10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 27, 2009

or

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission file number 000-31581

OPLINK COMMUNICATIONS, INC.

(Exact name of registrant as specified in its charter)

Delaware	No. 77-0411346
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

46335 Landing Parkway, Fremont, CA 94538
(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (510) 933-7200

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o  Accelerated filer þ  Non-accelerated filer   o
(Do not check if a smaller reporting company) Smaller Reporting Company o 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o

The number of shares of the Registrant’s common stock outstanding as of October 30, 2009 was 20,754,182.

OPLINK COMMUNICATIONS, INC.

FORM 10-Q
TABLE OF CONTENTS

	Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited):
Condensed Consolidated Balance Sheets — September 30, 2009 and June 30, 2009	3
Condensed Consolidated Statements of Operations — Three months ended September 30, 2009 and 2008	4
Condensed Consolidated Statements of Cash Flows — Three months ended September 30, 2009 and 2008	5
Notes to Condensed Consolidated Financial Statements	7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3. Quantitative and Qualitative Disclosures About Market Risk	31
Item 4. Controls and Procedures	32
PART II. OTHER INFORMATION
Item 1. Legal Proceedings	32
Item 1A. Risk Factors	32
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	34
Item 3. Defaults Upon Senior Securities	34
Item 4. Submission of Matters to a Vote of Security Holders	34
Item 5. Other Information	34
Item 6. Exhibits	34
SIGNATURES	36
EX-10.1
EX-10.2
EX-10.3
EX-31.1
EX-31.2
EX-32.1
EX-32.2

2

PART I. FINANCIAL INFORMATION

ITEM 1 — FINANCIAL STATEMENTS

OPLINK COMMUNICATIONS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	September 30,			June 30,
	2009			2009
	(In thousands, except share
	and per share data)
ASSETS
Current assets:
Cash and cash equivalents	$	53,266		$	49,702
Short-term investments		125,390			115,774
Accounts receivable, net		27,222			29,023
Inventories		7,907			10,031
Prepaid expenses and other current assets		3,092			2,648
Total current assets		216,877			207,178
Long-term investments		—			3,180
Property, plant and equipment, net		29,145			30,318
Intangible assets, net		7,902			8,848
Other assets		424			423
Total assets	$	254,348		$	249,947
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	6,908		$	7,580
Accrued liabilities		10,750			10,044
Income taxes payable		229			644
Accrued transitional costs for contract manufacturing		160			160
Total current liabilities		18,047			18,428
Income taxes payable, non-current		2,923			2,816
Other non-current liabilities		678			676
Total liabilities		21,648			21,920
Commitments and contingencies (Note 14)
Stockholders’ equity:
Common stock, $0.001 par value, 34,000,000 shares authorized; 20,654,233 and 20,497,592 shares issued and outstanding as of September 30, 2009 and June 30, 2009, respectively		21			20
Additional paid-in capital		455,838			453,083
Accumulated other comprehensive income		8,354			8,246
Accumulated deficit		(231,513	)		(233,322	)
Total stockholders’ equity		232,700			228,027
Total liabilities and stockholders’ equity	$	254,348		$	249,947

(1) The condensed consolidated balance sheet at June 30, 2009 has been derived from the audited consolidated financial statements at that date.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

3

OPLINK COMMUNICATIONS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended
	September 30,
	2009			2008
	(in thousands, except per share data)
Revenues	$	33,565		$	42,952
Cost of revenues:
Cost of revenues		23,634			36,645
Stock compensation expense		99			118
Total cost of revenues		23,733			36,763
Gross profit		9,832			6,189
Operating expenses:
Research and development:
Research and development		2,225			3,282
Stock compensation expense		269			223
Total research and development		2,494			3,505
Sales and marketing:
Sales and marketing		2,086			2,257
Stock compensation expense		328			315
Total sales and marketing		2,414			2,572
General and administrative:
General and administrative		1,721			2,666
Stock compensation expense		950			911
Total general and administrative		2,671			3,577
Amortization of intangible assets		404			412
Total operating expenses		7,983			10,066
Income (loss) from operations		1,849			(3,877	)
Interest and other income, net		274			1,040
Gain (loss) on sale or disposal of assets		124			(119	)
Income (loss) before provision for income taxes		2,247			(2,956	)
Provision for income taxes		(438	)		(456	)
Net income (loss)	$	1,809		$	(3,412	)
Net income (loss) per share:
Basic	$	0.09		$	(0.16	)
Diluted	$	0.09		$	(0.16	)
Shares used in per share calculation:
Basic		20,566			20,757
Diluted		21,173			20,757

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

4

OPLINK COMMUNICATIONS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Three Months Ended
	September 30,
	2009			2008
	(In thousands)
Cash flows from operating activities:
Net income (loss)	$	1,809		$	(3,412	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization of property and equipment		1,666			1,835
Amortization of intangible and other assets		946			954
Stock compensation expense		1,646			1,567
Provision for doubtful accounts		—			148
Inventory charges		—			4,065
Amortization of premium (discount) on investments		9			(146	)
(Gain) loss on sale or disposal of assets		(124	)		119
Other		(6	)		(341	)
Change in assets and liabilities:
Accounts receivable		1,795			1,356
Inventories		2,105			401
Prepaid expenses and other current assets		(445	)		(382	)
Other assets		18			(7	)
Accounts payable		(672	)		(1,579	)
Accrued liabilities and other liabilities		386			(137	)
Net cash provided by operating activities		9,133			4,441
Cash flows from investing activities:
Purchases of available-for-sale investments		(43,974	)		(5,033	)
Sales and maturities of available-for-sale investments		37,685			28,019
Proceeds from sales of property and equipment		147			355
Purchases of property and equipment		(541	)		(462	)
Net cash (used in ) provided by investing activities		(6,683	)		22,879
Cash flows from financing activities:
Proceeds from issuance of common stock		1,109			353
Net cash provided by financing activities		1,109			353
Effect of exchange rate changes on cash and cash equivalents		5			(224	)
Net increase in cash and cash equivalents		3,564			27,449
Cash and cash equivalents, beginning of period		49,702			72,001
Cash and cash equivalents, end of period	$	53,266		$	99,450

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

5

OPLINK COMMUNICATIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(CONTINUED FROM PREVIOUS PAGE)

	Three Months Ended
	September 30,
	2009		2008
	(In thousands)
Supplemental disclosures of cash flow information:
Cash paid during the period for income taxes	$	749,000	$	186,000
Cash paid during the period for interest	$	—	$	—

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

6

OPLINK COMMUNICATIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Description of Business. Oplink Communications, Inc. (“Oplink” or the “Company”) was incorporated in California in September 1995 and was later reincorporated in Delaware in September 2000. The Company is headquartered in Fremont, California and has manufacturing, design and research and development facilities in Zhuhai, Shanghai and Wuhan, China, in Taiwan and in Calabasas, California.

     Oplink began selling its products in 1996. The Company’s product portfolio includes solutions for next-generation, all-optical dense and coarse wavelength division multiplexing (“DWDM” and “CWDM,” respectively), optical amplification, switching and routing, monitoring and conditioning, and line transmission applications. Oplink’s addressable markets include long-haul networks, metropolitan area networks (“MANs”), local area networks (“LANs”) and fiber-to-the-home (“FTTH”) networks. The Company’s customers include telecommunications, data communications and cable TV equipment manufacturers located around the globe.

     Oplink offers its customers design, integration and optical manufacturing solutions (“OMS”) for the production and packaging of highly-integrated optical subsystems and turnkey solutions, based upon a customer’s specific product design and specifications. Oplink also offers solutions with lower levels of component integration for customers that place more value on flexibility than would be provided with turnkey solutions.

2. Basis of Presentation. The unaudited condensed consolidated financial statements included herein have been prepared by the Company in conformity with accounting principles generally accepted in the United States of America and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures, normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America, have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, these unaudited condensed consolidated financial statements contain all adjustments (consisting only of normal recurring adjustments) necessary to present fairly the financial position of the Company at September 30, 2009, the results of its operations for the three-month periods ended September 30, 2009 and 2008 and its cash flows for the three-month periods ended September 30, 2009 and 2008. The results of operations for the periods presented are not necessarily indicative of those that may be expected for the full year. The condensed consolidated financial statements presented herein have been prepared by management, without audit by independent auditors who do not express an opinion thereon, and should be read in conjunction with the audited consolidated financial statements and notes thereto for the fiscal year ended June 30, 2009 included in the Company’s Annual Report on Form 10-K.

     The Company operates and reports using a fiscal year, which ends on the Sunday closest to June 30. Interim fiscal quarters end on the Sundays closest to each calendar quarter end. For presentation purposes, the Company presents each fiscal year as if it ended on June 30. The Company presents each of the fiscal quarters as if it ended on the last day of each calendar quarter. September 27, 2009 represents the Sunday closest to the period ended September 30, 2009. Fiscal 2010 and fiscal 2009 are 52-week fiscal years. The quarter ending December 31, 2009 is a 14-week fiscal period.

     The consolidated financial statements include the accounts of the Company and its wholly and majority- owned subsidiaries. The ownership interests of minority investors are recorded as minority interests. All significant intercompany accounts and transactions have been eliminated in consolidation. With the exception of the Company’s Optical Communication Products, Inc. (“OCP”) subsidiaries, the Company presents the financial information of its consolidated foreign operating subsidiaries in its consolidated financial statements utilizing accounts as of a date one month earlier than the accounts of its parent company, U.S. subsidiary and its non-operating non-U.S. subsidiaries to ensure timely reporting of consolidated results.

7

     The Company conducts its business within one business segment and has no organizational structure dictated by product, service lines, geography or customer type.

     Certain items previously reported in prior periods’ consolidated financial statements have been reclassified to conform to the current period presentation. Such reclassifications had no effect on previously reported total assets, stockholders’ equity, or net income (loss).

     In June 2009, the Financial Accounting Standards Board (“FASB”) established the Accounting Standards Codification (“Codification” or “ASC”) as the official single source of authoritative U.S. generally accepted accounting principles (“GAAP”). In the first quarter of fiscal 2010, the Company adopted the Codification and all future references to authoritative accounting literature will be referenced in accordance with the ASC. Since the Codification is not intended to change GAAP, the adoption had no impact on the Company’s consolidated financial position, results of operations or cash flows.

     The Company has reviewed and evaluated events subsequent to the end of the first quarter of fiscal 2010, September 27, 2009 through November 6, 2009, the date that the consolidated financial statements were issued. Refer to Note 17 for disclosure on subsequent events.

3. Risks and Uncertainties. There are a number of risks and uncertainties facing the Company that could have a material adverse effect on the Company’s financial condition, operating results or cash flows. These risks and uncertainties include, but are not limited to, a further and sustained downturn in the telecommunications industry or the overall economy in the United States and other parts of the world, possible further reductions in customer orders, intense competition in the Company’s target markets and potential pricing pressure that may arise from changing supply or demand conditions in the industry. In addition, the Company obtains most of its critical materials from a single or limited number of suppliers and generally does not have long-term supply contracts with them. The Company could experience discontinuation of key components, price increases and late deliveries from its suppliers. Also, substantially all of the Company’s manufacturing operations are located in China and are subject to laws and regulations of China. These and other risks and uncertainties facing the Company are described from time to time in the Company’s periodic reports filed with SEC.

4. Net Income (Loss) Per Share. Basic net income (loss) per share is computed by dividing the net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per share is computed by dividing the net income (loss) for the period by the weighted average number of common and common equivalent shares outstanding during the period, if dilutive. Potentially dilutive common equivalent shares are composed of the incremental common shares issuable upon the exercise of stock options, the vesting of restricted stock units (“RSUs”) and purchases under the employee stock purchase plan. The following is a reconciliation of the numerators and denominators of the basic and diluted net income (loss) per share computations and the antidilutive common stock equivalents excluded from the computations for the periods presented (in thousands, except per share data):

8

	Three Months Ended
	September 30,
	2009		2008
Numerator:
Net income (loss)	$	1,809	$	(3,412	)
Denominator:
Weighted average shares outstanding — basic		20,566		20,757
Effect of dilutive potential common shares		607		—
Weighted average shares outstanding — diluted		21,173		20,757
Net income (loss) per share — basic	$	0.09	$	(0.16	)
Net income (loss) per share — diluted	$	0.09	$	(0.16	)
Antidilutive stock options and restricted stock units not included in income per share calculation		2,644		4,185

5. Comprehensive Income (Loss). Comprehensive income (loss) is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. The components of comprehensive income (loss) consist of foreign currency translation adjustments, foreign currency transaction gains and losses from intercompany transactions and balances for which settlement is not planned or anticipated in the foreseeable future, and changes in unrealized gains and losses on investments. The balance of accumulated other comprehensive income is as follows (in thousands):

	September 30,		June 30,
	2009		2009
Accumulated other comprehensive income:
Cumulative translation adjustment	$	8,291	$	8,329
Unrealized gain (loss) on investments, net		63		(83	)
	$	8,354	$	8,246

     The reconciliation of net income (loss) to comprehensive income (loss) for the three months ended September 30, 2009 and 2008 is as follows (in thousands):

	Three Months Ended
	September 30,
	2009			2008
Net income (loss)	$	1,809		$	(3,412	)
Change in cumulative translation adjustment		(38	)		501
Change in unrealized gain on investments, net		146			15
Total comprehensive income (loss)	$	1,917		$	(2,896	)

6. Short-Term and Long-Term Investments. The Company generally invests its excess cash in certificates of deposit, debt instruments of the U.S. Treasury, government agencies and corporations with strong credit ratings. Such investments are made in accordance with the Company’s investment policy, which establishes guidelines relative to diversification and maturities designed to maintain safety and liquidity. These guidelines are periodically reviewed and modified to take advantage of trends in yields and interest rates. Available-for-sale investments are reported at their fair value based on quoted market prices. Unrealized gains and losses on these securities are reported as a separate component of accumulated other comprehensive income (loss) until realized. Held-to-maturity investments are reported at amortized costs.

9

     Short-term and long-term investments at September 30, 2009 and June 30, 2009 consist of the following (in thousands):

	September 30, 2009
					Gross		Gross
	Carrying		Amortized		Unrealized		Unrealized			Estimated
	Value		Cost		Gains		Losses			Fair Value
Short-term investments:
Certificates of deposit	$	6,960	$	6,960	$	—	$	—		$	6,960
United States government agencies		10,006		10,000		6		—			10,006
United States Treasury		53,957		53,944		18		(5	)		53,957
Corporate securities		54,467		54,423		72		(8	)		54,487
Total short-term investments		125,390		125,327		96		(13	)		125,410
Total investments	$	125,390	$	125,327	$	96	$	(13	)	$	125,410

	June 30, 2009
					Gross		Gross
	Carrying		Amortized		Unrealized		Unrealized			Estimated
	Value		Cost		Gains		Losses			Fair Value
Short-term investments:
Certificates of deposit	$	3,140	$	3,140	$	—	$	—		$	3,140
United States government agencies		10,004		10,001		3		(2	)		10,002
United States Treasury		48,971		48,944		27		—			48,971
Corporate securities		53,659		53,772		13		(126	)		53,659
Total short-term investments		115,774		115,857		43		(128	)		115,772
Long-term investments:
Corporate securities		3,180		3,180		—		—			3,180
Total long-term investments		3,180		3,180		—		—			3,180
Total investments	$	118,954	$	119,037	$	43	$	(128	)	$	118,952

     The amortized cost and fair value of available-for-sale and held-to-maturity investments at September 30, 2009 and June 30, 2009 are presented in the following tables (in thousands):

	September 30, 2009
			Gross		Gross
	Amortized		Unrealized		Unrealized			Estimated
	Cost		Gains		Losses			Fair Value
Available-for-sale investments:
Certificates of deposit	$	6,960	$	—	$	—		$	6,960
United States government agencies		5,000		6		—			5,006
United States Treasury		53,944		18		(5	)		53,957
Corporate securities		51,263		52		(8	)		51,307
Total available-for-sale investments		117,167		76		(13	)		117,230
Held-to-maturity investments:
Corporate securities		3,160		20		—			3,180
United States government agencies		5,000		—		—			5,000
Total held-to-maturity investments		8,160		20		—			8,180
Total investments	$	125,327	$	96	$	(13	)	$	125,410

10

	June 30, 2009
			Gross		Gross
	Amortized		Unrealized		Unrealized			Estimated
	Cost		Gains		Losses			Fair Value
Available-for-sale investments:
Certificates of deposit	$	3,140	$	—	$	—		$	3,140
United States government agencies		5,000		3		—			5,003
United States Treasury		48,944		27		—			48,971
Corporate securities		53,772		13		(126	)		53,659
Total available-for-sale investments		110,856		43		(126	)		110,773
Held-to-maturity investments:
Corporate securities		3,180		—		—			3,180
United States government agencies		5,001		—		(2	)		4,999
Total held-to-maturity investments		8,181		—		(2	)		8,179
Total investments	$	119,037	$	43	$	(128	)	$	118,952

     There were no gross realized gains (losses) on sales of available-for-sale or held-to-maturity securities for the three months ended September 30, 2009 or 2008. The unrealized losses on available-for-sale securities are primarily due to decreases in the fair value of debt securities as a result of changes in market interest rates. The Company has the intent and the ability to hold these securities for a reasonable period of time sufficient for a forecasted recovery of fair value up to (or beyond) the initial cost of the investment. The Company expects to realize the full value of all of these investments upon maturity. In addition, the Company does not believe that it will be required to sell these securities to meet its cash or working capital requirements or contractual or regulatory obligations. Therefore, the Company has determined that the gross unrealized losses on its available-for-sale securities at September 30, 2009 are temporary in nature. The following table provides a breakdown of the Company’s available-for-sale securities with unrealized losses as of September 30, 2009 (in thousands):

	September 30, 2009
	In Loss Position
	< 12 months
			Gross
	Fair		Unrealized
	Value		Losses
Available-for-sale investments:
United States Treasury	$	9,975	$	(5	)
Corporate securities		16,107		(8	)
Total available-for-sale investments in loss position	$	26,082	$	(13	)

11

     The amortized cost and estimated fair value of debt securities at September 30, 2009 and June 30, 2009 by contractual maturities are shown below (in thousands):

	September 30, 2009				June 30, 2009
	Amortized		Estimated		Amortized		Estimated
	Cost		Fair Value		Cost		Fair Value
Available-for-sale investments:
Due in one year or less	$	117,167	$	117,230	$	110,856	$	110,773
Total available-for-sale investments		117,167		117,230		110,856		110,773
Held-to-maturity investments:
Due in one year or less		8,160		8,180		5,001		4,999
Due in one year to five years		—		—		3,180		3,180
Total held-to-maturity investments		8,160		8,180		8,181		8,179
Total investments	$	125,327	$	125,410	$	119,037	$	118,952

7. Fair Value Accounting. Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities, which are required to be recorded at fair value, the Company considers the principal or most advantageous market in which the Company would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as inherent risk, transfer restrictions and credit risk. The Company applies the fair value hierarchy which has the following three levels of inputs to measure fair value:

• Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date;

• Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and

• Level 3 inputs are unobservable inputs for the asset or liability.

     The Company’s Level 1 financial assets generally include money market funds. The Company’s Level 2 financial assets generally include United States Treasury securities, United States government agency debt securities, certificates of deposit, commercial paper, and corporate bonds.

     The Company adopted the authoritative guidance on fair value measurement for financial assets and financial liabilities effective June 30, 2008 and for nonfinancial assets and liabilities, except for items that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually) effective June 29, 2009.

     Items Measured at Fair Value on a Recurring Basis

     The Company did not have any financial liabilities that are measured at fair value at September 30, 2009. The following table presents the Company’s financial assets, excluding accrued interest components, which are measured at fair value on a recurring basis at September 30, 2009 consistent with the fair value hierarchy (in thousands):

12

	September 30, 2009
	Level 1		Level 2		Level 3		Total
Financial assets:
Money market funds	$	29,818	$	—	$	—	$	29,818
Certificates of deposit		—		6,960		—		6,960
United States government agencies		—		5,006		—		5,006
United States Treasury		—		63,957		—		63,957
Corporate securities		—		51,307		—		51,307
Total financial assets	$	29,818	$	127,230	$	—	$	157,048
Financial liabilities	$	—	$	—	$	—	$	—

     As of September 30, 2009, the Company did not have any assets or liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3).

     Items Measured at Fair Value on a Nonrecurring Basis

     Certain assets that are subject to nonrecurring fair value measurement are not included in the table above. These assets include cost method investments in private companies. The Company did not record any other-than-temporary impairment charges for these investments during the three months ended September 30, 2009 or 2008.

8. Inventories. Inventories are stated at the lower of cost or market. Inventory cost is determined using standard costs, which approximates actual cost on a first-in, first-out basis. Inventories consist of (in thousands):

	September 30,		June 30,
	2009		2009
Inventories:
Raw materials	$	6,727	$	7,809
Work-in-process		1,180		2,222
Total	$	7,907	$	10,031

9. Intangible Assets, Net. The following table presents details of the intangible assets acquired as a result of acquisitions as of September 30, 2009 and June 30, 2009 (in thousands):

	Estimated
	Useful Life		Gross		Accumulated
September 30, 2009	(in Years)		Amount		Amortization		Net
Technology		4	$	8,673	$	4,445	$	4,228
Trade name		6		1,595		541		1,054
Customer relationships		3-4		5,481		2,861		2,620
Backlog		1		97		97		—
Total			$	15,846	$	7,944	$	7,902

	Estimated
	Useful Life		Gross		Accumulated
June 30, 2009	(in Years)		Amount		Amortization		Net
Technology		4	$	8,673	$	3,903	$	4,770
Trade name		6		1,595		474		1,121
Customer relationships		3-4		5,481		2,524		2,957
Backlog		1		97		97		—
Total			$	15,846	$	6,998	$	8,848

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     The following table presents details of the amortization expense of intangible and other assets as reported in the condensed consolidated statements of operations (in thousands):

	Three Months Ended
	September 30,
	2009		2008
Reported as:
Cost of revenues	$	542	$	542
Operating expenses		404		412
Total	$	946	$	954

     The future amortization of intangible assets is as follows (in thousands):

	Amount
Fiscal years ending June 30,
2010	$	2,836
2011		3,677
2012		1,066
2013		260
2014		63
After 2014		—
	$	7,902

10. Accrued Liabilities. Accrued liabilities consist of (in thousands):

	September 30,		June 30,
	2009		2009
Accrued liabilities:
Payroll and related expenses	$	3,383	$	3,120
Employee withholdings and related expenses		958		586
Accrued sales commission		671		535
Accrued warranty		371		371
Accrued professional fees		860		1,561
Accrued sales return		598		595
Advance deposits from customers		248		123
Other		3,661		3,153
	$	10,750	$	10,044

11. Product Warranties. The Company provides reserves for the estimated cost of product warranties at the time revenue is recognized based on its historical experience of known product failure rates and expected material and labor costs to provide warranty services. The Company generally provides a one-year warranty on its products. Additionally, from time to time, specific warranty accruals may be made if unforeseen technical problems arise. Alternatively, if estimates are determined to be greater than the actual amounts necessary, the Company may reverse a portion of such provisions in future periods.

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     Changes in the warranty liability, which is included as a component of “Accrued liabilities” on the condensed consolidated balance sheets as disclosed in Note 10, is as follows (in thousands):

	Three Months Ended
	September 30,
	2009			2008
Balance at the beginning of the period	$	371		$	286
Accruals for warranties issued during the period		59			85
Accruals related to pre-existing warranties including expirations and changes in estimates		14			25
Cost of warranty repair		(73	)		(50	)
Balance at the end of the period	$	371		$	346

12. Stock Compensation. Stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense over the employee requisite service period. The Company’s stock compensation is generally accounted for as an equity instrument. The effect of recording stock compensation for the three months ended September 30, 2009 and 2008 was as follows (in thousands, except per share data):

	Three Months Ended
	September 30,
	2009			2008
Stock-based compensation expense by type of award:
Employee stock options	$	1,015		$	1,116
Restricted stock awards and restricted stock units		398			223
Employee stock purchase plan		233			228
Total stock-based compensation		1,646			1,567
Tax effect on stock-based compensation		—			—
Net effect on net income (loss)	$	1,646		$	1,567
Effect on net income (loss) per share:
Basic	$	(0.08	)	$	(0.08	)
Diluted	$	(0.08	)	$	(0.08	)

     Forfeitures are estimated at the time of grant and revised if necessary in subsequent periods if actual forfeitures differ from those estimates. Changes in estimated forfeitures will be recognized through a cumulative catch-up adjustment in the period of change and will also impact the amount of compensation expense to be recognized in future periods.

     During the three months ended September 30, 2009 and 2008, the Company granted 26,000 and 277,980 stock options, respectively, with an estimated total grant-date fair value of $169,000 and $1.7 million, respectively. In addition, the Company granted 479,733 and 16,000 restricted stock awards (“RSAs”) and restricted stock units (“RSUs”), with a total grant-date fair value of $6.7 million and $223,000 during the three months ended September 30, 2009 and 2008, respectively. The Company estimated that the stock compensation expense for the awards granted in the three months ended September 30, 2009 and 2008 not expected to vest was $1.2 million and $266,000, respectively.

     As of September 30, 2009, the unrecorded deferred stock compensation balance related to stock options to purchase Oplink common stock was $6.5 million which will be recognized over an estimated weighted average amortization period of 2.1 years. The unrecorded deferred stock compensation balance related to RSUs was $5.1 million which will be recognized over an estimated weighted average amortization period of 3.9 years. Approximately $8,000 of stock compensation was capitalized as inventory at September 30, 2009 and June 30, 2009.

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     Valuation Assumptions

     The Company estimates the fair value of stock options and purchase rights under the Company’s employee stock purchase plan using a Black-Scholes valuation model. The fair value of each option grant is estimated on the date of grant using the Black-Scholes valuation model and the straight-line attribution approach with the following weighted-average assumptions:

	Three Months Ended
	September 30,
	2009		2008
Risk-free interest rate		2.49%		2.97%
Expected term	4.6 years		4.6 years
Expected dividends		0%		0%
Volatility		54%		49%

     No purchase rights were granted under the Company’s employee stock purchase plan during the three months ended September 30, 2009 or 2008.

     The dividend yield of zero is based on the fact that the Company has never paid cash dividends and has no present intention to pay cash dividends. Expected volatility is based on the historical volatility of the Company’s common stock. The risk-free interest rates are taken from the Daily Federal Yield Curve Rates as of the grant dates as published by the Federal Reserve and represent the yields on actively traded Treasury securities for terms equal to the expected term of the options or purchase rights. The expected term calculation for stock options is based on the observed historical option exercise behavior and post-vesting forfeitures of options by the Company’s employees. The expected term assumption for purchase rights is based on the average exercise date for the four purchase periods in each 24-month offering period.

     The weighted-average grant date fair value for options to purchase Oplink common stock granted under the Company’s stock option plans was $6.49 and $6.09 for the three months ended September 30, 2009 and 2008, respectively.

     Equity Incentive Program

     Oplink adopted the 2000 Equity Incentive Plan (the “2000 Plan”) in July 2000. The 2000 Plan provides for the grant of stock awards to employees, directors and consultants. These stock awards include incentive stock options to employees, including officers and employee directors, and nonstatutory stock options, RSAs, RSUs, stock bonuses and stock purchase rights to employees, directors and consultants. Options granted under the 2000 Plan must be granted with exercise prices not less than 100% and 85% for incentive and nonqualified stock options, respectively, of the fair value of the Company’s common stock on the date of grant. Options granted to stockholders who own greater than 10% of the Company’s outstanding stock must be issued with exercise prices not less than 110% of the fair value of the Company’s common stock on the date of grant. Options under the 2000 Plan generally become exercisable at a rate of 25% during the first year of the vesting period and then at a rate of 1/48 per month thereafter. Options will expire, if not exercised, upon the earlier of 10 years from the date of grant (five years if the option is granted to a 10% stockholder) or generally 90 days after termination as an employee of the Company. As of September 30, 2009, there were stock options outstanding to purchase 3,624,262 shares of common stock and RSUs outstanding representing 463,733 shares of common stock under the 2000 Plan, with 1,411,716 shares remaining available for grant under the 2000 plan.

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     The following table summarizes activity under the equity incentive plans for the indicated periods:

							Weighted		Restricted			Weighted
				Number of			Average		Stock			Average
	Awards Available			Options			Exercise		Awards/Units			Grant Date
	for Grant			Outstanding			Price		Outstanding			Fair Value
Balance, June 30, 2009		1,876,918			3,795,130		$	14.0630		—		$	—
Granted		(505,733	)		26,000			13.9000		479,733			13.9000
Exercised or vested		—			(140,641	)		7.8841		(16,000	)		13.9000
Cancelled or forfeited		56,227			(56,227	)		33.0703		—			—
Expired (1)		(15,696	)		—			—		—			—
Balance, September 30, 2009		1,411,716			3,624,262		$	14.0067		463,733		$	13.9000

(1) In connection with the acquisition of OCP, Oplink assumed outstanding stock options issued pursuant to OCP’s stock option plans and converted them into options to purchase shares of Oplink’s common stock pursuant to conversion terms stated in the merger agreement. Stock options that were granted and subsequently cancelled are not available for future grant.

     The options outstanding and exercisable at September 30, 2009 were in the following exercise price ranges:

	Options Outstanding								Options Vested and Exercisable
	at September 30, 2009								at September 30, 2009
			Weighted								Weighted
			Average								Average
			Remaining		Weighted		Aggregate				Remaining		Weighted		Aggregate
			Contractual		Average		Intrinsic				Contractual		Average		Intrinsic
Range of Exercise	Number		Life		Exercise		Value		Number		Life		Exercise		Value
Price	Outstanding		(in Years)		Price		(in thousands)		Outstanding		(in Years)		Price		(in thousands)
$1.0000 - $5.00		414,904		3.1	$	4.62	$	3,979		414,904		3.1	$	4.62	$	3,979
$5.0001 - $8.00		393,408		3.9		5.78		3,317		343,558		3.2		5.51		2,988
$8.0001 - $10.00		47,199		2.3		8.70		260		47,199		2.3		8.70		260
$10.0001 - $11.00		485,711		8.1		10.09		2,001		201,819		7.4		10.09		831
$11.0001 - $13.00		270,428		7.6		12.18		550		138,312		6.6		12.40		250
$13.0001 - $15.00		691,755		7.5		13.68		401		367,372		6.6		13.65		234
$15.0001 - $18.00		267,191		6.7		17.45		—		191,658		6.4		17.43		—
$18.0001 - $20.00		193,370		4.3		18.87		—		167,810		4.0		18.81		—
$20.0001 - $25.00		753,170		6.7		20.24		—		611,824		6.7		20.24		—
$25.0001 - $35.00		70,059		0.9		31.40		—		69,977		0.9		31.40		—
$42.0000 - $158.00		37,067		1.0		74.21		—		37,067		1.0		74.21		—
		3,624,262		6.0	$	14.10	$	10,508		2,591,500		5.2	$	14.21	$	8,542
Vested and expected to vest		3,547,094		6.0	$	14.04	$	10,335

     As of September 30, 2009 and June 30, 2009, options to purchase 2,591,500 and 2,579,605 shares at weighted average exercise prices of $14.21 and $14.21 per share, respectively, were vested and exercisable.

     The aggregate intrinsic value in the table above represents the total pretax intrinsic value, based on the Company’s closing stock price of $14.21 as of September 25, 2009, which would have been received by the option holders had all option holders exercised their options as of that date. The total number of in-the-money options exercisable as of September 30, 2009 was 1,418,608. The total intrinsic value of options exercised during the three months ended September 30, 2009 and 2008 was $795,000 and $136,000, respectively. The total cash received by

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the Company from employees as a result of employee stock option exercises during the three months ended September 30, 2009 and 2008 was approximately $1.1 million and $353,000, respectively.

     The aggregate intrinsic value and weighted average remaining contractual term of RSUs vested and expected to vest as of September 30, 2009 was $6.6 million and 3.9 years, respectively. The number of RSUs that are vested and expected to vest is 384,122 shares.

     The Company settles employee stock option exercises and RSUs with newly issued common shares.

     Employee Stock Purchase Plan

     The Company’s employee stock purchase plan authorizes the granting of stock purchase rights to eligible employees during an offering period not more than 27 months with exercise dates approximately every six months. Shares are purchased through employee payroll deductions at purchase prices equal to 85% of the lesser of the fair market value of the Company’s common stock at either the first day of each offering period or the date of purchase. No shares were purchased under the employee stock purchase plan during the three months ended September 30, 2009 or 2008. A maximum of 2,857,142 shares may be issued during the term of the Company’s employee stock purchase plan.

13. Recent Accounting Pronouncements. In September 2006, the Financial Accounting Standards Board (“FASB”) issued fair value measurement guidance, which was later codified under ASC Topic 820, “Fair Value Measurements and Disclosures” (“ASC 820”) This guidance was effective for fiscal years beginning after November 15, 2007 and for interim periods within those years. It defines fair value, establishes a framework for measuring fair value and expands the related disclosure requirements. This guidance applies under other accounting pronouncements that require or permit fair value measurements. The guidance indicates, among other things, that a fair value measurement assumes that the transaction to sell an asset or transfer a liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability. This guidance defines fair value based upon an exit price model. In February 2008, the FASB issued further guidance to exclude accounting for leases from fair value measurement and to delay the effective date of fair value measurement for all nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually) to fiscal years and interim periods within those fiscal years, beginning after November 15, 2008, which, for the Company, was June 29, 2009. The adoption of this fair value measurement was applied to nonfinancial assets and nonfinancial liabilities. The adoption of fair value measurements did not have a significant impact on the Company’s consolidated financial position, results of operations or cash flows.

     In April 2008, the FASB issued guidance related to determining the useful lives of intangible assets later codified under ASC Topic 350, “Intangibles — Goodwill and Other” (“ASC 350”). This guidance amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under ASC 350. This guidance is intended to improve the consistency between the useful life of an intangible asset and the period of expected cash flows used to measure the fair value of the asset under ASC Topic 805, “Business Combinations”, and other U.S. generally accepted accounting principles. This guidance was effective on a prospective basis to all intangible assets acquired and for disclosures on all intangible assets recognized on or after the beginning of the first annual period subsequent to December 15, 2008, which, for the Company, was June 29, 2009. The Company has determined that there is no material impact from adopting this guidance on its consolidated financial position, results of operations or cash flows.

     In December 2007, the FASB issued a revision of business combinations guidance, which was later codified under ASC Topic 805, “Business Combinations” (“ASC 805”). This guidance replaces the previous FASB guidance on business combinations and establishes principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree in a business combination. It also establishes principles around how goodwill acquired in a business combination or a gain from a bargain purchase should be recognized and measured, as well as provides

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guidelines on the disclosure requirements on the nature and financial impact of the business combination. In addition, the guidance establishes a model to account for certain pre-acquisition contingencies. This guidance was effective on a prospective basis for all business combinations for which the acquisition date is on or after the beginning of the first annual period subsequent to December 15, 2008, which, for the Company, was June 29, 2009. The impact from the adopting the provisions on the Company’s consolidated financial position, results of operations or cash flows will be dependent on future business combinations, if any.

     In December 2007, the FASB issued guidance related to noncontrolling interests later codified under ASC Topic 810, “Consolidation.” This guidance was effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008, which, for the Company, was June 29, 2009. This guidance requires that minority interest be separately reported in the consolidated entity’s equity section and that no gain or loss shall be reported when transactions occur between the controlling interest and the non-controlling interests. Furthermore, the acquisition of non-controlling interest by the controlling interest is not treated as a business combination. The Company has determined that there is no material impact from adopting this guidance on its consolidated financial position, results of operations or cash flows.

     In August 2009, the FASB issued Accounting Standards Update 2009-05, “Fair Value Measurements and Disclosures — Measuring Liabilities at Fair Value”. This update provides amendments to ASC Topic 820-10, “Fair Value Measurements and Disclosures-Overall”, for the fair value measurement of liabilities. This update is effective for the first reporting period (including interim periods) beginning after issuance. The Company does not believe that the implementation will have a material impact on its consolidated financial position, results of operations or cash flows.

     In various areas, including revenue recognition, stock option and purchase accounting, accounting standards and practices continue to evolve. The Company believes that it is in compliance with all of the rules and related guidance as they currently exist. However, any changes to accounting principles generally accepted in the United States of America in these areas could impact the future accounting of its operations.

14. Commitments and Contingencies.

     Contractual Obligations

     Contractual obligations as of September 30, 2009 have been summarized below (in thousands):

			Contractual Obligations Due by Period
Contractual Obligations	Total		Less than 1 year		1-3 years		4-5 years
Purchase obligations	$	8,050	$	8,050	$	—	$	—
Operating leases		526		331		187		8
Capital expenditure		446		220		205		21
Total	$	9,022	$	8,601	$	392	$	29

     Litigation

     IPO Securities Litigation

     In November 2001, Oplink and certain of its officers and directors were named as defendants in a class action shareholder complaint filed in the United States District Court for the Southern District of New York. In the amended complaint, the plaintiffs allege that Oplink, certain of Oplink’s officers and directors and the underwriters of Oplink’s initial public offering (“IPO”) violated Section 11 of the Securities Act of 1933 based on allegations that Oplink’s registration statement and prospectus failed to disclose material facts regarding the compensation to be received by, and the stock allocation practices of, the IPO underwriters. The complaint also contains a claim for violation of Section 10(b) of the Securities Exchange Act of 1934 based on allegations that this omission constituted a deceit on investors. The plaintiffs seek unspecified monetary damages and other relief. Similar complaints were filed by plaintiffs against hundreds of other public companies that went public in the late 1990s

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and early 2000s and their IPO underwriters (collectively, the “IPO Lawsuits”). The IPO Lawsuits were consolidated for pretrial purposes in the United States District Court for the Southern District of New York.

     During the summer of 2008, the parties engaged in a formal mediation process to discuss a global resolution of the IPO Lawsuits. Ultimately, the parties reached an agreement to settle all 309 cases against all defendants, which is memorialized in a Stipulation and Agreement of Settlement, dated as of April 1, 2009. The settlement provides for a $586 million recovery in total. This total amount is being divided over the 309 cases. Oplink’s share of the settlement is $327,458, which is the amount Oplink will be required to pay if the settlement is finally approved by the court. The amount is included in accrued liabilities on the consolidated balance sheet as of June 30, 2009. The settlement was submitted to the district court for review and approval on April 2, 2009, and was preliminarily approved by the court on June 9, 2009. Members of the plaintiff class had the opportunity to “opt out” of the settlement or object to the settlement terms prior to the settlement hearing. The settlement hearing was held on September 10, 2009. On October 9, 2009, the court issued a final order approving the settlement. The parties (including members of the plaintiff class that objected to the settlement) have sixty (60) days from the date of the order to file an appeal of the settlement approval.

     IPO 16(b) Claim

     In October 2007, Vanessa Simmonds filed in the United States District Court for the Western District of Washington a Complaint for Recovery of Short Swing Profits Under Section 16(b) of the Securities Exchange Act of 1934 against Bank of America and JP Morgan Chase & Company as defendants, and against Oplink as a nominal defendant. The complaint did not seek recovery of damages or other relief against Oplink. The Complaint alleged that in the years 2000 and 2001 the underwriters and unnamed officers, directors and principal shareholders of Oplink acted as a “group” by coordinating their efforts to undervalue the IPO price of Oplink and to thereafter inflate the aftermarket price throughout the six month lock-up period. The Complaint further alleges that the underwriters profited by (a) sharing in profits of customers to whom they had made IPO allocations; (b) allocating shares of Oplink to insiders at other companies from whom the underwriters expected to receive additional work in return; and (c) by creating the opportunity (through the alleged laddering practices) for Oplink’s directors, officers and other insiders to profit through their sale of stock after the lock-up period in return for future business for the underwriter.

     The complaint against Oplink and its underwriters was one of a total of 54 nearly identical lawsuits filed by Ms. Simmonds in October 2007 against companies and underwriters that had completed IPOs in the early 2000s. All of these cases were transferred to one judge at the U.S. District Court. In July 2008, the defendants filed a motion to dismiss the amended complaint. Briefing on the motion to dismiss was completed in October 2008. In March 2009, the judge dismissed the complaints, ruling that the plaintiff made an insufficient demand on the issuers and that the cases did not merit tolling the statute of limitations. The plaintiff filed notices of appeal in each of the 54 cases in April 2009, and the appeals were consolidated in June 2009 in the Ninth Circuit Court of Appeals. Ms. Simmonds filed her opening brief on the appeal on August 26, 2009. The issuer and underwriter defendants’ opposition briefs were filed on October 2, 2009. Ms. Simmonds’ reply brief was filed on November 2, 2009. The issuer and underwriter defendants’ reply is due on November 17, 2009.

     Oplink vs. O-Net Communications, et al.

     In June 2007, Oplink initiated legal action against several parties by filing a complaint in U.S. federal court. Oplink’s amended complaint alleges claims for patent infringement, trade secret misappropriation, breach of the duty of loyalty, unfair competition, breach of contract and intentional interference with contractual relations against O-Net Communications (ShenZhen), Ltd. (“O-Net”), Multiwave Digital Solutions, Inc. (“Multiwave”), and Chunmeng Wu (“Wu”). The amended complaint requests an order enjoining O-Net and Multiwave from making, using or selling devices covered by Oplink’s patents, an order enjoining Multiwave and Wu from misappropriating Oplink’s trade secrets, monetary damages, attorney’s fees and costs. In September 2007, O-Net and Multiwave filed a counterclaim for declaratory judgment against Oplink declaring that O-Net and Multiwave have not infringed on Oplink’s patents, a judgment declaring that three patents held by Oplink are invalid, and an award of

20

attorney’s fees and costs. In August 2008, Oplink, O-Net, Multiwave and Wu entered into a confidential settlement agreement resolving all claims at issue in the lawsuit. Pursuant to the settlement agreement, the parties agreed to a license agreement and other provisions that are subject to a confidentiality provision and O-Net acknowledged the validity of the Oplink patents at issue in the lawsuit. A stipulation dismissing all claims with prejudice was filed with the court jointly by the parties in September 2008.

     The Company is subject to legal proceedings and claims, either asserted or unasserted, that arise in the ordinary course of business. While the outcome of these proceedings and claims cannot be predicted with certainty, management does not believe that the outcome of any of these legal matters will have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flow.

15. Segment Reporting. The Company has determined that it has one reportable segment: fiber optic component and subsystem product sales. This segment consists of organizations located in the United States and China, which develop, manufacture, and/or market fiber optic networking components.

     The geographic breakdown of revenues by customers’ bill-to location is as follows (in thousands):

	Three Months
	Ended September 30,
	2009		2008
Revenues:
United States	$	13,417	$	14,247
Canada		810		2,851
Europe		4,975		6,899
China		7,846		9,248
Japan		3,661		4,551
Asia-Pacific (excluding China and Japan)		2,856		5,156
Totals	$	33,565	$	42,952

     The breakdown of property, plant and equipment, net by geographical location is as follows (in thousands):

	September 30,		June 30,
	2009		2009
United States	$	6,032	$	7,492
China		23,102		22,811
Asia-Pacific (excluding China)		11		15
Totals	$	29,145	$	30,318

     Top five customers, although not the same five customers for each period, together accounted for 58% and 62% of revenues for the three months ended September 30, 2009 and 2008, respectively.

16. Income Taxes. The Company accounts for income taxes under the liability method, which recognizes deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the tax bases of assets and liabilities and their financial statement reported amounts, and for net operating loss and tax credit carryforwards. Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date. The Company records a valuation allowance against deferred tax assets when it is more likely than not that such assets will not be realized.

     The Company accounts for uncertain tax positions in accordance with the authoritative guidance on income taxes under which the Company may only recognize or continue to recognize tax positions that meet a “more likely

21

than not” threshold. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as a component of income tax expense.

     As of June 30, 2009, the Company’s total unrecognized tax benefits were $4,854,000, of which $2,564,000, if recognized, would affect the Company’s effective tax rate. There is no significant change for the three months ended September 30, 2009. The Company had accrued interest and penalties related to unrecognized tax benefits of approximately $354,000 at September 30, 2009.

     Although the Company files U.S. federal, various state, and foreign tax returns, the Company’s only major tax jurisdictions are the United States, California, and China. The tax years 2004 to 2008 remain open in several jurisdictions.

17. Subsequent Events. The Company held its annual meeting of stockholders on November 4, 2009. At the meeting, the stockholders approved a new 2009 Equity Incentive Plan (the “2009 Plan”), which became effective upon such approval. The Company’s 2000 Equity Incentive Plan (the “2000 Plan”) was terminated upon the approval and adoption of the new 2009 Plan. No further equity awards will be granted under the 2000 Plan; however, the 2000 Plan will continue to govern awards previously granted under that plan.

     A total of 2,500,000 shares may be granted under the 2009 Plan, plus shares subject to awards that were outstanding under the 2000 Plan as of the end of the Company’s last fiscal year that expire or otherwise terminate without having been exercised in full, or are forfeited to or repurchased by the Company. There were 3,795,130 shares subject to outstanding awards under the 2000 Plan at June 30, 2009, the end of the Company’s last fiscal year, all of which will be eligible to be added to the 2009 Plan share reserve if such awards expire, terminate, or are forfeited to or repurchased by the Company. Shares subject to awards under the 2009 Plan of restricted stock, restricted stock units, performance shares and performance units (collectively, “Full Value Awards”) will count against the 2009 Plan’s share reserve as 1.3 shares for each share subject to such award. If shares acquired pursuant to Full Value Awards are forfeited or repurchased by the Company and would otherwise return to the share reserve as described above, then 1.3 times the number of shares forfeited or repurchased will return to the share reserve.

     Also approved at the annual meeting was an amendment and restatement of the Company’s 2000 Employee Stock Purchase Plan (the “ESPP”). The primary effect of the amendment and restatement was to extend the term of the ESPP. Prior to the restatement, the ESPP was scheduled to expire in October 2010. After the restatement, the ESPP will continue in effect until the share reserve is depleted or the plan is terminated by the Board. The maximum number of shares issuable during the life of the ESPP was not changed by the restatement, and remains at 2,857,142. However, the “evergreen” provision which provided for an automatic annual increase in the maximum number of shares issuable under the ESPP was eliminated in the restated ESPP. As of the date of this report, a total of 978,957 shares have been previously issued under the ESPP during the life of the plan, which means that a total of 1,878,185 shares remain available for issuance under the ESPP.

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ITEM 2 — MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-looking statements

     This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including, without limitation, statements regarding our expectations, beliefs, intentions, or future strategies that are signified by the words “expects,” “anticipates,” “intends,” “believes,” or similar language. All forward-looking statements included in this document are based on information available to us on the date hereof, and we assume no obligation to update any such forward-looking statements. Actual results could differ materially from those projected in the forward-looking statements. In evaluating our business, prospective investors should carefully consider the information set forth below under the caption “Risk Factors” in addition to the other information set forth herein. We caution investors that our business and financial performance are subject to substantial risks and uncertainties.

     The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes in this report, and Management’s Discussion and Analysis of Financial Condition and Results of Operations, related financial information and audited consolidated financial statements contained in our Form 10-K for the fiscal year ended June 30, 2009 as filed with the Securities and Exchange Commission on September 11, 2009.

Overview

     We design, manufacture and sell optical networking components and subsystems. Our products expand optical bandwidth, amplify optical signals, monitor and protect wavelength performance, redirect light signals and provide signal transmission and reception within an optical network. Our products enable greater and higher quality bandwidth over longer distances, which reduces network congestion and transmission cost per bit. Our products also enable optical system manufacturers to provide flexible and scalable bandwidth to support the increase of data traffic on the Internet and other public and private networks.

     We offer our customers design, integration and optical manufacturing solutions (“OMS”) for the production and packaging of highly-integrated optical subsystems and turnkey solutions, based upon a customer’s specific product design and specifications. We also offer solutions with lower levels of component integration for customers that place more value on flexibility than would be provided with turnkey solutions.

Use of Estimates and Critical Accounting Policies

     The preparation of our condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure. On an ongoing basis, we evaluate our estimates, including those related to product returns, accounts receivable, inventories, intangible assets, warranty obligations, restructuring accruals, contingencies and litigation. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates due to actual outcomes being different from those on which we based our assumptions. These estimates and judgments are reviewed by management on an ongoing basis and by the audit committee of our board of directors at the end of each quarter prior to the public release of our financial results. We believe the following critical accounting policies and our procedures relating to these policies, affect our more significant judgments and estimates used in the preparation of our condensed consolidated financial statements.

     We have identified the policies below as critical to our business operations and understanding of our financial condition and results of operations. A critical accounting policy is one that is both material to the presentation of

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our financial statements and requires us to make difficult, subjective or complex judgments that could have a material effect on our financial condition and results of operations. These policies may require us to make assumptions about matters that are highly uncertain at the time of the estimate, and different estimates that we could have used, or changes in the estimate that are reasonably likely to occur, may have a material impact on our financial condition or results of operations. Our critical accounting policies cover the following areas:

• revenue recognition and product returns;

• depreciation and amortization;

• warranty obligations;

• allowance for doubtful accounts;

• excess and obsolete inventory;

• impairment of investments;

• long-lived asset valuation;

• impairment of goodwill and other intangible assets;

• fair value accounting;

• business combination;

• income taxes;

• stock compensation; and

• loss contingencies.

This is not a comprehensive list of all of our accounting policies.

     As of the date of the filing of this quarterly report, we believe there have been no material changes to our critical accounting policies and estimates during these three months ended September 30, 2009 compared to those disclosed in our Annual Report on Form 10K for the fiscal year ended June 30, 2009 as filed with the SEC on September 11, 2009. Additional information about these critical accounting policies may be found in the “Management’s Discussion & Analysis of Financial Condition and Results of Operations” section included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2009.

Results of Operations

     Revenues

	Three Months Ended
	September 30,							Percentage
	2009		2008		Change			Change
	(In thousands, except percentages)
Revenue	$	33,565	$	42,952	$	(9,387	)		-21.9	%

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     The decrease in revenues for the three months ended September 30, 2009 compared to the three months ended September 30, 2008 was mainly due to decreased unit shipments in all our major product categories, in particular our line transmission application product, conditioning and monitoring product, and ROADM optical switching and routing product. The decrease in shipments was largely due to a general decrease in spending activities in the telecommunications industry. A decline in average selling prices, which is a characteristic of the industry, also contributed to the decrease in revenues for the three months ended September 30, 2009 compared to the three months ended September 30, 2008.

     For the second quarter of fiscal 2010, we expect our revenues to be in the range of $31 million to $35 million.

     Gross Profit

	Three Months Ended
	September 30,								Percentage
	2009			2008			Change		Change
	(In thousands, except percentages)
Gross profit	$	9,832		$	6,189		$	3,643		58.9	%
Gross profit margin		29.3	%		14.4	%

     Gross profit increased for the three months ended September 30, 2009 compared to the three months ended September 30, 2008 primarily reflecting a lower provision for excess and obsolete inventory, lower material costs, higher utilization of previously reserved inventory, and lower manufacturing overhead expenses and labor costs as a result of further integration of Optical Communication Products, Inc. (“OCP”) into Oplink. During the three months ended September 30, 2008, we recorded a provision for excess and obsolete inventory of $4.1 million which was primarily related to line transmission application product. Our gross profit for the three months ended September 30, 2009 was positively impacted by the sale of inventory that had been previously fully reserved of $1.5 million, compared to the sale of inventory that had been previously fully reserved of $497,000 in the three months ended September 30, 2008.

     Our gross profit margin increased for the three months ended September 30, 2009 compared to the three months ended September 30, 2008 mainly due to a lower provision for excess and obsolete inventory, higher utilization of previously reserved inventory, and lower material costs as a percentage of revenues.

     We expect our gross profit margin in the second quarter of fiscal 2010 to increase slightly compared to the first quarter of fiscal 2010.

     Research and Development

	Three Months Ended
	September 30,							Percentage
	2009		2008		Change			Change
	(In thousands, except percentages)
Research and development	$	2,494	$	3,505	$	(1,011	)		-28.8	%

     Research and development expenses decreased $1.0 million for the three months ended September 30, 2009 compared to the three months ended September 30, 2008. The decrease was primarily due to cost savings as a result of research and development programs being transitioned from higher cost facilities in the United States to our lower cost facilities in China, continued integration of OCP into Oplink, and other cost reduction initiatives.

     We believe that developing customer solutions at the prototype stage is critical to our strategic product development objectives. In order to meet the changing requirements of our customers, we will need to fund

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investments in several concurrent product development projects. We expect our research and development expenses, excluding stock compensation expense, to increase slightly in the second quarter of fiscal 2010 compared to the first quarter of fiscal 2010.

     Sales and Marketing

	Three Months Ended
	September 30,							Percentage
	2009		2008		Change			Change
	(In thousands, except percentages)
Sales and marketing	$	2,414	$	2,572	$	(158	)		-6.1	%

     Sales and marketing expenses for the three months ended September 30, 2009 decreased slightly compared to the three months ended September 30, 2008. The slight decrease primarily reflected the cost savings associated with the continued integration of OCP into Oplink and other cost reduction initiatives. We expect our sales and marketing expenses, excluding stock compensation expense, to remain largely unchanged in the second quarter of fiscal 2010 compared to the first quarter of fiscal 2010.

     General and Administrative

	Three Months Ended
	September 30,							Percentage
	2009		2008		Change			Change
	(In thousands, except percentages)
General and administrative	$	2,671	$	3,577	$	(906	)		-25.3	%

     General and administrative expenses decreased $0.9 million for the three months ended September 30, 2009 compared to the three months ended September 30, 2008. The decrease was mainly driven by the cost savings as a result of the further integration of OCP into Oplink and other cost reduction initiatives and lower professional fees.

     We expect our general and administrative expense, excluding stock compensation expense, to remain largely unchanged in the second quarter of fiscal 2010 compared to the first quarter of fiscal 2010.

     Stock Compensation Expense

	Three Months Ended
	September 30,						Percentage
	2009		2008		Change		Change
	(In thousands, except percentages)
Stock compensation expense	$	1,646	$	1,567	$	79		5.0	%

     Stock compensation expense recorded in cost of revenues, research and development, sales and marketing, and general and administrative is the amortization of the fair value of share-based payments made to employees and members of our board of directors, primarily in the form of stock options, restricted stock awards and units (“RSAs” and “RSUs”) and purchases under the employee stock purchase plan (see Note 12 — Stock Compensation). The fair value of stock options and purchase rights granted to purchase our common stock under the employee stock purchase plan is estimated using a Black-Scholes valuation model and is recognized as expense over the employee requisite service period. The compensation expense incurred for RSAs and RSUs is based on the closing market price of Oplink’s common stock on the date of grant and is amortized on a straight-line basis over the requisite service period.

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     Stock compensation expenses increased slightly for the three months ended September 30, 2009 compared to the three months ended September 30, 2008. Stock compensation expense in fiscal 2010 includes the continued amortization of previously-granted stock options and the amortization of RSUs which were granted in the three months ended September 30, 2009. We expect our stock compensation expense in the second quarter of fiscal 2010 to remain at the similar level as the first quarter of fiscal 2010.

     Amortization of Intangible and Other Assets

     Amortization of intangible and other assets was approximately $946,000 and $954,000 for the three months ended September 30, 2009 and 2008, respectively, representing charges incurred as a result of our acquisitions.

     Interest and Other Income, Net

	Three Months Ended
	September 30,							Percentage
	2009		2008		Change			Change
	(In thousands, except percentages)
Interest and other income, net	$	274	$	1,040	$	(766	)		-73.7	%

     The decrease in interest and other income for the three months ended September 30, 2009 compared to the three months ended September 30, 2008 was primarily due to the declining average rate of return, partially offset by the increased overall cash and cash equivalents, short-term and long-term investments balances. The average rate of return for the three months ended September 30, 2009 was 0.5% compared to the average rate of return of 2.5% for the three months ended September 30, 2008.

     Provision for Income Taxes

     As a multinational corporation, we are subject to taxation in the United States and in foreign jurisdictions. The taxation of our business is subject to the application of multiple and sometimes conflicting tax laws and regulations as well as multinational tax conventions. Our effective tax rate is highly dependent upon the geographic distribution of our worldwide earnings or losses, the tax regulations and tax holidays in each geographic region, and the availability of tax credits and carryforwards. The application of tax laws and regulations is subject to legal and factual interpretation, judgment and uncertainty. Tax laws themselves are subject to change as a result of changes in fiscal policy, changes in legislation, and the evolution of regulations and court rulings. Consequently, taxing authorities may impose tax assessments or judgments against us that could materially impact our tax liability and/or our effective income tax rate.

     We are required to make our best estimate of the annual effective tax rate for the full fiscal year and use that rate to provide for income taxes on a current year-to-date basis. We have recorded a tax provision of $438,000 and $456,000 for the three months ended September 30, 2009 and 2008, respectively.

     The effective tax rate for the first quarter of fiscal 2010 differs from the statutory rate. This is primarily due to taxable income being reduced as a result of carrying forward net operating losses from previous years and tax holidays in certain jurisdictions. The effective tax rate could increase in the future due to changes in the taxable income mix between various jurisdictions and the expiration of certain tax holidays.

Liquidity and Capital Resources

     Since our inception, we have financed our operations primarily through issuances of equity, which totaled approximately $319.4 million in aggregate net proceeds, partially offset by $48.3 million in common stock

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repurchases, net of proceeds from exercise of stock options, employee stock purchase plan and warrants through September 30, 2009. As of September 30, 2009, we had cash, cash equivalents and short-term investments of $178.7 million and working capital of $198.8 million.

     We believe that our current cash, cash equivalent and short-term investment balances will be sufficient to meet our operating and capital requirements for at least the next 12 months. We may use cash and cash equivalents from time to time to fund our acquisition of businesses and technologies. We may be required to raise funds through public or private financings, strategic relationships or other arrangements. We cannot assure you that such funding, if needed, will be available on terms attractive to us, or at all. Furthermore, any additional equity financing may be dilutive to stockholders, and debt financing, if available, may involve restrictive covenants. Our failure to raise capital when needed could harm our ability to pursue our business strategy and achieve and maintain profitability.

     Three Months Ended September 30, 2009

     Our operating activities provided cash of $9.1 million in the first quarter of fiscal 2010 as a result of a net income of $1.8 million for the period adjusted by non-cash charges of $2.6 million in depreciation and amortization charges, $1.6 million in stock-based compensation expenses, and an increase in cash of $3.2 million as a result of a net change in assets and liabilities.

     For the three months ended September 30, 2009, the increase in net assets and liabilities was primarily the result of a decrease in inventory and accounts receivables of $2.1 million and $1.8 million, respectively, partially offset by a decrease in accounts payable of $672,000.

     Accounts receivable provided $1.8 million of cash driven primarily by improvement in collection, partially offset by increased shipments during the first quarter of fiscal 2010 compared to the fourth quarter of fiscal 2009. Days sales outstanding (“DSO”) was 74 days for the first quarter of fiscal 2010 compare to 82 days for the fourth quarter of fiscal 2009. We typically bill customers on an open account basis with net thirty to ninety day payment terms. We would generally expect the level of accounts receivable at the end of any quarter to reflect the level of sales in that quarter and to change from one period to another in a direct relationship to the change in the level of sales. Our level of accounts receivable would increase if shipments are made closer to the end of the quarter and if customers delayed their payments or if we offered extended payment terms to our customers.

     Inventories generated $2.1 million of cash in the first quarter of fiscal 2010 due primarily to a higher usage of inventory driven by increased revenues. In order to maintain an adequate supply of product for our customers, we must carry a certain level of inventory. Our inventory level may vary based primarily upon orders received from our customers, our forecast of demand for these products and lead-time for materials. These considerations are balanced against risk of obsolescence or potentially excess inventory levels. We generally expect the level of inventory to vary from one period to another as a result of changes in the level of sales. However, we do not expect similar declines in inventory levels in the second quarter of fiscal 2010.

     Accounts payable used cash of $672,000 in the first quarter of fiscal 2010 primarily as a result of the timing of payments to our vendors.

     Our investing activities used cash of $6.7 million in the first quarter of fiscal 2010 due to purchases of investments of $44.0 million and equipment purchases of $541,000, partially offset by sales and maturities of investments of $37.7 million. We anticipate that cash outlays in capital expenditures will be approximately $1.0 million for the second quarter of fiscal 2010.

     Our financing activities provided cash of $1.1 million in the first quarter of fiscal 2010 due to proceeds from issuance of common stock in connection with the exercise of stock options.

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     Three Months Ended September 30, 2008

     Our operating activities provided cash of $4.4 million in the first quarter of fiscal 2009 as a result of a net loss of $3.4 million for the period adjusted by $2.8 million in non-cash charges of depreciation and amortization charges, $1.6 million in non-cash stock-based compensation expenses and $4.1 million in provision for excess and obsolete inventory, partially offset by other non-cash items of $220,000 and a decrease in cash of $348,000 as a result of a net change in assets and liabilities.

     For the three months ended September 30, 2008, cash used as a result of the net change in assets and liabilities was primarily the result of changes in accounts receivable, inventories, prepaid expenses, accrued liabilities and accounts payable.

     Accounts receivable provided $1.4 million of cash primarily driven by improvement in collection. DSO was 70 days for the first quarter of fiscal 2009 compare to 84 days for the fourth quarter of fiscal 2008.

     Inventories provided $401,000 of cash during the first quarter of fiscal 2009 primarily due to the increased volume of sales in the first quarter of fiscal 2009 and change of level of inventory purchases as a result of lower anticipated sales in the second quarter of fiscal 2009.

     Accounts payable used cash of $1.6 million in the first quarter of fiscal 2009 primarily as a result of the timing of payments to our vendors and lower levels of inventory purchases driven by lower anticipated sales in the second quarter of fiscal 2009.

     Our investing activities provided cash of $23.0 million in the first quarter of fiscal 2009. The net cash provided by investing activities in the first quarter of fiscal 2009 was primarily due to sales or maturities of investments of $28.0 million, partially offset by purchases of investments of $5.0 million.

     Our financing activities provided cash of $353,000 in the first quarter of fiscal 2009 due to proceeds from issuance of common stock in connection with the exercise of stock options.

Off-Balance Sheet Arrangements

     As of September 30, 2009, we did not have any off-balance sheet financing arrangements and have never established any special purpose entities.

Contractual Obligations

     Our contractual obligations as of September 30, 2009 have been summarized below (in thousands):

			Contractual Obligations Due by Period
Contractual Obligations	Total		Less than 1 year		1-3 years		4-5 years
Purchase obligations	$	8,050	$	8,050	$	—	$	—
Operating leases		526		331		187		8
Capital expenditure		446		220		205		21
Total	$	9,022	$	8,601	$	392	$	29

Recent Accounting Pronouncements

     In September 2006, the Financial Accounting Standards Board (“FASB”) issued fair value measurement guidance, which was later codified under ASC Topic 820, “Fair Value Measurements and Disclosures” (“ASC 820”) This guidance was effective for fiscal years beginning after November 15, 2007 and for interim periods within those years. It defines fair value, establishes a framework for measuring fair value and expands the related disclosure requirements. This guidance applies under other accounting pronouncements that require or permit fair value measurements. The guidance indicates, among other things, that a fair value measurement assumes that the transaction to sell an asset or transfer a liability occurs in the principal market for the asset or liability or, in the

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absence of a principal market, the most advantageous market for the asset or liability. This guidance defines fair value based upon an exit price model. In February 2008, the FASB issued further guidance to exclude accounting for leases from fair value measurement and to delay the effective date of fair value measurement for all nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually) to fiscal years and interim periods within those fiscal years, beginning after November 15, 2008, which, for Oplink, was June 29, 2009. The adoption of this fair value measurement was applied to nonfinancial assets and nonfinancial liabilities. The adoption of fair value measurements did not have a significant impact on our consolidated financial position, results of operations or cash flows.

     In April 2008, the FASB issued guidance related to determining the useful lives of intangible assets later codified under ASC Topic 350, “Intangibles — Goodwill and Other” (“ASC 350”). This guidance amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under ASC 350. This guidance is intended to improve the consistency between the useful life of an intangible asset and the period of expected cash flows used to measure the fair value of the asset under ASC Topic 805, “Business Combinations”, and other U.S. generally accepted accounting principles. This guidance was effective on a prospective basis to all intangible assets acquired and for disclosures on all intangible assets recognized on or after the beginning of the first annual period subsequent to December 15, 2008, which, for Oplink, was June 29, 2009. We have determined that there is no material impact from adopting this guidance on our consolidated financial position, results of operations or cash flows.

     In December 2007, the FASB issued a revision of business combinations guidance, which was later codified under ASC Topic 805, “Business Combinations” (“ASC 805”). This guidance replaces the previous FASB guidance on business combinations and establishes principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree in a business combination. It also establishes principles around how goodwill acquired in a business combination or a gain from a bargain purchase should be recognized and measured, as well as provides guidelines on the disclosure requirements on the nature and financial impact of the business combination. In addition, the guidance establishes a model to account for certain pre-acquisition contingencies. This guidance was effective on a prospective basis for all business combinations for which the acquisition date is on or after the beginning of the first annual period subsequent to December 15, 2008, which, for Oplink, was June 29, 2009. The impact from the adopting the provisions on our consolidated financial position, results of operations or cash flows will be dependent on future business combinations, if any.

     In December 2007, the FASB issued guidance related to noncontrolling interests later codified under ASC Topic 810, “Consolidation.” This guidance was effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008, which, for Oplink, was June 29, 2009. This guidance requires that minority interest be separately reported in the consolidated entity’s equity section and that no gain or loss shall be reported when transactions occur between the controlling interest and the non-controlling interests. Furthermore, the acquisition of non-controlling interest by the controlling interest is not treated as a business combination. We have determined that there is no material impact from adopting this guidance on our consolidated financial position, results of operations or cash flows.

     In August 2009, the FASB issued Accounting Standards Update 2009-05, “Fair Value Measurements and Disclosures — Measuring Liabilities at Fair Value”. This update provides amendments to ASC Topic 820-10, “Fair Value Measurements and Disclosures-Overall”, for the fair value measurement of liabilities. This update is effective for the first reporting period (including interim periods) beginning after issuance. We do not believe that the implementation will have a material impact on our consolidated financial position, results of operations or cash flows.

     In various areas, including revenue recognition, stock option and purchase accounting, accounting standards and practices continue to evolve. We believe that we are in compliance with all of the rules and related guidance as

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they currently exist. However, any changes to accounting principles generally accepted in the United States of America in these areas could impact the future accounting of our operations.

ITEM 3 — QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

     We are exposed to market risk related to fluctuations in interest rates and in foreign currency exchange rates as follows:

     Interest Rate Exposure

     The primary objective of our investment activities is to preserve principal while maximizing the income we receive from our investments without significantly increasing risk. Some of the securities that we invest in are subject to market risk. To minimize this risk, we maintain our portfolio of cash equivalents and investments in a variety of securities, including commercial paper, money market funds, government and non-government debt securities and corporate bonds.

     As of September 30, 2009, all of our short-term investments were in certificates of deposit, high quality corporate bonds and government and government agency debt securities. We invest our excess cash in short-term and long-term investments to take advantage of higher yields generated by these investments. We do not hold any instruments for trading purposes. As of September 30, 2009, the gross unrealized losses on our investments classified as available-for-sale were immaterial which are primarily due to decreases in the fair value of debt securities as a result of changes in market interest rates. We have the intent and the ability to hold these securities for a reasonable period of time sufficient for a forecasted recovery of fair value up to (or beyond) the initial cost of the investment. We expect to realize the full value of all of these investments upon maturity. In addition, we do not believe that we will be required to sell these securities to meet its cash or working capital requirements or contractual or regulatory obligations. Therefore, we have determined that the gross unrealized losses on the available-for-sale securities at September 30, 2009 are temporary in nature. The following table summarizes our investment securities (in thousands, except percentages) for the last two years:

	Carrying		Average Rate			Carrying		Average Rate
	Value at		of Return at			Value at		of Return at
	September 30,		September 30,			June 30,		June 30,
	2009		2009			2009		2009
			(Annualized)					(Annualized)
Investment Securities:
Cash equivalents — variable rate	$	28,363		0.2	%	$	24,813		0.3	%
Cash equivalents — fixed rate		11,633		0.3	%		4,999		0.2	%
Short-term investments — variable rate		14,774		0.8	%		14,362		1.2	%
Short-term investments — fixed rate		110,616		0.7	%		101,412		1.4	%
Long-term investments — fixed rate		—		—			3,180		1.5	%
Total	$	165,386				$	148,766

     Foreign Currency Exchange Rate Exposure

     We operate in the United States, manufacture in China, and the substantial majority of our sales to date have been made in U.S. dollars. Certain expenses from our China operations are incurred in the Chinese Renminbi. As a result, currency fluctuations between the U.S. dollar and the Chinese Renminbi could cause foreign currency transaction gains or losses that we would recognize in the period incurred. A 10% fluctuation in the dollar at September 30, 2009 would have an immaterial impact on our net dollar position in outstanding trade receivables and payables.

     Renminbi appreciated by 10% against the U.S. dollar as of June 30, 2008 compared to June 30, 2007 and further appreciated slightly as of September 30, 2009. It is uncertain what further adjustments will follow. The

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Renminbi-U.S. dollar exchange rate could continue to float, and the Renminbi could continue to appreciate relative to the U.S. dollar.

     We expect our international revenues and expenses to continue to be denominated largely in U.S. dollars. We also believe that our China operations will likely expand in the future if our business continues to grow. As a result, we anticipate that we may experience increased exposure to the risks of fluctuating currencies and may choose to engage in currency hedging activities to reduce these risks. However, we cannot be certain that any such hedging activities will be effective, or available to us at commercially reasonable rates.

ITEM 4 — CONTROLS AND PROCEDURES.

     Evaluation of Disclosure Controls and Procedures. Our management evaluated, with the participation of our Chief Executive Officer and our Chief Financial Officer, the effectiveness of our disclosure controls and procedures as of the end of the quarterly period covered by this report. Based on this evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that our disclosure controls and procedures are effective to ensure that information we are required to disclose in reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms.

     Changes in Internal Control over Financial Reporting. There was no change in our internal control over financial reporting that occurred during the quarterly period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1 — LEGAL PROCEEDINGS

     The material set forth in under the caption “Litigation” in Note 14 of the Notes to Condensed Consolidated Financial Statements appearing in Part I, Item I of this Quarterly Report on Form 10-Q is incorporated herein by reference.

ITEM 1A—RISK FACTORS

     Other than with respect to the risk factors set forth below, there have been no material changes from the risk factors previously disclosed in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended June 30, 2009.

We expect volatility in our stock price, which could cause you to lose all or part of your investment.

     We expect the market price of our common stock to fluctuate significantly. For example, the market price of our common stock has fluctuated from a high of $22.38 in October 2006 to an intra-day low of $5.05 in November 2008. The closing sale price of our common stock on November 2, 2009 was $14.92. These fluctuations may occur in response to a number of factors, some of which are beyond our control, including:

• quarterly variations in our operating results;

• changes in financial estimates by securities analysts and/or our failure to meet estimates;

• changes in market values of comparable companies;

• announcements by our competitors or us of new products or of significant acquisitions, strategic partnerships or joint ventures;

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• any loss by us of a major customer;

• economic fluctuations in the market for optical communications products, or in the telecommunications industry generally;

• the outcome of, and costs associated with, any litigation to which we are or may become a party;

• departures of key management or engineering personnel; and

• future sales of our common stock.

Our operating results may be further adversely affected by the downturn in the global economy and the global telecommunications industry.

     Challenging economic conditions worldwide have resulted in slowdowns in the global telecommunications and networking industries, as well as specific segments and markets in which we operate, resulting in:

• reduced demand for our products as a result of constraints on IT-related capital spending, decreasing our revenue;

• increased price competition for our products; and

• higher overhead costs as a percentage of revenue, producing lower gross margins.

     Our quarterly revenue has decreased from $43.0 million for the quarter ended September 30, 2008 to $33.6 million for the quarter ended September 30, 2009. There is a risk of a further decrease in revenue. We have recently been able to produce positive cash flow from operations, but may be unable to do so if revenue decreases.

     If global economic and market conditions, or economic conditions in the United States or other key markets for our products, remain uncertain or persist, spread, or deteriorate further, we may experience further material impacts on our business, operating results, and financial condition.

We depend upon a small number of customers for a substantial portion of our revenues, and any decrease in revenues from, or loss of, these customers without a corresponding increase in revenues from other customers would harm our operating results.

     We depend upon a small number of customers for a substantial portion of our revenues. Our dependence on orders from a relatively small number of customers makes our relationship with each customer critical to our business.

     Our top five customers, although not the same five customers for each period, together accounted for 58% and 62% of our revenues for the three months ended September 30, 2009 and 2008, respectively.

     We expect that the majority of our revenues will continue to depend on sales to a relatively small number of customers. We may not be the sole source of supply to our customers, and they may choose to purchase products from other vendors. The loss of one or more of our significant customers, our inability to successfully develop relationships with additional customers or future price reductions could cause our revenue to decline significantly. Our dependence on a small number of customers may increase if the fiber optic components and subsystems industry and our other target markets continue to consolidate.

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If our current inventory levels prove to be too low for us to be able to respond quickly to an increase in demand for our products, we may lose sales opportunities.

     In recent months, we have been closely managing our inventory levels in an effort to maximize the efficiency of our operations and to match inventory levels to anticipated demand. As of September 30, 2009, our inventory balance was $7.9 million, a 67% reduction from our inventory balance of $24.1 million one year prior, at September 30, 2008. Due to our lower inventory levels, we may not be able to react quickly to a sharp increase in demand for our products, which could result in lost sales opportunities with current or potential customers

ITEM 2 — UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

     None.

ITEM 3 — DEFAULTS UPON SENIOR SECURITIES

     None.

ITEM 4 — SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     None.

ITEM 5 — OTHER INFORMATION

     None.

ITEM 6 — EXHIBITS

Exhibit Index

Exhibit No.			Description
	3.1	(1)	Amended and Restated Certificate of Incorporation of the Registrant.
	3.2	(1)	Bylaws of the Registrant.
	3.3	(2)	Certificate of Designation of Series A Junior Participating Preferred Stock.
	3.4	(3)	Certificate of Amendment to Amended and Restated Certificate of Incorporation of the Registrant.
	10.1	*	2009 Equity Incentive Plan
	10.2	*	Amended and Restated 2000 Employee Stock Purchase Plan
	10.3		Consulting Agreement dated November 4, 2009 between the Registrant and Leonard J. LeBlanc
	31.1		Certification of Chief Executive Officer Required under Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended.
	31.2		Certification of Chief Financial Officer Required under Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended.
	32.1	**	Certification of Chief Executive Officer Required under Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934, as amended, and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. Section 1350).
	32.2	**	Certification of Chief Financial Officer Required under Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. Section 1350.

(1)	Incorporated by reference to the Registrant’s Registration Statement on Form S-1/A, No. 333-41506, as filed on October 3, 2000.
(2)	Previously filed as an Exhibit to the Registrant’s Report on Form 8-K filed on March 22, 2002 and incorporated herein by reference.

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(3)	Previously filed as an Exhibit to the Registrant’s Quarterly Report on Form 10-Q filed on November 14, 2006 and incorporated herein by reference.
*	Management contract or compensatory plan or arrangement.
**	The certifications attached as Exhibits 32.1 and 32.2 accompanies this Quarterly Report on Form 10-Q pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed “filed” by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	OPLINK COMMUNICATIONS, INC.
	(Registrant)
DATE: November 6, 2009	By:	/s/ Shirley Yin
	Shirley Yin
	Chief Financial Officer
	(Principal Financial and Accounting Officer)

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EX-10.1

Exhibit 10.1

OPLINK COMMUNICATIONS, INC.

2009 EQUITY INCENTIVE PLAN

(Effective November 4, 2009)

     1. Purposes of the Plan. The purposes of this Plan are:

• to attract and retain the best available personnel for positions of substantial responsibility,

• to provide incentives to individuals who perform services to the Company, and

• to promote the success of the Company’s business.

          The Plan permits the grant of Incentive Stock Options, Nonstatutory Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Units and Performance Shares.

     2. Definitions. As used herein, the following definitions will apply:

          (a) “Administrator” means the Board or any of its Committees as will be administering the Plan, in accordance with Section 4 of the Plan.

          (b) “Affiliate” means any corporation or any other entity (including, but not limited to, partnerships and joint ventures) controlling, controlled by, or under common control with the Company.

          (c) “Applicable Laws” means the requirements relating to the administration of equity-based awards under U.S. state corporate laws, U.S. federal and state securities laws, the Code, any stock exchange or quotation system on which the Common Stock is listed or quoted and the applicable laws of any foreign country or jurisdiction where Awards are, or will be, granted under the Plan.

          (d) “Award” means, individually or collectively, a grant under the Plan of Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Units or Performance Shares.

          (e) “Award Agreement” means the written or electronic agreement setting forth the terms and provisions applicable to each Award granted under the Plan. The Award Agreement is subject to the terms and conditions of the Plan.

          (f) “Award Transfer Program” means any program instituted by the Administrator that would permit Participants the opportunity to transfer for value any outstanding Awards to a financial institution or other person or entity approved by the Administrator.

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

          (h) “Change in Control” means the occurrence of any of the following events:

               (i) Change in Ownership of the Company. A change in the ownership of the Company which occurs on the date that any one person, or more than one person acting as a group (“Person”), acquires ownership of the stock of the Company that, together with the stock held by such Person, constitutes more than fifty percent (50%) of the total voting power of the stock of the Company; provided, however, that for purposes of this subsection (i), the acquisition of additional stock by any one

Person, who is considered to own more than fifty percent (50%) of the total voting power of the stock of the Company will not be considered a Change in Control; or

               (ii) Change in Effective Control of the Company. If the Company has a class of securities registered pursuant to Section 12 of the Exchange Act, a change in the effective control of the Company which occurs on the date that a majority of members of the Board is replaced during any twelve (12) month period by Directors whose appointment or election is not endorsed by a majority of the members of the Board prior to the date of the appointment or election. For purposes of this subsection (ii), if any Person is considered to be in effective control of the Company, the acquisition of additional control of the Company by the same Person will not be considered a Change in Control; or

               (iii) Change in Ownership of a Substantial Portion of the Company’s Assets. A change in the ownership of a substantial portion of the Company’s assets which occurs on the date that any Person acquires (or has acquired during the twelve (12) month period ending on the date of the most recent acquisition by such person or persons) assets from the Company that have a total gross fair market value equal to or more than fifty percent (50%) of the total gross fair market value of all of the assets of the Company immediately prior to such acquisition or acquisitions; provided, however, that for purposes of this subsection (iii), the following will not constitute a change in the ownership of a substantial portion of the Company’s assets: (A) a transfer to an entity that is controlled by the Company’s stockholders immediately after the transfer, or (B) a transfer of assets by the Company to: (1) a stockholder of the Company (immediately before the asset transfer) in exchange for or with respect to the Company’s stock, (2) an entity, fifty percent (50%) or more of the total value or voting power of which is owned, directly or indirectly, by the Company, (3) a Person, that owns, directly or indirectly, fifty percent (50%) or more of the total value or voting power of all the outstanding stock of the Company, or (4) an entity, at least fifty percent (50%) of the total value or voting power of which is owned, directly or indirectly, by a Person described in this subsection (iii)(B)(3). For purposes of this subsection (iii), gross fair market value means the value of the assets of the Company, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets.

          For purposes of this Section 2(h), persons will be considered to be acting as a group if they are owners of a corporation that enters into a merger, consolidation, purchase or acquisition of stock, or similar business transaction with the Company.

          Notwithstanding the foregoing, a transaction shall not be deemed a Change in Control unless the transaction qualifies as a change in control event within the meaning of Section 409A of the Code, as it has been and may be amended from time to time, and any proposed or final Treasury Regulations and Internal Revenue Service guidance that has been promulgated or may be promulgated thereunder from time to time.

          Further and for the avoidance of doubt, a transaction shall not constitute a Change in Control if: (i) its sole purpose is to change the state of the Company’s incorporation, or (ii) its sole purpose is to create a holding company that shall be owned in substantially the same proportions by the persons who held the Company’s securities immediately before such transaction.

          (i) “Code” means the Internal Revenue Code of 1986, as amended. Reference to a specific section of the Code or Treasury Regulation thereunder will include such section or regulation, any valid regulation or other official applicable guidance promulgated under such section, and any comparable provision of any future legislation or regulation amending, supplementing or superseding such section or regulation.

          (j) “Committee” means a committee of Directors or of other individuals satisfying Applicable Laws appointed by the Board in accordance with Section 4 hereof.

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

          (l) “Company” means Oplink Communications, Inc., a Delaware corporation, or any successor thereto.

          (m) “Consultant” means any person, including an advisor, engaged by the Company or its Affiliates to render services to such entity other than as an Employee.

          (n) “Determination Date” means the latest possible date that will not jeopardize the qualification of an Award granted under the Plan as “performance-based compensation” under Section 162(m) of the Code.

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

          (p) “Disability” means total and permanent disability as defined in Section 22(e)(3) of the Code, provided that in the case of Awards other than Incentive Stock Options, the Administrator in its discretion may determine whether a permanent and total disability exists in accordance with uniform and non-discriminatory standards adopted by the Administrator from time to time.

          (q) “Employee” means any person, including Officers and Directors, employed by the Company or its Affiliates. Neither service as a Director nor payment of a director’s fee by the Company will be sufficient to constitute “employment” by the Company.

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

          (s) “Fair Market Value” means, 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 Global Market, the Nasdaq Global Select Market or the Nasdaq Capital Market, its Fair Market Value shall be the closing sales price for such stock (or, if no closing sales price was reported on that date, as applicable, on the last trading date such closing sales price is reported) as quoted on such exchange or system on the day of determination, as reported in The Wall Street Journal or such other source as the Administrator 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 between the high bid and low asked prices for the Common Stock on the day of determination (or, if no bids and asks were reported on that date, as applicable, on the last trading date such bids and asks are reported); or

               (iii) In the absence of an established market for the Common Stock, the Fair Market Value will be determined in good faith by the Administrator.

          (t) “Fiscal Year” means the fiscal year of the Company.

          (u) “Incentive Stock Option” means an Option that by its terms qualifies and is otherwise intended to qualify as an incentive stock option within the meaning of Section 422 of the Code and the regulations promulgated thereunder.

          (v) “Nonstatutory Stock Option” means an Option that by its terms does not qualify or is not intended to qualify as an Incentive Stock Option.

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          (w) “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.

          (x) “Option” means a stock option granted pursuant to the Plan.

          (y) “Parent” means a “parent corporation,” whether now or hereafter existing, as defined in Section 424(e) of the Code.

          (z) “Participant” means the holder of an outstanding Award.

          (aa) “Performance Goals” will have the meaning set forth in Section 11 of the Plan.

          (bb) “Performance Period” means any Fiscal Year of the Company or such longer or shorter period as determined by the Administrator in its sole discretion.

          (cc) “Performance Share” means an Award denominated in Shares which may be earned in whole or in part upon attainment of performance goals or other vesting criteria as the Administrator may determine pursuant to Section 10.

          (dd) “Performance Unit” means an Award which may be earned in whole or in part upon attainment of performance goals or other vesting criteria as the Administrator may determine and which may be settled for cash, Shares or other securities or a combination of the foregoing pursuant to Section 10.

          (ee) “Period of Restriction” means the period during which the transfer of Shares of Restricted Stock are subject to restrictions and therefore, the Shares are subject to a substantial risk of forfeiture. Such restrictions may be based on the passage of time, the achievement of target levels of performance, or the occurrence of other events as determined by the Administrator.

          (ff) “Plan” means this 2009 Equity Incentive Plan.

          (gg) “Restricted Stock” means Shares issued pursuant to a Restricted Stock award under Section 8 of the Plan, or issued pursuant to the early exercise of an Option.

          (hh) “Restricted Stock Unit” means a bookkeeping entry representing an amount equal to the Fair Market Value of one Share, granted pursuant to Section 9. Each Restricted Stock Unit represents an unfunded and unsecured obligation of the Company.

          (ii) “Rule 16b-3” means Rule 16b-3 of the Exchange Act or any successor to Rule 16b-3, as in effect when discretion is being exercised with respect to the Plan.

          (jj) “Section 16(b)” means Section 16(b) of the Exchange Act.

          (kk) “Service Provider” means an Employee, Director or Consultant.

          (ll) “Share” means a share of the Common Stock, as adjusted in accordance with Section 15 of the Plan.

          (mm) “Stock Appreciation Right” means an Award, granted alone or in connection with an Option, that pursuant to Section 7 is designated as a Stock Appreciation Right.

          (nn) “Subsidiary” means a “subsidiary corporation”, whether now or hereafter existing, as defined in Section 424(f) of the Code.

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     3. Stock Subject to the Plan.

          (a) Subject to the provisions of Section 15 of the Plan, the maximum aggregate number of Shares that may be issued under the Plan is 2,500,000 Shares plus any Shares subject to stock options or similar awards granted under 2000 Equity Incentive Plan (the “2000 Plan”) that expire or otherwise terminate without having been exercised in full and Shares issued pursuant to awards granted under the 2000 Plan that are forfeited to or repurchased by the Company (up to a maximum of 3,795,130 additional Shares from expired, terminated, forfeited or repurchased awards granted under the 2000 Plan). The Shares may be authorized, but unissued, or reacquired Common Stock.

          (b) Full Value Awards. Any Shares subject to Awards of Restricted Stock, Restricted Stock Units, Performance Units, and Performance Shares will be counted against the numerical limits of this Section 3 as 1.3 Shares for every one Share subject thereto. Further, if Shares acquired pursuant to any such Award are forfeited or repurchased by the Company and would otherwise return to the Plan pursuant to Section 3(c), 1.3 times the number of Shares so forfeited or repurchased will return to the Plan and will again become available for issuance.

          (c) Lapsed Awards. If an Award expires or becomes unexercisable without having been exercised in full or, with respect to Restricted Stock, Restricted Stock Units, Performance Units or Performance Shares, is forfeited to or repurchased by the Company due to failure to vest, the unpurchased Shares (or for Awards other than Options or Stock Appreciation Rights the forfeited, repurchased, or unissued Shares) which were subject thereto will become available for future grant or sale under the Plan (unless the Plan has terminated). Upon the exercise of a Stock Appreciation Right settled in Shares, the gross number of Shares covered by the portion of the Award so exercised will cease to be available under the Plan. Shares that have actually been issued under the Plan under any Award will not be returned to the Plan and will not become available for future distribution under the Plan; provided, however, that if Shares issued pursuant to Awards of Restricted Stock, Restricted Stock Units, Performance Shares or Performance Units are repurchased by the Company or are forfeited to the Company due to failure to vest, such Shares will become available for future grant under the Plan. Shares used to pay the exercise or purchase price of an Award and/or to satisfy the tax withholding obligations related to an Award will not become available for future grant or sale under the Plan. To the extent an Award under the Plan is paid out in cash rather than Shares, such cash payment will not result in reducing the number of Shares available for issuance under the Plan. Notwithstanding the foregoing and, subject to adjustment as provided in Section 15, the maximum number of Shares that may be issued upon the exercise of Incentive Stock Options will equal the aggregate Share number stated in Section 3(a), plus, to the extent allowable under Section 422 of the Code and the Treasury Regulations promulgated thereunder, any Shares that become available for issuance under the Plan under this Section 3(c).

          (d) Share Reserve. The Company, during the term of this Plan, will at all times reserve and keep available such number of Shares as will be sufficient to satisfy the requirements of the Plan.

     4. Administration of the Plan.

          (a) Procedure.

               (i) Multiple Administrative Bodies. Different Committees with respect to different groups of Service Providers may administer the Plan.

               (ii) Section 162(m). To the extent that the Administrator determines it to be desirable to qualify Awards granted hereunder as “performance-based compensation” within the meaning of

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Section 162(m) of the Code, the Plan will be administered by a Committee of two (2) or more “outside directors” within the meaning of Section 162(m) of the Code.

               (iii) Rule 16b-3. To the extent desirable to qualify transactions hereunder as exempt under Rule 16b-3, the transactions contemplated hereunder will be structured to satisfy the requirements for exemption under Rule 16b-3.

               (iv) Other Administration. Other than as provided above, the Plan will be administered by (A) the Board or (B) a Committee, which committee will be constituted to satisfy Applicable Laws.

          (b) Powers of the Administrator. Subject to the provisions of the Plan, and in the case of a Committee, subject to the specific duties delegated by the Board to such Committee, the Administrator will have the authority, in its discretion:

               (i) to determine the Fair Market Value;

               (ii) to select the Service Providers to whom Awards may be granted hereunder;

               (iii) to determine the number of Shares to be covered by each Award granted hereunder;

               (iv) to approve forms of Award Agreements for use under the Plan;

               (v) to determine the terms and conditions, not inconsistent with the terms of the Plan, of any Award granted hereunder. Such terms and conditions include, but are not limited to, the exercise price, the time or times when Awards may be exercised (which may be based on performance criteria), any vesting acceleration or waiver of forfeiture restrictions, and any restriction or limitation regarding any Award or the Shares relating thereto, based in each case on such factors as the Administrator will determine;

               (vi) to construe and interpret the terms of the Plan and Awards granted pursuant to the Plan;

               (vii) to prescribe, amend and rescind rules and regulations relating to the Plan, including rules and regulations relating to sub-plans established for the purpose of satisfying applicable foreign laws or for qualifying for favorable tax treatment under applicable foreign laws;

               (viii) to modify or amend each Award (subject to Section 20(c) of the Plan), including but not limited to the discretionary authority to extend the post-termination exercisability period of Awards and to extend the maximum term of an Option (subject to Section 6(e) regarding Incentive Stock Options);

               (ix) to allow Participants to satisfy withholding tax obligations in such manner as prescribed in Section 16;

               (x) to authorize any person to execute on behalf of the Company any instrument required to effect the grant of an Award previously granted by the Administrator;

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               (xi) to allow a Participant to defer the receipt of the payment of cash or the delivery of Shares that would otherwise be due to such Participant under an Award pursuant to such procedures as the Administrator may determine; and

               (xii) to make all other determinations deemed necessary or advisable for administering the Plan.

          (c) Prohibition Against Repricing. Subject to adjustments made pursuant to Section 15 and notwithstanding anything to the contrary in the Plan, in no event shall the Administrator have the right to amend the terms of any Award to reduce the exercise price of such outstanding Award or cancel an outstanding Award in exchange for cash or other Awards with an exercise price that is less than the exercise price of the original Award without stockholder approval.

          (d) Effect of Administrator’s Decision. The Administrator’s decisions, determinations and interpretations will be final and binding on all Participants and any other holders of Awards.

          (e) No Liability. Under no circumstances shall the Company, its Affiliates, the Administrator, or the Board incur liability for any indirect, incidental, consequential or special damages (including lost profits) of any form incurred by any person, whether or not foreseeable and regardless of the form of the act in which such a claim may be brought, with respect to the Plan or the Company’s, its Affiliates’, the Administrator’s or the Board’s roles in connection with the Plan.

     5. Eligibility. Nonstatutory Stock Options, Restricted Stock, Restricted Stock Units, Stock Appreciation Rights, Performance Units, and Performance Shares may be granted to Service Providers. Incentive Stock Options may be granted only to employees of the Company or any Parent or Subsidiary of the Company.

     6. Stock Options.

          (a) Grant of Stock Options. Subject to the terms and conditions of the Plan, an Option may be granted to Service Providers at any time and from time to time as will be determined by the Administrator, in its sole discretion. Each Option will be designated in the Award Agreement as either an Incentive Stock Option or a Nonstatutory Stock Option. However, notwithstanding such designation, to the extent that the aggregate Fair Market Value of the Shares with respect to which Incentive Stock Options are exercisable for the first time by the Participant during any calendar year (under all plans of the Company and any Parent or Subsidiary) exceeds one hundred thousand U.S. dollars ($100,000), such Options will be treated as Nonstatutory Stock Options. For purposes of this Section 6(a), Incentive Stock Options will be taken into account in the order in which they were granted. The Fair Market Value of the Shares will be determined as of the time the Option with respect to such Shares is granted.

          (b) Number of Shares. The Administrator will have complete discretion to determine the number of Shares subject to an Option granted to any Participant, provided that during any Fiscal Year, no Participant will be granted Options covering more than 1,000,000 Shares. The foregoing limitation will be adjusted proportionately in connection with any change in the Company’s capitalization as described in Section 15.

          (c) Exercise Price and Other Terms. The Administrator, subject to the provisions of the Plan, will have complete discretion to determine the terms and conditions of Options granted under the Plan, provided, however, that the exercise price will not be less than one hundred percent (100%) of the Fair Market Value of a Share on the date of grant. In addition, in the case of an Incentive Stock Option granted to an employee of the Company or any Parent or Subsidiary of the Company who, at the time the Incentive

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Stock Option is granted, owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary, the per Share exercise price will be no less than one hundred ten percent (110%) of the Fair Market Value per Share on the date of grant. Notwithstanding the foregoing provisions of this Section 6(c), Options may be granted with a per Share exercise price of less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant pursuant to a transaction described in, and in a manner consistent with, Section 424(a) of the Code and the Treasury Regulations thereunder.

          (d) Option Agreement.

               (i) Terms and Conditions. Each Option grant will be evidenced by an Award Agreement that will specify the exercise price, the term of the Option, the acceptable forms of consideration for exercise (which may include any form of consideration permitted by Section 6(d)(ii), the conditions of exercise, and such other terms and conditions as the Administrator, in its sole discretion, will determine.

               (ii) Form of Consideration. The Administrator will determine the acceptable form(s) of consideration for exercising an Option, including the method of payment, to the extent permitted by Applicable Laws. In the case of an Incentive Stock Option, the Administrator will determine the acceptable form of consideration at the time of grant. Such consideration to the extent permitted by Applicable Laws may include, but is not limited to:

                    (1) cash;

                    (2) check;

                    (3) other Shares which have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as to which said Option will be exercised and provided that accepting such Shares, in the sole discretion of the Administrator, will not result in any adverse accounting consequences to the Company;

                    (4) by net exercise;

                    (5) consideration received by the Company under a cashless exercise program implemented by the Company in connection with the Plan;

                    (6) a reduction in the amount of any Company liability to the Participant, including any liability attributable to the Participant’s participation in any Company-sponsored deferred compensation program or arrangement;

                    (7) such other consideration and method of payment for the issuance of Shares to the extent permitted by Applicable Laws; or

                    (8) any combination of the foregoing methods of payment.

          (e) Term of Option. An Option granted under the Plan will expire upon the date determined by the Administrator, in its sole discretion, and set forth in the Award Agreement; provided, however, that the term will be no more than seven (7) years from the date of grant thereof. In the case of an Incentive Stock Option granted to a Participant who, at the time the Incentive Stock Option is granted, owns stock representing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or any Parent or Subsidiary, the term of the Incentive Stock Option will be five (5) years from the date of grant or such shorter term as may be provided in the Award Agreement.

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          (f) Exercise of Option.

               (i) Procedure for Exercise; Rights as a Stockholder. Any Option granted hereunder will be exercisable according to the terms of the Plan and at such times and under such conditions as determined by the Administrator and set forth in the Award Agreement. An Option may not be exercised for a fraction of a Share.

                    An Option will be deemed exercised when the Company receives: (i) notice of exercise (in such form as the Administrator specifies from time to time) from the person entitled to exercise the Option, and (ii) full payment for the Shares with respect to which the Option is exercised (together with applicable tax withholdings). Full payment may consist of any consideration and method of payment authorized by the Administrator and permitted by the Award Agreement and the Plan. Shares issued upon exercise of an Option will be issued in the name of the Participant or, if requested by the Participant, in the name of the Participant and his or her spouse. 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), no right to vote or receive dividends or any other rights as a stockholder will exist with respect to the Shares subject to an Option, notwithstanding the exercise of the Option. The Company will issue (or cause to be issued) such Shares promptly after the Option is exercised. No adjustment will be made for a dividend or other right for which the record date is prior to the date the Shares are issued, except as provided in Section 15 of the Plan.

     Exercising an Option in any manner will decrease the number of Shares thereafter available, both for purposes of the Plan and for sale under the Option, by the number of Shares as to which the Option is exercised.

               (ii) Termination of Relationship as a Service Provider. If a Participant ceases to be a Service Provider, other than upon the Participant’s termination as the result of the Participant’s death or Disability, the Participant may exercise his or her Option within such period of time as is specified in the Award Agreement to the extent that the Option is vested on the date of termination (but in no event later than the expiration of the term of such Option as set forth in the Award Agreement). In the absence of a specified time in the Award Agreement, the Option will remain exercisable for three (3) months following the Participant’s termination. Unless otherwise provided by the Administrator, if on the date of termination the Participant is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option will revert to the Plan. If after termination the Participant does not exercise his or her Option within the time specified by the Administrator, the Option will terminate, and the Shares covered by such Option will revert to the Plan.

               (iii) Disability of Participant. If a Participant ceases to be a Service Provider as a result of the Participant’s Disability, the Participant may exercise his or her Option within such period of time as is specified in the Award Agreement to the extent the Option is vested on the date of termination (but in no event later than the expiration of the term of such Option as set forth in the Award Agreement). In the absence of a specified time in the Award Agreement, the Option will remain exercisable for twelve (12) months following the Participant’s termination. Unless otherwise provided by the Administrator, if on the date of termination the Participant is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option will revert to the Plan. If after termination the Participant does not exercise his or her Option within the time specified herein, the Option will terminate, and the Shares covered by such Option will revert to the Plan.

               (iv) Death of Participant. If a Participant dies while a Service Provider, the Option may be exercised following the Participant’s death within such period of time as is specified in the Award Agreement to the extent that the Option is vested on the date of death (but in no event may the Option be exercised later than the expiration of the term of such Option as set forth in the Award Agreement), by the

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Participant’s designated beneficiary, provided such beneficiary has been designated prior to Participant’s death in a form acceptable to the Administrator. If no such beneficiary has been designated by the Participant, then such Option may be exercised by the personal representative of the Participant’s estate or by the person(s) to whom the Option is transferred pursuant to the Participant’s will or in accordance with the laws of descent and distribution. In the absence of a specified time in the Award Agreement, the Option will remain exercisable for twelve (12) months following Participant’s death. Unless otherwise provided by the Administrator, if at the time of death Participant is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option will immediately revert to the Plan. If the Option is not so exercised within the time specified herein, the Option will terminate, and the Shares covered by such Option will revert to the Plan.

               (v) Other Termination. A Participant’s Award Agreement also may provide that if the exercise of the Option following the termination of Participant’s status as a Service Provider (other than upon the Participant’s death or Disability) would result in liability under Section 16(b), then the Option will terminate on the earlier of (A) the expiration of the term of the Option set forth in the Award Agreement, or (B) the tenth (10th) day after the last date on which such exercise would result in such liability under Section 16(b). Finally, a Participant’s Award Agreement may also provide that if the exercise of the Option following the termination of the Participant’s status as a Service Provider (other than upon the Participant’s death or Disability) would be prohibited at any time solely because the issuance of Shares would violate the registration requirements under the Securities Act, then the Option will terminate on the earlier of (A) the expiration of the term of the Option, or (B) the expiration of a period of three (3) months after the termination of the Participant’s status as a Service Provider during which the exercise of the Option would not be in violation of such registration requirements.

     7. Stock Appreciation Rights.

          (a) Grant of Stock Appreciation Rights. Subject to the terms and conditions of the Plan, a Stock Appreciation Right may be granted to Service Providers at any time and from time to time as will be determined by the Administrator, in its sole discretion.

          (b) Number of Shares. The Administrator will have complete discretion to determine the number of Stock Appreciation Rights granted to any Participant, provided that during any Fiscal Year, no Participant will be granted Stock Appreciation Rights covering more than 1,000,000 Shares. The foregoing limitation will be adjusted proportionately in connection with any change in the Company’s capitalization as described in Section 15.

          (c) Exercise Price and Other Terms. The Administrator, subject to the provisions of the Plan, will have complete discretion to determine the terms and conditions of Stock Appreciation Rights granted under the Plan, provided, however, that the exercise price will not be less than one hundred percent (100%) of the Fair Market Value of a Share on the date of grant. Notwithstanding the foregoing provisions of this Section 7(c), Stock Appreciation Rights may be granted with a per Share exercise price of less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant pursuant to a transaction described in, and in a manner consistent with, Section 424(a) of the Code and the Treasury Regulations thereunder.

          (d) Stock Appreciation Right Agreement. Each Stock Appreciation Right grant will be evidenced by an Award Agreement that will specify the exercise price, the term of the Stock Appreciation Right, the acceptable forms of consideration for exercise (which may include any form of consideration permitted by Section 6(d)(ii), the conditions of exercise, and such other terms and conditions as the Administrator, in its sole discretion, will determine.

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          (e) Expiration of Stock Appreciation Rights. A Stock Appreciation Right granted under the Plan will expire upon the date determined by the Administrator, in its sole discretion, and set forth in the Award Agreement; provided, however, that the term will be no more than seven (7) years from the date of grant thereof. Notwithstanding the foregoing, the rules of Section 6(f) relating to exercise also will apply to Stock Appreciation Rights.

          (f) Payment of Stock Appreciation Right Amount. Upon exercise of a Stock Appreciation Right, a Participant will be entitled to receive payment from the Company in an amount determined by multiplying:

               (i) The difference between the Fair Market Value of a Share on the date of exercise over the exercise price; times

               (ii) The number of Shares with respect to which the Stock Appreciation Right is exercised.

     At the discretion of the Administrator, the payment upon Stock Appreciation Right exercise may be in cash, in Shares of equivalent value, or in some combination thereof.

     8. Restricted Stock.

          (a) Grant of Restricted Stock. Subject to the terms and provisions of the Plan, the Administrator, at any time and from time to time, may grant Shares of Restricted Stock to Service Providers in such amounts as the Administrator, in its sole discretion, will determine.

          (b) Restricted Stock Agreement. Each Award of Restricted Stock will be evidenced by an Award Agreement that will specify the Period of Restriction, the number of Shares granted, and such other terms and conditions as the Administrator, in its sole discretion, will determine. Unless the Administrator determines otherwise, the Company as escrow agent will hold Shares of Restricted Stock until the restrictions on such Shares have lapsed. Notwithstanding the foregoing sentence, for restricted stock intended to qualify as “performance-based compensation” within the meaning of Section 162(m) of the Code, during any Fiscal Year no Participant will receive more than an aggregate of 300,000 Shares of Restricted Stock. The foregoing limitation will be adjusted proportionately in connection with any change in the Company’s capitalization as described in Section 15.

          (c) Transferability. Except as provided in this Section 8, Shares of Restricted Stock may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated until the end of the applicable Period of Restriction.

          (d) Other Restrictions. The Administrator, in its sole discretion, may impose such other restrictions on Shares of Restricted Stock as it may deem advisable or appropriate.

          (e) Removal of Restrictions. Except as otherwise provided in this Section 8, Shares of Restricted Stock covered by each Restricted Stock grant made under the Plan will be released from escrow as soon as practicable after the last day of the Period of Restriction or at such other time as the Administrator may determine. The Administrator, in its sole discretion, may reduce or waive any restrictions for such Award and may accelerate the time at which any restrictions will lapse or be removed.

          (f) Voting Rights. During the Period of Restriction, Service Providers holding Shares of Restricted Stock granted hereunder may exercise full voting rights with respect to those Shares, unless the Administrator determines otherwise.

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          (g) Dividends and Other Distributions. During the Period of Restriction, Service Providers holding Shares of Restricted Stock will be entitled to receive all dividends and other distributions paid with respect to such Shares, unless the Administrator provides otherwise. If any such dividends or distributions are paid in Shares, the Shares will be subject to the same restrictions on transferability and forfeitability as the Shares of Restricted Stock with respect to which they were paid.

          (h) Return of Restricted Stock to Company. On the date set forth in the Award Agreement, the Restricted Stock for which restrictions have not lapsed will revert to the Company and again will become available for grant under the Plan.

          (i) Section 162(m) Performance Restrictions. For purposes of qualifying grants of Restricted Stock as “performance-based compensation” under Section 162(m) of the Code, the Administrator, in its discretion, may set restrictions based upon the achievement of Performance Goals. The Performance Goals will be set by the Administrator on or before the Determination Date. In granting Restricted Stock which is intended to qualify under Section 162(m) of the Code, the Administrator will follow any procedures determined by it from time to time to be necessary or appropriate to ensure qualification of the Award under Section 162(m) of the Code (e.g., in determining the Performance Goals).

     9. Restricted Stock Units.

          (a) Grant. Restricted Stock Units may be granted at any time and from time to time as determined by the Administrator. After the Administrator determines that it will grant Restricted Stock Units under the Plan, it will advise the Participant in an Award Agreement of the terms, conditions, and restrictions related to the grant, including the number of Restricted Stock Units. Notwithstanding anything to the contrary in this subsection (a), for Restricted Stock Units intended to qualify as “performance-based compensation” within the meaning of Section 162(m) of the Code, during any Fiscal Year of the Company, no Participant will receive more than an aggregate of 300,000 Restricted Stock Units. The foregoing limitation will be adjusted proportionately in connection with any change in the Company’s capitalization as described in Section 15.

          (b) Vesting Criteria and Other Terms. The Administrator will set vesting criteria in its discretion, which, depending on the extent to which the criteria are met, will determine the number of Restricted Stock Units that will be paid out to the Participant. The Administrator may set vesting criteria based upon the achievement of Company-wide, business unit, or individual goals (including, but not limited to, continued employment), or any other basis determined by the Administrator in its discretion.

          (c) Earning Restricted Stock Units. Upon meeting the applicable vesting criteria, the Participant will be entitled to receive a payout as determined by the Administrator. Notwithstanding the foregoing, at any time after the grant of Restricted Stock Units, the Administrator, in its sole discretion, may reduce or waive any vesting criteria that must be met to receive a payout and may accelerate the time at which any restrictions will lapse or be removed.

          (d) Form and Timing of Payment. Payment of earned Restricted Stock Units will be made as soon as practicable after the date(s) set forth in the Award Agreement or as otherwise provided in the applicable Award Agreement or as required by Applicable Laws. The Administrator, in its sole discretion, may pay earned Restricted Stock Units in cash, Shares, or a combination thereof. Shares represented by Restricted Stock Units that are fully paid in cash again will not reduce the number of Shares available for grant under the Plan.

          (e) Cancellation. On the date set forth in the Award Agreement, all unearned Restricted Stock Units will be forfeited to the Company.

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          (f) Section 162(m) Performance Restrictions. For purposes of qualifying grants of Restricted Stock Units as “performance-based compensation” under Section 162(m) of the Code, the Administrator, in its discretion, may set restrictions based upon the achievement of Performance Goals. The Performance Goals will be set by the Administrator on or before the Determination Date. In granting Restricted Stock Units which are intended to qualify under Section 162(m) of the Code, the Administrator will follow any procedures determined by it from time to time to be necessary or appropriate to ensure qualification of the Award under Section 162(m) of the Code (e.g., in determining the Performance Goals).

     10. Performance Units and Performance Shares.

          (a) Grant of Performance Units/Shares. Performance Units and Performance Shares may be granted to Service Providers at any time and from time to time, as will be determined by the Administrator, in its sole discretion. The Administrator will have complete discretion in determining the number of Performance Units and Performance Shares granted to each Participant provided that during any Fiscal Year, for Performance Units or Performance Shares intended to qualify as “performance-based compensation” within the meaning of Section 162(m) of the Code, (i) no Participant will receive Performance Units having an initial value greater than $3,000,000, and (ii) no Participant will receive more than 300,000 Performance Shares. The foregoing limitations will be adjusted proportionately in connection with any change in the Company’s capitalization as described in Section 15.

          (b) Value of Performance Units/Shares. Each Performance Unit will have an initial value that is established by the Administrator on or before the date of grant. Each Performance Share will have an initial value equal to the Fair Market Value of a Share on the date of grant.

          (c) Performance Objectives and Other Terms. The Administrator will set performance objectives or other vesting provisions (including, without limitation, continued status as a Service Provider) in its discretion which, depending on the extent to which they are met, will determine the number or value of Performance Units/Shares that will be paid out to the Service Providers. The time period during which the performance objectives or other vesting provisions must be met will be called the “Performance Period.” Each Award of Performance Units/Shares will be evidenced by an Award Agreement that will specify the Performance Period, and such other terms and conditions as the Administrator, in its sole discretion, will determine. The Administrator may set performance objectives based upon the achievement of Company-wide, divisional, or individual goals, applicable federal or state securities laws, or any other basis determined by the Administrator in its discretion.

          (d) Earning of Performance Units/Shares. After the applicable Performance Period has ended, the holder of Performance Units/Shares will be entitled to receive a payout of the number of Performance Units/Shares earned by the Participant over the Performance Period, to be determined as a function of the extent to which the corresponding performance objectives or other vesting provisions have been achieved. After the grant of a Performance Unit/Share, the Administrator, in its sole discretion, may reduce or waive any performance objectives or other vesting provisions for such Performance Unit/Share and may accelerate the time at which any restrictions will lapse or be removed.

          (e) Form and Timing of Payment of Performance Units/Shares. Payment of earned Performance Units/Shares will be made as soon as practicable after the expiration of the applicable Performance Period, or as otherwise provided in the applicable Award Agreement or as required by Applicable Laws. The Administrator, in its sole discretion, may pay earned Performance Units/Shares in the form of cash, in Shares (which have an aggregate Fair Market Value equal to the value of the earned Performance Units/Shares at the close of the applicable Performance Period) or in a combination thereof.

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          (f) Cancellation of Performance Units/Shares. On the date set forth in the Award Agreement, all unearned or unvested Performance Units/Shares will be forfeited to the Company, and again will be available for grant under the Plan.

          (g) Section 162(m) Performance Restrictions. For purposes of qualifying grants of Performance Units/Shares as “performance-based compensation” under Section 162(m) of the Code, the Administrator, in its discretion, may set restrictions based upon the achievement of Performance Goals. The Performance Goals will be set by the Administrator on or before the Determination Date. In granting Performance Units/Shares which are intended to qualify under Section 162(m) of the Code, the Administrator will follow any procedures determined by it from time to time to be necessary or appropriate to ensure qualification of the Award under Section 162(m) of the Code (e.g., in determining the Performance Goals).

     11. Performance-Based Compensation Under Code Section 162(m).

          (a) General. If the Administrator, in its discretion, decides to grant an Award intended to qualify as “performance-based compensation” under Section 162(m) of the Code, the provisions of this Section 11 will control over any contrary provision in the Plan; provided, however, that the Administrator may in its discretion grant Awards that are not intended to qualify as “performance-based compensation” under Section 162(m) of the Code to such Participants that are based on Performance Goals or other specific criteria or goals but that do not satisfy the requirements of this Section 11.

          (b) Performance Goals. The granting and/or vesting of Awards of Restricted Stock, Restricted Stock Units, Performance Shares and Performance Units and other incentives under the Plan may be made subject to the attainment of performance goals relating to one or more business criteria within the meaning of Section 162(m) of the Code and may provide for a targeted level or levels of achievement (“Performance Goals”) including: attainment of research and development milestones; business divestitures and acquisitions; cash flow; cash position; contract awards or backlog; customer renewals; customer retention rates from an acquired company, business unit or division; earnings (which may include earnings before interest and taxes, earnings before taxes and net earnings); earnings per Share; expenses; gross margin; growth in stockholder value relative to the moving average of the S&P 500 Index or another index; market share; net income; net profit; net sales; new product development; new product invention or innovation; operating cash flow; operating expenses; operating income; operating margin; overhead or other expense reduction; product defect measures; product release timelines; productivity; profit; return on assets; return on capital; return on equity; return on investment; return on sales; revenue; revenue growth; sales results; sales growth; stock price; time to market; total stockholder return; or working capital. Any criteria used may be (A) measured in absolute terms, (B) measured in terms of growth, (C) compared to another company or companies, (D) measured against the market as a whole and/or according to applicable market indices, (E) measured against the performance of the Company as a whole or a segment of the Company and/or (F) measured on a pre-tax or post-tax basis (if applicable). Further, any Performance Goals may be used to measure the performance of the Company as a whole or a business unit or other segment of the Company, or one or more product lines or specific markets and may be measured relative to a peer group or index. The Performance Goals may differ from Participant to Participant and from Award to Award. Prior to the Determination Date, the Administrator will determine whether any significant element(s) will be included in or excluded from the calculation of any Performance Goal with respect to any Participant. In all other respects, Performance Goals will be calculated in accordance with the Company’s financial statements, generally accepted accounting principles, or under a methodology established by the Administrator prior to the issuance of an Award and which is consistently applied with respect to a Performance Goal in the relevant Performance Period. The Administrator will appropriately adjust any evaluation of performance under a Performance Goal to exclude (i) any extraordinary non-recurring items as described in Accounting Principles Board Opinion No. 30 and/or in management’s discussion and analysis of financial conditions and

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results of operations appearing in the Company’s annual report to stockholders for the applicable year, or (ii) the effect of any changes in accounting principles affecting the Company’s or a business units’ reported results. In addition, the Administrator will adjust any performance criteria, Performance Goal or other feature of an Award that relates to or is wholly or partially based on the number of, or the value of, any stock of the Company, to reflect any stock dividend or split, repurchase, recapitalization, combination, or exchange of shares or other similar changes in such stock.

          (c) Procedures. To the extent necessary to comply with the performance-based compensation provisions of Section 162(m) of the Code, with respect to any Award granted subject to Performance Goals and intended to qualify as “performance-based compensation” under Section 162(m) of the Code, within the first twenty-five percent (25%) of the Performance Period, but in no event more than ninety (90) days following the commencement of any Performance Period (or such other time as may be required or permitted by Section 162(m) of the Code), the Administrator will, in writing, (i) designate one or more Participants to whom an Award will be made, (ii) select the Performance Goals applicable to the Performance Period, (iii) establish the Performance Goals, and amounts of such Awards, as applicable, which may be earned for such Performance Period, and (iv) specify the relationship between Performance Goals and the amounts of such Awards, as applicable, to be earned by each Participant for such Performance Period.

          (d) Additional Limitations. Notwithstanding any other provision of the Plan, any Award which is granted to a Participant and is intended to constitute qualified performance-based compensation under Section 162(m) of the Code will be subject to any additional limitations set forth in the Code (including any amendment to Section 162(m)) or any regulations and ruling issued thereunder that are requirements for qualification as qualified performance-based compensation as described in Section 162(m) of the Code, and the Plan will be deemed amended to the extent necessary to conform to such requirements.

          (e) Determination of Amounts Earned. Following the completion of each Performance Period, the Administrator will certify in writing whether the applicable Performance Goals have been achieved for such Performance Period. A Participant will be eligible to receive payment pursuant to an Award intended to qualify as “performance-based compensation” under Section 162(m) of the Code for a Performance Period only if the Performance Goals for such period are achieved. In determining the amounts earned by a Participant pursuant to an Award intended to qualified as “performance-based compensation” under Section 162(m) of the Code, the Committee will have the right to (a) reduce or eliminate (but not to increase) the amount payable at a given level of performance to take into account additional factors that the Committee may deem relevant to the assessment of individual or corporate performance for the Performance Period, (b) determine what actual Award, if any, will be paid in the event of a termination of employment as the result of a Participant’s death or disability or upon a Change in Control or in the event of a termination of employment following a Change in Control prior to the end of the Performance Period, and (c) determine what actual Award, if any, will be paid in the event of a termination of employment other than as the result of a Participant’s death or disability prior to a Change of Control and prior to the end of the Performance Period to the extent an actual Award would have otherwise been achieved had the Participant remained employed through the end of the Performance Period. A Participant will be eligible to receive payment pursuant to an Award intended to qualify as “performance-based compensation” under Section 162(m) of the Code for a Performance Period only if the Performance Goals for such period are achieved.

     12. Compliance With Code Section 409A. Awards will be designed and operated in such a manner that they are either exempt from the application of, or comply with, the requirements of Code Section 409A such that the grant, payment, settlement or deferral will not be subject to the additional tax or interest applicable under Code Section 409A, except as otherwise determined in the sole discretion of the Administrator. The Plan and each Award Agreement under the Plan is intended to meet the requirements of Code Section 409A and will be construed and interpreted in accordance with such intent, except as otherwise

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determined in the sole discretion of the Administrator. To the extent that an Award or payment, or the settlement or deferral thereof, is subject to Code Section 409A the Award will be granted, paid, settled or deferred in a manner that will meet the requirements of Code Section 409A, such that the grant, payment, settlement or deferral will not be subject to the additional tax or interest applicable under Code Section 409A.

     13. Leaves of Absence/Transfer Between Locations. Unless the Administrator provides otherwise and except as required by Applicable Laws, vesting of Awards granted hereunder will be suspended during any unpaid leave of absence. A Participant will not cease to be an Employee in the case of (i) any leave of absence approved by the Company or (ii) transfers between locations of the Company or between the Company, its Parent, or any Subsidiary. For purposes of Incentive Stock Options, no such leave may exceed three (3) months, unless reemployment upon expiration of such leave is guaranteed by statute or contract. If reemployment upon expiration of a leave of absence approved by the Company is not so guaranteed, then six (6) months following the first (1^st) day of such leave, any Incentive Stock Option held by the Participant will cease to be treated as an Incentive Stock Option and will be treated for tax purposes as a Nonstatutory Stock Option.

     14. Transferability.

          (a) Non-Transferability of Awards. Unless determined otherwise by the Administrator, an Award may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution and may be exercised, during the lifetime of the Participant, only by the Participant.

          (b) Prohibition Against an Award Transfer Program. Notwithstanding anything to the contrary in the Plan, in no event will the Administrator have the right to determine and implement the terms and conditions of any Award Transfer Program without stockholder approval.

     15. Adjustments; Dissolution or Liquidation; Merger or Change in Control.

          (a) Adjustments. In the event that any dividend or other distribution (whether in the form of cash, Shares, other securities, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of Shares or other securities of the Company, or other change in the corporate structure of the Company affecting the Shares occurs, the Administrator, in order to prevent diminution or enlargement of the benefits or potential benefits intended to be made available under the Plan, will adjust the number and class of Shares that may be delivered under the Plan and/or the number, class, and price of Shares covered by each outstanding Award, the numerical Share limits set forth in Sections 3, 6, 7, 8, 9 and 10 of the Plan.

          (b) Dissolution or Liquidation. In the event of the proposed dissolution or liquidation of the Company, the Administrator will notify each Participant as soon as practicable prior to the effective date of such proposed transaction. To the extent it has not been previously exercised, an Award will terminate immediately prior to the consummation of such proposed action.

          (c) Change in Control. In the event of a merger or Change in Control, each outstanding Award will be treated as the Administrator determines without a Participant’s consent, including, without limitation, that (i) Awards will be assumed, or substantially equivalent Awards will be substituted, by the acquiring or succeeding corporation (or an affiliate thereof) with appropriate adjustments as to the number and kind of shares and prices; (ii) upon written notice to a Participant, that the Participant’s Awards will terminate upon or immediately prior to the consummation of such merger or Change in Control; (iii) outstanding Awards will vest and become exercisable, realizable, or payable, or restrictions applicable to an Award will lapse, in whole or in part prior to or upon consummation of such merger or Change in

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Control, and, to the extent the Administrator determines, terminate upon or immediately prior to the effectiveness of such merger of Change in Control; (iv) (A) the termination of an Award in exchange for an amount of cash and/or property, if any, equal to the amount that would have been attained upon the exercise of such Award or realization of the Participant’s rights as of the date of the occurrence of the transaction (and, for the avoidance of doubt, if as of the date of the occurrence of the transaction the Administrator determines in good faith that no amount would have been attained upon the exercise of such Award or realization of the Participant’s rights, then such Award may be terminated by the Company without payment), or (B) the replacement of such Award with other rights or property selected by the Administrator in its sole discretion; or (v) any combination of the foregoing. In taking any of the actions permitted under this subsection 15(c), the Administrator will not be obligated to treat all Awards, all Awards held by a Participant, or all Awards of the same type, similarly.

          In the event that the successor corporation does not assume or substitute for the Award (or portion thereof), the Participant will fully vest in and have the right to exercise all of his or her outstanding Options and Stock Appreciation Rights that are not assumed or substituted for, including Shares as to which such Awards would not otherwise be vested or exercisable, all restrictions on Restricted Stock, Restricted Stock Units, and Performance Shares/Units not assumed or substituted for will lapse, and, with respect to Awards with performance-based vesting not assumed or substituted for, all performance goals or other vesting criteria will be deemed achieved at one hundred percent (100%) of target levels and all other terms and conditions met. In addition, if an Option or Stock Appreciation Right is not assumed or substituted for in the event of a Change in Control, the Administrator will notify the Participant in writing or electronically that the Option or Stock Appreciation Right will be fully vested and exercisable for a period of time determined by the Administrator in its sole discretion, and the Option or Stock Appreciation Right will terminate upon the expiration of such period.

          For the purposes of this subsection (c), an Award will be considered assumed if, following the Change in Control, the Award confers the right to purchase or receive, for each Share subject to the Award immediately prior to the Change in Control, the consideration (whether stock, cash, or other securities or property) or, in the case of a Stock Appreciation Right upon the exercise of which the Administrator determines to pay cash or a Restricted Stock Unit, Performance Share or Performance Unit which the Administrator can determine to pay in cash, the fair market value of the consideration received in the merger or Change in Control by holders of Common Stock for each Share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Shares); provided, however, that if such consideration received in the Change in Control is not solely common stock of the successor corporation or its Parent, the Administrator may, with the consent of the successor corporation, provide for the consideration to be received upon the exercise of an Option or Stock Appreciation Right or upon the payout of a Restricted Stock Unit, Performance Unit or Performance Share, for each Share subject to such Award (or in the case of an Award settled in cash, the number of implied shares determined by dividing the value of the Award by the per share consideration received by holders of Common Stock in the Change in Control), to be solely common stock of the successor corporation or its Parent equal in fair market value to the per share consideration received by holders of Common Stock in the Change in Control.

          Notwithstanding anything in this Section 15(c) to the contrary, an Award that vests, is earned or paid-out upon the satisfaction of one or more Performance Goals will not be considered assumed if the Company or its successor modifies any of such Performance Goals without the Participant’s consent; provided, however, a modification to such Performance Goals only to reflect the successor corporation’s post-Change in Control corporate structure will not be deemed to invalidate an otherwise valid Award assumption.

          Notwithstanding anything in this Section 15(c) to the contrary, if a payment under an Award Agreement is subject to Section 409A of the Code and if the change in control definition contained in the

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Award Agreement or other agreement related to the Award does not comply with the definition of “change in control” for purposes of a distribution under Section 409A of the Code, then any payment of an amount that is otherwise accelerated under this Section will be delayed until the earliest time that such payment would be permissible under Section 409A of the Code without triggering any penalties applicable under Section 409A of the Code.

     16. Tax Withholding.

          (a) Withholding Requirements. Prior to the delivery of any Shares or cash pursuant to an Award (or exercise thereof), the Company will have the power and the right to deduct or withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy federal, state, local, foreign or other taxes (including the Participant’s FICA obligation) required to be withheld with respect to such Award (or exercise thereof).

          (b) Withholding Arrangements. The Administrator, in its sole discretion and pursuant to such procedures as it may specify from time to time, may permit a Participant to satisfy such tax withholding obligation, in whole or in part by (without limitation) (a) paying cash, (b) electing to have the Company withhold otherwise deliverable cash or Shares having a Fair Market Value equal to the amount required to be withheld, (c) delivering to the Company already-owned Shares having a Fair Market Value equal to the amount required to be withheld, provided the delivery of such Shares will not result in any adverse accounting consequences as the Administrator determines in its sole discretion, (d) selling a sufficient number of Shares otherwise deliverable to the Participant through such means as the Administrator may determine in its sole discretion (whether through a broker or otherwise) equal to the amount required to be withheld, or (e) retaining from salary or other amounts payable to the Participant cash having a sufficient value to satisfy the amount required to be withheld. The amount of the withholding requirement will be deemed to include any amount which the Administrator agrees may be withheld at the time the election is made, not to exceed the amount determined by using the maximum federal, state or local marginal income tax rates applicable to the Participant with respect to the Award on the date that the amount of tax to be withheld is to be determined. The Fair Market Value of the Shares to be withheld or delivered will be determined as of the date that the taxes are required to be withheld.

     17. No Effect on Employment or Service. Neither the Plan nor any Award will confer upon a Participant any right with respect to continuing the Participant’s relationship as a Service Provider with the Company, nor will they interfere in any way with the Participant’s right or the Company’s right to terminate such relationship at any time, with or without cause, to the extent permitted by Applicable Laws.

     18. Date of Grant. The date of grant of an Award will be, for all purposes, the date on which the Administrator makes the determination granting such Award, or such other later date as is determined by the Administrator. Notice of the determination will be provided to each Participant within a reasonable time after the date of such grant.

     19. Term of Plan. The Plan will become effective upon its approval by the stockholders of the Company. It will continue in effect for a term of ten (10) years from the date the Plan was adopted by the Board, unless terminated earlier under Section 20 of the Plan.

     20. Amendment and Termination of the Plan.

          (a) Amendment and Termination. The Administrator may at any time amend, alter, suspend or terminate the Plan.

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          (b) Stockholder Approval. The Company will obtain stockholder approval of any Plan amendment to the extent necessary and desirable to comply with Applicable Laws.

          (c) Effect of Amendment or Termination. No amendment, alteration, suspension or termination of the Plan will impair the rights of any Participant, unless mutually agreed otherwise between the Participant and the Administrator, which agreement must be in writing and signed by the Participant and the Company. Termination of the Plan will not affect the Administrator’s ability to exercise the powers granted to it hereunder with respect to Awards granted under the Plan prior to the date of such termination.

     21. Conditions Upon Issuance of Shares.

          (a) Legal Compliance. Shares will not be issued pursuant to the exercise of an Award unless the exercise of such Award and the issuance and delivery of such Shares will comply with Applicable Laws and will be further subject to the approval of counsel for the Company with respect to such compliance.

          (b) Investment Representations. As a condition to the exercise of an Award, the Company may require the person exercising such Award 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.

     22. Inability to Obtain Authority. The inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder, will relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority will not have been obtained.

     23. Stockholder Approval. The Plan was adopted by the Board on September 23, 2009 and was approved by the stockholders of the Company, and became effective, on November 4, 2009.

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EX-10.2

Exhibit 10.2

OPLINK COMMUNICATIONS, INC.

2000 EMPLOYEE STOCK PURCHASE PLAN

(Amended and Restated Effective November 4, 2009)

     1. Purpose.

     (a) The purpose of this Amended and Restated 2000 Employee Stock Purchase Plan (the “Plan”) is to provide a means by which employees of Oplink Communications, Inc. (the “Company”) and its Affiliates, as defined in subparagraph 1(b), which are designated as provided in subparagraph 2(b), may be given an opportunity to purchase common stock of the Company (the “Common Stock”).

     (b) The word “Affiliate” as used in the Plan means any parent corporation or subsidiary corporation of the Company, as those terms are defined in Sections 424(e) and (f), respectively, of the Internal Revenue Code of 1986, as amended (the “Code”).

     (c) The Company, by means of the Plan, seeks to retain the services of its 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.

     (d) The Company intends that the rights to purchase stock of the Company granted under the Plan be considered options issued under an “employee stock purchase plan” as that term is defined in Section 423(b) of the Code.

     2. Administration.

          (a) The Plan shall be administered by the Board of Directors (the “Board”) of the Company unless and until the Board delegates administration to a Committee, as provided in subparagraph 2(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 shall have the power, subject to, and within the limitations of, the express provisions of the Plan:

               (i) To determine when and how rights to purchase stock of the Company shall be granted and the provisions of each offering of such rights (which need not be identical).

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

               (iii) To construe and interpret the Plan and rights granted under it, and to establish, amend and revoke rules and regulations for its administration. 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 in paragraph 13.

               (v) To terminate or suspend the Plan as provided in paragraph 15.

               (vi) Generally, to exercise such powers and to perform such acts as the Board deems necessary or expedient to promote the best interests of the Company and its Affiliates and to carry out the

intent that the Plan be treated as an “employee stock purchase plan” within the meaning of Section 423 of the Code.

          (c) The Board may delegate administration of the Plan to a Committee composed of not fewer than two (2) members of the Board (the “Committee”). 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.

     3. Shares Subject To The Plan.

          (a) Subject to the provisions of paragraph 13 relating to adjustments upon changes in securities, the shares of the Common Stock that may be sold pursuant to rights granted under the Plan shall not exceed in the aggregate 2,857,142 shares of Common Stock. If any right granted under the Plan shall for any reason terminate without having been exercised, the shares of the Common Stock not purchased under such right shall again become available for the Plan.

          (b) The stock subject to the Plan may be unissued shares or reacquired shares, bought on the market or otherwise.

     4. Grant Of Rights; Offering.

               The Board or the Committee may from time to time grant or provide for the grant of rights to purchase Common Stock of the Company under the Plan to eligible employees (an “Offering”) on a date or dates (the “Offering Date(s)”) selected by the Board or the Committee. Each Offering shall be in such form and shall contain such terms and conditions as the Board or the Committee shall deem appropriate, which shall comply with the requirements of Section 423(b)(5) of the Code that all employees granted rights to purchase stock under the Plan 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 paragraphs 5 through 8, inclusive.

     5. Eligibility.

          (a) Rights may be granted only to employees of the Company or, as the Board or the Committee may designate as provided in subparagraph 2(b), to employees of any Affiliate of the Company. Except as provided in subparagraph 5(b), an employee of the Company or any Affiliate shall not be eligible to be granted rights under the Plan unless, on the Offering Date, such employee has been in the employ of the Company or any Affiliate for such continuous period preceding such grant as the Board or the Committee may require, but in no event shall the required period of continuous employment be greater than two (2) years. In addition, unless otherwise determined by the Board or the Committee and set forth in the terms of the applicable Offering, no employee of the Company or any Affiliate shall be eligible to be granted rights under the Plan unless, on the Offering Date, such employee’s customary employment with the Company or such Affiliate is for at least twenty (20) hours per week and at least five (5) months per calendar year.

          (b) The Board or the Committee may provide that each person who, during the course of an Offering, first becomes an eligible employee of the Company or designated Affiliate will, on a date or dates specified in the Offering, which date coincides with the day on which such person becomes an eligible

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employee or occurs thereafter, receive a right under that Offering, which right shall thereafter be deemed to be a part of that Offering. Such right shall have the same characteristics as any rights originally granted under that Offering, as described herein, except that:

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

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

               (iii) the Board or the Committee 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 will not receive any right under that Offering.

          (c) No employee shall be eligible for the grant of any rights under the Plan if, immediately after any such 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 Affiliate. For purposes of this subparagraph 5(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 rights and options shall be treated as stock owned by such employee.

          (d) An eligible employee may be granted rights under the Plan only if such rights, together with any other rights granted under “employee stock purchase plans” of the Company and any Affiliates, as specified by Section 423(b)(8) of the Code, do not permit such employee to purchase stock of the Company or any Affiliate at a rate that exceeds twenty-five thousand dollars ($25,000) of fair market value of such stock (determined at the time such rights are granted) for each calendar year in which such rights are outstanding at any time, as determined in accordance with Section 423 of the Code and the regulations thereunder.

          (e) Officers of the Company and any designated Affiliate shall be eligible to participate in Offerings under the Plan; provided, however, that the Board may provide in an Offering that certain employees who are highly compensated employees within the meaning of Section 423(b)(4)(D) of the Code shall not be eligible to participate.

     6. Rights; Purchase Price.

          (a) On each Offering Date, each eligible employee, pursuant to an Offering made under the Plan, shall be granted the right to purchase up to that number of shares of Common Stock of the Company purchasable with up to twenty percent (20%) (or such lower percentage as may be designated by the Board or Committee) of such employee’s Earnings (as defined in subparagraph 7(a)) during the period which begins on the Offering Date (or such later date as the Board or the Committee 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. The Board or the Committee shall establish one or more dates during an Offering (the “Purchase Date(s)”) on which rights granted under the Plan shall be exercised and purchases of Common Stock carried out in accordance with such Offering.

          (b) In connection with each Offering made under the Plan, the Board or the Committee may specify a maximum number of shares that may be purchased by any employee as well as a maximum aggregate number of shares that may be purchased by all eligible employees pursuant to such Offering. In addition, in connection with each Offering that contains more than one Purchase Date, the Board or the Committee may specify a maximum aggregate number of shares that may be purchased by all eligible

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employees on any given Purchase Date under the Offering. If the aggregate number of shares issuable upon exercise of rights granted under the Offering would exceed any such maximum aggregate number, the Board or the Committee shall make a pro rata allocation of the shares available in as nearly a uniform manner as shall be practicable and as it shall deem to be equitable. Unless and until the Board or the Committee provide otherwise, in no event will an eligible employee be permitted to purchase more than 25,000 shares of the Common Stock on any one Purchase Date (subject to any adjustment pursuant to Section 12) and any such purchase will be subject to the limitations set forth in Sections 5. The Board or the Committee may, for future Offerings, increase or decrease, in its absolute discretion, the maximum number of shares of Common Stock that an eligible employee may purchase on any Purchase Date.

          (c) The purchase price of stock acquired pursuant to rights granted under the Plan shall be not less than the lesser of:

               (i) an amount equal to eighty-five percent (85%) of the fair market value of the stock on the Offering Date; or

               (ii) an amount equal to eighty-five percent (85%) of the fair market value of the stock on the Purchase Date.

     Fair market value will be determined by the Board or the Committee, as of any date, by reference to the price of Common Stock on any established stock exchange or a national market system on the day of determination if the Common Stock is so listed on any established stock exchange or a national market system. If the Common Stock is not listed on any established stock exchange or a national market system, the value of the Common Stock as the Board or the Committee may determine in good faith.

     7. Participation; Withdrawal; Termination.

          (a) An eligible employee may become a participant in the Plan pursuant to an Offering by delivering a participation agreement to the Company within the time specified in the Offering, in such form as the Company provides. Each such agreement shall authorize payroll deductions of up to the maximum percentage specified by the Board or the Committee of such employee’s Earnings during the Offering. “Earnings” is defined as an employee’s wages (including amounts thereof elected to be deferred by the employee, that would otherwise have been paid, under any arrangement established by the Company that is intended to comply with Section 125, 401(k), 402(h) or 403(b) of the Code or that provides non-qualified deferred compensation), overtime pay, bonuses, incentive pay, commissions and other remuneration paid directly to the employee, but excluding profit sharing, the cost of employee benefits paid for by the Company or an Affiliate, education or tuition reimbursements, imputed income arising under any group insurance or benefit program, traveling expenses, business and moving expense reimbursements, income received in connection with stock options, contributions made by the Company or an Affiliate under any employee benefit plan, and similar items of compensation, as determined by the Board or the Committee. The payroll deductions made for each participant shall be credited to an account for such participant under the Plan and shall be deposited with the general funds of the Company. A participant may reduce (including to zero) or increase such payroll deductions, and an eligible employee may begin such payroll deductions, after the beginning of any Offering only as provided for in the Offering. A participant may make additional payments into his or her account only if specifically provided for in the Offering and only if the participant has not had the maximum amount withheld during the Offering.

          (b) At any time during an Offering, a participant may terminate his or her payroll deductions under the Plan and withdraw from the Offering by delivering to the Company a notice of withdrawal in such form as the Company provides. Such withdrawal may be elected at any time prior to the end of the Offering except as provided by the Board or the Committee in the Offering. Upon such withdrawal from the Offering

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by a participant, the Company shall distribute to such participant all of his or her accumulated payroll deductions (reduced to the extent, if any, such deductions have been used to acquire stock for the participant) under the Offering, without interest, and such participant’s interest in that Offering shall be automatically terminated. A participant’s withdrawal from an Offering will have no effect upon such participant’s eligibility to participate in any other Offerings under the Plan but such participant will be required to deliver a new participation agreement in order to participate in subsequent Offerings under the Plan.

          (c) Rights granted pursuant to any Offering under the Plan shall terminate immediately upon cessation of any participating employee’s employment with the Company and any designated Affiliate, for any reason, and the Company shall distribute to such terminated employee all of his or her accumulated payroll deductions (reduced to the extent, if any, such deductions have been used to acquire stock for the terminated employee), under the Offering, without interest.

          (d) Rights granted under the Plan 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 paragraph 14 and, otherwise during his or her lifetime, shall be exercisable only by the person to whom such rights are granted.

     8. Exercise.

          (a) On each Purchase Date specified in the relevant Offering, each participant’s accumulated payroll deductions and other additional payments specifically provided for in the Offering (without any increase for interest) will be applied to the purchase of whole shares of stock of the Company, up to the maximum number of shares 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 rights granted under the Plan. The amount, if any, of accumulated payroll deductions remaining in each participant’s account after the purchase of shares that is less than the amount required to purchase one share of stock on the final Purchase Date of an Offering shall be held in each such participant’s account for the purchase of shares under the next Offering under the Plan, unless such participant withdraws from such next Offering, as provided in subparagraph 7(b), or is no longer eligible to be granted rights under the Plan, as provided in paragraph 5, in which case such amount shall be distributed to the participant after such final Purchase Date, without interest. Any amount of accumulated payroll deductions remaining in a participant’s account after the purchase of shares that equals or exceeds the amount required to purchase a whole share of stock on the final Purchase Date of an Offering shall be distributed in full to the participant after such Purchase Date, without interest.

          (b) No rights granted under the Plan may be exercised to any extent unless the shares to be issued upon such exercise under the Plan are covered by an effective registration statement pursuant to the Securities Act of 1933, as amended (the “Securities Act”) and the Plan is in material compliance with all applicable state, foreign and other securities and other laws applicable to the Plan. If, on the Purchase Date of any Offering hereunder, the shares to be issued under the Plan are not so registered or the Plan is not in such compliance, no rights granted under the Plan or any Offering shall be exercised on such Purchase Date. If, on the Purchase Date of any Offering hereunder, such shares are not registered and the Plan is not in such compliance, no rights granted under the Plan or any Offering shall be exercised and all payroll deductions accumulated during the Offering (reduced to the extent, if any, such deductions have been used to acquire stock) shall be distributed to the participants, without interest.

     9. Covenants of the Company.

          (a) During the terms of the rights granted under the Plan, the Company shall keep available at all times the number of shares of stock required to satisfy such rights.

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          (b) 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 stock upon exercise of the rights granted under the Plan. If, after reasonable efforts, the Company is unable to obtain from any such regulatory commission or agency the authority which counsel for the Company deems necessary for the lawful issuance and sale of stock under the Plan, the Company shall be relieved of any liability for failure to issue and sell stock upon exercise of such rights unless and until such authority is obtained.

     10. Use of Proceeds From Stock.

               Proceeds from the sale of stock pursuant to rights granted under the Plan shall constitute general funds of the Company.

     11. 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, any shares subject to rights granted under the Plan unless and until the participant’s shares acquired upon exercise of rights under the Plan are recorded in the books of the Company.

     12. Adjustments Upon Changes in Stock.

     (a) In the event that any dividend or other distribution (whether in the form of cash, Common Stock, other securities, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of Common Stock or other securities of the Company, or other change in the corporate structure of the Company affecting the Common Stock occurs, the Board, in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan, will, in such manner as it may deem equitable, adjust the number and class of Common Stock that may be delivered under the Plan, the purchase price per share and the number of shares of Common Stock covered by each option under the Plan that has not yet been exercised, and the numerical limits of Sections 3 and 6(b). Such adjustments shall be made by the Board, the determination of which shall be final, binding and conclusive.

     (b) In the event of: (1) a dissolution or liquidation of the Company, (2) the sale of all or substantially all of the securities or assets of the Company, (3) a merger or consolidation in which the Company is not the surviving corporation or (4) a reverse merger in which the Company is the surviving corporation but the shares of Common Stock outstanding immediately preceding the merger are converted by virtue of the merger into other property, whether in the form of securities, cash or otherwise, then any surviving corporation may assume outstanding rights or substitute similar rights for those under the Plans. If no surviving corporation assumes outstanding rights or substitutes similar rights therefor, the Offerings with respect to which such rights relate will be shortened by setting a new Purchase Date on which such Offering shall end. The new Purchase Date will occur before the date of the Company’s proposed transaction described above. The Board will notify each participant in writing prior to the new Purchase Date, that the Purchase Date for the participant’s option has been changed to the new Purchase Date and that the participant’s right will be exercised automatically on the new Purchase Date, unless prior to such date the participant has withdrawn from the Offering.

     13. Amendment of the Plan.

     (a) The Board at any time, and from time to time, may amend the Plan. However, except as provided in paragraph 12 relating to adjustments upon changes in stock, no amendment shall be effective

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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.

     It is expressly contemplated that the Board may amend the Plan in any respect the Board deems necessary or advisable to provide eligible employees with the maximum benefits provided or to be provided under the provisions of the Code and the regulations promulgated thereunder relating to employee stock purchase plans and/or to bring the Plan and/or rights granted under it into compliance therewith.

     (b) Rights and obligations under any 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 rights were granted, (ii) as necessary to comply with any laws or governmental regulations, or (iii) as necessary to ensure that the Plan and/or rights granted under the Plan comply with the requirements of Section 423 of the Code.

     14. 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 the end of an Offering but prior to delivery to the 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 during an Offering.

     (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 sole 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.

     15. Termination or Suspension of the Plan.

     (a) The Board in its discretion, may suspend or terminate the Plan at any time. No rights may be granted under the Plan while the Plan is suspended or after it is terminated.

     (b) Rights and obligations under any rights granted while the Plan is in effect shall not be altered or 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 rights were granted, (ii) as necessary to comply with any laws or governmental regulation, or (iii) as necessary to ensure that the Plan and/or rights granted under the Plan comply with the requirements of Section 423 of the Code.

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     (c) Notwithstanding the foregoing, the Plan shall continue in effect unless terminated sooner under this Section 15.

     16. Effective Date of Plan.

     The Plan was originally adopted by the Board in July 2000 and originally approved by the stockholders of the Company in September 2000. The amendment and restatement of the Plan was adopted by the Board on September 23, 2009 and was approved by the stockholders of the Company, and became effective, on November 4, 2009.

     17. Automatic Transfer to Lower Price Offering Period.

     To the extent permitted by applicable laws, if the fair market value of the Common Stock on any Purchase Date in an Offering is lower than the fair market value of the Common Stock on the Offering Date of such Offering, then all participants in such Offering will be automatically withdrawn from such Offering immediately after the exercise of their right on such Purchase Date and automatically re-enrolled in the immediately following Offering.

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EX-10.3

Exhibit 10.3

CONSULTING AGREEMENT

     This Consulting Agreement (“Agreement”) is made and entered into as of November 4, 2009 (“Effective Date”) by and between Oplink Communications, Inc., a Delaware corporation, its subsidiaries, affiliates, successors or assigns (collectively, “Oplink” or the “Company”), and Leonard J. LeBlanc (“Consultant”). The Company desires to retain Consultant as an independent contractor to perform consulting services for the Company and Consultant is willing to perform such services on terms set forth more fully below. In consideration of the mutual promises contained herein, the parties agree as follows:

     1. SERVICES AND COMPENSATION

     (a) Consultant agrees to perform for the Company the services described in Exhibit A (“Services”).

     (b) The Company agrees to pay Consultant the compensation set forth in Exhibit A for the performance of the Services.

     2. CONFIDENTIALITY

     (a) “Confidential Information” means any Company proprietary information, technical data, trade secrets or know-how, including, but not limited to, marketing, finances or other business information disclosed by the Company either directly or indirectly and either orally or in writing.

     (b) Consultant will not, during or subsequent to the term of this Agreement, use the Company’s Confidential Information for any purpose whatsoever other than the performance of the Services on behalf of the Company or disclose the Company’s Confidential Information to any third party. Consultant further agrees to take all reasonable precautions to prevent any unauthorized disclosure of such Confidential Information. Confidential Information does not include information which (i) is known to Consultant at the time of disclosure to Consultant by the Company as evidenced by written records of Consultant, (ii) has become publicly known and made generally available through no wrongful act of Consultant, or (iii) has been rightfully received by Consultant from a third party who is authorized to make such disclosure.

     3. CONFLICTING OBLIGATIONS

     Consultant certifies that Consultant has no outstanding agreement or obligation that is in conflict with any of the provisions of this Agreement, or that would preclude Consultant from complying with the provisions hereof, and further certifies that Consultant will not enter into any such conflicting agreement during the term of this Agreement.

     5. TERM AND TERMINATION

     (a) This Agreement will terminate on the first anniversary of the Effective Date, unless extended by written agreement of both parties. In addition, either party may terminate this Agreement in the event of a breach of any material provision of this Agreement by the other party, where such breach is not cured within thirty (30) days after notice to the breaching party.

     (b) Upon such termination all rights and duties of the parties toward each other shall cease except:

Page 1 of 3

     (i) that the Company shall be obliged to pay, within thirty (30) days of the effective date of termination, all amounts owing to Consultant for unpaid Services and related expenses, if any, in accordance with the provisions of Section 1 (Services and Compensation) hereof; and

     (ii) Sections 2 (Confidentiality) and 6 (Independent Contractors) shall survive termination of this Agreement.

     6. INDEPENDENT CONTRACTOR

     Nothing in this Agreement shall in any way be construed to constitute Consultant as an agent, employee or representative of the Company, but Consultant shall perform the Services hereunder as an independent contractor.

     7. GOVERNING LAW

     This Agreement shall be governed by the laws of the State of California as applied to agreements entered into and performed within California by residents of that state. Consultant hereby expressly consents to the nonexclusive personal jurisdiction and venue of the state and federal courts located in the federal Northern District of California for any lawsuit filed there against me by the Company arising from or relating to this Agreement.

     8. ENTIRE AGREEMENT

     This Agreement and the Exhibit hereto form the entire agreement of the parties and supersede any prior agreements between them with respect to the subject matter hereof.

     9. WAIVER

     Waiver of any term or provision of this Agreement or forbearance to enforce any term or provision by either party shall not constitute a waiver as to any subsequent breach or failure of the same term or provision or a waiver of any other term or provision of this Agreement.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

CONSULTANT	OPLINK COMMUNICATIONS INC.
/s/ Leonard J. LeBlanc	/s/ Joseph Liu
Leonard J. LeBlanc	Name: Joseph Liu
	Title:   President and CEO

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EXHIBIT A

1. Services to be performed by Consultant

     Consultant will provide advisory services relating to financial matters, including financial reporting, internal and external audit matters and internal controls. Services may include reviewing annual and quarterly reports prior to filing with the SEC and responding to inquiries from the CFO or other members of management regarding finance matters. There is no minimum hours of service requirement under the Agreement.

2. Compensation to be paid to Consultant

     Consultant will be paid cash consulting fees equal to $55,000 per annum, to be paid quarterly at the time that directors fee are paid. Consultant will also receive 4,000 shares of fully-vested, unrestricted common stock of the Company at the time of the next annual equity award grant to Company directors in August 2010.

Agreed by:
CONSULTANT	OPLINK COMMUNICATIONS INC.
/s/ Leonard J. LeBlanc	/s/ Joseph Liu
Leonard J. LeBlanc	Name: Joseph Liu
	Title:   President and CEO

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EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Joseph Y. Liu, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Oplink Communications, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 6, 2009

/s/ Joseph Y. Liu

Joseph Y. Liu

President and Chief Executive Officer

(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Shirley Yin, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Oplink Communications, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 6, 2009

/s/ Shirley Yin

Shirley Yin

Chief Financial Officer

(Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C.§ 1350, as adopted), Joseph Y. Liu, Chief Executive Officer of Oplink Communications, Inc. (the “Company”), hereby certifies that, to the best of his knowledge:

1. The Company’s Quarterly Report on Form 10-Q for the period ended September 27, 2009, to which this Certification is attached as Exhibit 32.1 (the “Quarterly Report”) fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Quarterly Report fairly presents, in all material respects, the financial condition at the end of the period covered by the Quarterly Report and results of operations of the Company for the periods covered by the Quarterly Report.

In Witness Whereof, the undersigned has set his hands hereto as of the 6th day of November, 2009.

  /s/ Joseph Y. Liu

  Joseph Y. Liu

  Chief Executive Officer

This certification accompanies the Form 10-Q to which it relates, is not deemed filed with the SEC and is not to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, irrespective of any general incorporation language contained in such filing.

EX-32.2

Exhibit 32.2

CERTIFICATION

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C.§ 1350, as adopted), Shirley Yin, Chief Financial Officer of Oplink Communications, Inc. (the “Company”), hereby certifies that, to the best of her knowledge:

1. The Company’s Quarterly Report on Form 10-Q for the period ended September 27, 2009, to which this Certification is attached as Exhibit 32.2 (the “Quarterly Report”) fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Quarterly Report fairly presents, in all material respects, the financial condition at the end of the period covered by the Quarterly Report and results of operations of the Company for the periods covered by the Quarterly Report.

In Witness Whereof, the undersigned has set her hands hereto as of the 6th day of November, 2009.

  /s/ Shirley Yin

  Shirley Yin

  Chief Financial Officer

This certification accompanies the Form 10-Q to which it relates, is not deemed filed with the SEC and is not to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, irrespective of any general incorporation language contained in such filing.