UNIPHASE CORPORATION
1998 EMPLOYEE STOCK PURCHASE PLAN
I. PURPOSE
The Uniphase Corporation 1998 EMPLOYEE STOCK PURCHASE PLAN
(the "Plan") is intended to provide eligible employees of the Company
and one or more of its Corporate Affiliates with the opportunity to
acquire a proprietary interest in the Company through participation in a
plan designed to qualify as an employee stock purchase plan under
Section 423 of the Internal Revenue Code (the "Code").
II. DEFINITIONS
For purposes of administration of the Plan, the following
terms shall have the meanings indicated:
Base Compensation means (i) the regular basic earnings paid
to a Participant by one or more Participating Companies plus (ii) all
contributions made on the Participant's behalf pursuant to any qualified
salary deferral arrangement under Section 401(k) of the Code and to a
plan qualified under Section 125 of the Code in effect for Employees.
The calculation of Base Compensation may also include, at the discretion
of the Plan Administrator (such discretion to be applied uniformly to
all participants), overtime, shift differentials and other
differentials. Compensation shall be calculated on the basis of
equivalent bi-weekly straight-time hours multiplied by straight-time
rate.
Board means the Board of Directors of the Company.
Company means Uniphase Corporation, a Delaware corporation,
and any corporate successor to all or substantially all of the assets or
voting stock of Uniphase Corporation, which shall by appropriate action
adopt the Plan.
Corporate Affiliate means any company which is either the
parent corporation or a subsidiary corporation of the Company (as
determined in accordance with Section 424 of the Code), including any
parent or subsidiary corporation which becomes such after the Effective
Date.
Effective Date means August 1, 1998. However, should any
Corporate Affiliate become a Participating Company in the Plan after
such applicable date, then such entity shall designate a separate
Effective Date with respect to its employee-Participants.
Employee means any person who is regularly engaged, for a
period of more than 20 hours per week and more than 5 months per
calendar year, in the rendition of personal services to the Company or
any other Participating Company for earnings considered wages under
Section 3121(a) of the Code.
Quarter means any three-month period commencing August 1,
November 1 February 1 or May 1, during each calendar year during the
term of the Plan.
Participant means any Employee of a Participating Company
who is actively participating in the Plan.
Participating Company means the Company and such Corporate
Affiliate or Affiliates as may be designated from time to time by the
Board.
Plan Administrator means either the Board or a Committee of
the Board that is responsible for administration of the Plan.
Stock means shares of the common stock of the Company.
III. ADMINISTRATION
(a) The Plan shall be administered by the Plan
Administrator which 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 Plan
Administrator shall, to the full extent permitted by Applicable Law, be
final and binding upon all persons.
(b) No member of the Committee while serving as such shall
be eligible to participate in the Plan.
IV. PURCHASE PERIODS
(a) Stock shall be offered for purchase under the Plan
through a series of successive purchase periods until such time as (i)
the maximum number of shares of Stock available for issuance under the
Plan shall have been purchased or (ii) the Plan shall have been sooner
terminated in accordance with Article X or Article XI.
(b) The Plan shall be implemented in a series of
overlapping purchase periods, each to be of such duration (not to exceed
twenty-four (24) months per purchase period) as determined by the Plan
Administrator prior to the commencement date of the purchase period.
The initial purchase period will begin on the Effective Date and
subsequent purchase periods will commence, at the Plan Administrator's
discretion, either on the first day of each succeeding Quarter or of
each alternate succeeding Quarter. Accordingly, either four (4) or two
(2) separate purchase periods may commence in each subsequent calendar
year during which the Plan remains in existence. The Plan Administrator
shall have the authority to change the length of any purchase period by
announcement at least thirty (30) days prior to the commencement of such
purchase period and to determine whether subsequent purchase periods
shall be consecutive or overlapping. A purchase period may be
terminated by the Plan Administrator on any date of exercise if the Plan
Administrator determines that the termination of the purchase period is
in the best interests of the Company and its stockholders.
(c) The Participant shall be granted a separate purchase
right for each purchase period in which he/she participates. The
purchase right shall be granted on the first day of the purchase period
and shall be automatically exercised in (i) successive quarterly
installments on the last day of each Quarter such purchase right remains
outstanding, in the case of quarterly purchase periods, or (ii)
successive semi-annual installments on the last day of each alternate
Quarter such purchase right remains outstanding, in the case of semi-
annual purchase periods.
(d) An Employee may participate in only one purchase
period at a time. Accordingly, an Employee who wishes to join a new
purchase period must withdraw from the current purchase period in which
he/she is participating and must also enroll in the new purchase period
prior to the commencement date for that period.
(e) The acquisition of Stock through participation in the
Plan for any purchase period shall neither limit nor require the
acquisition of Stock by the Participant in any subsequent purchase
period.
(f) Under no circumstances shall any purchase rights
granted under the Plan be exercised, nor shall any shares of Stock be
issued hereunder, until such time as (i) the Plan shall have been
approved by the Company's stockholders and (ii) the Company shall have
complied with all applicable requirements of the Securities Act of 1933
(as amended), all applicable listing requirements of any securities
exchange on which the Stock is listed and all other applicable
requirements established by law or regulation.
V. ELIGIBILITY AND PARTICIPATION
(a) Every Employee of a Participating Company shall be
eligible to participate in the Plan on the first day of the first
purchase period following the Employee's commencement of service with
the Company or any Corporate Affiliate, but in no event shall
participation commence prior to the Effective Date.
(b) In order to participate in the Plan for a particular
purchase period, the Employee must complete the enrollment forms
prescribed by the Plan Administrator (including a purchase agreement and
a payroll deduction authorization) and file such forms with the Plan
Administrator (or its designate) prior to the commencement date of the
purchase period.
(c) The payroll deduction authorized by a Participant for
purposes of acquiring Stock under the Plan may be any multiple of 1% of
the Base Compensation paid to the Participant during the relevant
purchase period, up to a maximum of 10%. The deduction rate so
authorized shall continue in effect for the entire purchase period
unless the Participant shall, prior to the end of the purchase period
for which the purchase right is in effect, reduce the rate by filing the
appropriate form with the Plan Administrator (or its designate). The
reduced rate shall become effective as soon as practicable following the
filing of such form. Each Participant shall be permitted such a rate
reduction only four (4) times in each purchase period. The reduced
rate shall continue in effect for the entire purchase period and for
each subsequent purchase period, unless the Participant shall, prior to
the commencement of any subsequent purchase period, designate a
different rate (up to the 10% maximum) by filing the appropriate form
with the Plan Administrator (or its designate). The new rate shall
become effective for the first purchase period commencing after the
filing of such form. Payroll deductions, however, will automatically
cease upon the termination of the Participant's purchase right in
accordance with Section VII(d) or (e) below.
VI. STOCK SUBJECT TO PLAN
(a) The Stock purchasable by Participants under the Plan
shall, solely in the Board's discretion, be made available from either
authorized but unissued Stock or from reacquired Stock, including shares
of Stock purchased on the open market. The total number of shares of
Stock which may be issued under the Plan shall not exceed 1,000,000
shares (subject to adjustment under Section VI(b).
(b) In the event any change is made to the Stock
purchasable under the Plan by reason of any recapitalization, stock
dividend, stock split, combination of shares or other change affecting
the outstanding common stock of the Company as a class without receipt
of consideration, then appropriate adjustments shall be made by the Plan
Administrator to the class and maximum number of shares purchasable
under the Plan, the class and maximum number of shares purchasable per
Participant under any purchase right outstanding at the time or
purchasable per Participant over the term of the Plan, and the class and
number of shares and the price per share of the Stock subject to
outstanding purchase rights held by Participants under the Plan.
VII. PURCHASE RIGHTS
An Employee who participates in the Plan for a particular
purchase period shall have the right to purchase Stock on the purchase
dates designated by the Plan Administrator for such purchase period upon
the terms and conditions set forth below and shall execute a purchase
agreement embodying such terms and conditions and such other provisions
(not inconsistent with the Plan) as the Plan Administrator may deem
advisable.
(a) Purchase Price. The purchase price per share shall be
the lesser of (i) 85% of the fair market value of a share of Stock on
the date on which the purchase right is granted or (ii) 85% of the fair
market value of a share of Stock on the date the purchase right is
exercised. For purposes of determining such fair market value (and for
all other valuation purposes under the Plan), the fair market value per
share of Stock on any date shall be the closing selling price per share
on such date, as officially quoted on the principal exchange on which
the Stock is at the time traded or, if not traded on any exchange, the
mean of the highest bid and the lowest asked prices (or, if such
information is available, the closing price per share) of the Stock on
such date, as reported on the NASDAQ system. If there are no sales of
Stock on such day, then the closing selling price (or, to the extent
applicable, the mean of the highest bid and lowest asked prices) for the
Stock on the next preceding day for which there do exist such quotations
shall be determinative of fair market value.
(b) Number of Purchasable Shares. The number of shares
purchasable by a Participant on any particular purchase date shall be
the number of whole shares obtained by dividing the amount collected
from the Participant through payroll deductions during the quarterly or
semi-annual period beginning with the start of the purchase period or
the most recent purchase date in the same purchase period (whichever is
applicable), together with any amount carried over from the preceding
purchase date in the same purchase period pursuant to the provisions of
Section VII(f), by the purchase price in effect for such purchase date.
However, the maximum number of shares purchasable by the Participant
pursuant to any one outstanding purchase right shall not exceed 5,000
shares (subject to adjustment under Section VI(b)).
Under no circumstances shall purchase rights be granted
under the Plan to any Employee if such Employee would, immediately after
the grant, own (within the meaning of Section 424(d) of the Code), or
hold outstanding options or other rights to purchase, stock possessing
5% or more of the total combined voting power or value of all classes of
stock of the Company or any of its Corporate Affiliates.
(c) Payment. Payment for Stock purchased under the Plan
shall be effected by means of the Participant's authorized payroll
deductions. Such deductions shall begin on the first pay day coincident
with or immediately following the commencement date of the relevant
purchase period and shall terminate with the pay day ending with or
immediately prior to the last day of the purchase period. The amounts
so collected shall be credited to the Participant's individual account
under the Plan, but no interest shall be paid on the balance from time
to time outstanding in the account. The amounts collected from a
Participant may be commingled with the general assets of the Company and
may be used for general corporate purposes.
(d) Termination of Purchase Rights.
(i) A Participant may, prior to any purchase date,
terminate his/her outstanding purchase right under the Plan
by filing the prescribed notification form with the Plan
Administrator (or its designate). The Company will then
refund the payroll deductions which the Participant made
with respect to the terminated purchase right, and no
further amounts will be collected from the Participant with
respect to such terminated right.
(ii) The termination shall be irrevocable with
respect to the particular purchase period to which it
pertains and shall also require the Participant to re-enroll
in the Plan (by making a timely filing of a new purchase
agreement and payroll deduction authorization) if the
Participant wishes to resume participation in a subsequent
purchase period.
(e) Termination of Employment. If a Participant ceases
Employee status during any purchase period, then the Participant's
outstanding purchase right under the Plan shall immediately terminate
and all sums previously collected from the Participant and not
previously applied to the purchase of stock during such purchase period
shall be promptly refunded. However, should the Participant die or
become permanently disabled while in Employee status, then the
Participant or the person or persons to whom the rights of the deceased
Participant under the Plan are transferred by will or by the laws of
descent and distribution (the "successor") will have the election,
exercisable at any time prior to the purchase date for the quarterly or
semi-annual period in which the Participant dies or becomes permanently
disabled, to (i) withdraw all of the funds in the Participant's payroll
account at the time of his/her cessation of Employees status or
(ii) have such funds held for purchase of shares of Stock on the
purchase date. In no event, however, shall any further payroll
deductions be added to the Participant's account following his/her
cessation of Employee status.
For purposes of the Plan: (a) a Participant shall be
considered to be an Employee for so long as such Participant remains in
the employ of the Company or any other Participating Company under the
Plan and (b) a Participant shall be deemed to be permanently disabled if
he/she is unable, by reason of any medically determinable physical or
mental impairment expected to result in death or to be of continuous
duration of at least twelve (12) months, to engage in any substantial
gainful employment.
(f) Stock Purchase. Outstanding purchase rights shall be
automatically exercised in a series of successive installments as
provided in Section IV(c). The exercise shall be effected by applying
the amount credited to the Participant's account on the last date of the
Quarter, in the case of a purchase period in which purchases are
effected quarterly, or the last date of the alternate Quarter, in the
case of a purchase period in which purchases are effected semi-annually,
to the purchase of whole shares of Stock (subject to the limitations on
the maximum number of purchasable shares set forth in Section VII(b)) at
the purchase price in effect for such purchase date. Any amount
remaining in the Participant's account after such exercise shall be held
for the purchase of Stock on the next quarterly or semi-annual purchase
date within the purchase period; provided, however, that any amount not
applied to the purchase of Stock at the end of a purchase period shall
be refunded promptly after the close of the purchase period and any
amount not applied to the purchase of stock by reason by the
Section VII(b) limitations on the maximum number of purchasable shares
shall be refunded promptly after the quarterly or semi-annual purchase
date.
(g) Proration of Purchase Rights. Should the total number
of shares of Stock which are to be purchased pursuant to outstanding
purchase rights on any particular date exceed the number of shares then
available for issuance under the Plan, the Plan Administrator shall make
a pro-rata allocation of the available shares on a uniform and
nondiscriminatory basis, and any amounts credited to the accounts of
Participants shall, to the extent not applied to the purchase of Stock,
be refunded to the Participants.
(h) Rights as Stockholder. A Participant shall have no
rights as a stockholder with respect to shares covered by the purchase
rights granted to the Participant under the Plan until the shares are
actually purchased on the Participant's behalf in accordance with
Section VII(f). No adjustments shall be made for dividends,
distributions or other rights for which the record date is prior to the
date of such purchase.
A Participant shall be entitled to receive, as soon as
practicable after the date of each purchase, stock certificates for the
number of shares purchased on the Participant's behalf.
(i) Assignability. No purchase rights granted under the
Plan shall be assignable or transferable by a Participant except by will
or by the laws of descent and distribution, and the purchase rights
shall, during the lifetime of the Participant, be exercisable only by
such Participant.
(j) Merger or Liquidation of Company. In the event the
Company or its stockholders enter into an agreement to dispose of all or
substantially all of the assets or outstanding capital stock of the
Company by means of a sale, merger or reorganization in which the
Company will not be the surviving corporation (other than a
reorganization effected primarily to change the State in which the
Company is incorporated) or in the event the Company is liquidated, then
all outstanding purchase rights under the Plan shall automatically be
exercised immediately prior to such sale, merger, reorganization or
liquidation by applying all sums previously collected from Participants
pursuant to their payroll deductions in effect for such rights to the
purchase of whole shares of Stock, subject, however, to the applicable
limitations of Section VII(b).
VIII. ACCRUAL LIMITATIONS
(a) No Participant shall be entitled to accrue rights to
acquire Stock pursuant to any purchase right under this Plan if and to
the extent such accrual, when aggregated with (I) Stock rights accrued
under other purchase rights outstanding under this Plan and (II) similar
rights accrued under other employee stock purchase plans (within the
meaning of Section 423 of the Code) of the Company or its Corporate
Affiliates, would otherwise permit such Participant to purchase more
than $25,000 worth of stock of the Company or any Corporate Affiliate
(determined on the basis of the fair market value of such stock on the
date or dates such rights are granted to the Participant) for each
calendar year such rights are at any time outstanding.
(b) For purposes of applying the accrual limitations of
Section VIII(a), the right to acquire Stock pursuant to each purchase
right outstanding under the Plan shall accrue as follows:
(i) The right to acquire Stock under each such
purchase right shall accrue in a series of successive
quarterly or semi-annual installments as and when the
purchase right first becomes exercisable for each
installment as provided in Section IV(c).
(ii) No right to acquire Stock under any
outstanding purchase right shall accrue to the extent the
Participant has already accrued in the same calendar year
the right to acquire $25,000 worth of Stock (determined on
the basis of the fair market value on the date or dates of
grant) pursuant to that purchase right or one or more other
purchase rights which may have been held by the Participant
during such calendar year.
(iii) If by reason of the Section VIII(a)
limitations, the Participant's outstanding purchase right
does not accrue for a particular purchase date of any
purchase period, then the payroll deductions which the
Participant made during that quarterly or semi-annual period
with respect to such purchase right shall be promptly
refunded.
(c) In the event there is any conflict between the
provisions of this Article VIII and one or more provisions of the Plan
or any instrument issued thereunder, the provisions of this Article VIII
shall be controlling.
IX. STATUS OF PLAN UNDER FEDERAL TAX LAWS
(a) The Plan is designed to qualify as an employee stock
purchase plan under Section 423 of the Code. However, after the
Effective Date, the Plan Administrator may, at its discretion, cease to
administer the Plan as a qualified employee stock purchase plan under
Code Section 423. Accordingly, share purchases effected under the Plan
at any time after the Plan ceases to be administered as a qualified
employee stock purchase plan under Code Section 423 (whether pursuant to
purchase rights granted before or after the Plan ceases to be qualified)
shall result in taxable income to each Participant equal to the excess
of (i) the fair market value of the purchased shares on the purchase
date over (ii) the purchase price paid for such shares.
(b) To the extent required by law, the Company's
obligation to deliver shares to the Participant upon the exercise of any
outstanding purchase right shall be subject to the Participant's
satisfaction of all applicable federal, state and local income and
employment tax withholding requirements.
X. AMENDMENT AND TERMINATION
(a) The Board may from time to time alter, amend, suspend
or discontinue the Plan; provided, however, that no such action shall
become effective prior to the exercise of outstanding purchase rights at
the end of the quarterly or semi-annual period in which such action is
authorized. To the extent necessary to comply with Code Section 423,
the Company shall obtain stockholder approval in such a manner and to
such a degree as required.
(b) The Company shall have the right, exercisable in the
sole discretion of the Plan Administrator, to terminate the Plan
immediately following the end of a quarterly or semi-annual purchase
date. Should the Company elect to exercise such right, then the Plan
shall terminate in its entirety, and no further purchase rights shall
thereafter be granted, and no further payroll deductions shall
thereafter be collected, under the Plan.
XI. GENERAL PROVISIONS
(a) The Plan shall terminate upon the earlier of
(i) August 1, 2008 or (ii) the date on which all shares available for
issuance under the Plan shall have been sold pursuant to purchase rights
exercised under the Plan.
(b) All costs and expenses incurred in the administration
of the Plan shall be paid by the Company.
(c) Neither the action of the Company in establishing the
Plan, nor any action taken under the Plan by the Plan Administrator, nor
any provision of the Plan itself shall be construed so as to grant any
person the right to remain in the employ of the Company or any of its
Corporate Affiliates for any period of specific duration, and such
person's employment may be terminated at any time, with or without
cause.
(d) Governing Law. The Plan is to be construed in
accordance with and governed by the internal laws of the State of
California (as permitted by Section 1646.5 of the California Civil Code,
or any similar successor provision) without giving effect to any choice
of law rule that would cause the application of the laws of any
jurisdiction other than the internal laws of the State of California to
the rights and duties of the parties, except to the extent the internal
laws of the State of California are superseded by the laws of the United
States. Should any provision of the Plan be determined by a court of
law to be illegal or unenforceable, the other provisions shall
nevertheless remain effective and shall remain enforceable.