Photon
Dynamics, Inc.
2005 Equity Incentive
Plan
Stock
Option Agreement
(Incentive Stock Option
or Nonstatutory Stock Option)
Pursuant to your
Stock Option Grant Notice (“Grant Notice”) and this
Stock Option Agreement, Photon Dynamics, Inc. (the
“Company”) has granted you an option under its 2005
Equity Incentive Plan (the “Plan”) to purchase the
number of shares of the Company’s Common Stock indicated in
your Grant Notice at the exercise price indicated in your Grant
Notice. Defined terms not explicitly defined in this Stock Option
Agreement but defined in the Plan shall have the same definitions
as in the Plan.
The details of
your option are as follows:
1.
Vesting. Subject
to the limitations contained herein, your option will vest as
provided in your Grant Notice, provided that vesting will cease
upon the termination of your Continuous Service.
2.
Number of Shares and
Exercise Price. The number of shares of Common Stock
subject to your option and your exercise price per share referenced
in your Grant Notice may be adjusted from time to time for
Capitalization Adjustments.
3.
Exercise prior to Vesting
(“Early Exercise”). If permitted in your
Grant Notice (i.e., the “Exercise Schedule” indicates
that “Early Exercise” of your option is permitted) and
subject to the provisions of your option, you may elect at any time
that is both (i) during the period of your Continuous Service
and (ii) during the term of your option, to exercise all or
part of your option, including the nonvested portion of your
option; provided, however, that:
(a) a partial exercise of your option shall be deemed to
cover first vested shares of Common Stock and then the earliest
vesting installment of unvested shares of Common Stock;
(b) any shares of Common Stock so purchased from
installments that have not vested as of the date of exercise shall
be subject to the purchase option in favor of the Company as
described in the Company’s form of Early Exercise Stock
Purchase Agreement;
(c) you shall enter into the Company’s form of Early
Exercise Stock Purchase Agreement with a vesting schedule that will
result in the same vesting as if no early exercise had occurred;
and
(d) if your option is an Incentive Stock Option, then, to
the extent that the aggregate Fair Market Value (determined at the
time of grant) of the shares of Common Stock with respect to which
your option plus all other Incentive Stock Options you hold are
exercisable for the first time by you during any calendar year
(under all plans of the Company and its Affiliates) exceeds one
hundred thousand dollars ($100,000), your option(s) or portions
thereof
1.
that exceed
such limit (according to the order in which they were granted)
shall be treated as Nonstatutory Stock Options.
4.
Method of
Payment. Payment of the exercise price is due in full
upon exercise of all or any part of your option. You may elect to
make payment of the exercise price in cash or by check or in any
other manner permitted by your Grant Notice, which
may include one or more of the following:
(a) In the Company’s sole discretion at the time your
option is exercised and provided that at the time of exercise the
Common Stock is publicly traded and quoted regularly in The Wall
Street Journal , pursuant to a program developed under
Regulation T as promulgated by the Federal Reserve Board that,
prior to the issuance of Common Stock, results in either the
receipt of cash (or check) by the Company or the receipt of
irrevocable instructions to pay the aggregate exercise price to the
Company from the sales proceeds.
(b) Provided that at the time of exercise the Common Stock
is publicly traded and quoted regularly in The Wall Street
Journal , by delivery of already-owned shares of Common Stock
either that you have held for the period required to avoid a charge
to the Company’s reported earnings (generally six
(6) months) or that you did not acquire, directly or
indirectly from the Company, that are owned free and clear of any
liens, claims, encumbrances or security interests, and that are
valued at Fair Market Value on the date of exercise.
“Delivery” for these purposes, in the sole discretion
of the Company at the time you exercise your option, shall include
delivery to the Company of your attestation of ownership of such
shares of Common Stock in a form approved by the Company.
Notwithstanding the foregoing, you may not exercise your option by
tender to the Company of Common Stock to the extent such tender
would violate the provisions of any law, regulation or agreement
restricting the redemption of the Company’s stock.
(c) By a “net exercise” arrangement pursuant to
which the Company will reduce the number of shares of Common Stock
issued upon exercise by the largest whole number of shares with a
Fair Market Value that does not exceed the aggregate exercise
price; provided, however, the Company shall accept a cash or
other payment from you to the extent of any remaining balance of
the aggregate exercise price not satisfied by such holding back of
whole shares; provided, however, shares of Common Stock will
no longer be outstanding under an Option and will not be
exercisable thereafter to the extent that (i) shares are used
to pay the exercise price pursuant to the “net
exercise,” (ii) shares are delivered to you as a result
of such exercise, and (iii) shares are withheld to satisfy tax
withholding obligations.
5.
Whole Shares. You
may exercise your option only for whole shares of Common
Stock.
6.
Securities Law
Compliance. Notwithstanding anything to the contrary
contained herein, you may not exercise your option unless the
shares of Common Stock is
|
