Photon Dynamics, Inc. Amended and Restated 1995 Stock Option Plan
EXHIBIT 10.20.01
Photon Dynamics, Inc.
Amended and Restated 1995 Stock Option Plan
Amended and Restated 1995 Stock Option Plan
Stock Option Agreement
(Incentive Stock Option or Nonstatutory Stock Option)
(Incentive Stock Option or Nonstatutory Stock Option)
Pursuant to your Notice of Grant of Stock Options (“Grant Notice”) and this Stock Option
Agreement, Photon Dynamics, Inc. (the “Company”) has granted you an option under its Amended and
Restated 1995 Stock Option 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 as provided for in Section 3(b) of the Plan.
3. 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 either:
(a) In cash, personal cheek, certified cheek, bank draft, or postal or express money order
payable to the order of the Company; or
(b) 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; provided,
however, that in no event will the Company participate in any Regulation T program if such
participation would violate Section 13(k) of the Securities Exchange Act of 1934 (prohibiting
employer loans to officers and directors).
4. Whole Shares. You may exercise your option only for whole shares of Common
Stock.
5. Securities Law Compliance. Notwithstanding anything to the contrary
contained herein, you may not exercise your option unless the shares of Common Stock issuable upon
such exercise are then registered under the Securities Act of 1933, as amended (the “Securities
Act”) or, if such shares of Common Stock are not then so registered, the Company
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has determined that such exercise and issuance would be exempt from the registration requirements
of the Securities Act. The exercise of your option also must comply with other applicable laws and
regulations governing your option, and you may not exercise your option if the Company determines
that such exercise would not be in material compliance with such laws and regulations.
6. Term. You may not exercise your option before the commencement of its term or
after its term expires. The term of your option commences on the “Date of Grant” indicated in your
Grant Notice and expires upon the earliest of the following:
(a) ninety (90) days after the termination of your continuous service for any
reason other than your disability or death, provided that if during any part of such ninety (90)
day period your option is not exercisable solely because of the condition set forth in Section
5, your option shall not expire until the earlier of the “Expiration Date” indicated in
your Grant Notice or until it shall have been exercisable for an aggregate period of ninety (90)
days after the termination of your continuous service;
(b) three hundred sixty-five (365) days after the termination of your continuous service due
to your disability;
(c) three hundred sixty-five (365) days after your death if you die
either during your continuous service or within ninety (90) days after your continuous service
terminates;
(d) the Expiration Date indicated in your Grant Notice; or
(e) the day before the tenth (10th) anniversary of the Date of Grant
If your option is an incentive stock option, note that to obtain the federal income tax
advantages associated with an incentive stock option, the Code requires that at all times beginning
on the date of grant of your option and ending on the day three (3) months before the date of your
option’s exercise, you must be an employee of the Company or an Affiliate, except in the event of
your death or disability. The Company has provided for extended exercisability of your option under
certain circumstances for your benefit but cannot guarantee that your option will necessarily be
treated as an incentive stock option if you continue to provide services to the Company or an
Affiliate as a consultant or director after your employment terminates or if you otherwise exercise
your option more than three (3) months after the date your employment with the Company or an Affiliate terminates.
7. Exercise
(a) You may exercise the vested portion of your option (and the unvested portion
of your option if your Grant Notice so permits) during its term by delivering a Notice of Exercise
(in a form designated by the Company together with the exercise price to the Secretary of the
Company, or to such other person as the Company may designate, during regular business hours,
together with such additional documents as the Company may then require.
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(b) By exercising your option you agree that, as a condition to any exercise of your option,
the Company may require you to enter into an arrangement providing for the payment by you to the
Company of any tax withholding obligation of the Company arising by reason of (1) the exercise of
your option, (2) the lapse of any substantial risk of forfeiture to which the shares of
Common Stock are subject at the time of exercise, or (3) the disposition of shares of Common Stock
acquired upon such exercise.
(c) If your option is an incentive stock option, by exercising your option you agree that you
will notify the Company in writing within fifteen (15) days after the date of any
disposition of any of the shares of the Common Stock issued upon exercise of your option that
occurs within two (2) years after the date of your option grant or within one (1) year
after such shares of Common Stock are transferred upon exercise of your option.
8. Transferability. Your option is not transferable, except by will or by the laws
of descent and distribution, and is exercisable during your life only by you. Notwithstanding the
foregoing, by delivering written notice to the Company, in a form satisfactory to the Company, you
may designate a third party who, in the event of your death, shall thereafter be entitled to
exercise your option.
9. Option not a Service Contract. Your option is not an employment
or service contract, and nothing in your option shall be deemed to create in any way whatsoever any
obligation on your part to continue in the employ of the Company or an Affiliate, or of the Company
or an Affiliate to continue your employment. In addition, nothing in your option shall
obligate the Company or an Affiliate, their respective shareholders, boards of directors, officers
or employees to continue any relationship that you might have as a director or consultant for the
Company or an Affiliate.
10. Withholding Obligations.
(a) At the time you exercise your option, in whole or in part, or at any time thereafter as
requested by the Company, you hereby authorize withholding from payroll and any other amounts
payable to you, and otherwise agree to make adequate provision for (including by means of a
“broker-assisted exercise” pursuant to a program developed under Regulation T as
promulgated by the Federal Reserve Board to the extent permitted by the Company), any sums required
to satisfy the federal, state, local and foreign tax withholding obligations of the Company or an
Affiliate; if any, which arise in connection with the exercise of your option.
(h) Upon your request and subject to approval by the Company, in its sole discretion, and
compliance with any applicable legal conditions or restrictions, the Company may withhold from
fully vested shares of Common Stock otherwise issuable to you upon the exercise of your option a
number of whole shares of Common Stock having a fair market value, determined by the Company as of
the date of exercise, not in excess of the minimum amount of tax required to be withheld by law (or
such lower amount as may be necessary to avoid variable award accounting). If the date of
determination of any tax withholding obligation is deferred to a date later than the date of
exercise of your option, share withholding pursuant to the preceding sentence shall not be
permitted unless you make a proper and timely election under Section 83(b) of the Code, covering
the aggregate number of shares of Common Stock acquired upon such
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exercise with respect to which such determination is otherwise deferred, to accelerate the
determination of such tax withholding obligation to the date of exercise of your option.
Notwithstanding the filing of such election, shares of Common Stock shall be withheld solely from
fully vested shares of Common Stock determined as of the date of exercise of your option that are
otherwise issuable to you upon such exercise. Any adverse consequences to you arising in connection
with such share withholding procedure shall be your sole responsibility.
(c) You may not exercise your option unless the tax withholding obligations of the
Company and/or any Affiliate are satisfied. Accordingly, you may not be able to exercise your
option when desired even though your option is vested, and the Company shall have no obligation to
issue a certificate for such shares of Common Stock or release such shares of Common Stock from any
escrow provided for herein unless such obligations are satisfied.
11. Notices. Any notices provided for in your option or the Plan shall be given in writing and
shall be deemed effectively given upon receipt or; in the case of notices delivered by mail by the
Company to you, five (5) days after deposit in the United States mail, postage prepaid,
addressed to you at the last address you provided to the Company.
12. Governing Plan Document. Your option is subject to all the provisions of the
Plan, the provisions of which are hereby made a part of your option, and is further subject to all
interpretations, amendments, rules and regulations, which may from time to time be promulgated and
adopted pursuant to the Plan. In the event of any conflict between the provisions of your option
and those of the Plan, the provisions of the Plan shall control.
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