficiary may be changed by the participant
at any time by written notice. In the event of the death of a participant
and in the absence of a beneficiary validly designated under the Plan who
is living at the time of such participant's death, the Company shall
deliver such shares and/or cash to the executor or administrator of the
estate of the participant, or if no such executor or administrator has been
appointed (to the knowledge of the Company), the Company, in its
discretion, may deliver such shares and/or cash to the spouse or to any one
or more dependents or relatives of the participant, or if no spouse,
dependent or relative is known to the Company, then to such other person as
the Company may designate.
c). All beneficiary designations shall be in such form and manner as
the Administrator may designate from time to time.
16. Transferability. Neither payroll deductions credited to a
participant's account nor any rights with regard to the exercise of an option or
to receive shares under the Plan may be assigned, transferred, pledged or
otherwise disposed of in any way (other than by will, the laws of descent and
distribution or as provided in Section 15 hereof) by the participant. Any such
attempt at assignment, transfer, pledge or other disposition shall be without
effect, except that the Company may treat such act as an election to withdraw
funds from an Offering Period in accordance with Section 10 hereof.
17. Use of Funds. 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
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segregate such payroll deductions. Until shares are issued, participants shall
only have the rights of an unsecured creditor.
18. Reports. Individual accounts shall be maintained for each participant
in the Plan. Statements of account shall be given to participating Eligible
Employees at least annually, which statements shall set forth the amounts of
payroll deductions, the Purchase Price, the number of shares purchased and the
remaining cash balance, if any.
19. Adjustments Upon Changes in Capitalization, Dissolution, Liquidation,
Merger or Change-in-Control.
a). Changes in Capitalization. Subject to any required action by the
stockholders of the Company, the maximum number of shares of the Company's
Common Stock which shall be made available for sale under the Plan, the
maximum number of shares each participant may purchase each Purchase Period
(pursuant to Sections 3(b), and 7), as well as the price per share and the
number of shares 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 change in
the number of 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 Administrator, whose determination in that respect shall be final,
binding and conclusive. Except as expressly provided herein, no issuance by
the Company of shares of stock of any class, or securities convertible into
shares of stock of any 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.
b). Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Offering Period then in
progress shall be shortened by setting a New Exercise Date (the "New
Exercise Date"), and shall terminate immediately prior to the consummation
of such proposed dissolution or liquidation, unless provided otherwise by
the Administrator. The New Exercise Date shall be before the date of the
Company's proposed dissolution or liquidation. The Administrator shall
notify each participant in writing, at least 10 (ten) business days prior
to the New Exercise Date, that the Exercise Date for the participant's
option has been changed to the New Exercise Date and that the participant's
option shall be exercised automatically on the New Exercise Date, unless
prior to such date the participant has withdrawn from the Offering Period
as provided in Section 10 hereof.
c). Merger or Change-of-Control. In the event of a merger or
Change-of-Control, each outstanding option shall be assumed or an
equivalent option substituted by the successor corporation or a Parent or
Subsidiary of the successor corporation. In the event that the successor
corporation refuses to assume or substitute for the option, any Purchase
Periods then in progress shall be shortened by setting a New Exercise Date
and any Offering Periods then in progress shall end on the New Exercise
Date. The New Exercise Date shall be before the date of the Company's
proposed merger or Change-of-Control. The Administrator shall notify each
participant in writing, at least 10 (ten) business days prior to the New
Exercise Date, that the Exercise Date for the participant's option has been
changed to the New Exercise Date and that the participant's option shall be
exercised automatically on the New Exercise Date, unless prior to such date
the participant has withdrawn from the Offering Period as provided in
Section 10 hereof.
20. Amendment or Termination.
a). The Administrator may at any time and for any reason terminate or
amend the Plan. Except as otherwise provided in the Plan, no such
termination can affect options previously
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granted, provided that an Offering Period may be terminated by the
Administrator on any Exercise Date if the Administrator determines that the
termination of the Offering Period or the Plan is in the best interests of
the Company and its stockholders. Except as provided in Section 19 and this
Section 20 hereof, 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 Section 423 of the Code (or any
successor rule or provision or any other applicable law, regulation or
stock exchange rule), the Company shall obtain stockholder approval in such
a manner and to such a degree as required.
b). Without stockholder consent and without regard to whether any
participant rights may be considered to have been "adversely affected," the
Administrator shall be entitled to change the Offering Periods, limit the
frequency and/or number of changes in the amount withheld during an
Offering Period, establish the exchange ratio applicable to amounts
withheld in a currency other than U.S. dollars, permit payroll withholding
in excess of the amount designated by a participant in order to adjust for
delays or mistakes in the Company's processing of properly completed
withholding elections, establish reasonable waiting and adjustment periods
and/or accounting and crediting procedures to ensure that amounts applied
toward the purchase of Common Stock for each participant properly
correspond with amounts withheld from the participant's Compensation, and
establish such other limitations or procedures as the Administrator
determines in its sole discretion advisable which are consistent with the
Plan.
c). In the event the Administrator determines that the ongoing
operation of the Plan may result in unfavorable financial accounting
consequences, the Board may, in its discretion and, to the extent necessary
or desirable, modify or amend the Plan to reduce or eliminate such
accounting consequence including, but not limited to:
(i) increasing the Purchase Price for any Offering Period including
an Offering Period underway at the time of the change in Purchase Price;
(ii) shortening any Offering Period so that Offering Period ends on
a new Exercise Date, including an Offering Period underway at the time
of the Board action; and
(iii) allocating shares.
Such modifications or amendments shall not require stockholder
approval or the consent of any Plan participants.
21. Notices. All notices or other communications by a participant to the
Company under or in connection with the Plan shall be deemed to have been duly
given when received in the form and manner specified by the Company at the
location, or by the person, designated by the Company for the receipt thereof.
22. Conditions Upon Issuance of Shares. Shares 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 Exchange Act, 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.
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23. 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
stockholders of the Company. It shall continue in effect until terminated under
Section 20 hereof.
24. Automatic Transfer to Low Price Offering Period. To the extent
permitted by any applicable laws, regulations, or stock exchange rules if the
Fair Market Value of the Common Stock on any Exercise Date in an Offering Period
is lower than the Fair Market Value of the Common Stock on the Offering Date of
such Offering Period, then all participants in such Offering Period shall be
automatically withdrawn from such Offering Period immediately after the exercise
of their option on such Exercise Date and automatically re-enrolled in the
immediately following Offering Period.
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EXHIBIT 1
HARMONIC INC.
2002 EMPLOYEE STOCK PURCHASE PLAN
SUBSCRIPTION AGREEMENT
____ Original Application
____ Change in Payroll Deduction Rate
____ Change of Beneficiary(ies) Offering Date
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1.
----------------------------- hereby elects to participate in the Harmonic,
Inc. 2002 Employee Stock Purchase Plan (the "Employee Stock Purchase Plan") and
subscribes to purchase shares of the Company's Common Stock in accordance with
this Subscription Agreement and the Employee Stock Purchase Plan.
2. I hereby authorize payroll deductions from each paycheck in the amount
of ___% of my Compensation on each payday (from 0% to 10%) during the Offering
Period in accordance with the Employee Stock Purchase Plan. (Please note that no
fractional percentages are permitted.)
3. I understand that said payroll deductions shall be accumulated for the
purchase of shares of Common Stock at the applicable Purchase Price determined
in accordance with the Employee Stock Purchase Plan. I understand that if I do
not withdraw from an Offering Period, any accumulated payroll deductions will be
used to automatically exercise my option.
4. I have received a copy of the complete Employee Stock Purchase Plan. I
understand that my participation in the Employee Stock Purchase Plan is in all
respects subject to the terms of the Plan. I understand that my ability to
exercise the option under this Subscription Agreement is subject to stockholder
approval of the Employee Stock Purchase Plan.
5. Shares purchased for me under the Employee Stock Purchase Plan should
be issued in the name(s) of (Eligible Employee or Eligible Employee and Spouse
only).
6. I understand that if I dispose of any shares received by me pursuant to
the Plan within 2 years after the Offering Date (the first day of the Offering
Period during which I purchased such shares) or one year after the Exercise
Date, I will be treated for federal income tax purposes as having received
ordinary income at the time of such disposition in an amount equal to the excess
of the fair market value of the shares at the time such shares were purchased by
me over the price which I paid for the shares. I hereby agree to notify the
Company in writing within 30 days after the date of any disposition of my shares
and I will make adequate provision for Federal, state or other tax withholding
obligations, if any, which arise upon the disposition of the Common Stock. The
Company may, but will not be obligated to, withhold from my compensation the
amount necessary to meet any applicable withholding obligation including any
withholding necessary to make available to the Company any tax deductions or
benefits attributable to sale or early disposition of Common Stock by me. If I
dispose of such shares at any time after the expiration of the 2-year and 1-year
holding periods, I understand that I will be treated for federal income tax
purposes as having received income only at the time of such disposition, and
that such income will be taxed as ordinary income only to the extent of an
amount equal to the lesser of (1) the excess of the fair market value of the
shares at the time of such disposition over the purchase price which I paid for
the shares, or (2) 15% of the fair market value of the shares on the first day
of the Offering Period. The remainder of the gain, if any, recognized on such
disposition will be taxed as capital gain.
7. I hereby agree to be bound by the terms of the Employee Stock Purchase
Plan. The effectiveness of this Subscription Agreement is dependent upon my
eligibility to participate in the Employee Stock Purchase Plan.
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8. In the event of my death, I hereby designate the following as my
beneficiary(ies) to receive all payments and shares due me under the Employee
Stock Purchase Plan:
NAME: (Please print)
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(First) (Middle) (Last)
<Table>
------------------------------ ------------------------------------------------
Relationship
------------------------------ ------------------------------------------------
Percentage Benefit (Address)
</Table>
NAME: (Please print)
------------------------------------------------------------------
(First) (Middle) (Last)
<Table>
------------------------------ ------------------------------------------------
Relationship
------------------------------ ------------------------------------------------
Percentage Benefit (Address)
</Table>
<Table>
Employee's Social Security Number:
------------------------------------------------
Employee's Address:
------------------------------------------------
------------------------------------------------
------------------------------------------------
</Table>
I UNDERSTAND THAT THIS SUBSCRIPTION AGREEMENT SHALL REMAIN IN EFFECT THROUGHOUT
SUCCESSIVE OFFERING PERIODS UNLESS TERMINATED BY ME.
<Table>
Dated:
------------------------------ -----------------------------------------------------------
Signature of Employee
-----------------------------------------------------------
Spouse's Signature (If beneficiary other than spouse)
</Table>
B-11
EXHIBIT 2
HARMONIC INC.
2002 EMPLOYEE STOCK PURCHASE PLAN
NOTICE OF WITHDRAWAL
The undersigned participant in the Offering Period of the Harmonic Inc.
2002 Employee Stock Purchase Plan which began on ____________, ____ (the
"Offering Date") hereby notifies the Company that he or she hereby withdraws
from the Offering Period. He or she hereby directs the Company to pay to the
undersigned as promptly as practicable all the payroll deductions credited to
his or her account with respect to such Offering Period. The undersigned
understands and agrees that his or her option for such Offering Period will be
automatically terminated. The undersigned understands further that no further
payroll deductions will be made for the purchase of shares in the current
Offering Period and the undersigned shall be eligible to participate in
succeeding Offering Periods only by delivering to the Company a new Subscription
Agreement. Name and Address of Participant:
--------------------------------------
--------------------------------------
--------------------------------------
Signature:
--------------------------------------
Date:
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B-12