<SUBMISSION>
<ACCESSION-NUMBER>0000891618-02-001804
<TYPE>DEF 14A
<PUBLIC-DOCUMENT-COUNT>5
<PERIOD>20020517
<FILING-DATE>20020416
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>HARMONIC INC
<CIK>0000851310
<ASSIGNED-SIC>3663
<IRS-NUMBER>770201147
<STATE-OF-INCORPORATION>DE
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>DEF 14A
<ACT>34
<FILE-NUMBER>000-25826
<FILM-NUMBER>02612457
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>549 BALTIC WAY
<CITY>SUNNYVALE
<STATE>CA
<ZIP>94089
<PHONE>4085422500
</BUSINESS-ADDRESS>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>HARMONIC LIGHTWAVES INC
<DATE-CHANGED>19950404
</FORMER-COMPANY>
</FILER>
<DOCUMENT>
<TYPE>DEF 14A
<SEQUENCE>1
<FILENAME>f79624dedef14a.htm
<DESCRIPTION>DEFINITIVE NOTICE AND PROXY STATMENT
<TEXT>
<HTML>
<HEAD>
<TITLE>Harmonic Definitive Notive and Proxy Statment</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center"><FONT size="2"><B>SCHEDULE 14A INFORMATION</B></FONT>

<P align="center"><FONT size="2"><B>PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE<BR>
SECURITIES EXCHANGE ACT OF 1934</B></FONT>

<P align="center"><FONT size="2"><B>(AMENDMENT NO.___)</B></FONT>

<P><FONT size="2">Filed by the Registrant &#091;&nbsp;X&nbsp;&#093;
</FONT>
<P><FONT size="2">Filed by a Party other than the Registrant &#091;&nbsp;&nbsp;&nbsp;&#093;
</FONT>
<P><FONT size="2">Check the appropriate box:
</FONT>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
        <TD width="2%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="95%">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">&#091;&nbsp;&nbsp;&nbsp;&#093;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
Preliminary Proxy Statement</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">&#091;&nbsp;X&nbsp;&#093;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
Definitive Proxy Statement</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">&#091;&nbsp;&nbsp;&nbsp;&#093;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
Confidential, for Use of the Commission Only (as permitted by Rule&nbsp;14a-6(e)(2))</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">&#091;&nbsp;&nbsp;&nbsp;&#093;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
Definitive Additional Materials</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">&#091;&nbsp;&nbsp;&nbsp;&#093;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
Soliciting Material Pursuant to sec. 240.14a-11(c) or sec. 240.14a-12</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P>&nbsp;</P>
<P>


<P align="center"><FONT size="2">HARMONIC INC.</FONT>
<HR size="1" noshade>
<DIV align="center"><FONT size="2"><B>(Name of Registrant as Specified In Its Charter)</B></FONT></DIV>

<P>&nbsp;</P>
<P>


<P align="center"><FONT size="2">&nbsp;</FONT>
<HR size="1" noshade>
<DIV align="center"><FONT size="2"><B>(Name of Person(s) Filing Proxy Statement, if other than the Registrant)</B></FONT></DIV>

<P><FONT size="2">Payment of Filing Fee (Check the appropriate box):
</FONT>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
        <TD width="1%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="2%">&nbsp;</TD>
        <TD width="93%">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">&#091;&nbsp;X&nbsp;&#093;</FONT></TD>

<TD align="left" valign="top" colspan="4"><FONT size="2">&nbsp;&nbsp;Fee not required.</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">&#091;&nbsp;&nbsp;&nbsp;&#093;</FONT></TD>

<TD align="left" valign="top" colspan="4"><FONT size="2">&nbsp;&nbsp;Fee computed on table below per Exchange Act Rules&nbsp;14a-6(i)(1) and 0-11.</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
(1)
</FONT></TD>
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top" colspan="2"><FONT size="2">Title of each class of securities to which transaction applies:<BR><BR>
        <HR size="1" noshade></FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
(2)
</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">Aggregate number of securities to which transaction applies:<BR><BR>
        <HR size="1" noshade></FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
(3)
</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule&nbsp;0-11 (set forth the
amount on which the filing fee is calculated and state how it
was determined):<BR><BR>
        <HR size="1" noshade></FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
(4)
</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">Proposed maximum aggregate value of transaction:<BR><BR>
        <HR size="1" noshade></FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
(5)
</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">Total fee paid:<BR><BR>
        <HR size="1" noshade></FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">&#091;&nbsp;&nbsp;&nbsp;&#093;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top" colspan="3"><FONT size="2">Fee paid previously with preliminary materials.</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">&#091;&nbsp;&nbsp;&nbsp;&#093;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top" colspan="3"><FONT size="2">Check box if any part of the fee is offset as provided by Exchange Act Rule&nbsp;0-11(a)(2) and identify the
filing for which the offsetting fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
(1)
</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">Amount Previously Paid:<BR><BR>
        <HR size="1" noshade></FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
(2)
</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">Form, Schedule or Registration Statement No.:<BR><BR>
        <HR size="1" noshade></FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
(3)
</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">Filing Party:<BR><BR>
        <HR size="1" noshade></FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
(4)
</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">Date Filed:<BR><BR>
        <HR size="1" noshade></FONT></TD>
</TR>
</TABLE>
</CENTER>

<P align="center"><FONT size="2"></FONT>



<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="4">HARMONIC INC.</FONT></B>

<P align="center">
<HR size="1" width="26%" align="center" noshade>

<DIV>&nbsp;</DIV>

<!-- link1 "NOTICE OF ANNUAL MEETING OF STOCKHOLDERS" -->
<DIV align="left"><A NAME="000"></A></DIV>

<DIV align="center">
<B>NOTICE OF ANNUAL MEETING OF STOCKHOLDERS</B>
</DIV>

<DIV align="center">
<B>To be held on May&nbsp;17, 2002</B>
</DIV>

<P align="center">
<HR size="1" width="26%" align="center" noshade>

<P align="left">
<B><FONT size="2">TO THE STOCKHOLDERS OF HARMONIC
INC.:</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">NOTICE IS HEREBY GIVEN that the Annual Meeting of
Stockholders of Harmonic Inc., a Delaware corporation (the
&#147;Company&#148;), will be held on Friday, May&nbsp;17, 2002
at 8:00&nbsp;a.m., Pacific Time, at the Marriott Hotel,
2700&nbsp;Mission College Blvd., Santa Clara, California, 95054,
for the following purposes:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="4%"></TD>
	<TD width="93%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">1.</FONT></TD>
	<TD align="left">
	<FONT size="2">To elect six directors to serve for the ensuing
	year or until their successors are elected and duly qualified.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">2.</FONT></TD>
	<TD align="left">
	<FONT size="2">To approve the adoption of the 2002 Director
	Option Plan.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">3.</FONT></TD>
	<TD align="left">
	<FONT size="2">To approve the adoption of the 2002 Employee
	Stock Purchase Plan.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">4.</FONT></TD>
	<TD align="left">
	<FONT size="2">To ratify the appointment of
	PricewaterhouseCoopers LLP as independent auditors of the
	Company for the fiscal year ending December&nbsp;31, 2002.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">5.</FONT></TD>
	<TD align="left">
	<FONT size="2">To transact such other business as may properly
	come before the meeting and any adjournment or postponement
	thereof.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The foregoing items of business are more fully
described in the Proxy Statement accompanying this Notice.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Only stockholders of record at the close of
business on March&nbsp;28, 2002 are entitled to notice of and to
vote at the meeting and any adjournment thereof.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">All stockholders are cordially invited to attend
the meeting in person. However, to ensure your representation at
the meeting, you are urged to either vote by Internet, by
telephone or to mark, sign, date and return the enclosed proxy
card as promptly as possible in the postage-prepaid envelope
enclosed for that purpose. Any stockholder attending the meeting
may vote in person even if such stockholder has returned a proxy.
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="34%"></TD>
	<TD width="66%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">By Order of the Board of Directors
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<IMG src="f79624def79624s1.gif" alt="-s- Jeffrey D. Saper"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">JEFFREY D. SAPER,
	</FONT></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<I><FONT size="2">Secretary</FONT></I></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">Sunnyvale, California
</FONT>

<DIV align="left">
<FONT size="2">April&nbsp;16, 2002
</FONT>
</DIV>

<P align="center">
<B><FONT size="2">YOUR VOTE IS IMPORTANT</FONT></B>

<P align="left">
<B><FONT size="2">IN ORDER TO ASSURE YOUR REPRESENTATION AT THE
MEETING, YOU ARE REQUESTED TO COMPLETE, SIGN AND DATE THE
ENCLOSED PROXY AS PROMPTLY AS POSSIBLE AND RETURN IT IN THE
ENCLOSED ENVELOPE OR VOTE BY TELEPHONE OR BY USING THE INTERNET
AS INSTRUCTED IN THE PROXY CARD.</FONT></B>

<!-- PAGEBREAK -->
<P><HR noshade><P>

<!-- TOC -->
<A name="toc"><DIV align="CENTER" style="page-break-before:always"><U><B>TABLE OF CONTENTS</B></U></DIV></A>

<P><CENTER>
<TABLE border="0" width="90%" cellpadding="0" cellspacing="0">
<TR>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="76%"></TD>
</TR>
<TR><TD colspan="9"><A HREF="#000">NOTICE OF ANNUAL MEETING OF STOCKHOLDERS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#001">INFORMATION CONCERNING SOLICITATION VOTING</A></TD></TR>
<TR><TD colspan="9"><A HREF="#002">PROPOSAL ONE&nbsp;&nbsp;ELECTION OF DIRECTORS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#003">PROPOSAL TWO&nbsp;&nbsp;2002 DIRECTOR OPTION PLAN</A></TD></TR>
<TR><TD colspan="9"><A HREF="#004">PROPOSAL THREE&nbsp;&nbsp;2002 EMPLOYEE STOCK PURCHASE PLAN</A></TD></TR>
<TR><TD colspan="9"><A HREF="#005">PROPOSAL FOUR&nbsp;&nbsp;RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#006">ADDITIONAL INFORMATION</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#007">Performance Graph</A></TD></TR>
<TR><TD colspan="9"><A HREF="#008">OTHER MATTERS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#009">Appendix A&nbsp;&nbsp;2002 DIRECTOR OPTION PLAN</A></TD></TR>
<TR><TD colspan="9"><A HREF="#010">Exhibit #1&nbsp;&nbsp;2002 DIRECTOR OPTION AGREEMENT</A></TD></TR>
<TR><TD colspan="9"><A HREF="#011">Exhibit #2&nbsp;&nbsp;2002 DIRECTOR OPTION EXERCISE NOTICE</A></TD></TR>
<TR><TD colspan="9"><A HREF="#012">Appendix B&nbsp;&nbsp;2002 EMPLOYEE STOCK PURCHASE PLAN</A></TD></TR>
<TR><TD colspan="9"><A HREF="#013">Exhibit 1&nbsp;&nbsp;2002 EMPLOYEE STOCK PURCHASE PLAN SUBSCRIPTION AGREEMENT</A></TD></TR>
<TR><TD colspan="9"><A HREF="#014">Exhibit 2&nbsp;&nbsp;2002 EMPLOYEE STOCK PURCHASE PLAN NOTICE OF WITHDRAWAL</A></TD></TR>
</TABLE>
</CENTER>
<!-- /TOC -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="4">HARMONIC INC.</FONT></B>

<DIV align="center">
<B><FONT size="2">549 Baltic Way</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">Sunnyvale, California 94089</FONT></B>
</DIV>

<P align="center">
<HR size="1" width="26%" align="center" noshade>

<P align="center">
<B>PROXY STATEMENT</B>

<P align="center">
<HR size="1" width="26%" align="center" noshade>

<DIV>&nbsp;</DIV>

<!-- link1 "INFORMATION CONCERNING SOLICITATION VOTING" -->
<DIV align="left"><A NAME="001"></A></DIV>

<DIV align="center">
<B><FONT size="2">INFORMATION CONCERNING SOLICITATION
VOTING</FONT></B>
</DIV>

<P align="left">
<B><FONT size="2">General</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The enclosed Proxy is solicited on behalf of the
board of directors of Harmonic Inc., a Delaware corporation (the
&#147;Company&#148;), for use at the Annual Meeting of
Stockholders (the &#147;Annual Meeting&#148;) to be held
May&nbsp;17, 2002 at 8:00&nbsp;a.m., Pacific Time, or at any
adjournment thereof, for the purposes set forth herein and in
the accompanying Notice of Annual Meeting of Stockholders. The
Annual Meeting will be held at the Marriott Hotel,
2700&nbsp;Mission College Blvd., Santa Clara, California, 95054.
The telephone number of the Company&#146;s principal offices is
(408)&nbsp;542-2500.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">These proxy solicitation materials and the
Company&#146;s Annual Report to Stockholders for the year ended
December&nbsp;31, 2001, including financial statements, were
mailed on or about April&nbsp;16, 2002 to all stockholders
entitled to vote at the meeting.
</FONT>

<P align="left">
<B><FONT size="2">Record Date and Voting Securities</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Stockholders of record at the close of business
on March&nbsp;28, 2002 (the &#147;Record Date&#148;) are
entitled to notice of and to vote at the meeting. At the Record
Date, 59,491,522 shares of the Company&#146;s Common Stock,
$0.001 par value per share, were issued and outstanding.
</FONT>

<P align="left">
<B><FONT size="2">Revocability of Proxies</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Any proxy given pursuant to this solicitation may
be revoked by the person giving it at any time before its use by
delivering to the Secretary of the Company a written notice of
revocation or a duly executed proxy bearing a later date or by
voting on a later date by telephone or by using the Internet
(only your latest telephone or Internet proxy is counted) or by
attending the meeting and voting in person.
</FONT>

<P align="left">
<B><FONT size="2">Voting and Solicitation</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Each stockholder is entitled to one vote for each
share of common stock on all matters presented at the Annual
Meeting. Stockholders do not have the right to cumulate their
votes in the election of directors.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company will bear the cost of soliciting
proxies. In addition, the Company may reimburse brokerage firms
and other persons representing beneficial owners of shares for
their expenses in forwarding solicitation material to such
beneficial owners. Solicitation of proxies by mail may be
supplemented by telephone, telegram, facsimile or personal
solicitation by directors, officers or employees of the Company.
No additional compensation will be paid to such persons for such
services.
</FONT>

<P align="left">
<B><FONT size="2">Quorum; Abstentions; Broker
Non-Votes</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The required quorum for the transaction of
business at the Annual Meeting is a majority of the votes
eligible to be cast by holders of shares of common stock issued
and outstanding on the Record Date. Shares that are voted
&#147;FOR,&#148; &#147;AGAINST,&#148; &#147;WITHHELD&#148; or
&#147;ABSTAIN&#148; are treated as being present at the meeting
for purposes of establishing a quorum and are also treated as
shares entitled to vote at the Annual Meeting (the &#147;Votes
Cast&#148;) with respect to such matter.
</FONT>

<P align="center">
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">While there is no definitive statutory or case
law authority in Delaware as to the proper treatment of
abstentions, the Company believes that abstentions should be
counted for purposes of determining both (i)&nbsp;the presence
or absence of a quorum for the transaction of business and
(ii)&nbsp;the total number of Votes Cast with respect to a
proposal (other than the election of directors). In the absence
of controlling precedent to the contrary, the Company intends to
treat abstentions in this manner. Accordingly, abstentions will
have the same effect as a vote against the proposal.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Delaware Supreme Court has held that, while
broker non-votes should be counted for purposes of determining
the presence or absence of a quorum for the transaction of
business, broker non-votes should not be counted for purposes of
determining the number of Votes Cast with respect to the
particular proposal on which the broker has expressly not voted.
The Company intends to treat broker non-votes in a similar
manner. Thus, a broker non-vote will not affect the outcome of
the voting on a proposal.
</FONT>

<P align="left">
<B><FONT size="2">Deadline for Receipt of Stockholder
Proposals</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Proposals of stockholders of the Company that are
intended to be presented by such stockholders at the
Company&#146;s 2003 Annual Meeting and that stockholders desire
to have included in the Company&#146;s proxy materials relating
to such meeting must be received by the Company no later than
December&nbsp;17, 2002, which is 120 calendar days prior to the
anniversary of the mailing date of this proxy statement, and
must be in compliance with applicable laws and regulations in
order to be considered for possible inclusion in the proxy
statement and form of proxy for that meeting. Under the
Company&#146;s bylaws, a stockholder&#146;s notice of business
to be brought before an annual meeting must set forth, as to
each proposed matter: a)&nbsp;a brief description of the
business and reason for conducting such business at the meeting;
b)&nbsp;the name and address as they appear on the
Company&#146;s books of the stockholder; c)&nbsp;the class and
number of shares of the Company owned by the stockholder;
d)&nbsp;any material interest of the stockholder in such
business; and e)&nbsp;any other information that may be required
under Regulation&nbsp;14A of the Securities and Exchange
Commission, or SEC, rules.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">SEC rules also establish a different deadline for
submission of stockholder proposals that are not intended to be
included in the Company&#146;s proxy statement with respect to
discretionary voting. The discretionary vote deadline for the
year 2003 Annual Meeting is March&nbsp;2, 2003, 45 calendar days
prior to the anniversary of the mailing date of this proxy
statement. If a stockholder gives notice of such a proposal
after the discretionary vote deadline, the Company&#146;s proxy
holders will be allowed to use their discretionary voting
authority to vote against the stockholder proposal when and if
the proposal is raised at the Company&#146;s year 2003 Annual
Meeting.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company has not been notified by any
stockholder of his or her intent to present a stockholder
proposal from the floor at this year&#146;s annual meeting.
</FONT>

<!-- link1 "PROPOSAL ONE&nbsp;&nbsp;ELECTION OF DIRECTORS" -->
<DIV align="left"><A NAME="002"></A></DIV>

<P align="center">
<B><FONT size="2">PROPOSAL ONE</FONT></B>

<P align="center">
<B><FONT size="2">ELECTION OF DIRECTORS</FONT></B>

<P align="left">
<B><FONT size="2">Nominees</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company has authorized a board of six
directors, and six directors are to be elected at the Annual
Meeting. Each of the directors elected at the Annual Meeting
will hold office until the Annual Meeting of Stockholders in
2003 or until his successor has been duly elected and qualified.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Unless otherwise instructed, the proxy holders
will vote the proxies received by them for the Company&#146;s
six nominees named below, all of whom are currently directors of
the Company. In the event that any nominee of the Company
becomes unable or declines to serve as a director at the time of
the Annual Meeting, the proxy holders will vote the proxies for
any substitute nominee who is
</FONT>

<P align="center"><FONT size="2">2
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">designated by the current board of directors to
fill the vacancy. It is not expected that any nominee listed
below will be unable or will decline to serve as a director.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The names of the nominees for director and
certain information about each of them are set forth below.
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="28%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="62%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" nowrap><B><FONT size="1">Name</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Age</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Principal Occupation</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Anthony J. Ley
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">63</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Chairman, President and CEO, Harmonic Inc.
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">E. Floyd Kvamme
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">64</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">General Partner, Kleiner Perkins Caufield &#38;
	Byers
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">David A. Lane
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">43</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">General Partner, Diamondhead Ventures
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Lewis Solomon
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">68</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Chairman and CEO of Broadband Services Inc.
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Michel L. Vaillaud
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">70</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Retired; former Chairman and CEO of Schlumberger,
	Limited
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">David R. Van Valkenburg
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">59</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Chairman, Balfour Associates, Inc.
	</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Except as indicated below, each nominee or
incumbent director has been engaged in the principal occupation
set forth above during the past five years. There are no family
relationships between any directors or executive officers of the
Company.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Anthony J. Ley </FONT></I><FONT size="2">has
served as Harmonic&#146;s President and Chief Executive Officer
since November 1988. Mr.&nbsp;Ley was elected Chairman of the
Board of Directors in 1995. From 1963 to 1987, Mr.&nbsp;Ley was
employed at Schlumberger, both in Europe and the United States,
holding various senior business management and research and
development positions, most recently as Vice President, Research
and Engineering at Fairchild Semiconductor/ Schlumberger in Palo
Alto, California. Mr.&nbsp;Ley holds an M.A. in mechanical
sciences from the University of Cambridge and an S.M.E.E. from
the Massachusetts Institute of Technology, is named as an
inventor on 29 patents and is a Fellow of the I.E.E. (U.K.) and
a senior member of the I.E.E.E.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">E. Floyd Kvamme </FONT></I><FONT size="2">has
been a director of the Company since 1990. Since 1984, Mr.
Kvamme has been a general partner of Kleiner Perkins Caufield
&#38; Byers, a venture capital firm. Mr.&nbsp;Kvamme is also a
director of Brio Technology, Inc., National Semiconductor
Corporation, Photon Dynamics, Inc., Power Integrations, Inc., as
well as several private companies. Mr.&nbsp;Kvamme holds a
B.S.E.E. from the University of California, Berkeley and an
M.S.E.E. from Syracuse University.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">David A. Lane </FONT></I><FONT size="2">has
been a director of the Company since 1992. Mr.&nbsp;Lane is a
general partner and co-founder of both Alpine Technology
Ventures and Diamondhead Ventures, venture capital firms. Since
1994, he has been a general partner of Alpine Technology
Ventures. From June 2000, he has been a general partner of
Diamondhead Ventures. From 1987 to 1994, he was a Vice President
at the Harvard Private Capital Group, the investment affiliate
through which the Harvard Management Company made private and
direct investments. Mr.&nbsp;Lane is also a director of several
private companies. Mr.&nbsp;Lane holds a B.S.E.E. from the
University of Southern California and an M.B.A. from Harvard
University.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Lewis Solomon </FONT></I><FONT size="2">has
been a director of the Company since January 2002. Presently,
Mr.&nbsp;Solomon is Co-Founder and Chief Executive Officer of
Broadband Services, Inc.&nbsp;(BSI) an outsource provider of
supply chain management, network planning, and fulfillment
services. He is also Co-Founder and Chairman of G&#38;L
Investments, a consulting firm specializing in technology. From
1983 to 1988, he served as the Executive Vice President of Alan
Patricof Associates (APA), a global venture capital firm.
Mr.&nbsp;Solomon also spent 14&nbsp;years at General Instrument
Corporation&nbsp;(GI) ultimately as Senior Vice President and
Assistant to the CEO. Mr.&nbsp;Solomon is a director of
Anadigics Inc., Artesyn Technologies Inc, Terayon Communications
and several private companies. BSI is a customer of the Company
and in 2001 purchased equipment in the amount of
$4.9&nbsp;million.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Michel L. Vaillaud
</FONT></I><FONT size="2">has been a director of the Company
since March 1997. Now retired, from 1973 to 1986
Mr.&nbsp;Vaillaud was with Schlumberger, Limited, most recently
as Chairman and Chief Executive Officer. He is a graduate of
Ecole Polytechnique in Paris and Ecole Nationale Superieure
</FONT>

<P align="center"><FONT size="2">3
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">des Mines in Paris. He serves as a Trustee of the
Institute of Advanced Studies in Princeton, New Jersey.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">David R. Van Valkenburg
</FONT></I><FONT size="2">has been a director of the Company
since October 2001. He currently serves as Chairman of Balfour
Associates, a firm providing counsel to chief executive
officers, boards of directors and private equity funds.
Previously, he was Executive Vice President of MediaOne Group,
Inc. from 1995 to 2000. While at MediaOne Group, Mr.&nbsp;Van
Valkenburg was seconded to Telewest Communications where he was
Chief Executive Officer and Chief Operating Officer from 1997 to
1999. He has also held the position of President at both
Multivision Cable TV Corporation and Cox Cable Communications
Inc. Mr.&nbsp;Van&nbsp;Valkenburg serves on the board of Mobile
Data Solutions Inc. and several private companies. He holds a
B.A. degree from Malone College, an M.S.&nbsp;degree from the
University of Kansas, and an M.B.A. from Harvard University.
</FONT>

<P align="left">
<B><FONT size="2">Board Meetings and Committees</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The board of directors of the Company held a
total of 6 meetings during the fiscal year ended
December&nbsp;31, 2001. No incumbent director attended fewer
than 75% of the meetings of the board of directors or the
committees upon which such director served during 2001.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The board of directors has an Audit Committee, a
Compensation Committee and a Nominating Committee.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Audit Committee currently consists of
Messrs.&nbsp;Kvamme, Lane and Vaillaud. In July 2000, the board
of directors adopted the Audit Committee Charter. The Audit
Committee principally reviews the scope and results of the
annual audit of the financial statements and other services
provided by the Company&#146;s independent auditors. In
addition, the Audit Committee reviews the information provided
to stockholders and the Company&#146;s systems of internal
controls. The Audit Committee held 4 meetings during 2001.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Compensation Committee currently consists of
Messrs.&nbsp;Kvamme and Van Valkenburg. The Compensation
Committee is responsible for reviewing and approving the
Company&#146;s compensation policies and the compensation paid
to executive officers. This committee held 1 meeting during 2001.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Nominating Committee currently consists of
Messrs.&nbsp;Lane and Van Valkenburg. The Nominating Committee
is responsible for identifying and nominating suitable
candidates for the Company&#146;s board of directors and for
review and recommendations concerning compensation of board
members.
</FONT>

<P align="left">
<B><FONT size="2">Compensation Committee Interlocks and Insider
Participation</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Compensation Committee of the board of
directors currently consists of Messrs.&nbsp;Kvamme and Van
Valkenburg. No member of the Compensation Committee or executive
officer of the Company has a relationship that would constitute
an interlocking relationship with executive officers or
directors of another entity.
</FONT>

<P align="left">
<B><FONT size="2">Compensation of Directors</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During 2001, each non-employee director was paid
a retainer of $8,000, plus $2,000 per board meeting attended and
$1,000 per Board Committee meeting attended. The 1995 Director
Option Plan provides for the grant of nonstatutory stock options
to certain non-employee directors of the Company who are not
representatives or beneficial owners of certain previously
affiliated investment funds, by means of an automatic,
non-discretionary grant mechanism. Under the 1995 Director
Option Plan, each eligible outside director was granted an
option to purchase 4,000 shares of Common Stock upon election to
the board of directors and a further option to purchase 4,000
shares on the date of re-election to the board of directors if
on such date, he shall have served on the Board for at least six
months. If Proposal Two is approved, the 1995 Director Option
Plan will be terminated and be replaced by the 2002 Director
Option Plan.
</FONT>

<P align="center"><FONT size="2">4
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">
<B><FONT size="2">Vote Required and Recommendation</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The six nominees receiving the highest number of
affirmative votes of the shares entitled to vote on this matter
shall be elected as directors. Votes withheld from any director
will be counted for purposes of determining the presence or
absence of a quorum but are not counted as affirmative votes. A
broker non-vote will be counted for purposes of determining the
presence or absence of a quorum, but, under Delaware law, it
will have no other legal effect upon the election of directors.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
VOTING &#147;FOR&#148; THE NOMINEES SET FORTH ABOVE.</FONT></B>

<!-- link1 "PROPOSAL TWO&nbsp;&nbsp;2002 DIRECTOR OPTION PLAN" -->
<DIV align="left"><A NAME="003"></A></DIV>

<P align="center">
<B><FONT size="2">PROPOSAL TWO</FONT></B>

<P align="center">
<B><FONT size="2">2002 DIRECTOR OPTION PLAN</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In March, 2002, our board of directors adopted
the 2002 Director Option Plan, subject to the approval of our
stockholders. The 2002 Director Option Plan is intended to
replace our 1995 Director Option Plan, which the board of
directors plans to terminate after approval of the 2002 Director
Option Plan. Our board of directors has reserved a maximum of
400,000 shares of our common stock for issuance under the 2002
Director Option Plan. The fair market value of our common stock
as of March&nbsp;28, 2002 was $11.60&nbsp;per share.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Purpose. </FONT></I><FONT size="2">The purpose
of the 2002 Director Option Plan is to provide the most
significant element of director compensation in the form of
equity in order to recruit and retain highly qualified
non-employee directors and to closely align the interests of
directors with those of stockholders.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Harmonic Board of Directors believes that
recent developments in corporate governance, including
uncertainty surrounding ramifications of the Enron situation,
continuing litigation risk and additional requirements of Audit
Committee members, will make the recruitment and retention of
directors even more difficult in the future. As a result, the
board recently asked its Nominating Committee to review
Harmonic&#146;s director compensation package.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Nominating Committee of the board of
directors studied thoroughly director compensation survey data
provided by an executive compensation consulting firm and
recommended to the board that the 2002 Director Option Plan
replace the 1995 Director Option Plan. The Nominating Committee
did not recommend any changes in cash compensation at this time.
Following these recommendations, and after consultation with
other third parties, including counsel, the board of directors
concluded that the 1995 Director Option Plan is no longer
competitive with equity compensation levels at public companies
of similar size and profile. Consequently, in March 2002, the
board of directors adopted the 2002 Director Plan, which will
replace the 1995 Director Option Plan, subject to stockholder
approval.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Shares Subject to the 2002 Director Option
Plan. </FONT></I><FONT size="2">Our board has reserved a maximum
of 400,000 shares of our common stock for issuance under the
2002 Director Option Plan. The shares may be authorized, but
unissued, or reacquired common stock.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Administration. </FONT></I><FONT size="2">The
2002 Director Option Plan provides for grants of options to be
made in two ways:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(a)&nbsp;Each non-employee director is
	automatically granted an option to purchase 20,000 shares,
	referred to as the &#147;First Option,&#148; on the date of
	either of the following events: (A)&nbsp;the date the 2002
	Director Option Plan is approved by the stockholders of the
	Company or (B)&nbsp;the date on which such person first becomes
	a non-employee director, whether through election by our
	stockholders or appointment by our board of directors to fill a
	vacancy, provided, however, that an employee director who ceases
	to be an employee director but who remains a director will not
	receive a First Option upon the occurrence of (B); and
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">5
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(b)&nbsp;Each non-employee director is
	automatically granted an option to purchase 10,000 shares,
	referred to as the &#147;Annual Option&#148; on the date of our
	annual stockholders meeting each year if on such dates he or she
	shall have served on our board of directors for at least the
	preceding six (6)&nbsp;months.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">Accordingly, if the 2002 Director Option Plan is
	adopted by the stockholders at the Annual Meeting, each
	non-employee director would be granted automatically a First
	Option.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">Our board of directors has the authority, in its
	discretion, to:
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="6%"></TD>
	<TD width="94%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(i)&nbsp;determine the fair market value of our
	common stock;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(ii)&nbsp;interpret the 2002 Director Option Plan;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(iii)&nbsp;authorize any person to execute, on
	our behalf, any instrument required to effectuate the options
	granted under the 2002 Director Option Plan; and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(iv)&nbsp;make all other determinations deemed
	necessary or advisable for the administration of the 2002
	Director Option Plan.
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">All decisions, determinations and interpretations
	of our board of directors shall be final.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Eligibility. </FONT></I><FONT size="2">Only
non-employee directors are eligible to receive nonstatutory
stock options under the 2002 Director Option Plan. Currently,
our board of directors consists of six&nbsp;(6) directors of
whom five&nbsp;(5) are non-employee directors.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Terms and Conditions of
Options.</FONT></I><FONT size="2"> Each option is evidenced by a
director option agreement between us and the relevant
non-employee director, and is subject to the following
additional terms and conditions:
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Exercise Price.</FONT></I><FONT size="2"> The
exercise price of options granted under the 2002 Director Option
Plan is 100% of the fair market value per share of our common
stock on the date of grant.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Exercise of Option.</FONT></I><FONT size="2">
A First Option will vest monthly over 3&nbsp;years from the date
of grant. An Annual Option will vest monthly over 1&nbsp;year
from the date of grant. An option will be exercisable in whole
or in part by giving us written notice, stating the number of
shares with respect to which the option is being exercised,
accompanied by payment in full for such shares.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Forms of
Consideration.</FONT></I><FONT size="2"> We receive no
consideration for granting options under the 2002 Director
Option Plan. The means of payment for shares issued upon
exercise of an option is specified in each option agreement. The
2002 Director Option Plan permits payment to be made by cash,
check, other shares of common stock of the Company (with some
restrictions), cashless exercises or any combination of these
alternatives.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Term of Option. </FONT></I><FONT size="2">The
term of any option shall be ten&nbsp;(10) years from the date of
grant. No option may be exercised after the expiration of its
term.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Termination of Directorship.
</FONT></I><FONT size="2">If a non-employee director&#146;s
status as a director terminates for any reason, then all options
held by him or her under the 2002 Director Option Plan expire
3&nbsp;months following the termination. If the non-employee
director&#146;s status as a director terminates due to death or
disability, then all options held by him or her under the 2002
Director Option Plan expire 12&nbsp;(twelve) months following
the termination. In no case may an option be exercised after the
its 10-year term.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Nontransferability of Options:
</FONT></I><FONT size="2">Options granted under the 2002
Director Option Plan are not transferable other than by will or
the laws of descent and distribution, and may be exercised
during the non-employee director&#146;s lifetime only by the
non-employee director.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Other Provisions:
</FONT></I><FONT size="2">The director option agreement may
contain other terms, provisions and conditions consistent with
the 2002 Director Option Plan as may be determined by the board.
</FONT>

<P align="center"><FONT size="2">6
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Adjustments Upon Changes in Capitalization,
Dissolution, Merger or Change-In-Control.
</FONT></I><FONT size="2">In the event that our stock changes by
reason of any stock split, reverse stock split, stock dividend,
combination, reclassification or other similar change in our
capital structure effected without the receipt of consideration,
appropriate adjustments will be made in the number and class of
shares of stock subject to the 2002 Director Option Plan, the
number and class of shares of stock subject to any outstanding
option, the exercise price of any such outstanding option and
the number of shares that may be subsequently issued pursuant to
First and Annual Options.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the event of our proposed liquidation or
dissolution, any unexercised options will terminate prior to
such action.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the event we are acquired pursuant to a merger
or the sale of substantially all of our assets, each option may
be assumed or an equivalent option substituted for by the
successor corporation. If an option is assumed or substituted
for by the successor corporation, it shall continue to be
exercisable as provided in the 2002 Director Option Plan. In
addition, whether or not the successor corporation assumes an
outstanding option or substitutes for it an equivalent option,
immediately upon a change-in-control transaction as defined in
the 2002 Director Option Plan, the option shall become fully
vested and exercisable and shall remain exercisable in
accordance with the provisions of the 2002 Director Option Plan
and the applicable option agreement, but in any event, the
option shall be fully vested and exercisable for a period of no
shorter than three&nbsp;(3) months from the date of the
change-in-control.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Amendment and Termination of the 2002 Director
Option Plan.</FONT></I><FONT size="2"> Our board of directors
may amend, alter, suspend or terminate the 2002 Director Option
Plan, or any part thereof, at any time and for any reason.
However, we will obtain stockholder approval for any amendment
to the 2002 Director Option Plan to the extent necessary to
comply with applicable laws or regulations. No such action by
our board of directors or stockholders may alter or impair any
option previously granted under the 2002 Director Option Plan
without the consent of the non-employee director. Unless
terminated earlier, the 2002 Director Option Plan will terminate
ten&nbsp;(10) years from the later of its approval by our board
of directors or our stockholders.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Federal Income Tax
Consequences.</FONT></I><FONT size="2"> The following discussion
summarizes certain U.S. federal income tax considerations for
non-employee directors receiving options under the 2002 Director
Option Plan and certain tax effects for us, based upon the
provisions of the Internal Revenue Code of 1986, as amended, as
in effect on the date of this Proxy Statement, current
regulations and existing administrative rulings of the Internal
Revenue Service. However, the summary is not intended to be a
complete discussion of all the federal income tax consequences
of these plans:
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Nonstatutory Stock
Options.</FONT></I><FONT size="2"> Options granted under the
2002 Director Option Plan do not qualify as incentive stock
options under Section&nbsp;422 of the Code. A non-employee
director does not recognize any taxable income at the time he or
she is granted a nonstatutory stock option. Upon exercise, the
non-employee director recognizes taxable income generally
measured by the excess of the fair market value on the date of
exercise for the shares exercised over the exercise price.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are entitled to a deduction in the same amount
as the ordinary income recognized by the non-employee director.
Upon a disposition of such shares by the non-employee director,
any difference between the sale price and the relevant
option&#146;s exercise price, to the extent not recognized as
taxable income as provided above, is treated as long-term or
short-term capital gain or loss, depending on how long after
exercise the shares are sold. Net capital gains on shares held
more than 12&nbsp;(twelve) months may be taxed at a maximum
federal rate of 20%. Capital losses are allowed in full against
capital gains and up to $3,000 against other income.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">For the full text of the 2002 Director Option
Plan, see &#147;Appendix&nbsp;A.&#148;
</FONT>

<P align="center"><FONT size="2">7
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">
<B><FONT size="2">Vote Required and Recommendation</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The approval of the 2002 Director Option Plan
requires the affirmative vote of a majority of the Votes Cast on
the proposal at the Annual Meeting.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
VOTING &#147;FOR&#148; THE ADOPTION OF THE 2002 DIRECTOR OPTION
PLAN AND THE NUMBER OF SHARES RESERVED FOR ISSUANCE
THEREUNDER.</FONT></B>

<!-- link1 "PROPOSAL THREE&nbsp;&nbsp;2002 EMPLOYEE STOCK PURCHASE PLAN" -->
<DIV align="left"><A NAME="004"></A></DIV>

<P align="center">
<B><FONT size="2">PROPOSAL THREE</FONT></B>

<P align="center">
<B><FONT size="2">2002 EMPLOYEE STOCK PURCHASE PLAN</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In March 2002, the Harmonic board of directors
adopted the 2002 Employee Stock Purchase Plan (the &#147;2002
ESPP&#148;), subject to stockholder approval. The 2002 ESPP is
intended to replace the 1995 Employee Stock Purchase Plan (the
&#147;1995 ESPP&#148;), which will be terminated by our board of
directors on or before July&nbsp;1, 2002. The 1995 ESPP will be
terminated because the Company believes that it has insufficient
shares in the 1995 ESPP to satisfy forecast future purchases.
Under accounting rules, the approval of additional shares for
the 1995 ESPP could result in future non-cash compensation
charges which, depending on the future market price per share of
the Company&#146;s common stock, could be significant. These
future charges could arise in the second half of 2002 because
the majority of our employees are currently enrolled in an
ongoing offering period during which the purchase price of
Harmonic common stock is $4.78, significantly below the current
market value. If our stockholders adopt the 2002 ESPP, the
purchase price of Harmonic stock in the first offering period of
the 2002 ESPP, commencing July&nbsp;1, 2002, would be reset to
85% of market value on that date, and no compensation charges
will be incurred. The 2002 ESPP will have substantially the same
terms as the 1995 ESPP and will become effective on July&nbsp;1,
2002, subject to stockholder approval.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our board of directors has determined that it is
in our best interests and the best interests of our stockholders
to adopt the 2002 ESPP. If our stockholders approve the adoption
of the 2002 ESPP, the total number of shares of common stock
available to be issued under the plan will be 1,500,000. As of
the date of the 2002 Annual Stockholders Meeting, no rights to
purchase will have yet been granted under the plan.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following is a summary of the principal
features of our 2002 ESPP. For the full text of the 2002 ESPP,
please see &#147;Appendix&nbsp;B.&#148;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Purpose. </FONT></I><FONT size="2">The purpose
of the 2002 ESPP is to provide employees with an opportunity to
purchase our common stock through payroll deductions. The
Company believes that an employee stock purchase plan is an
essential element of a competitive compensation package. These
plans are offered by most companies with which Harmonic competes
for employees. Currently, over 80% of our employees participate
in the 1995 ESPP.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Administration. </FONT></I><FONT size="2">Our
2002 ESPP shall be administered by the board of directors or a
committee appointed by the board of directors. All questions of
interpretation or application of the 2002 ESPP are determined by
our board of directors or its appointed committee, and its
decisions are final, conclusive and binding upon all
participants.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Eligibility. </FONT></I><FONT size="2">Each of
our employees and each employee of our designated subsidiaries,
whose customary employment with the Company or the designated
subsidiary is at least 20&nbsp;(twenty) hours per week and more
than 5&nbsp;(five) months in any calendar year, is eligible to
participate in the 2002 ESPP; except that no employee shall be
granted an option under the 2002 ESPP
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(i)&nbsp;to the extent that, immediately after
	the grant, such employee would own 5% of either the voting power
	or value of our stock or any of our subsidiaries, or
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">8
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(ii)&nbsp;to the extent that his or her rights to
	purchase stock under all of our employee stock purchase plans or
	those of our subsidiaries accrue at a rate which exceeds $25,000
	worth of stock (determined at the fair market value of the
	shares at the time such option is granted) for each calendar
	year.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Offering Period.</FONT></I><FONT size="2"> Our
2002 ESPP has consecutive and overlapping twenty-four
(24)&nbsp;month offering periods that begin every six months
commencing on the first business day on or after each July 1 and
January 1. Each twenty-four month offering period includes four
six-month purchase periods, during which payroll deductions are
accumulated and, at the end of which, shares of our common stock
are purchased with a participant&#146;s accumulated payroll
deductions. If the 2002 ESPP is approved by the stockholders of
the Company at the 2002 Stockholders Meeting, the first offering
period will commence on July&nbsp;1, 2002. Our board of
directors has the power to change commencement date and/or the
duration of future offering periods, if such change is announced
at least five days prior to the scheduled beginning of the first
offering period to be affected. To participate in the employee
stock purchase plan, an eligible employee must authorize payroll
deductions pursuant to the employee stock purchase plan. Such
payroll deductions may not exceed 10% of a participant&#146;s
compensation during the offering period. For the purposes of the
2002 ESPP, compensation is defined as base straight time gross
earnings, including commissions and payments for overtime and
shift premium, but excluding all payments for incentive
compensation, incentive payments, bonuses and other
compensation. Once an employee becomes a participant in the 2002
ESPP, the employee automatically will participate in each
successive offering period until the employee withdraws from the
2002 ESPP or the employee&#146;s employment with us or our
designated subsidiaries terminates. At the beginning of each
offering period, each participant automatically is granted an
option to purchase shares of our common stock. The option
expires at the end of the offering period or upon termination of
employment, whichever is earlier, but is exercised at the end of
each purchase period to the extent of the payroll deductions
accumulated during such purchase period, unless the participant
withdraws from the 2002 ESPP or his or her employment terminates.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Purchase Price.</FONT></I><FONT size="2">
Shares of our common stock are purchased under the 2002 ESPP at
a purchase price of not less than 85% of the lesser of the fair
market value of our common stock on
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(i)&nbsp;the first day of the offering period or
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(ii)&nbsp;the last day of the purchase period.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The fair market value of our common stock on any
relevant date will be the closing price per share as reported on
the Nasdaq National Market, or the mean of the closing bid and
asked prices, if no sales were reported, as quoted on such
exchange or reported in The Wall Street Journal.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Payment of Purchase Price; Payroll Deductions.
</FONT></I><FONT size="2">The purchase price of the shares is
accumulated by payroll deductions throughout each offering
period. The number of shares of our common stock a participant
may purchase in each offering period during an offering period
is determined by dividing the total amount of payroll deductions
withheld from the participant&#146;s compensation during that
purchase period by the purchase price; provided, however, that a
participant may not purchase more than 3,000 shares in any
purchase period. During the offering period, a participant may
discontinue his or her participation in the employee stock
purchase plan, and may decrease or increase the rate of payroll
deductions in an offering period within limits set by the plan
and the administrator.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">All payroll deductions made for a participant are
credited to the participant&#146;s account under the employee
stock purchase plan, are withheld in whole percentages only and
are included with our general funds. Funds received by us
pursuant to exercises under the 2002 ESPP are also used for
general corporate purposes. A participant may not make any
additional payments into his or her account.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Withdrawal.
</FONT></I><FONT size="2">Generally, a participant may withdraw
from an offering period at any time by written notice without
affecting his or her eligibility to participate in future
offering periods.
</FONT>

<P align="center"><FONT size="2">9
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">However, once a participant withdraws from a
particular offering period, that participant may not participate
again in the same offering period. To participate in a
subsequent offering period, the participant must deliver to us a
new subscription agreement.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Termination of Employment.
</FONT></I><FONT size="2">Upon termination of a
participant&#146;s employment for any reason, he or she will be
deemed to have elected to withdraw from the 2002 ESPP and the
payroll deductions credited to the participant&#146;s account
during the offering period but not yet used to exercise the
option will be returned to the participant.
</FONT>

<P align="left">
<I><FONT size="2">Adjustments upon Changes in Capitalization,
Dissolution, Liquidation, Merger or Change-of-Control.</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Changes in Capitalization.
</FONT></I><FONT size="2">Subject to any required action by our
stockholders, the number of shares reserved under the 2002 ESPP,
the number of shares that may be added to the 2002 ESPP on an
annual basis, the maximum number of shares that may be purchased
during any purchase period, as well as the price per share of
common stock covered by each option under the 2002 ESPP which
has not yet been exercised shall be proportionately adjusted for
any increase or decrease in the number of issued shares of
common stock resulting from a stock split, reverse stock split,
stock dividend, combination or reclassification of the common
stock, or any other increase or decrease in the number of shares
of common stock effected without receipt of consideration by us;
provided, however, that conversion of any of our convertible
securities shall not be deemed to have been &#147;effected
without receipt of consideration.&#148; Such adjustment shall be
made by our board of directors, whose determination in that
respect shall be final, binding and conclusive. Except as
expressly provided herein, no issuance by us of shares of stock
of any class, or securities convertible into shares of stock of
any class, shall affect, and no adjustment by reason thereof
shall be made with respect to, the number or price of shares of
common stock subject to an option.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Dissolution or Liquidation.
</FONT></I><FONT size="2">In the event of our proposed
dissolution or liquidation, unless the board of directors
determines otherwise the offering periods then in progress shall
be shortened by setting a new exercise date and the offering
period shall end on the new exercise date. The new exercise date
shall be immediately prior to the dissolution or liquidation. If
the board of directors shortens the offering periods then in
progress, the board of directors shall notify each participant
in writing, at least ten (10)&nbsp;business days prior to the
new exercise date, that the exercise date has been changed to
the new exercise date and that the option will be exercised
automatically on the new exercise date, unless the participant
has already withdrawn from the offering period.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Merger or Change of Control.
</FONT></I><FONT size="2">In the event of any merger or our
&#147;change of control,&#148; as defined in the 2002 ESPP, each
option under the 2002 ESPP shall be assumed or an equivalent
option shall be substituted by such successor corporation or a
parent or subsidiary of such successor corporation. In the event
the successor corporation refuses to assume or substitute for
the options, the board of directors shall shorten any purchase
periods and offering periods then in progress by setting a new
exercise date and any offering periods shall end on the new
exercise date. The new exercise date shall be prior to the
merger or change of control. If the board of directors shortens
any purchase periods and offering periods then in progress, the
board of directors shall notify each participant in writing, at
least ten (10)&nbsp;business days prior to the new exercise
date, that the exercise date has been changed to the new
exercise date and that the option will be exercised
automatically on the new exercise date, unless the participant
has already withdrawn from the offering period.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Amendment and Termination of the Plan.
</FONT></I><FONT size="2">Our board of directors may at any time
and for any reason terminate or amend the 2002 ESPP. An offering
period may be terminated by the board of directors at the end of
any purchase period if the board of directors determines that
termination of the 2002 ESPP is in our best interests and the
best interests of our stockholders. Generally, no such
termination can affect options previously granted. No amendment
shall be effective unless it is approved by the holders of a
majority of the votes cast at a duly held stockholders&#146;
meeting, if such amendment would require stockholder approval in
order to comply with Section&nbsp;423 of the Code.
</FONT>

<P align="center"><FONT size="2">10
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Without stockholder consent and without regard to
whether any participant rights may be considered to have been
adversely affected, the board of directors shall be entitled to
change the offering periods, limit the frequency and/or number
of changes in the amount withheld during an offering period, and
establish such other limitations or procedures as the board of
directors determines in its sole discretion advisable which are
consistent with the 2002 ESPP. Further, in the event that the
board of directors determines that the ongoing operation of the
2002 ESPP may result in unfavorable financial accounting
consequences, the Board may, in its discretion and, to the
extent necessary or desirable, modify or amend the
2002&nbsp;ESPP to reduce or eliminate such accounting
consequence without stockholder approval or the consent of any
2002 ESPP participants.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Certain Federal Income Tax Information.
</FONT></I><FONT size="2">The following brief summary of the
effect of federal income taxation upon the participant and us
with respect to the shares purchased under the 2002 ESPP does
not purport to be complete, and does not discuss the tax
consequences of a participant&#146;s death or the income tax
laws of any state or foreign country in which the participant
may reside.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The 2002 ESPP, and the right of participants to
make purchases thereunder, is intended to qualify under the
provisions of Sections&nbsp;421 and 423 of the Code. Under these
provisions, no income will be taxable to a participant until the
shares purchased under the 2002 ESPP are sold or otherwise
disposed of. However, participants should be aware that the
Internal Revenue Service has issued proposed regulations that
would require Social Security (FICA)&nbsp;and FUTA taxes to be
withheld on the spread of purchased 2002 ESPP shares on the date
of purchase. Currently, these proposed regulations are slated to
commence with purchases occurring on or after January&nbsp;1,
2003. Upon sale or other disposition of the shares, the
participant will generally be subject to tax in an amount that
depends upon the holding period. If the shares are sold or
otherwise disposed of more than two years from the first day of
the applicable offering period and one year from the applicable
date of purchase, the participant will recognize ordinary income
measured as the lesser of (i)&nbsp;the excess of the fair market
value of the shares at the time of such sale or disposition over
the purchase price, or (ii)&nbsp;an amount equal to 15% of the
fair market value of the shares as of the first day of the
applicable offering period. Any additional gain will be treated
as long-term capital gain. If the shares are sold or otherwise
disposed of before the expiration of these holding periods, the
participant will recognize ordinary income generally measured as
the excess of the fair market value of the shares on the date
the shares are purchased over the purchase price. Any additional
gain or loss on such sale or disposition will be long-term or
short-term capital gain or loss, depending on how long the
shares have been held from the date of purchase. We generally
are not entitled to a deduction for amounts taxed as ordinary
income or capital gain to a participant except to the extent of
ordinary income recognized by participants upon a sale or
disposition of shares prior to the expiration of the holding
periods described above.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Accounting Treatment.
</FONT></I><FONT size="2">The issuance of common stock under the
2002 ESPP generally should not result in a direct compensation
expense chargeable against the Company&#146;s reported earnings.
However, the Company must disclose, in footnotes to the
Company&#146;s financial statements, the impact the purchase
rights granted under the 2002 ESPP would have upon the
Company&#146;s reported earnings were the value of those
purchase rights treated as compensation expense.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Stock Issuances. </FONT></I><FONT size="2">The
table that follows shows, as to each of the Company&#146;s
executive officers named in the Summary Compensation Table of
the Executive Compensation and Additional Information section of
this Proxy Statement and the various indicated groups, the
number of shares of common stock purchased under the 1995 ESPP
during 2001 together with the weighted average purchase price
paid per share.
</FONT>

<P align="center"><FONT size="2">11
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="68%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">1995 Purchase Plan</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Transactions&nbsp;&#151;&nbsp;2001</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Number of</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Weighted</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Purchased</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Average</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><B><FONT size="1">Name</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Shares</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Purchase Price</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Anthony J. Ley
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,444</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4.781</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Robin N. Dickson
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,444</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4.781</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Israel Levi
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Patrick Harshman
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,960</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4.781</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Yaron Simler
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,444</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4.781</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">All executive officers as a group (5&nbsp;persons)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">15,292</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4.781</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">All non-employee directors as a group
	(5&nbsp;persons)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">All employees, including current officers who are
	not executive officers, as a group (700&nbsp;persons)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">958,616</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4.840</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">New Plan Benefits.
</FONT></I><FONT size="2">No purchase rights have been granted,
and no shares of common stock have been issued, under the 2002
ESPP.
</FONT>

<P align="left">
<B><FONT size="2">Vote Required and Recommendation</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The approval of the 2002 ESPP requires the
affirmative vote of a majority of the votes cast on the proposal
at the Annual Meeting.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
VOTING &#147;FOR&#148; THE ADOPTION OF THE 2002 ESPP AND THE
NUMBER OF SHARES RESERVED FOR ISSUANCE THEREUNDER.</FONT></B>

<!-- link1 "PROPOSAL FOUR&nbsp;&nbsp;RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS" -->
<DIV align="left"><A NAME="005"></A></DIV>

<P align="center">
<B><FONT size="2">PROPOSAL FOUR</FONT></B>

<P align="center">
<B><FONT size="2">RATIFICATION OF APPOINTMENT OF INDEPENDENT
ACCOUNTANTS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The board of directors has selected
PricewaterhouseCoopers LLP, independent accountants, to audit
the financial statements of the Company for the year ending
December&nbsp;31, 2002. PricewaterhouseCoopers LLP has served as
the Company&#146;s independent accountants since 1989.
PricewaterhouseCoopers has rotated Harmonic&#146;s audit
partners in compliance with current SEC regulations. In the
event of a negative vote on the ratification of
PricewaterhouseCoopers LLP, the board of directors will
reconsider its selection. Information regarding fees billed to
the Company by PricewaterhouseCoopers LLP can be found in the
Report of the Audit Committee of the board of directors below.
Representatives of PricewaterhouseCoopers LLP are expected to be
present at the Annual Meeting and will have the opportunity to
make a statement if they so desire. The representatives also are
expected to be available to respond to appropriate questions
from stockholders.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
VOTING &#147;FOR&#148; THE RATIFICATION OF THE APPOINTMENT OF
PRICEWATERHOUSECOOPERS LLP AS THE COMPANY&#146;S INDEPENDENT
ACCOUNTANTS FOR THE FISCAL YEAR ENDING DECEMBER 31,
2002.</FONT></B>

<P align="center"><FONT size="2">12
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link1 "ADDITIONAL INFORMATION" -->
<DIV align="left"><A NAME="006"></A></DIV>

<P align="center">
<B><FONT size="2">ADDITIONAL INFORMATION</FONT></B>

<P align="left">
<B><FONT size="2">Executive Compensation</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following Summary Compensation Table sets
forth certain information regarding the compensation of the
Chief Executive Officer of the Company and the other four most
highly compensated executive officers of the Company whose
salary plus bonus exceeded $100,000 in the last fiscal year
(collectively, the &#147;Named Executive Officers&#148;) for
services rendered in all capacities to the Company during the
fiscal years ended December&nbsp;31, 1999, December&nbsp;31,
2000 and December&nbsp;31, 2001.
</FONT>

<P align="center">
<B><FONT size="2">Summary Compensation Table</FONT></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="52%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Long Term</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Compensation</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Annual Compensation(1)</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Securities</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Underlying</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2" align="center" nowrap><B><FONT size="1">Name and Principal Position</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Year</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Salary</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Bonus</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Options</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Anthony J. Ley,
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2001</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">448,269</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">60,000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Chairman of the Board, President &#38;
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">359,327</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">50,000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">70,000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Chief Executive Officer
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1999</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">325,000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">641,069</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">50,000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Robin N. Dickson,
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2001</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">298,269</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">150,000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">40,000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Chief Financial Officer
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">209,690</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">30,000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">45,000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1999</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">183,596</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">374,781</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">24,000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Israel Levi,
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2001</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">259,135</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">130,000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">35,000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Senior Vice President,
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">214,567</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">30,000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">30,000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Systems &#38; Technology
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1999</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">185,000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">384,916</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">20,000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Patrick Harshman,
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2001</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">248,558</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">125,000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">40,000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">President, Broadband
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">191,673</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">22,000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">30,000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Access Networks
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1999</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">130,504</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">116,994</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">18,000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Yaron Simler,
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2001</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">222,115</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">105,000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">30,000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">President, Convergent Systems
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">215,484</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">20,000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">30,000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1999</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">125,673</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">80,765</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8,000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left">
<HR size="1" width="18%" align="left" noshade>
</DIV>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="4%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(1)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Other than compensation described above, the
	Company did not pay any Named Executive Officer any
	compensation, including incidental personal benefits, in excess
	of 10% of such executive officers salary.
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">13
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">Option Grants and Exercises</FONT></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="34%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="7"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Individual Grants</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Potential Realizable</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Value at Assumed</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Number of</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Percent of</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Annual Rates of Stock</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Securities</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Total Option</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Price Appreciation for</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Underlying</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Granted to</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Option Term(2)</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Options</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Employees in</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Exercise or</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Expiration</FONT></B></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD align="center" nowrap><B><FONT size="1">Name</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Granted(1)</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Fiscal Year</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Base Price</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Date</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">5%</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">10%</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Anthony J. Ley
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">60,000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2.2</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9.125</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1/26/2011</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">344,320</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">872,574</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Robin N. Dickson
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">40,000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.5</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9.125</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1/26/2011</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">229,547</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">581,716</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Israel Levi
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">35,000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.3</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9.125</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1/26/2011</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">200,853</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">509,002</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Patrick Harshman
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">40,000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.5</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9.125</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1/26/2011</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">229,547</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">581,716</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Yaron Simler
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">30,000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.1</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9.125</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1/26/2011</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">172,160</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">436,287</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="4%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(1)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">The options were granted pursuant to the
	Company&#146;s 1995 Stock Plan, and become exercisable at a rate
	of &nbsp;1/4 of the shares subject to the option one year after
	the date of grant and an additional &nbsp;1/48 of the shares at
	the end of each month thereafter, subject to continued service
	as an employee. The term of each option is ten years.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(2)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Potential gains are net of the exercise price but
	before taxes associated with the exercise. The 5% and 10%
	assumed annual rates of compounded stock appreciation are
	mandated by the rules of the SEC and do not represent the
	Company&#146;s estimate or projection of the future common stock
	price. Actual gains, if any, on stock option exercises will
	depend on the future financial performance of the Company,
	overall market conditions and the option holders&#146; continued
	employment through the vesting period.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table provides information with
respect to the exercise of stock options during 2001 and the
value of stock options held as of December&nbsp;31, 2001 by each
of the Named Executive Officers.
</FONT>

<P align="left">
<B><FONT size="2">Aggregate Option Exercises in Fiscal 2001 and
Year-End Values</FONT></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="27%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Value of Unexercised</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Number of Securities</FONT></B></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">In-the-Money Options</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Shares</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Options at 12/31/01</FONT></B></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">at 12/31/01(2)</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Acquired</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Value</FONT></B></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD align="center" nowrap><B><FONT size="1">Name</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">on Exercise</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Realized(1)</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Exercisable</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Unexercisable</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Exercisable</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Unexercisable</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Anthony J. Ley
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">120,832</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,152,142</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">392,081</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">135,417</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,090,540</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">215,775</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Robin N. Dickson
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">147,399</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">81,999</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">844,437</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">128,422</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Israel Levi
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">105,305</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">65,501</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">366,359</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">113,948</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Patrick Harshman
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">47,375</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">68,625</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">119,676</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">121,059</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Yaron Simler
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">39,668</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">54,000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">159,060</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">91,065</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="4%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(1)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Value realized represents the difference between
	the exercise price of the options and the fair market value of
	the underlying securities on the date of exercise.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(2)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Calculated by determining the difference between
	the fair market value of the common stock as of
	December&nbsp;31, 2001 and the exercise price of the underlying
	options.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">Employment Agreements</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company has entered into change-of-control
severance agreements with Mr.&nbsp;Ley, Mr.&nbsp;Dickson, and
Mr.&nbsp;Levi which provide that in the event of termination
within eighteen months of a change-in-control of the Company,
Mr.&nbsp;Ley will receive a lump-sum payment of eighteen
months&#146; salary and benefits, and Mr.&nbsp;Dickson, and
Mr.&nbsp;Levi will each receive a lump-sum payment of one
year&#146;s salary and benefits. These agreements also provide
for the acceleration of unvested stock options held by the Named
Executive Officer, subject to certain limitations.
</FONT>

<P align="center"><FONT size="2">14
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">
<B><FONT size="2">Report of the Compensation Committee of the
Board of Directors on Executive Compensation</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The members of the Compensation Committee of the
board of directors are Messrs.&nbsp;Kvamme and Van Valkenburg,
neither of whom is an employee of the Company.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Compensation Committee is responsible for the
approval of the Company&#146;s executive compensation policies.
The Committee reviews and approves the base salary and incentive
compensation paid to executive officers and administers the
Company&#146;s stock plans. The Company&#146;s board of
directors reviews and approves all stock option grants.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Compensation
Philosophy</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company&#146;s executive compensation
programs are designed to attract, motivate and retain executives
who will contribute significantly to the long-term success of
the Company and the enhancement of stockholder value. In
addition to base salary, certain elements of total compensation
are payable in the form of variable incentive plans tied to the
performance of the Company and the individual, and in
equity-based plans designed to closely align executive and
stockholder interests.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The three key components of executive
compensation in 2001 were:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Base Salary
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Incentive Bonus Plan
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Stock Option Plan
	</FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Base
Salary</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Base salary for executives, including that of the
chief executive officer, is set according to the
responsibilities of the position, the specific skills and
experience of the individual and the competitive market for
executive talent. In order to evaluate the competitive position
of the Company&#146;s salary structure, the Committee makes
reference to compensation surveys of comparable companies in the
high-technology sector, the Company&#146;s industry and the
Company&#146;s geographic location. Executive salary levels are
set to approximate average rates, with the intent that superior
performance under incentive bonus plans will enable the
executive to elevate his total cash compensation to levels that
are above the average of comparable companies. The Committee
reviews salaries annually and adjusts them as appropriate to
reflect changes in market conditions and individual performance
and responsibilities.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Incentive
Bonus Plan</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company&#146;s annual incentive bonus plan
reflects the Committee&#146;s belief that a meaningful component
of executive compensation should be contingent on the
performance of the Company and the individual executive officer.
In 2001, the Company&#146;s incentive bonus plan was based in
part upon the retention of management talent in the Company, and
in part upon the attainment of certain revenue and loss
reduction goals with a target bonus established for each
participant. In 2001, although the Company significantly
increased its revenue and decreased its net loss in the second
half of the year, compared to the first half, the Company&#146;s
financial results did not meet internal expectations of either
revenue or pro forma operating loss and only the retention
element of the bonuses were paid to those officers who remained
with the Company during 2001.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Stock Option
Plans</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Committee believes that the Company&#146;s
stock option plans are an essential tool to link the long-term
interests of stockholders and employees, especially executive
management, and serves to motivate executives to make decisions
that will, in the long run, give the best returns to
stockholders. Stock options are generally granted when an
executive joins the Company, and on an annual basis
</FONT>

<P align="center"><FONT size="2">15
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">thereafter. These options typically vest over a
four year period and are granted at an exercise price equal to
the fair market value of the Company&#146;s common stock at the
date of grant. The size of initial option grants is based upon
the position, responsibilities and expected contribution of the
individual, with subsequent grants also taking into account the
individual&#146;s performance and the vesting status of
previously granted options. This approach is designed to
maximize stockholder value over a long term, as no benefit is
realized from the option grant unless the price of the
Company&#146;s common stock has increased over a number of years.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition to the Option Plan, executive
officers are eligible to participate in the Company&#146;s 1995
ESPP. This plan allows eligible employees to purchase the
Company&#146;s common stock at a price equal to 85% of the lower
of the fair market value at the beginning of the offering period
or the fair market value at the end of the purchase period, with
the purchase amount limited to 10% of base salary or applicable
IRS regulations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Other elements of executive compensation include
life and long-term disability insurance, medical benefits and a
401(k)&nbsp;deferred compensation plan. The Company makes
matching contributions to the 401(k)&nbsp;plan up to $750 per
annum per participant. Such benefits are available to all
regular, full-time U.S.&nbsp;employees of the Company.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The compensation of the Chief Executive Officer
in 2001 was determined in a manner substantially consistent with
that of other executive officers, except that Mr.&nbsp;Ley did
not participate in the retention portion of the Incentive Bonus
Plan.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Section&nbsp;162(m)</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have considered the potential future effects
of Section&nbsp;162(m) of the Internal Revenue Code on the
compensation paid to our executive officers. Section&nbsp;162(m)
disallows a tax deduction for any publicly held corporation for
individual compensation exceeding $1.0 million in any taxable
year for the Chief Executive Officer or any of our next four
most highly compensated executive officers, unless compensation
is performance based. We have adopted a policy that, where
reasonably practicable, we will seek to qualify the variable
compensation paid to our executive officers for an exemption
from the deductibility limitations of Section&nbsp;162(m).
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="34%"></TD>
	<TD width="66%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<B><FONT size="2">Compensation Committee</FONT></B></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">E. Floyd Kvamme
	</FONT></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">David R. Van Valkenburg
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">16
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link2 "Performance Graph" -->
<DIV align="left"><A NAME="007"></A></DIV>

<P align="left">
<B><FONT size="2">Performance Graph</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Set forth below is a line graph comparing the
annual percentage change in the cumulative return to the
stockholders of the Company&#146;s common stock with the
cumulative return of the Nasdaq Telecom Index and of the
Standard &#38; Poor&#146;s (S&#38;P) 500&nbsp;Index for the
period commencing December&nbsp;31, 1996 and ending on
December&nbsp;31, 2001. The graph assumes that $100 was invested
in each of the Company&#146;s common stock, in the S&#38;P 500
and the Nasdaq Telecom Index on December&nbsp;31, 1996. Historic
stock price performance is not necessarily indicative of future
stock price performance.
</FONT>

<P align="center">
<IMG src="f79624def7962401.gif" alt="(PLOT GRAPH)">

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="34%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">12/31/96</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">12/31/97</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">12/31/98</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">12/31/99</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">12/29/00</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">12/31/01</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">HLIT
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">100.00</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">70.74</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">121.91</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1234.59</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">73.99</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">156.31</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Nasdaq Telecom
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">100.00</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">145.97</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">241.58</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">431.01</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">183.57</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">122.88</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">S&#38;P 500
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">100.00</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">133.45</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">172.19</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">208.54</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">189.97</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">167.58</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<B><FONT size="2">Report of the Audit Committee of the Board of
Directors</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Audit Committee of the board of directors of
Harmonic serves as the representative of the Board for general
oversight of Harmonic&#146;s financial accounting and reporting
process, system of internal control, audit process, and process
for monitoring the compliance with laws and regulations.
Harmonic&#146;s management has primary responsibility for
preparing financial statements and the financial reporting
process.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Audit Committee is composed of three
non-employee members, each of whom is independent as defined by
the Nasdaq rules. Harmonic&#146;s independent accountants,
PricewaterhouseCoopers LLP, are responsible for expressing an
opinion on the conformity of Harmonic&#146;s audited financial
statements to generally accepted accounting principles.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Audit Committee of the board of directors has:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(i)&nbsp;reviewed and discussed the audited
	financial statements with Company management;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(ii)&nbsp;discussed with PricewaterhouseCoopers
	LLP the matters required to be discussed by Statement of
	Accounting Standards 61; and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(iii)&nbsp;reviewed the written disclosures and
	the letter from PricewaterhouseCoopers LLP required by
	Independence Standards Board Standard No.&nbsp;1 and has
	discussed with PricewaterhouseCoopers LLP its independence.
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">17
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Based on the foregoing review and discussions,
the Audit Committee recommended to the board of directors that
the audited financial statements be included in Harmonic&#146;s
2001 Annual Report on Form&nbsp;10-K filed with the SEC.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><FONT size="2">Fees
Billed to the Company by PricewaterhouseCoopers LLP during
Fiscal 2001:
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Audit Fees: </FONT></I><FONT size="2">The
aggregate fees billed by PricewaterhouseCoopers for professional
services rendered for the audit of Harmonic&#146;s fiscal year
2001 financial statements, and for the reviews of the financial
statements included in each of the Company&#146;s
Forms&nbsp;10-Q were $356,000.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Financial Information Systems Design and
Implementation Fees:</FONT></I><FONT size="2">
PricewaterhouseCoopers LLP did provide any professional services
for financial information systems design or implementation for
fiscal year 2001.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">All Other Fees:
</FONT></I><FONT size="2">Aggregate fees billed for all other
services rendered by PricewaterhouseCoopers, principally tax
services and accounting advice related to acquisitions and
registration statements, for fiscal year 2001 were $511,000.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Audit Committee has considered whether the
services provided by PricewaterhouseCoopers LLP are compatible
with maintaining the independence of PricewaterhouseCoopers LLP
and has concluded that the independence of
PricewaterhouseCoopers LLP is maintained and is not compromised
by the services provided.
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="34%"></TD>
	<TD width="66%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<B><FONT size="2">The Audit Committee</FONT></B></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">E. Floyd Kvamme
	</FONT></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">Michel Vaillaud
	</FONT></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">David Lane
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The information contained above under the
captions &#147;Report of the Compensation Committee of the Board
of Directors on Executive Compensation&#148; and
&#147;Performance Graph&#148; and &#147;Report of the Audit
Committee of the Board of Directors&#148; shall not be deemed to
be &#147;soliciting material&#148; or to be &#147;filed&#148;
with the SEC, nor shall such information be incorporated by
reference into any future filing under the Securities Act of
1933, as amended, or the Securities Exchange Act of 1934, as
amended, except to the extent that the Company specifically
incorporates it by reference into such filing.
</FONT>

<P align="left">
<B><FONT size="2">Security Ownership of Certain Beneficial
Owners and Management</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table sets forth certain
information known to the Company with respect to beneficial
ownership of the Company&#146;s common stock as of the Record
Date by (i)&nbsp;each beneficial owner of more than 5% of the
Common Stock; (ii)&nbsp;each director and each nominee;
(iii)&nbsp;each Named Executive Officer; and (iv)&nbsp;all
directors and executive officers as a group. The Company was not
aware of any beneficial owner of the Company&#146;s common stock
who held more than 5% of the Company&#146;s common stock as of
the Record Date. Except as otherwise indicated, each person has
sole
</FONT>

<P align="center"><FONT size="2">18
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">voting and investment power with respect to all
shares shown as beneficially owned, subject to community
property laws where applicable.
</FONT>
</DIV>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="70%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Number of</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Percent of</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><B><FONT size="1">Name and Address of Beneficial Owner</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Shares</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Total</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Anthony J. Ley<SUP>(1)</SUP>
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">781,862</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.3</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">E. Floyd Kvamme
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">468,684</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">*</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">David A. Lane<SUP>(2)</SUP>
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">49,866</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">*</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Lewis Solomon<SUP>(3)</SUP>
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,333</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">*</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Michel L. Vaillaud<SUP>(4)</SUP>
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">39,666</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">*</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">David R. Van Valkenburg<SUP>(5)</SUP>
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,333</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">*</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Robin N. Dickson<SUP>(6)</SUP>
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">225,124</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">*</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Israel Levi<SUP>(7)</SUP>
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">136,422</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">*</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Patrick Harshman<SUP>(8)</SUP>
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">70,089</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">*</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Yaron Simler<SUP>(9)</SUP>
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">62,733</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">*</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">All directors and executive officers as a group
	(10&nbsp;persons)<SUP>(10)</SUP>
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,840,112</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="1%"></TD>
	<TD width="4%"></TD>
	<TD width="95%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">*</FONT></TD>
	<TD align="left">
	<FONT size="2">Percentage of shares beneficially owned is less
	than one percent of total.
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="4%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(1)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Includes 432,913 shares which may be acquired
	upon exercise of options exercisable within 60&nbsp;days of
	March&nbsp;28, 2002.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(2)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Includes 27,666 shares which may be acquired upon
	exercise of options exercisable within 60&nbsp;days of
	March&nbsp;28, 2002.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(3)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Includes 1,333 shares which may be acquired upon
	exercise of options exercisable within 60&nbsp;days of
	March&nbsp;28, 2002.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(4)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Includes 19,666 shares which may be acquired upon
	exercise of options exercisable within 60&nbsp;days of
	March&nbsp;28, 2002.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(5)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Includes 2,333 shares which may be acquired upon
	exercise of options exercisable within 60&nbsp;days of
	March&nbsp;28, 2002.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(6)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Includes 165,418 shares which may be acquired
	upon exercise of options exercisable within 60&nbsp;days of
	March&nbsp;28, 2002.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(7)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Includes 124,679 shares which may be acquired
	upon exercise of options exercisable within 60&nbsp;days of
	March&nbsp;28, 2002.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(8)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Includes 66,540 shares which may be acquired upon
	exercise of options exercisable within 60&nbsp;days of
	March&nbsp;28, 2002.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(9)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Includes 54,459 shares which may be acquired upon
	exercise of options exercisable within 60&nbsp;days of
	March&nbsp;28, 2002.
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="5%"></TD>
	<TD width="95%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(10)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Includes 895,007 shares which may be acquired
	upon exercise of options exercisable within 60&nbsp;days of
	March&nbsp;28, 2002.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">Section&nbsp;16(a) Beneficial Ownership
Reporting Compliance</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Section&nbsp;16(a) of the Securities Exchange Act
of 1934, as amended (the &#147;Exchange Act&#148;) requires the
Company&#146;s executive officers and directors and persons who
own more than ten percent of a registered class of the
Company&#146;s equity securities to file an initial report of
ownership on Form&nbsp;3 and changes in ownership on Form&nbsp;4
or Form&nbsp;5 with the SEC and the National Association of
Securities Dealers, Inc. Executive officers, directors and
greater than ten percent stockholders are also required by SEC
rules to furnish the Company with copies of all
Section&nbsp;16(a) forms they file. Based solely on its review
of the copies of such forms received by it or written
representations from certain reporting persons, the Company
believes that, with respect to 2001, all filing requirements
applicable to its officers, directors and ten percent
stockholders were complied with.
</FONT>

<P align="center"><FONT size="2">19
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">
<B><FONT size="2">Certain Relationships and Related
Transactions</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Except for the compensation agreements and other
arrangements that are described under &#147;Change of Control
and Severance Agreements&#148; and the transactions described
under &#147;Transactions with Directors, Executive Officers and
5% Stockholders,&#148; there was not during fiscal 2001, nor is
there currently proposed, any transaction or series of similar
transactions to which the Company was or is to be a party in
which the amount involved exceeds $60,000 and in which any
director, executive officer, 5% stockholder or any member of the
immediate family of any of the foregoing persons had or will
have a direct or indirect material interest.
</FONT>

<P align="left">
<B><FONT size="2">Transactions with Directors, Executive
Officers and 5% Stockholders</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Mr.&nbsp;Solomon, a director of the Company, is
co-founder and Chief Executive Officer of Broadband Services,
Inc. (BSI). During fiscal 2001, we recorded total revenues from
sales to BSI of $4.9&nbsp;million. We believe that our
transactions with BSI were on terms no more favorable than those
with unrelated parties.
</FONT>

<!-- link1 "OTHER MATTERS" -->
<DIV align="left"><A NAME="008"></A></DIV>

<P align="center">
<B><FONT size="2">OTHER MATTERS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company knows of no other matters to be
submitted at the meeting. If any other matters properly come
before the meeting or any adjournment or postponement thereof,
it is the intention of the persons named in the enclosed form of
Proxy to vote the shares they represent as the Board of
Directors may recommend.
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="34%"></TD>
	<TD width="66%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">Dated: April&nbsp;16, 2002
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">By Order of the Board of Directors
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<IMG src="f79624def79624s1.gif" alt="-s- Jeffrey D. Saper"></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">JEFFREY D. SAPER,
	</FONT></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<I><FONT size="2">Secretary</FONT></I></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">20
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link1 "Appendix A&nbsp;&nbsp;2002 DIRECTOR OPTION PLAN" -->
<DIV align="left"><A NAME="009"></A></DIV>

<P align="right">
<B><FONT size="2">Appendix&nbsp;A</FONT></B>

<P align="center">
<B><FONT size="2">HARMONIC INC.</FONT></B>

<P align="center">
<B><FONT size="2">2002 DIRECTOR OPTION PLAN</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Purposes of
the Plan.</I> The purposes of this 2002 Director Option Plan are
to attract and retain the best available personnel for service
as Outside Directors (as defined herein) of the Company, to
provide additional incentive to the Outside Directors of the
Company to serve as Directors, and to encourage their continued
service on the Board.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">All options granted hereunder shall be
nonstatutory stock options.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Definitions.</I>
As used herein, the following definitions shall apply:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">a).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>&#147;Board&#148;
	</I>means the Board of Directors of the Company.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">b).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>&#147;Change-in-Control&#148;
	</I>means the occurrence of any of the following events:
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="6%"></TD>
	<TD width="94%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(i)&nbsp;Any &#147;person&#148; (as such term is
	used in Sections&nbsp;13(d) and 14(d) of the Exchange Act)
	becomes the &#147;beneficial owner&#148; (as defined in
	Rule&nbsp;13d-3 of the Exchange Act), directly or indirectly, of
	securities of the Company representing fifty percent (50%) or
	more of the total voting power represented by the Company&#146;s
	then outstanding voting securities; or
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(ii)&nbsp;The consummation of the sale or
	disposition by the Company of all or substantially all of the
	Company&#146;s assets;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(iii)&nbsp;A change in the composition of the
	Board occurring within a two-year period, as a result of which
	fewer than a majority of the directors are Incumbent Directors.
	<I>&#147;Incumbent Directors&#148;</I> means directors who
	either (A)&nbsp;are Directors as of the date hereof, or (B) are
	elected, or nominated for election, to the Board with the
	affirmative votes of at least a majority of the Incumbent
	Directors at the time of such election or nomination (but will
	not include an individual whose election or nomination is in
	connection with an actual or threatened proxy contest relating
	to the election of directors to the Company); or
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(iv)&nbsp;The consummation of a merger or
	consolidation of the Company with any other corporation, other
	than a merger or consolidation which would result in the voting
	securities of the Company outstanding immediately prior thereto
	continuing to represent (either by remaining outstanding or by
	being converted into voting securities of the surviving entity
	or its parent) at least fifty percent (50%) of the total voting
	power represented by the voting securities of the Company or
	such surviving entity or its parent outstanding immediately
	after such merger or consolidation.
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">c).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>&#147;Code&#148;
	</I>means the Internal Revenue Code of 1986, as amended.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">d).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>&#147;Common
	Stock&#148; </I>means the common stock of the Company.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">e).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>&#147;Company&#148;
	</I>means Harmonic Inc., a Delaware corporation.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">f).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>&#147;Director&#148;
	</I>means a member of the Board.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">g).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>&#147;Disability&#148;
	</I>means total and permanent disability as defined in section
	22(e)(3) of the Code.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">h).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>&#147;Employee&#148;
	</I>means any person, including officers and Directors, employed
	by the Company or any Parent or Subsidiary of the Company. The
	payment of a Director&#146;s fee by the Company shall not be
	sufficient in and of itself to constitute &#147;employment&#148;
	by the Company.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">i).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>&#147;Exchange
	Act&#148; </I>means the Securities Exchange Act of 1934, as
	amended.
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">A-1
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">j).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>&#147;Fair
	Market Value&#148; </I>means, as of any date, the value of
	Common Stock determined as follows:
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="6%"></TD>
	<TD width="94%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(i)&nbsp;If the Common Stock is listed on any
	established stock exchange or a national market system,
	including without limitation the Nasdaq National Market or The
	Nasdaq SmallCap Market of The Nasdaq Stock Market, its Fair
	Market Value shall be the closing sales price for such stock (or
	the closing bid, if no sales were reported) as quoted on such
	exchange or system for the last market trading day prior to the
	time of determination as reported in The Wall Street Journal or
	such other source as the Administrator deems reliable;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(ii)&nbsp;If the Common Stock is regularly quoted
	by a recognized securities dealer but selling prices are not
	reported, the Fair Market Value of a Share of Common Stock shall
	be the mean between the high bid and low asked prices for the
	Common Stock for the last market trading day prior to the time
	of determination, as reported in The Wall Street Journal or such
	other source as the Board deems reliable; or
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(iii)&nbsp;In the absence of an established
	market for the Common Stock, the Fair Market Value thereof shall
	be determined in good faith by the Board.
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">k).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>&#147;Inside
	Director&#148; </I>means a Director who is an Employee.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">l).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>&#147;Option&#148;
	</I>means a stock option granted pursuant to the Plan.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">m).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>&#147;Optioned
	Stock&#148; </I>means the Common Stock subject to an Option.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">n).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>&#147;Optionee&#148;
	</I>means a Director who holds an Option.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">o).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>&#147;Outside
	Director&#148; </I>means a Director who is not an Employee.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">p).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>&#147;Parent&#148;
	</I>means a &#147;parent corporation,&#148; whether now or
	hereafter existing, as defined in Section&nbsp;424(e) of the
	Code.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">q).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>&#147;Plan&#148;
	</I>means this 2002 Director Option Plan.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">r).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>&#147;Securities
	Act&#148; </I>means the Securities Act of 1933, as amended.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">s).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>&#147;Share&#148;
	</I>means a share of the Common Stock, as adjusted in accordance
	with Section&nbsp;10 of the Plan.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">t).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>&#147;Subsidiary&#148;
	</I>means a &#147;subsidiary corporation,&#148; whether now or
	hereafter existing, as defined in Section&nbsp;424(f) of the
	Internal Revenue Code of 1986.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Stock Subject
to the Plan.</I> Subject to the provisions of Section&nbsp;10 of
the Plan, the maximum aggregate number of Shares which may be
optioned and sold under the Plan is 400,000&nbsp;Shares (the
&#147;Pool&#148;). The Shares may be authorized, but unissued,
or reacquired Common Stock.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If an Option expires or becomes unexercisable
without having been exercised in full, the unpurchased Shares
which were subject thereto shall become available for future
grant or sale under the Plan (unless the Plan has terminated).
Shares that have actually been issued under the Plan shall not
be returned to the Plan and shall not become available for
future distribution under the Plan.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Administration
and Grants of Options under the Plan.</I>
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">a).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Procedure for
	Grants.</I> All grants of Options to Outside Directors under
	this Plan shall be automatic and nondiscretionary and shall be
	made strictly in accordance with the following provisions:
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="6%"></TD>
	<TD width="94%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(i)&nbsp;No person shall have any discretion to
	select which Outside Directors shall be granted Options or to
	determine the number of Shares to be covered by Options.
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">A-2
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="6%"></TD>
	<TD width="94%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(ii)&nbsp;Each Outside Director shall be
	automatically granted an Option to purchase 20,000 Shares (the
	<I>&#147;First Option&#148;</I>) on the date on which the later
	of the following events occurs: (A)&nbsp;the effective date of
	this Plan, as determined in accordance with Section&nbsp;6
	hereof, or (B)&nbsp;the date on which such person first becomes
	an Outside Director, whether through election by the
	stockholders of the Company or appointment by the Board to fill
	a vacancy; provided, however, that an Inside Director who ceases
	to be an Inside Director but who remains a Director shall not
	receive a First Option.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(iii)&nbsp;Each Outside Director shall be
	automatically granted an Option to purchase 10,000 Shares (a
	<I>&#147;Subsequent Option&#148;</I>) on the date such Outside
	Director is reelected to the Board by the stockholders of the
	Company at the Company&#146;s annual meeting of stockholders or
	otherwise; provided that he or she is then an Outside Director
	and if, as of such date, he or she shall have served on the
	Board for at least the preceding six&nbsp;(6) months.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(iv)&nbsp;Notwithstanding the provisions of
	subsections (ii) and (iii) hereof, any exercise of an Option
	granted before the Company has obtained stockholder approval of
	the Plan shall be conditioned upon obtaining such stockholder
	approval of the Plan.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(v)&nbsp;The terms of a First Option granted
	hereunder shall be as follows:
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="10%"></TD>
	<TD width="90%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">A.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the term of the
	First Option shall be ten&nbsp;(10)&nbsp;years;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">B.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the First Option
	shall be exercisable only while the Outside Director remains a
	Director of the Company, except as set forth in Sections&nbsp;8
	and 10 hereof;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">C.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the exercise
	price per Share shall be 100% of the Fair Market Value per Share
	on the date of grant of the First Option;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">D.&nbsp;subject to Section&nbsp;10 hereof, the
	First Option shall become exercisable as to &nbsp;1/36th of the
	Shares subject to the First Option at the end of each month
	following its date of grant, provided that the Optionee
	continues to serve as a Director on such dates.
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="6%"></TD>
	<TD width="94%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(vi)&nbsp;The terms of a Subsequent Option
	granted hereunder shall be as follows:
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="10%"></TD>
	<TD width="90%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">A.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the term of the
	Subsequent Option shall be ten (10)&nbsp;years;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">B.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the Subsequent
	Option shall be exercisable only while the Outside Director
	remains a Director of the Company, except as set forth in
	Sections&nbsp;8 and 10 hereof;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">C.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the exercise
	price per Share shall be 100% of the Fair Market Value per Share
	on the date of grant of the Subsequent Option;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">D.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;subject to
	Section&nbsp;10 hereof, the Subsequent Option shall become
	exercisable as to &nbsp;1/12th of the Shares subject to the
	Subsequent Option at the end of each month following its date of
	grant, provided that the Optionee continues to serve as a
	Director on such dates.
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="6%"></TD>
	<TD width="94%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(vii)&nbsp;In the event that any Option granted
	under the Plan would cause the number of Shares subject to
	outstanding Options plus the number of Shares previously
	purchased under Options to exceed the Pool, then the remaining
	Shares available for Option grant shall be granted under Options
	to the Outside Directors on a pro rata basis. No further grants
	shall be made until such time, if any, as additional Shares
	become available for grant under the Plan through action of the
	Board or the stockholders to increase the number of Shares which
	may be issued under the Plan or through cancellation or
	expiration of Options previously granted hereunder.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Eligibility.</I>
Options may be granted only to Outside Directors. All Options
shall be automatically granted in accordance with the terms set
forth in Section&nbsp;4 hereof.
</FONT>

<P align="center"><FONT size="2">A-3
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Plan shall not confer upon any Optionee any
right with respect to continuation of service as a Director or
nomination to serve as a Director, nor shall it interfere in any
way with any rights which the Director or the Company may have
to terminate the Director&#146;s relationship with the Company
at any time.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Term of
Plan.</I> The Plan shall become effective upon its approval by
the stockholders of the Company. It shall continue in effect for
a term of ten (10)&nbsp;years unless sooner terminated under
Section&nbsp;11 of the Plan.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Form of
Consideration.</I> The consideration to be paid for the Shares
to be issued upon exercise of an Option, including the method of
payment, shall consist of
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">a).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;cash;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">b).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;check;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">c).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;other shares
	which (x)&nbsp;in the case of Shares acquired upon exercise of
	an option, have been owned by the Optionee for more than six (6)
	months on the date of surrender, and (y)&nbsp;have a Fair Market
	Value on the date of surrender equal to the aggregate exercise
	price of the Shares as to which said Option shall be exercised;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">d).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;consideration
	received by the Company under a cashless exercise program
	implemented by the Company in connection with the Plan; or
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">e).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;any combination
	of the foregoing methods of payment.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Exercise of
Option.</I>
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">a).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Procedure for
	Exercise; Rights as a Stockholder.</I> Any Option granted
	hereunder shall be exercisable at such times as are set forth in
	Section&nbsp;4 hereof; provided, however, that no Options shall
	be exercisable until stockholder approval of the Plan has been
	obtained.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">An Option may not be exercised for a fraction of
	a Share.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">An Option shall be deemed to be exercised when
	written notice of such exercise has been given to the Company in
	accordance with the terms of the Option by the person entitled
	to exercise the Option and full payment for the Shares with
	respect to which the Option is exercised has been received by
	the Company. Full payment may consist of any consideration and
	method of payment allowable under Section&nbsp;7 of the Plan.
	Until the issuance (as evidenced by the appropriate entry on the
	books of the Company or of a duly authorized transfer agent of
	the Company) of the stock certificate evidencing such Shares, no
	right to vote or receive dividends or any other rights as a
	stockholder shall exist with respect to the Optioned Stock,
	notwithstanding the exercise of the Option. A share certificate
	for the number of Shares so acquired shall be issued to the
	Optionee as soon as practicable after exercise of the Option. No
	adjustment shall be made for a dividend or other right for which
	the record date is prior to the date the stock certificate is
	issued, except as provided in Section&nbsp;10 of the Plan.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">Exercise of an Option in any manner shall result
	in a decrease in the number of Shares which thereafter may be
	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.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">b).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Termination
	of Continuous Status as a Director.</I> Subject to Section 10
	hereof, in the event an Optionee&#146;s status as a Director
	terminates (other than upon the Optionee&#146;s death or
	Disability), the Optionee may exercise his or her Option, but
	only within three (3)&nbsp;months following the date of such
	termination, and only to the extent that the Optionee was
	entitled to exercise it on the date of such termination (but in
	no event later than the expiration of its ten (10)&nbsp;year
	term). To the extent that the Optionee was not vested as to his
	or her entire Option on the date of such termination, the Shares
	covered by the unvested portion of the Option shall revert to
	the Plan. If, after termination, the Optionee does not exercise
	his or her Option within
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">A-4
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">the time specified herein, the Option shall
	terminate, and the Shares covered by such Option shall revert to
	the Plan.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">c).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Disability of
	Optionee.</I> In the event Optionee&#146;s status as a Director
	terminates as a result of Disability, the Optionee may exercise
	his or her Option, but only within twelve&nbsp;(12) months
	following the date of such termination, and only to the extent
	that the Optionee was entitled to exercise it on the date of
	such termination (but in no event later than the expiration of
	its ten (10)&nbsp;year term). To the extent that the Optionee
	was not vested as to his or her entire Option on the date of
	termination, the Shares covered by the unvested portion of the
	Option shall revert to the Plan. If, after termination, the
	Optionee does not exercise his or her Option within the time
	specified herein, the Option shall terminate, and the Shares
	covered by such Option shall revert to the Plan.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">d).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Death of
	Optionee.</I> In the event of an Optionee&#146;s death, the
	Optionee&#146;s estate or a person who acquired the right to
	exercise the Option by bequest or inheritance may exercise the
	Option, but only within twelve (12)&nbsp;months following the
	date of death, and only to the extent that the Optionee was
	entitled to exercise it on the date of death (but in no event
	later than the expiration of its ten (10)&nbsp;year term). To
	the extent that the Optionee was not vested as to his or her
	entire Option on the date of death, the Shares covered by the
	unvested portion of the Option shall revert to the Plan. To the
	extent that the Optionee&#146;s estate or a person who acquired
	the right to exercise such Option does not exercise such Option
	(to the extent otherwise so entitled) within the time specified
	herein, the Option shall terminate, and the Shares covered by
	such Option shall revert to the Plan.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Non-Transferability
of Options.</I> The Option 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 Optionee, only by the
Optionee.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">10.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Adjustments
Upon Changes in Capitalization, Dissolution, Merger or
Change-in-Control.</I>
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">a).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Changes in
	Capitalization.</I> Subject to any required action by the
	stockholders of the Company, the number of Shares covered by
	each outstanding Option, the number of Shares which have been
	authorized for issuance under the Plan but as to which no
	Options have yet been granted or which have been returned to the
	Plan upon cancellation or expiration of an Option, as well as
	the price per Share covered by each such outstanding Option, and
	the number of Shares issuable pursuant to the automatic grant
	provisions of Section&nbsp;4 hereof shall be proportionately
	adjusted for any increase or decrease in the number of issued
	Shares resulting from a stock split, reverse stock split, stock
	dividend, combination or reclassification of the Common Stock,
	or any other increase or decrease in the number of issued Shares
	effected without receipt of consideration by the Company;
	provided, however, that conversion of any convertible securities
	of the Company shall not be deemed to have been &#147;effected
	without receipt of consideration.&#148; Except as expressly
	provided herein, no issuance by the Company of shares of stock
	of any class, or securities convertible into shares of stock of
	any class, shall affect, and no adjustment by reason thereof
	shall be made with respect to, the number or price of Shares
	subject to an Option.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">b).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Dissolution
	or Liquidation.</I> In the event of the proposed dissolution or
	liquidation of the Company, to the extent that an Option has not
	been previously exercised, it shall terminate immediately prior
	to the consummation of such proposed action.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">c).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Merger or
	Change-in-Control.</I> In the event of a merger of the Company
	with or into another corporation or a Change-in-Control of the
	Company, outstanding Options may be assumed or equivalent
	options may be substituted by the successor corporation or a
	Parent or Subsidiary thereof (the &#147;Successor
	Corporation&#148;). If an option is assumed or substituted for,
	the Option or equivalent option shall continue to be exercisable
	as provided in Section&nbsp;4 hereof for so long as the Optionee
	serves as a Director or a director of the Successor Corporation.
	In
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">A-5
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">addition, whether or not the Successor
	Corporation assumes an outstanding option or substitutes for it
	an equivalent option, immediately upon a Change-in-Control each
	Option or option shall become fully vested and exercisable,
	including as to Shares for which it would not otherwise be
	exercisable. Thereafter, the Option or option shall remain
	exercisable in accordance with Section&nbsp;8(b) through
	(d)&nbsp;above. In such event the Board shall notify the
	Optionee that the Option shall be fully exercisable for a period
	of no shorter than 3 (three)&nbsp;months from the date of such
	Change-in-Control.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">For the purposes of this Section&nbsp;10(c), an
	Option shall be considered assumed if, following the merger or
	Change-in-Control, the Option confers the right to purchase or
	receive, for each Share of Optioned Stock subject to the Option
	immediately prior to the merger or Change-in-Control, the
	consideration (whether stock, cash, or other securities or
	property) 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). If such consideration
	received in the merger or 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 the Option, for each Share of Optioned Stock
	subject to the Option, 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 merger or Change-in-Control.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">11.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Amendment and
Termination of the Plan.</I>
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">a).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Amendment and
	Termination.</I> The Board may at any time amend, alter,
	suspend, or discontinue the Plan, but no amendment, alteration,
	suspension, or discontinuation shall be made which would impair
	the rights of any Optionee under any grant theretofore made,
	without his or her consent. In addition, to the extent necessary
	and desirable to comply with any applicable law, regulation or
	stock exchange rule, the Company shall obtain stockholder
	approval of any Plan amendment in such a manner and to such a
	degree as required.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">b).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Effect of
	Amendment or Termination.</I> Any such amendment or termination
	of the Plan shall not affect Options already granted and such
	Options shall remain in full force and effect as if this Plan
	had not been amended or terminated.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">12.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Time of
Granting Options.</I> The date of grant of an Option shall, for
all purposes, be the date determined in accordance with
Section&nbsp;4 hereof.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">13.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Conditions
Upon Issuance of Shares.</I> Shares shall not be issued pursuant
to the exercise of an Option unless the exercise of such Option
and the issuance and delivery of such Shares pursuant thereto
shall comply with all relevant provisions of law, including,
without limitation, the Securities Act of 1933, as amended, the
Exchange Act, the rules and regulations promulgated thereunder,
state securities laws, and the requirements of any stock
exchange upon which the Shares may then be listed, and shall be
further subject to the approval of counsel for the Company with
respect to such compliance.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As a condition to the exercise of an Option, the
Company may require the person exercising such Option to
represent and warrant at the time of any such exercise that the
Shares are being purchased only for investment and without any
present intention to sell or distribute such Shares, if, in the
opinion of counsel for the Company, such a representation is
required by any of the aforementioned relevant provisions of law.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Inability of the Company to obtain authority from
any regulatory body having jurisdiction, which authority is
deemed by the Company&#146;s counsel to be necessary to the
lawful issuance and sale of any Shares hereunder, shall relieve
the Company of any liability in respect of the failure to issue
or sell such Shares as to which such requisite authority shall
not have been obtained.
</FONT>

<P align="center"><FONT size="2">A-6
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">14.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Reservation
of Shares.</I> The Company, during the term of this Plan, will
at all times reserve and keep available such number of Shares as
shall be sufficient to satisfy the requirements of the Plan.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">15.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Option
Agreement.</I> Options shall be evidenced by written option
agreements in such form as the Board shall approve.
</FONT>

<P align="center"><FONT size="2">A-7
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link1 "Exhibit #1&nbsp;&nbsp;2002 DIRECTOR OPTION AGREEMENT" -->
<DIV align="left"><A NAME="010"></A></DIV>

<P align="right">
<B><FONT size="2">Exhibit #1</FONT></B>

<P align="center">
<B><FONT size="2">HARMONIC INC.</FONT></B>

<P align="center">
<B><FONT size="2">2002 DIRECTOR OPTION AGREEMENT</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Harmonic Inc., (the <I>&#147;Company&#148;</I>),
has granted to
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
(the <I>&#147;Optionee&#148;</I>), an option to purchase a total
of
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
(<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>)
shares of the Company&#146;s Common Stock (the <I>&#147;Optioned
Stock&#148;</I>), at the price determined as provided herein,
and in all respects subject to the terms, definitions and
provisions of the Company&#146;s 2002 Director Option Plan (the
<I>&#147;Plan&#148;</I>) adopted by the Company which is
incorporated herein by reference. The terms defined in the Plan
shall have the same defined meanings herein.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Nature of the
Option.</I> This Option is a nonstatutory option and is not
intended to qualify for any special tax benefits to the Optionee.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Exercise
Price.</I> The exercise price is
$<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
for each share of Common Stock.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Exercise of
Option.</I> This Option shall be exercisable during its term in
accordance with the provisions of Section&nbsp;8 of the Plan as
follows:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">a).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Right to
	Exercise.</I>
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="6%"></TD>
	<TD width="94%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(i)&nbsp;This Option shall become exercisable in
	installments cumulatively with respect to
	<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> percent
	(<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>%) of the Optioned Stock
	one month after the date of grant, and as to an additional
	<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> percent
	(<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>%) of the Optioned Stock
	on each monthly anniversary of the date of grant, so that one
	hundred percent (100%) of the Optioned Stock shall be
	exercisable &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;years after the date
	of grant; provided, however, that in no event shall any Option
	be exercisable prior to the date the stockholders of the Company
	approve the Plan.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(ii)&nbsp;This Option may not be exercised for a
	fraction of a share.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(iii)&nbsp;In the event of Optionee&#146;s death,
	disability or other termination of service as a Director, the
	exercisability of the Option is governed by Section&nbsp;8 of
	the Plan.
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">b).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Method of
	Exercise.</I> This Option shall be exercisable by written notice
	which shall state the election to exercise the Option and the
	number of Shares in respect of which the Option is being
	exercised. Such written notice, in the form attached hereto as
	Exhibit&nbsp;2, shall be signed by the Optionee and shall be
	delivered in person or by certified mail to the Secretary of the
	Company. The written notice shall be accompanied by payment of
	the exercise price.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Method of
Payment.</I> Payment of the exercise price shall be by any of
the following, or a combination thereof, at the election of the
Optionee:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">a).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;cash;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">b).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;check;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">c).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;surrender of
	other shares which (x)&nbsp;in the case of Shares acquired upon
	exercise of an Option, have been owned by the Optionee for more
	than 6 (six)&nbsp;months on the date of surrender, and
	(y)&nbsp;have a Fair Market Value on the date of surrender equal
	to the aggregate exercise price of the Shares as to which said
	Option shall be exercised;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">d).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;delivery of a
	properly executed exercise notice together with such other
	documentation as the Company and the broker, if applicable,
	shall require to effect an exercise of the Option and delivery
	to the Company of the sale or loan proceeds required to pay the
	exercise price; or
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">e).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any other term
	of consideration permitted under the Plan.
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">A-8
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Restrictions
on Exercise. </I>This Option may not be exercised if the
issuance of such Shares upon such exercise or the method of
payment of consideration for such shares would constitute a
violation of any applicable federal or state securities or other
law or regulations, or if such issuance would not comply with
the requirements of any stock exchange upon which the Shares may
then be listed. As a condition to the exercise of this Option,
the Company may require Optionee to make any representation and
warranty to the Company as may be required by any applicable law
or regulation.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Non-Transferability
of Option. </I>This Option may not be transferred in any manner
otherwise than by will or by the laws of descent or distribution
and may be exercised during the lifetime of Optionee only by the
Optionee. The terms of this Option shall be binding upon the
executors, administrators, heirs, successors and assigns of the
Optionee.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Term of
Option.</I> This Option may not be exercised more than ten
(10)&nbsp;years from the date of grant of this Option, and may
be exercised during such period only in accordance with the Plan
and the terms of this Option.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Taxation Upon
Exercise of Option.</I> Optionee understands that, upon exercise
of this Option, he or she will recognize income for tax purposes
in an amount equal to the excess of the then Fair Market Value
of the Shares purchased over the exercise price paid for such
Shares. Since the Optionee is subject to Section&nbsp;16(b) of
the Securities Exchange Act of 1934, as amended, under certain
limited circumstances the measurement and timing of such income
(and the commencement of any capital gain holding period) may be
deferred, and the Optionee is advised to contact a tax advisor
concerning the application of Section 83 in general and the
availability of a Section&nbsp;83(b) election in particular in
connection with the exercise of the Option. Upon a resale of
such Shares by the Optionee, any difference between the sale
price and the Fair Market Value of the Shares on the date of
exercise of the Option, to the extent not included in income as
described above, will be treated as capital gain or loss.
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="34%"></TD>
	<TD width="66%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">DATE OF
	GRANT:&nbsp;<HR size="1" align="left" noshade>
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">HARMONIC INC.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">a Delaware corporation
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="34%"></TD>
	<TD width="2%"></TD>
	<TD width="64%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">By:&nbsp;</FONT></TD>
	<TD align="left">
</TD>
</TR>

</TABLE>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="34%"></TD>
	<TD width="66%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<HR size="1" width="53%" align="left" noshade></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">Optionee acknowledges receipt of a copy of the
Plan, a copy of which is attached hereto, and represents that he
or she is familiar with the terms and provisions thereof, and
hereby accepts this Option subject to all of the terms and
provisions thereof. Optionee hereby agrees to accept as binding,
conclusive and final all decisions or interpretations of the
Board upon any questions arising under the Plan.
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="34%"></TD>
	<TD width="66%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">Dated:&nbsp;<HR size="1" align="left" noshade>
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<HR size="1" align="left" noshade></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">Optionee
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">A-9
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link1 "Exhibit #2&nbsp;&nbsp;2002 DIRECTOR OPTION EXERCISE NOTICE" -->
<DIV align="left"><A NAME="011"></A></DIV>

<P align="right">
<B><FONT size="2">Exhibit #2</FONT></B>

<P align="center">
<B><FONT size="2">2002 DIRECTOR OPTION EXERCISE NOTICE</FONT></B>

<P align="left">
<FONT size="2">Harmonic Inc.
</FONT>

<DIV align="left">
<FONT size="2">549 Baltic Way
</FONT>
</DIV>

<DIV align="left">
<FONT size="2">Sunnyvale, CA 94089
</FONT>
</DIV>

<DIV align="left">
<FONT size="2">Attention: Corporate Secretary
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Exercise of
Option.</I> The undersigned (<I>&#147;Optionee&#148;</I>) hereby
elects to exercise Optionee&#146;s option to purchase
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
shares of Common Stock (the <I>&#147;Shares&#148;</I>) of
Harmonic Inc. (the <I>&#147;Company&#148;</I>) under and
pursuant to the Company&#146;s 2002 Director Option Plan and the
Director Option Agreement dated
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
(the <I>&#147;Agreement&#148;</I>).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Representations
of Optionee.</I> Optionee acknowledges that Optionee has
received, read and understood the Agreement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Federal
Restrictions on Transfer.</I> Optionee understands that the
Shares must be held indefinitely unless they are registered
under the Securities Act of 1933, as amended (the <I>&#147;1933
Act&#148;</I>), or unless an exemption from such registration is
available, and that the certificate(s) representing the Shares
may bear a legend to that effect. Optionee understands that the
Company is under no obligation to register the Shares and that
an exemption may not be available or may not permit Optionee to
transfer Shares in the amounts or at the times proposed by
Optionee.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Tax
Consequences.</I> Optionee understands that Optionee may suffer
adverse tax consequences as a result of Optionee&#146;s purchase
or disposition of the Shares. Optionee represents that Optionee
has consulted with any tax consultant(s) Optionee deems
advisable in connection with the purchase or disposition of the
Shares and that Optionee is not relying on the Company for any
tax advice.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Delivery of
Payment.</I> Optionee herewith delivers to the Company the
aggregate purchase price for the Shares that Optionee has
elected to purchase and has made provision for the payment of
any federal or state withholding taxes required to be paid or
withheld by the Company.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Entire
Agreement.</I> The Agreement is incorporated herein by
reference. This Exercise Notice and the Agreement constitute the
entire agreement of the parties and supersede in their entirety
all prior undertakings and agreements of the Company and
Optionee with respect to the subject matter hereof. This
Exercise Notice and the Agreement are governed by Delaware law
except for that body of law pertaining to conflict of laws.
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="52%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="45%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Submitted by:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Accepted by:
	</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<FONT size="2">OPTIONEE:
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">HARMONIC INC.
	</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">By:&nbsp;</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">By:&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Its:&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>

</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<FONT size="2">Address:
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Dated:&nbsp;</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Dated:&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>

</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">A-10
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link1 "Appendix B&nbsp;&nbsp;2002 EMPLOYEE STOCK PURCHASE PLAN" -->
<DIV align="left"><A NAME="012"></A></DIV>

<P align="right">
<B><FONT size="2">Appendix&nbsp;B</FONT></B>

<P align="center">
<B><FONT size="2">HARMONIC INC.</FONT></B>

<P align="center">
<B><FONT size="2">2002 EMPLOYEE STOCK PURCHASE PLAN</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following constitute the provisions of the
2002 Employee Stock Purchase Plan (the <I>&#147;Plan&#148;</I>)
of Harmonic Inc.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Purpose.</I>
The purpose of the Plan is to provide employees of the Company
and its Designated Subsidiaries with an opportunity to purchase
Common Stock of the Company through accumulated payroll
deductions. It is the intention of the Company to have the Plan
qualify as an &#147;Employee Stock Purchase Plan&#148; under
Section&nbsp;423 of the Code. The provisions of the Plan,
accordingly, shall be construed so as to extend and limit
participation in a uniform and nondiscriminatory basis
consistent with the requirements of Section&nbsp;423.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Definitions.</I>
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">a).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>&#147;Administrator&#148;</I>
	shall mean the Board or any Committee designated by the Board to
	administer the Plan pursuant to Section&nbsp;14.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">b).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>&#147;Board&#148;</I>
	shall mean the Board of Directors of the Company.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">c).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>&#147;Change-of-Control&#148;</I>
	shall mean the occurrence of any of the following events:
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="6%"></TD>
	<TD width="94%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(i)&nbsp;any &#147;person&#148; (as such term is
	used in Sections&nbsp;13(d) and 14(d) of the Exchange Act)
	becomes the &#147;beneficial owner&#148; (as defined in
	Rule&nbsp;13d-3 of the Exchange Act), directly or indirectly, of
	securities of the Company representing fifty percent (50%) or
	more of the total voting power represented by the Company&#146;s
	then outstanding voting securities; or
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(ii)&nbsp;the consummation of the sale or
	disposition by the Company of all or substantially all of the
	Company&#146;s assets; or
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(iii)&nbsp;the consummation of a merger or
	consolidation of the Company, with any other corporation, other
	than a merger or consolidation which would result in the voting
	securities of the Company outstanding immediately prior thereto
	continuing to represent (either by remaining outstanding or by
	being converted into voting securities of the surviving entity
	or its parent) at least fifty percent (50%) of the total voting
	power represented by the voting securities of the Company, or
	such surviving entity or its parent outstanding immediately
	after such merger or consolidation;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(iv)&nbsp;a change in the composition of the
	Board, as a result of which fewer than a majority of the
	Directors are Incumbent Directors. &#147;Incumbent
	Directors&#148; shall mean Directors who either (A)&nbsp;are
	Directors of the Company, as applicable, as of the date hereof,
	or (B)&nbsp;are elected, or nominated for election, to the Board
	with the affirmative votes of at least a majority of those
	Directors whose election or nomination was not in connection
	with any transaction described in subsections&nbsp;(i), (ii) or
	(iii) or in connection with an actual or threatened proxy
	contest relating to the election of Directors of the Company.
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">d).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>&#147;Code&#148;</I>
	shall mean the Internal Revenue Code of 1986, as amended.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">e).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>&#147;Committee&#148;</I>
	means a committee of the Board appointed by the Board in
	accordance with Section&nbsp;14 hereof.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">f).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>&#147;Common
	Stock&#148;</I> shall mean the common stock of the Company.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">g).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>&#147;Company&#148;</I>
	shall mean Harmonic Inc., a Delaware corporation and any
	Designated Subsidiary of the Company.
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">B-1
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">h).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>&#147;Compensation&#148;</I>
	shall mean all base straight time gross earnings, including
	commissions and payments for overtime and shift premiums, but
	exclusive of payments for incentive compensation, incentive
	payments, bonuses and other compensation.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">i).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>&#147;Designated
	Subsidiary&#148;</I> shall mean any Subsidiary selected by the
	Administrator as eligible to participate in the Plan.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">j).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>&#147;Director&#148;</I>
	shall mean a member of the Board.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">k).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>&#147;Eligible
	Employee&#148;</I> shall mean any individual who is a common law
	employee of the Company or any Designated Subsidiary and whose
	customary employment with the Company or Designated Subsidiary
	is at least twenty (20)&nbsp;hours per week and more than five
	(5)&nbsp;months in any calendar year. For purposes of the Plan,
	the employment relationship shall be treated as continuing
	intact while the individual is on sick leave or other leave of
	absence approved by the Company. Where the period of leave
	exceeds 90&nbsp;days and the individual&#146;s right to
	reemployment is not guaranteed either by statute or by contract,
	the employment relationship shall be deemed to have terminated
	on the 91st&nbsp;day of such leave.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">l).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>&#147;Exchange
	Act&#148;</I> shall mean the Securities Exchange Act of 1934, as
	amended.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">m).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>&#147;Exercise
	Date&#148;</I> shall mean the first Trading Day on or after July
	1 and January 1 of each year. The first Exercise Date under the
	Plan shall be on January&nbsp;1, 2003.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">n).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>&#147;Fair
	Market Value&#148;</I> shall mean, as of any date, the value of
	Common Stock determined as follows:
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="6%"></TD>
	<TD width="94%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(i)&nbsp;if the Common Stock is listed on any
	established stock exchange or a national market system,
	including without limitation the Nasdaq National Market or The
	Nasdaq SmallCap Market of The Nasdaq Stock Market, its Fair
	Market Value shall be the closing sales price for such stock (or
	the closing bid, if no sales were reported) as quoted on such
	exchange or system on the date of determination, as reported in
	The Wall Street Journal or such other source as the Board deems
	reliable;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(ii)&nbsp;if the Common Stock is regularly quoted
	by a recognized securities dealer but selling prices are not
	reported, its Fair Market Value shall be the mean of the closing
	bid and asked prices for the Common Stock on the date of
	determination, as reported in The Wall Street Journal or such
	other source as the Board deems reliable;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(iii)&nbsp;in the absence of an established
	market for the Common Stock, the Fair Market Value thereof shall
	be determined in good faith by the Board.
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">o).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>&#147;Offering
	Date&#148;</I> shall mean the first Trading Day of each Offering
	Period.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">p).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>&#147;Offering
	Periods&#148;</I> shall mean the periods of approximately 24
	(twenty-four) months during which an option granted pursuant to
	the Plan may be exercised, commencing on the first Trading Day
	on or after July 1 and January 1 of each year and terminating on
	the first Trading Day on or after the January 1 and July 1
	Offering Period commencement date approximately 24 (twenty-four)
	months later. The duration and timing of Offering Periods may be
	changed pursuant to Section&nbsp;4 of this Plan.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">q).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>&#147;Plan&#148;</I>
	shall mean this 2002 Employee Stock Purchase Plan.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">r).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>&#147;Purchase
	Period&#148;</I> shall mean the approximately six&nbsp;(6) month
	period commencing on one Exercise Date and ending with the next
	Exercise Date, except that the first Purchase Period of any
	Offering Period shall commence on the Offering Date and end with
	the next Exercise Date.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">s).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>&#147;Purchase
	Price&#148;</I> shall mean 85% (eighty-five percent) of the Fair
	Market Value of a share of Common Stock on the Offering Date or
	on the Exercise Date, whichever is lower;
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">B-2
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">provided however, that the Purchase Price may be
	adjusted by the Administrator pursuant to Section&nbsp;20.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">t).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>&#147;Subsidiary&#148;</I>
	shall mean a &#147;subsidiary corporation,&#148; whether now or
	hereafter existing, as defined in Section&nbsp;424(f) of the
	Code.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">u).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>&#147;Trading
	Day&#148;</I> shall mean a day on which national stock exchanges
	and the Nasdaq System are open for trading.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Eligibility.</I>
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">a).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Offering
	Periods.</I> Any Eligible Employee on a given Offering Date
	shall be eligible to participate in the Plan.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">b).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Limitations.</I>
	Any provisions of the Plan to the contrary notwithstanding, no
	Eligible Employee shall be granted an option under the Plan
	(i)&nbsp;to the extent that, immediately after the grant, such
	Eligible Employee (or any other person whose stock would be
	attributed to such Eligible Employee pursuant to
	Section&nbsp;424(d) of the Code) would own capital stock of the
	Company and/or hold outstanding options to purchase such stock
	possessing 5% (five percent) or more of the total combined
	voting power or value of all classes of the capital stock of the
	Company or of any Subsidiary, or (ii)&nbsp;to the extent that
	his or her rights to purchase stock under all employee stock
	purchase plans of the Company and its subsidiaries accrues at a
	rate which exceeds $25,000 (twenty-five thousand dollars) worth
	of stock (determined at the fair market value of the shares at
	the time such option is granted) for each calendar year in which
	such option is outstanding at any time.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Offering
Periods.</I> The Plan shall be implemented by consecutive,
overlapping Offering Periods with a new Offering Period
commencing on the first Trading Day on or after July 1 and
January 1 each year, or on such other date as the Board shall
determine, and continuing thereafter until terminated in
accordance with Section&nbsp;20 hereof. The Board shall have the
power to change the duration of Offering Periods (including the
commencement dates thereof) with respect to future offerings
without stockholder approval if such change is announced prior
to the scheduled beginning of the first Offering Period to be
affected thereafter.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Participation.</I>
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">a).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Offering
	Periods.</I> An Eligible Employee may become a participant in
	the Plan by completing a subscription agreement authorizing
	payroll deductions in the form of Exhibit&nbsp;1 to this Plan
	and filing it with the Company&#146;s payroll office at least 5
	(five) days prior to the applicable Offering Date or as
	otherwise determined by the Administrator.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">b).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Payroll
	Deductions.</I> Payroll deductions for a participant shall
	commence on the first payroll following the first day of the
	applicable Offering Period and shall end on the last payroll in
	the Offering Period to which such authorization is applicable,
	unless sooner terminated by the participant as provided in
	Section&nbsp;10 hereof.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Payroll
Deductions.</I>
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">a).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At the time a
	participant files his or her subscription agreement, he or she
	shall elect to have payroll deductions made on each pay day
	during the Offering Period in an amount not exceeding 10% (ten
	percent) of the Compensation which he or she receives on each
	pay day during the Offering Period; provided, however, that
	should a pay day occur on an Exercise Date, a participant shall
	have the payroll deductions made on such day applied to his or
	her account under the new Offering Period or Purchase Period, as
	the case may be. A participant&#146;s subscription agreement
	shall remain in effect for successive Offering Periods unless
	terminated as provided in Section&nbsp;10 hereof.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">b).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payroll
	deductions for a participant shall commence on the first payday
	following the Offering Date and shall end on the last payday in
	the Offering Period to which such
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">B-3
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">authorization is applicable, unless sooner
	terminated by the participant as provided in Section&nbsp;10
	hereof, for any Offering Period as determined.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">c).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All payroll
	deductions made for a participant shall be credited to his or
	her account under the Plan and shall be withheld in whole
	percentages only. A participant may not make any additional
	payments into such account.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">d).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A participant
	may discontinue his or her participation in the Plan as provided
	in Section&nbsp;10 hereof, or may increase or decrease the rate
	of his or her payroll deductions during the Offering Period by
	completing or filing with the Company a new subscription
	agreement authorizing a change in payroll deduction rate. The
	Administrator may, in its discretion, limit the nature and/or
	number of participation rate changes during any Offering Period.
	The change in rate shall be effective with the first full
	payroll period following 5 (five) business days after the
	Company&#146;s receipt of the new subscription agreement unless
	the Company elects to process a given change in participation
	more quickly.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">e).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding
	the foregoing, to the extent necessary to comply with
	Section&nbsp;423(b)(8) of the Code and Section&nbsp;3(b) hereof,
	a participant&#146;s payroll deductions may be decreased to zero
	percent&nbsp;(0%) at any time during a Purchase Period. Payroll
	deductions shall recommence at the rate provided in such
	participant&#146;s subscription agreement at the beginning of
	the first Purchase Period which is scheduled to end in the
	following calendar year, unless terminated by the participant as
	provided in Section&nbsp;10 hereof.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">f).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At the time the
	option is exercised, in whole or in part, or at the time some or
	all of the Company&#146;s Common Stock issued under the Plan is
	disposed of, the participant must make adequate provision for
	the Company&#146;s federal, state, or other tax withholding
	obligations, if any, which arise upon the exercise of the option
	or the disposition of the Common Stock. At any time, the Company
	may, but shall not be obligated to, withhold from the
	participant&#146;s compensation the amount necessary for the
	Company to meet applicable withholding obligations, including
	any withholding required to make available to the Company any
	tax deductions or benefits attributable to sale or early
	disposition of Common Stock by the Eligible Employee.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Grant of
Option.</I> On the Offering Date of each Offering Period, each
Eligible Employee participating in such Offering Period shall be
granted an option to purchase on each Exercise Date during such
Offering Period (at the applicable Purchase Price) up to a
number of shares of the Company&#146;s Common Stock determined
by dividing such Eligible Employee&#146;s payroll deductions
accumulated prior to such Exercise Date and retained in the
Participant&#146;s account as of the Exercise Date by the
applicable Purchase Price; provided that in no event shall an
Eligible Employee be permitted to purchase during each Purchase
Period more than 3,000&nbsp;shares of the Company&#146;s Common
Stock (subject to any adjustment pursuant to Section&nbsp;19),
and provided further that such purchase shall be subject to the
limitations set forth in Sections&nbsp;3(b), 7 and 12 hereof.
The Eligible Employee may accept the grant of such option by
turning in a completed Subscription Agreement (attached hereto
as Exhibit&nbsp;1) to the Company at least 5 (five) days prior
to an Offering Date or as otherwise determined by the
Administrator. The Administrator may, for future Offering
Periods, increase or decrease, in its absolute discretion, the
maximum number of shares of the Company&#146;s Common Stock an
Eligible Employee may purchase during each Purchase Period of
such Offering Period. Exercise of the option shall occur as
provided in Section&nbsp;8 hereof, unless the participant has
withdrawn pursuant to Section&nbsp;10 hereof. The option shall
expire on the last day of the Offering Period.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Exercise of
Option.</I>
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">a).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unless a
	participant withdraws from the Plan as provided in
	Section&nbsp;10 hereof, his or her option for the purchase of
	shares shall be exercised automatically on the Exercise Date,
	and the maximum number of full shares subject to option shall be
	purchased for such participant at the applicable Purchase Price
	with the accumulated payroll deductions in his or her account. No
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">B-4
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">fractional shares shall be purchased; any payroll
	deductions accumulated in a participant&#146;s account which are
	not sufficient to purchase a full share shall be retained in the
	participant&#146;s account for the subsequent Purchase Period or
	Offering Period, subject to earlier withdrawal by the
	participant as provided in Section&nbsp;10 hereof. Any other
	funds left over in a participant&#146;s account after the
	Exercise Date shall be returned to the participant. During a
	participant&#146;s lifetime, a participant&#146;s option to
	purchase shares hereunder is exercisable only by him or her.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">b).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the
	Administrator determines that, on a given Exercise Date, the
	number of shares with respect to which options are to be
	exercised may exceed (i)&nbsp;the number of shares of Common
	Stock that were available for sale under the Plan on the
	Offering Date of the applicable Offering Period, or
	(ii)&nbsp;the number of shares available for sale under the Plan
	on such Exercise Date, the Administrator may in its sole
	discretion (x)&nbsp;provide that the Company shall make a pro
	rata allocation of the shares of Common Stock available for
	purchase on such Offering Date or Exercise Date, as applicable,
	in as uniform a manner as shall be practicable and as it shall
	determine in its sole discretion to be equitable among all
	participants exercising options to purchase Common Stock on such
	Exercise Date, and continue all Offering Periods then in effect,
	or (y)&nbsp;provide that the Company shall make a pro rata
	allocation of the shares available for purchase on such Offering
	Date or Exercise Date, as applicable, in as uniform a manner as
	shall be practicable and as it shall determine in its sole
	discretion to be equitable among all participants exercising
	options to purchase Common Stock on such Exercise Date, and
	terminate any or all Offering Periods then in effect pursuant to
	Section&nbsp;20 hereof. The Company may make pro rata allocation
	of the shares available on the Offering Date of any applicable
	Offering Period pursuant to the preceding sentence,
	notwithstanding any authorization of additional shares for
	issuance under the Plan by the Company&#146;s stockholders
	subsequent to such Offering Date.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Delivery.</I>
As soon as reasonably practicable after each Exercise Date on
which a purchase of shares occurs, the Company shall arrange the
delivery to each participant the shares purchased upon exercise
of his or her option in a form determined by the Administrator.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">10.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Withdrawal.</I>
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">a).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A participant
	may withdraw all but not less than all the payroll deductions
	credited to his or her account and not yet used to exercise his
	or her option under the Plan at any time by giving written
	notice to the Company in the form of Exhibit&nbsp;2 to this
	Plan. All of the participant&#146;s payroll deductions credited
	to his or her account shall be paid to such participant as
	promptly as practicable after receipt of notice of withdrawal
	and such participant&#146;s option for the Offering Period shall
	be automatically terminated, and no further payroll deductions
	for the purchase of shares shall be made for such Offering
	Period. If a participant withdraws from an Offering Period,
	payroll deductions shall not resume at the beginning of the
	succeeding Offering Period unless the participant delivers to
	the Company a new subscription agreement.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">b).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A
	participant&#146;s withdrawal from an Offering Period shall not
	have any effect upon his or her eligibility to participate in
	any similar plan that may hereafter be adopted by the Company or
	in succeeding Offering Periods which commence after the
	termination of the Offering Period from which the participant
	withdraws.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">11.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Termination
of Employment.</I> In the event a participant ceases to be an
Eligible Employee of the Company or any Designated Subsidiary,
as applicable, he or she will be deemed to have elected to
withdraw from the Plan and the payroll deductions credited to
such participant&#146;s account during the Offering Period but
not yet used to exercise the option will be returned to such
participant or, in the case of his or her death, to the person
or persons entitled thereto under Section&nbsp;15 hereof, and
such participant&#146;s option will be automatically terminated.
The preceding sentence notwithstanding, a participant who
receives payment in lieu of notice of termination of employment
shall be treated as continuing to be an Employee for the
participant&#146;s customary
</FONT>

<P align="center"><FONT size="2">B-5
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">number of hours per week of employment during the
period in which the participant is subject to such payment in
lieu of notice.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">12.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Interest.</I>
No interest shall accrue on the payroll deductions of a
participant in the Plan.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">13.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Stock.</I>
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">a).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subject to
	adjustment upon changes in capitalization of the Company as
	provided in Section&nbsp;19 hereof, the maximum number of shares
	of the Company&#146;s Common Stock which shall be made available
	for sale under the Plan shall be 1,500,000 shares.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">b).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Until the shares
	are issued (as evidenced by the appropriate entry on the books
	of the Company or of a duly authorized transfer agent of the
	Company), a participant shall only have the rights of an
	unsecured creditor with respect to such shares, and no right to
	vote or receive dividends or any other rights as a stockholder
	shall exist with respect to such shares.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">c).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shares to be
	delivered to a participant under the Plan shall be registered in
	the name of the participant or in the name of the participant
	and his or her spouse.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">14.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Administration.</I>
The Administrator shall administer the Plan and shall have full
and exclusive discretionary authority to construe, interpret and
apply the terms of the Plan, to determine eligibility and to
adjudicate all disputed claims filed under the Plan. Every
finding, decision and determination made by the Administrator
shall, to the full extent permitted by law, be final and binding
upon all parties.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">15.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Designation
of Beneficiary.</I>
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">a).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A participant
	may file a written designation of a beneficiary who is to
	receive any shares and cash, if any, from the participant&#146;s
	account under the Plan in the event of such participant&#146;s
	death subsequent to an Exercise Date on which the option is
	exercised but prior to delivery to such participant of such
	shares and cash. In addition, a participant may file a written
	designation of a beneficiary who is to receive any cash from the
	participant&#146;s account under the Plan in the event of such
	participant&#146;s death prior to exercise of the option. If a
	participant is married and the designated beneficiary is not the
	spouse, spousal consent shall be required for such designation
	to be effective.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">b).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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&#146;s death,
	the Company shall deliver such shares and/or cash to the
	executor or administrator of the estate of the participant, or
	if no such executor or administrator has been appointed (to the
	knowledge of the Company), the Company, in its discretion, may
	deliver such shares and/or cash to the spouse or to any one or
	more dependents or relatives of the participant, or if no
	spouse, dependent or relative is known to the Company, then to
	such other person as the Company may designate.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">c).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All beneficiary
	designations shall be in such form and manner as the
	Administrator may designate from time to time.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">16.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Transferability.</I>
Neither payroll deductions credited to a participant&#146;s
account nor any rights with regard to the exercise of an option
or to receive shares under the Plan may be assigned,
transferred, pledged or otherwise disposed of in any way (other
than by will, the laws of descent and distribution or as
provided in Section&nbsp;15 hereof) by the participant. Any such
attempt at assignment, transfer, pledge or other disposition
shall be without effect, except that the Company may treat such
act as an election to withdraw funds from an Offering Period in
accordance with Section&nbsp;10 hereof.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">17.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Use of
Funds.</I> All payroll deductions received or held by the
Company under the Plan may be used by the Company for any
corporate purpose, and the Company shall not be obligated to
</FONT>

<P align="center"><FONT size="2">B-6
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">segregate such payroll deductions. Until shares
are issued, participants shall only have the rights of an
unsecured creditor.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">18.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Reports.</I>
Individual accounts shall be maintained for each participant in
the Plan. Statements of account shall be given to participating
Eligible Employees at least annually, which statements shall set
forth the amounts of payroll deductions, the Purchase Price, the
number of shares purchased and the remaining cash balance, if
any.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">19.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Adjustments
Upon Changes in Capitalization, Dissolution, Liquidation, Merger
or Change-in-Control.</I>
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">a).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Changes in
	Capitalization.</I> Subject to any required action by the
	stockholders of the Company, the maximum number of shares of the
	Company&#146;s Common Stock which shall be made available for
	sale under the Plan, the maximum number of shares each
	participant may purchase each Purchase Period (pursuant to
	Sections&nbsp;3(b), and 7), as well as the price per share and
	the number of shares of Common Stock covered by each option
	under the Plan which has not yet been exercised shall be
	proportionately adjusted for any increase or decrease in the
	number of issued shares of Common Stock resulting from a stock
	split, reverse stock split, stock dividend, combination or
	reclassification of the Common Stock, or any other change in the
	number of shares of Common Stock effected without receipt of
	consideration by the Company; provided, however, that conversion
	of any convertible securities of the Company shall not be deemed
	to have been &#147;effected without receipt of
	consideration.&#148; Such adjustment shall be made by the
	Administrator, whose determination in that respect shall be
	final, binding and conclusive. Except as expressly provided
	herein, no issuance by the Company of shares of stock of any
	class, or securities convertible into shares of stock of any
	class, shall affect, and no adjustment by reason thereof shall
	be made with respect to, the number or price of shares of Common
	Stock subject to an option.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">b).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Dissolution
	or Liquidation.</I> In the event of the proposed dissolution or
	liquidation of the Company, the Offering Period then in progress
	shall be shortened by setting a New Exercise Date (the &#147;New
	Exercise Date&#148;), and shall terminate immediately prior to
	the consummation of such proposed dissolution or liquidation,
	unless provided otherwise by the Administrator. The New Exercise
	Date shall be before the date of the Company&#146;s proposed
	dissolution or liquidation. The Administrator shall notify each
	participant in writing, at least 10 (ten) business days prior to
	the New Exercise Date, that the Exercise Date for the
	participant&#146;s option has been changed to the New Exercise
	Date and that the participant&#146;s option shall be exercised
	automatically on the New Exercise Date, unless prior to such
	date the participant has withdrawn from the Offering Period as
	provided in Section&nbsp;10 hereof.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">c).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Merger or
	Change-of-Control.</I> In the event of a merger or
	Change-of-Control, each outstanding option shall be assumed or
	an equivalent option substituted by the successor corporation or
	a Parent or Subsidiary of the successor corporation. In the
	event that the successor corporation refuses to assume or
	substitute for the option, any Purchase Periods then in progress
	shall be shortened by setting a New Exercise Date and any
	Offering Periods then in progress shall end on the New Exercise
	Date. The New Exercise Date shall be before the date of the
	Company&#146;s proposed merger or Change-of-Control. The
	Administrator shall notify each participant in writing, at least
	10 (ten) business days prior to the New Exercise Date, that the
	Exercise Date for the participant&#146;s option has been changed
	to the New Exercise Date and that the participant&#146;s option
	shall be exercised automatically on the New Exercise Date,
	unless prior to such date the participant has withdrawn from the
	Offering Period as provided in Section&nbsp;10 hereof.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">20.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Amendment or
Termination.</I>
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">a).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
	Administrator may at any time and for any reason terminate or
	amend the Plan. Except as otherwise provided in the Plan, no
	such termination can affect options previously
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">B-7
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">granted, provided that an Offering Period may be
	terminated by the Administrator on any Exercise Date if the
	Administrator determines that the termination of the Offering
	Period or the Plan is in the best interests of the Company and
	its stockholders. Except as provided in Section&nbsp;19 and this
	Section&nbsp;20 hereof, no amendment may make any change in any
	option theretofore granted which adversely affects the rights of
	any participant. To the extent necessary to comply with
	Section&nbsp;423 of the Code (or any successor rule or provision
	or any other applicable law, regulation or stock exchange rule),
	the Company shall obtain stockholder approval in such a manner
	and to such a degree as required.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">b).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Without
	stockholder consent and without regard to whether any
	participant rights may be considered to have been
	&#147;adversely affected,&#148; the Administrator shall be
	entitled to change the Offering Periods, limit the frequency
	and/or number of changes in the amount withheld during an
	Offering Period, establish the exchange ratio applicable to
	amounts withheld in a currency other than U.S.&nbsp;dollars,
	permit payroll withholding in excess of the amount designated by
	a participant in order to adjust for delays or mistakes in the
	Company&#146;s processing of properly completed withholding
	elections, establish reasonable waiting and adjustment periods
	and/or accounting and crediting procedures to ensure that
	amounts applied toward the purchase of Common Stock for each
	participant properly correspond with amounts withheld from the
	participant&#146;s Compensation, and establish such other
	limitations or procedures as the Administrator determines in its
	sole discretion advisable which are consistent with the Plan.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">c).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the event the
	Administrator determines that the ongoing operation of the Plan
	may result in unfavorable financial accounting consequences, the
	Board may, in its discretion and, to the extent necessary or
	desirable, modify or amend the Plan to reduce or eliminate such
	accounting consequence including, but not limited to:
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="6%"></TD>
	<TD width="94%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(i)&nbsp;increasing the Purchase Price for any
	Offering Period including an Offering Period underway at the
	time of the change in Purchase Price;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(ii)&nbsp;shortening any Offering Period so that
	Offering Period ends on a new Exercise Date, including an
	Offering Period underway at the time of the Board action; and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(iii)&nbsp;allocating shares.
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">Such modifications or amendments shall not
	require stockholder approval or the consent of any Plan
	participants.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">21.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Notices.</I>
All notices or other communications by a participant to the
Company under or in connection with the Plan shall be deemed to
have been duly given when received in the form and manner
specified by the Company at the location, or by the person,
designated by the Company for the receipt thereof.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">22.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Conditions
Upon Issuance of Shares.</I> Shares shall not be issued with
respect to an option unless the exercise of such option and the
issuance and delivery of such shares pursuant thereto shall
comply with all applicable provisions of law, domestic or
foreign, including, without limitation, the Securities Act of
1933, as amended, the Exchange Act, the rules and regulations
promulgated thereunder, and the requirements of any stock
exchange upon which the shares may then be listed, and shall be
further subject to the approval of counsel for the Company with
respect to such compliance.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As a condition to the exercise of an option, the
Company may require the person exercising such option to
represent and warrant at the time of any such exercise that the
shares are being purchased only for investment and without any
present intention to sell or distribute such shares if, in the
opinion of counsel for the Company, such a representation is
required by any of the aforementioned applicable provisions of
law.
</FONT>

<P align="center"><FONT size="2">B-8
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">23.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Term of
Plan.</I> The Plan shall become effective upon the earlier to
occur of its adoption by the Board of Directors or its approval
by the stockholders of the Company. It shall continue in effect
until terminated under Section&nbsp;20 hereof.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">24.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Automatic
Transfer to Low Price Offering Period.</I> To the extent
permitted by any applicable laws, regulations, or stock exchange
rules if the Fair Market Value of the Common Stock on any
Exercise Date in an Offering Period is lower than the Fair
Market Value of the Common Stock on the Offering Date of such
Offering Period, then all participants in such Offering Period
shall be automatically withdrawn from such Offering Period
immediately after the exercise of their option on such Exercise
Date and automatically re-enrolled in the immediately following
Offering Period.
</FONT>

<P align="center"><FONT size="2">B-9
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link1 "Exhibit 1&nbsp;&nbsp;2002 EMPLOYEE STOCK PURCHASE PLAN SUBSCRIPTION AGREEMENT" -->
<DIV align="left"><A NAME="013"></A></DIV>

<P align="right">
<B><FONT size="2">Exhibit&nbsp;1</FONT></B>

<P align="center">
<B><FONT size="2">HARMONIC INC.</FONT></B>

<P align="center">
<B><FONT size="2">2002 EMPLOYEE STOCK PURCHASE PLAN</FONT></B>

<P align="center">
<B><FONT size="2">SUBSCRIPTION AGREEMENT</FONT></B>

<P align="left">
<U><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></U><FONT size="2">&nbsp;Original
Application
</FONT>

<DIV align="left">
<U><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></U><FONT size="2">&nbsp;Change
in Payroll Deduction Rate
</FONT>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="50%"></TD>
	<TD width="50%"></TD>
</TR>

<TR valign="top">
	<TD align="left"><U><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></U><FONT size="2">&nbsp;Change of Beneficiary(ies)</FONT></TD>
	<TD align="right"><FONT size="2">Offering Date&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
</TR>

</TABLE>

<DIV align="right">
<HR size="1" width="12%" align="right" noshade>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;_____________________________
hereby elects to participate in the Harmonic, Inc. 2002 Employee
Stock Purchase Plan (the &#147;Employee Stock Purchase
Plan&#148;) and subscribes to purchase shares of the
Company&#146;s Common Stock in accordance with this Subscription
Agreement and the Employee Stock Purchase Plan.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I hereby
authorize payroll deductions from each paycheck in the amount of
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>% of my
Compensation on each payday (from&nbsp;0% to&nbsp;10%) during
the Offering Period in accordance with the Employee Stock
Purchase Plan. (Please note that no fractional percentages are
permitted.)
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I understand that
said payroll deductions shall be accumulated for the purchase of
shares of Common Stock at the applicable Purchase Price
determined in accordance with the Employee Stock Purchase Plan.
I understand that if I do not withdraw from an Offering Period,
any accumulated payroll deductions will be used to automatically
exercise my option.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I have received a
copy of the complete Employee Stock Purchase Plan. I understand
that my participation in the Employee Stock Purchase Plan is in
all respects subject to the terms of the Plan. I understand that
my ability to exercise the option under this Subscription
Agreement is subject to stockholder approval of the Employee
Stock Purchase Plan.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shares purchased
for me under the Employee Stock Purchase Plan should be issued
in the name(s) of (Eligible Employee or Eligible Employee and
Spouse only).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I understand that
if I dispose of any shares received by me pursuant to the Plan
within 2&nbsp;years after the Offering Date (the first day of
the Offering Period during which I purchased such shares) or one
year after the Exercise Date, I will be treated for federal
income tax purposes as having received ordinary income at the
time of such disposition in an amount equal to the excess of the
fair market value of the shares at the time such shares were
purchased by me over the price which I paid for the shares. <U>I
hereby agree to notify the Company in writing within
30&nbsp;days after the date of any disposition of my shares and
I will make adequate provision for Federal, state or other tax
withholding obligations, if any, which arise upon the
disposition of the Common Stock.</U> The Company may, but will
not be obligated to, withhold from my compensation the amount
necessary to meet any applicable withholding obligation
including any withholding necessary to make available to the
Company any tax deductions or benefits attributable to sale or
early disposition of Common Stock by me. If I dispose of such
shares at any time after the expiration of the 2-year and 1-year
holding periods, I understand that I will be treated for federal
income tax purposes as having received income only at the time
of such disposition, and that such income will be taxed as
ordinary income only to the extent of an amount equal to the
lesser of (1)&nbsp;the excess of the fair market value of the
shares at the time of such disposition over the purchase price
which I paid for the shares, or (2)&nbsp;15% of the fair market
value of the shares on the first day of the Offering Period. The
remainder of the gain, if any, recognized on such disposition
will be taxed as capital gain.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I hereby agree to
be bound by the terms of the Employee Stock Purchase Plan. The
effectiveness of this Subscription Agreement is dependent upon
my eligibility to participate in the Employee Stock Purchase
Plan.
</FONT>

<P align="center"><FONT size="2">B-10
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the event of
my death, I hereby designate the following as my
beneficiary(ies) to receive all payments and shares due me under
the Employee Stock Purchase Plan:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="6%"></TD>
	<TD width="94%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">NAME:&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">(Please print)
	</FONT></TD>
</TR>

</TABLE>

<DIV align="right">
<HR size="1" width="82%" align="right" noshade>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="20%"></TD>
	<TD width="20%"></TD>
	<TD width="20%"></TD>
	<TD width="20%"></TD>
	<TD width="20%"></TD>
</TR>

<TR valign="top">
	<TD align="left"></TD>
	<TD align="center"><FONT size="2">(First)</FONT></TD>
	<TD align="center"><FONT size="2">(Middle)</FONT></TD>
	<TD align="center"><FONT size="2">(Last)</FONT></TD>
	<TD align="right"></TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="34%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="63%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>

</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Relationship
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">&nbsp;
	</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>

</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Percentage Benefit
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">(Address)
	</FONT></TD>
</TR>

</TABLE>
</CENTER>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="6%"></TD>
	<TD width="94%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">NAME:&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">(Please print)
	</FONT></TD>
</TR>

</TABLE>

<DIV align="right">
<HR size="1" width="82%" align="right" noshade>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="20%"></TD>
	<TD width="20%"></TD>
	<TD width="20%"></TD>
	<TD width="20%"></TD>
	<TD width="20%"></TD>
</TR>

<TR valign="top">
	<TD align="left"></TD>
	<TD align="center"><FONT size="2">(First)</FONT></TD>
	<TD align="center"><FONT size="2">(Middle)</FONT></TD>
	<TD align="center"><FONT size="2">(Last)</FONT></TD>
	<TD align="right"></TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="34%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="63%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>

</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Relationship
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">&nbsp;
	</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>

</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Percentage Benefit
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">(Address)
	</FONT></TD>
</TR>

</TABLE>
</CENTER>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="36%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="61%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Employee&#146;s Social Security Number:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Employee&#146;s Address:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>

</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">
<FONT size="2">I UNDERSTAND THAT THIS SUBSCRIPTION AGREEMENT
SHALL REMAIN IN EFFECT THROUGHOUT SUCCESSIVE OFFERING PERIODS
UNLESS TERMINATED BY ME.
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="40%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="57%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Dated:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Signature of Employee
	</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Spouse&#146;s Signature (If beneficiary other
	than spouse)
	</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">B-11
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link1 "Exhibit 2&nbsp;&nbsp;2002 EMPLOYEE STOCK PURCHASE PLAN NOTICE OF WITHDRAWAL" -->
<DIV align="left"><A NAME="014"></A></DIV>

<P align="right">
<B><FONT size="2">Exhibit&nbsp;2</FONT></B>

<P align="center">
<B><FONT size="2">HARMONIC INC.</FONT></B>

<P align="center">
<B><FONT size="2">2002 EMPLOYEE STOCK PURCHASE PLAN</FONT></B>

<P align="center">
<B><FONT size="2">NOTICE OF WITHDRAWAL</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The undersigned participant in the Offering
Period of the Harmonic Inc. 2002 Employee Stock Purchase Plan
which began on
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>,
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
(the &#147;Offering Date&#148;) hereby notifies the Company that
he or she hereby withdraws from the Offering Period. He or she
hereby directs the Company to pay to the undersigned as promptly
as practicable all the payroll deductions credited to his or her
account with respect to such Offering Period. The undersigned
understands and agrees that his or her option for such Offering
Period will be automatically terminated. The undersigned
understands further that no further payroll deductions will be
made for the purchase of shares in the current Offering Period
and the undersigned shall be eligible to participate in
succeeding Offering Periods only by delivering to the Company a
new Subscription Agreement. Name and Address of Participant:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="34%"></TD>
	<TD width="66%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<HR size="1" align="left" noshade></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<HR size="1" align="left" noshade></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<HR size="1" align="left" noshade></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">Signature:
	</FONT></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<HR size="1" align="left" noshade></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">Date:&nbsp;<HR size="1" align="left" noshade>
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">B-12
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P align="left"><FONT size="2"><B>PROXY</B>
</FONT>

<P align="center"><FONT size="2"><B>HARMONIC INC.</B><BR>
549 Baltic Way<BR>
Sunnyvale, CA 94089
</FONT>

<P align="center"><FONT size="2"><B>PROXY FOR AN<BR>
ANNUAL MEETING OF STOCKHOLDERS<BR>
May&nbsp;17, 2002</B>
</FONT>

<P align="center"><FONT size="2"><B>THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS</B>
</FONT>

<P><FONT size="2">The undersigned hereby appoints Anthony J. Ley and Robin N. Dickson, and each
or either of them as Proxies of the undersigned, with full power of
substitution, and hereby authorizes them to represent and to vote, as
designated on the reverse side, all of the shares of Common Stock of Harmonic
Inc., held of record by the undersigned on March&nbsp;28, 2002 at the Annual Meeting
of Stockholders of Harmonic Inc. to be held at the Marriott Hotel, 2700 Mission
College Blvd., Santa Clara, California, 95054, on May&nbsp;17, 2002, at 8:00 a.m.
Pacific Time, or at any adjournment thereof.
</FONT>
<P><FONT size="2">The undersigned hereby acknowledges receipt of the Notice of Annual Meeting and
Proxy Statement, dated April&nbsp;16, 2002, and a copy of the Company's 2001 Annual
Report on Form&nbsp;10-K filed with the Securities and Exchange Commission on March
18, 2002. The undersigned hereby expressly revokes any and all proxies
heretofore given or executed by the undersigned with respect to the shares of
stock represented by this proxy and, by filing this proxy with the Secretary of
the Company, gives notice of such revocation.
</FONT>
<P align="center"><FONT size="2">(Continued and to be marked, dated and signed on other side)
</FONT>

<HR noshade size="2">

<P align="center"><FONT size="2">&#916; FOLD AND DETACH HERE &#916;
</FONT>

<P align="center"><FONT size="3"><B>You can now access your Harmonic Inc. account online.</B>
</FONT>

<P><FONT size="2">Access your Harmonic, Inc. stockholder account online via Investor
ServiceDirect<sup>SM</sup> (ISD).
</FONT>
<P><FONT size="2">Mellon Investor Services LLC, agent for Harmonic
Inc., now makes it easy and
convenient to get current information on your stockholder account. After a
simple, and secure process of establishing a Personal Identification Number
(PIN), you are ready to log in and access your account to:
</FONT>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
        <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="91%"><FONT size="2">View account status</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="91%"><FONT size="2">View certificate history</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="91%"><FONT size="2">View book-entry information</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="91%"><FONT size="2">Make address changes</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="91%"><FONT size="2">Obtain a duplicate 1099 tax form</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="91%"><FONT size="2">Establish/change your PIN</FONT></TD>
</TR>
</TABLE>
<P align="center"><FONT size="2"><B>Visit us on the web at http://www.mellon-investor.com<BR>
and follow the instructions shown on this page.</B>
</FONT>

<P align="left"><FONT size="2"><B>Step 1: First Time Users &#151; Establish a PIN</B>
</FONT>

<P><FONT size="2">You must first establish a Personal Identification Number (PIN)&nbsp;online by
following the directions provided in the upper right portion of the web screen
as follows. You will also need your Social Security Number (SSN)&nbsp;available to
establish a PIN.
</FONT>
<P align="left"><FONT size="2"><B>Investor ServiceDirect<sup>SM</sup> is currently only available for domestic individual and joint accounts.</B>
</FONT>

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
        <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">SSN</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">PIN</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">Then click on the <B>Establish PIN </B>button</FONT></TD>
</TR>
</TABLE>
<P><FONT size="2"><B>Please be sure to remember your PIN, or maintain it in a secure place for future reference.</B>
</FONT>
<P align="left"><FONT size="2"><B>Step 2:  Log in for Account Access</B>
</FONT>

<P><FONT size="2">You are now ready to log in. To access your account please enter your:
</FONT>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
        <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">SSN</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">PIN</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="top">
        <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">Then click on the <B>Submit</B> button</FONT></TD>
</TR>

</TABLE>
<P><FONT size="2"><B>If you have more than one account, you will now be asked to select the
appropriate account.</B>
</FONT>
<P align="left"><FONT size="2"><B>Step 3: Account Status Screen</B>
</FONT>

<P><FONT size="2">You are now ready to access your account information. Click on the appropriate
button to view or initiate transactions.
</FONT>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
        <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">Certificate History</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">Book-Entry Information</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">Issue Certificate</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">Address Change</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">Duplicate 1099</FONT></TD>
</TR>
</TABLE>
<P align="center"><FONT size="2"><B>For Technical Assistance Call 1-877-978-7778 between<BR>
9am-7pm Monday-Friday Eastern Time</B>
</FONT>

<P align="center"><FONT size="2">&nbsp;</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>



<P align="center"><FONT size="2">THIS PROXY WILL BE VOTED AS
SPECIFIED HEREON. THIS PROXY WILL BE VOTED FOR PROPOSAL<BR>NOS.&nbsp;1, 2, 3, 4 AND 5 IF NO SPECIFICATION IS MADE.
</FONT>


<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
        <TD width="80%">&nbsp;</TD>
        <TD width="15%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD valign="top" align="left"><FONT size="2">Please mark your votes as
indicated in this example.</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
<IMG src="f79624dexbox.gif" alt="(XBOX)"></FONT></TD>
</TR>
</TABLE>


<P><FONT size="2">The Board of Directors of Harmonic Inc. recommends
a vote FOR Proposal Nos. 1, 2, 3, 4 and 5.</FONT>


<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
        <TD width="15%">&nbsp;</TD>
        <TD width="70%">&nbsp;</TD>
        <TD width="15%">&nbsp;</TD>


</TR>


<TR valign="bottom">

<TD align="center" valign="top"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
To elect the following directors to serve for the
ensuing year or until their successors are elected
and duly qualified:</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>

</tr>
<TR>
<TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
<B>FOR</B>&nbsp;<IMG src="f79624debox.gif" alt="(BOX)"></FONT></TD>
        <TD align="left" valign="top"><FONT size="2"><B>WITHHELD</B>&nbsp;<IMG src="f79624debox.gif" alt="(BOX)"></FONT></TD>
</tr>

<TR><TD>&nbsp;</TD></TR>

<TR valign="bottom">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">01&nbsp;Anthony&nbsp;J. Ley, 02&nbsp;E.&nbsp;Floyd Kvamme, 03&nbsp;David&nbsp;A.
Lane, 04&nbsp;Lewis Solomon, 05&nbsp;Michel Vaillaud and 06&nbsp;David&nbsp;R.
Van&nbsp;Valkenburg.</FONT></TD>
</tr>


<TR><TD>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">To withhold
authority to vote for a particular nominee or nominees, write the
name(s) of such nominee(s)
here:&nbsp;&nbsp;________________________________</FONT></TD>
</TR>


<TR><TD>&nbsp;</TD></TR>
<TR><TD>&nbsp;</TD></TR>

<TR valign="bottom">
        <TD valign="top" align="center"><FONT size="2">Proposal 2.</FONT></TD>
        <TD valign="top" align="left"><FONT size="2">To approve the
adoption of the 2002 Director Option Plan.</FONT></TD>
        <TD align="left" valign="top">&nbsp;<FONT size="2"></FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR valign="bottom">
        <TD valign="top" align="right"><FONT size="2"><B>FOR</B>
<IMG src="f79624debox.gif" alt="(BOX)"></FONT></TD>
        <TD valign="top" align="center"><FONT size="2"><B>AGAINST</B>
<IMG src="f79624debox.gif" alt="(BOX)"></FONT></TD>
        <TD valign="top" align="left"><FONT size="2"><B>ABSTAIN</B>
<IMG src="f79624debox.gif" alt="(BOX)"></FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR><TD>&nbsp;</TD></TR>
<TR><TD>&nbsp;</TD></TR>

<TR valign="bottom">
        <TD valign="top" align="center"><FONT size="2">Proposal 3.</FONT></TD>
        <TD valign="top" align="left"><FONT size="2">To approve the
adoption of the 2002 Employee Stock Purchase Plan.</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR valign="bottom">
        <TD valign="top" align="right"><FONT size="2"><B>FOR</B>
<IMG src="f79624debox.gif" alt="(BOX)"></FONT></TD>
        <TD valign="top" align="center"><FONT size="2"><B>AGAINST</B>
<IMG src="f79624debox.gif" alt="(BOX)"></FONT></TD>
        <TD valign="top" align="left"><FONT size="2"><B>ABSTAIN</B>
<IMG src="f79624debox.gif" alt="(BOX)"></FONT></TD>
</TR>


<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR><TD>&nbsp;</TD></TR>
<TR><TD>&nbsp;</TD></TR>

<TR valign="bottom">
        <TD valign="top" align="center"><FONT size="2">Proposal 4.</FONT></TD>
        <TD valign="top" align="left"><FONT size="2">To ratify the appointment of PricewaterhouseCoopers LLP as
independent auditors of the Company for the fiscal year ending December&nbsp;31,
2002.</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR valign="bottom">
        <TD valign="top" align="right"><FONT size="2"><B>FOR</B>
<IMG src="f79624debox.gif" alt="(BOX)"></FONT></TD>
        <TD valign="top" align="center"><FONT size="2"><B>AGAINST</B>
<IMG src="f79624debox.gif" alt="(BOX)"></FONT></TD>
        <TD valign="top" align="left"><FONT size="2"><B>ABSTAIN</B>
<IMG src="f79624debox.gif" alt="(BOX)"></FONT></TD>
</TR>


<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>


<TR><TD>&nbsp;</TD></TR>
<TR><TD>&nbsp;</TD></TR>

<TR valign="bottom">
        <TD valign="top" align="center"><FONT size="2">Proposal 5.</FONT></TD>
        <TD valign="top" align="left"><FONT size="2">To transact such other business as may properly come before the
meeting and any adjournment or postponement thereof.</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>


<TR valign="bottom">
        <TD valign="top" align="right"><FONT size="2"><B>FOR</B>
<IMG src="f79624debox.gif" alt="(BOX)"></FONT></TD>
        <TD valign="top" align="center"><FONT size="2"><B>AGAINST</B>
<IMG src="f79624debox.gif" alt="(BOX)"></FONT></TD>
        <TD valign="top" align="left"><FONT size="2"><B>ABSTAIN</B>
<IMG src="f79624debox.gif" alt="(BOX)"></FONT></TD>
</TR>




<TR><TD>&nbsp;</TD></TR>
<TR><TD>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD valign="top" align="right"><FONT size="2">&nbsp;</FONT></TD>
        <TD valign="top" align="left"><FONT size="2">&nbsp;</FONT></TD>

<TD valign="top" align="left"><FONT size="2"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WILL<BR>
&nbsp;&nbsp;ATTEND</B></FONT></TD>

</TR>


<TR valign="bottom">
        <TD valign="top" align="right"><FONT size="2">&nbsp;</FONT></TD>
        <TD valign="top" align="left" colspan="2"><FONT size="2">If you plan to
attend the Annual Meeting,
please mark the WILL ATTEND box&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<IMG src="f79624debox.gif" alt="(BOX)"></FONT></TD>

</TR>








<TR><TD>&nbsp;</TD></TR>
<TR><TD>&nbsp;</TD></TR>

<TR valign="bottom">
        <TD valign="top" align="center"><FONT size="2">&nbsp;</FONT></TD>
        <TD valign="top" align="left"><FONT size="2">Please disregard
if you have previously provided your consent
decision.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<IMG src="f79624debox.gif" alt="(BOX)"></FONT></TD>
        <TD valign="top" align="left"><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR><TD>&nbsp;</TD></TR>
<TR><TD>&nbsp;</TD></TR>


<TR valign="bottom">
        <TD colspan="3" valign="top" align="left"><FONT size="2">Please sign exactly as your name(s) is (are)&nbsp;shown on the share certificate to
which the Proxy applies. When shares are held by joint tenants, both should
sign. When signing as an attorney, executor, administrator, trustee or
guardian, please give full title as such. If a corporation, please sign in full
corporate name by President or other authorized officer. If a partnership,
please sign in partnership name by authorized person.</FONT></TD>

</TR>
</TABLE>
</CENTER>


<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="55%">
<TR valign="bottom">
        <TD width="47%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="11%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="16%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="11%">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">Signature_____________________________________</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">Date__________________
</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="center"><FONT size="2">PLEASE COMPLETE, SIGN AND DATE THIS
PROXY AND RETURN PROMPTLY<BR>IN THE ENCLOSED ENVELOPE.
</FONT>

<P align="center"><FONT size="2">&#916;&nbsp;FOLD AND DETACH HERE&nbsp;&#916;
</FONT>

<P align="center"><FONT size="3"><B>Vote by Internet or Telephone or Mail</B>
</FONT>

<P align="center"><FONT size="2"><B>24 Hours a Day, 7 Days a Week<BR>
Internet and telephone voting is available through 4PM Eastern Time<BR>
the business day prior to annual meeting day.</B>
</FONT>

<P align="center"><FONT size="2"><B>Your telephone or Internet vote authorizes the named proxies to vote your<BR>
shares in the same manner as if you marked, signed and returned your proxy card.</B></FONT>

<P align="center"><FONT size="2"><B>Internet<BR>
http://www.eproxy.com/hlit</B>
</FONT>

<P><FONT size="2">Use the Internet to vote your proxy. Have your proxy card in hand when you
access the web site. You will be prompted to enter your control number, located
in the box below, to create and submit an electronic ballot.
</FONT>
<P align="center"><FONT size="2">OR
</FONT>

<P align="center"><FONT size="2"><B>Telephone<BR>
1-800-435-6710</B>
</FONT>

<P><FONT size="2">Use any touch-tone telephone to vote your proxy. Have your proxy card in hand
when you call. You will be prompted to enter your control number, located in
the box below, and then follow the directions given.
</FONT>
<P align="center"><FONT size="2">OR
</FONT>

<P align="center"><FONT size="2"><B>Mail</B>
</FONT>

<P align="center"><FONT size="2">Mark, sign and date<BR>
your proxy card<BR>
and<BR>
return it in the<BR>
enclosed postage-paid<BR>
envelope.
</FONT>

<P align="center"><FONT size="2"><B>If you vote your proxy by Internet or by telephone,<BR>
you do NOT need to mail back your proxy card.</B>
</FONT>

<P align="center"><FONT size="2">&nbsp;</FONT>


</BODY>
</HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>GRAPHIC
<SEQUENCE>3
<FILENAME>f79624def79624s1.gif
<DESCRIPTION>GRAPHIC
<TEXT>
begin 644 f79624def79624s1.gif
M1TE&.#EA"@%``/<```````$!`0("`@,#`P0$!`4%!08&!@<'!P@("`D)"0H*
M"@L+"PP,#`T-#0X.#@\/#Q`0$!$1$1(2$A,3$Q04%!45%186%A<7%Q@8&!D9
M&1H:&AL;&QP<'!T='1X>'A\?'R`@("$A(2(B(B,C(R0D)"4E)28F)B<G)R@H
M*"DI*2HJ*BLK*RPL+"TM+2XN+B\O+S`P,#$Q,3(R,C,S,S0T-#4U-38V-C<W
M-S@X.#DY.3HZ.CL[.SP\/#T]/3X^/C\_/T!`0$%!04)"0D-#0T1$1$5%149&
M1D='1TA(2$E)24I*2DM+2TQ,3$U-34Y.3D]/3U!04%%145)24E-34U145%55
M55965E=75UA86%E965I:6EM;6UQ<7%U=75Y>7E]?7V!@8&%A86)B8F-C8V1D
M9&5E969F9F=G9VAH:&EI:6IJ:FMK:VQL;&UM;6YN;F]O;W!P<'%Q<7)R<G-S
M<W1T='5U=79V=G=W=WAX>'EY>7IZ>GM[>WQ\?'U]?7Y^?G]_?X"`@(&!@8*"
M@H.#@X2$A(6%A8:&AH>'AXB(B(F)B8J*BHN+BXR,C(V-C8Z.CH^/CY"0D)&1
MD9*2DI.3DY24E)65E9:6EI>7EYB8F)F9F9J:FIN;FYR<G)V=G9Z>GI^?GZ"@
MH*&AH:*BHJ.CHZ2DI*6EI::FIJ>GIZBHJ*FIJ:JJJJNKJZRLK*VMK:ZNKJ^O
MK["PL+&QL;*RLK.SL[2TM+6UM;:VMK>WM[BXN+FYN;JZNKN[N[R\O+V]O;Z^
MOK^_O\#`P,'!P<+"PL/#P\3$Q,7%Q<;&QL?'Q\C(R,G)R<K*RLO+R\S,S,W-
MS<[.SL_/S]#0T-'1T=+2TM/3T]34U-75U=;6UM?7U]C8V-G9V=K:VMO;V]S<
MW-W=W=[>WM_?W^#@X.'AX>+BXN/CX^3DY.7EY>;FYN?GY^CHZ.GIZ>KJZNOK
MZ^SL[.WM[>[N[N_O[_#P\/'Q\?+R\O/S\_3T]/7U]?;V]O?W]_CX^/GY^?KZ
M^OO[^_S\_/W]_?[^_O___RP`````"@%````(_P#_"1Q(L*#!@P@3*ES(L*'#
MAQ`C/B278X\^B1@S:MS(L:/'CR!#)EP#`(`OD2A3JES)LJ7+?^L>E-SULJ;-
MFSAS=I16`(""<3J#"AU*U"4R`@!L\"O*M*G3IPN)"0"@!ZK5JUB#UBI9*JO7
MKV!#:@(@@%C8LVC3,N0"H`$ZM7!;^HL+LET%`";PT=T;TIR0/WPY\@H`($G@
MPQS#E*QVM=]%EH)*ID%,6>*V!0`8<&-*SUNO4(7`S%C4$DE)1Y4#M\(C[V$^
M(B7G#,TGK(Z2#@9*XD64C:6S!``,/$N]MQ9A=0\[Z>X55)D:%[J#+ZF$[#%+
M,R4ST",>=]C=%?D<3O^C4-+%/)SE*#%!4))!D3VQO-GTEJ&D4NX;MX$*9&@5
MN9?]#%$2&0]9H5LD-[VSR0BZ9=`&-CJAH5L4^&D$R03156#)4BSUHELE#J4R
M@&[*V/0+=+J!(9].[FB@&QH58I1)@YB55,4Z*]T#A&[!-/1-![K)$)Y+V:A!
M6$DF=#+4)=$!$F-$DI1T`C#R='.&;C"\HY(XN0&P0CT,\9-#=)BXA(\>&-H'
MRW9";1-!=*L\^9`T!P"`@34$F>)`26RH!,N(`!S2D"71#>!,2]?<H)L'IH!)
ME&*Z%7"HG`VU`0`!M!C$2HV9BB1."R45``U#MF`V0FXFW+-2/I%L4)(%?X3_
MP]0LT0$@03N4-M1`80B-!0`+;'YDCX`ER<!A0M=@F`,XY'FQ$CX2EI1#,DWQ
MHP,`#V114@CVY,I02:0=M(\2)<42TAC1%;(0/U!DI@TW!P20BDKL2*&;&N<U
MA<B`MA#FPI#>)E22+0E!T],9(!$270BM*73E`/-Z`4`)>J%D#@PE2:#*4[D`
M1T(\R$R5P[$J62)$'.QX!<`!TB34CPQ>DJQ1(K4BK)`B)>7Q3RQU7I&2.F,"
M`((Q3^F3`@`!;`S,5$',M1(>NNF`(U8H"$"-0FD`,`#!'`52:P1X)D1+S_W\
MDW4`IZ`TCA`EL4#M4WW8*-!1O*JDCZ71:;(0+)/F_Y3U-`KA0M@7&]T#1ZT`
M/*%0,`H`<,)__U`!P`<5@]2/O;]N]A0LH9;X3S;`(0'1/<G@P@OD"N$=G<X)
MO3)QL#=%`@`N"AG]ZSX9L>-$202T(`'2HR1$37T3>&XM`%2@Y$=)%5QCDSZ2
M>,(,[`5U4Q\`=0P$.@"B-Y3/*3`@!0`'RR@DS%2URI%0-B249%9.K`"@KD)Q
M"R`+1KNL4)(*QMR#@^,`*\@W4'`I8`QD'A<`P"-$X@C"2*`8-SD'80I``B_P
MXB!-*%;#/@><(S1$'P:JE0YP=Y!SA"`[0"J)(1`"#`^4)`';T,DN`-"%A9SC
M+ER02"&`H[63W*,^6$#(-_]84!(_$"0;/9E%2(C!@$NQ`B?@8(]N!N"$OOT#
M9R71!4&T`1P>R.P@94`<MJ@W$#V4)`"CP%A)7'&04ORN)"\@(4Z``8`46`<A
M8AB?EO[!"SG\`4((6841=',`4`C$&KE!Q$&Z`2KL%<066BO?1^2A/P"P[B;Q
M<%&M'"`(W,6BB0`H`LG:L2L9W/$@OI),#;*#*X/\IB2%T$:70I".@JSC#SW1
MC16"0@X4!*!E"G%%2>+D"O258&H$"<85HI.`X`F$<P!@8_5>4!+"%602`%C`
M.>;F"494HA;FP$AD`*`#,KYD"V($`!FZX2H`0`"0!TP@"+J5$'FTTP"'B(8*
M2C+_`!N(HI4#B4-Y_L$'W7"B(+C89ZW6(!1=```/"T$'>6[PC!-$IPT#68<L
MJH"^DABA1P-Y!%G>-Q!L5!(';RE('N,(CS>(KR08<`1`&]*,GC0`F#FYQIO$
MV$[Y&>0>!'1`REJGFPT48E>U6L$F(#>/]@&@%M5(TPKB,1!B2$PW-0*`;(+B
M#R88H!L+44-)=AJ=.Y@B#QRH50+N8!#,18,@UE`C#+YAD'JTKPS_>$,Z6W#!
MAMS#-`!`D%`V`:AT_N"+^[#!I8B6$+:=,9TEV<`AQ.&(R"Z#B,&!H#ID`8:.
MEF`5`Y3,4*`!`"($T""H@&PZI6!%@:0#`@#@@3L&,@H+_\"QE@:I1D\HX8^[
M:*VC_!1#OA2RB9(TX;0Y^<1+$=>5@T2A)(E`"#T8`=GEZB8"H*P!9@$`@T,\
MX7HE:0`D]BC64!(E@X=PVD&&`5S5E@`4ZB7(,`(@`)#^0Q2Y?`%8#X*+DK`"
M'L`10">($8@/U`H'X4R(/_XW@&8PQ1"0%0$<X#D0.91D#/_H1S[H48Y8X$$*
M3A5C$91ABSL86(S+M2YW2?H/@0)@`C/-B3G6$(8O5K6]8N0!)9!I$$]D)CRK
MD`+ZCK"B@Q0W`,58!V82(`Z!J(,4CBU)#(21$&P"0`E-Z8<D>"A&!Q2A#8B@
MA"0$H5@`7``)/8"!!T`)60KT8?^V`GG'*[;`9=6&=Q!#'0@@=%,5@N@#'N5P
MQBYP@8M<%$,;>T2)/Y+Q"X2,0K40:,(NRJ80L0:@#%B(#A/@C)#E'2`;[,#,
M`II,D$M@`*N--@@\3K@`!S<%%V2ULZPABX/A'`08%I6U$%@\$&C(I"2!"`<[
MB&&(&3R``;GD9P(HX(1$O.(:\>U(,1R@"*H2I!X\$&,"9%"'WC"D'@Q"W!J0
M6Q`#+<`<^+#M`L!AD&.H$0`B>&M!%`8`*31%'X>88A/*<`0>X""%LW[5$LP@
MARWD.@2)D.-!KN';=(I@@0EI1'06X(#"RAH!08!$,3;(D4>W8!@$B99N''`%
M4VCCE`K_F4:R2T(!4C!$'S$`@`/@\8\>M`6W!8$'22(+\H'4`P39E#=1D!$T
M`+R@YQGFQSL@(6L:#"(4O-CF0.C1B4P@AR$[K]4`;K"*1"<D%'L*>#H'P`$G
M6.+J&QE$-A-A#V4<X;$`2`3J("*+6@UA5`R1AVT?T)HO8,O:!NE'"(6&S!ER
MCRF'@&U)6@"4@]A<-R70A2AL2T-'<80-M2+`((ZA\(5,(PP-.!)9$G`!(P!B
M%+:PA2D6L84,J#@[3X!$@C.R"A,`@`1-E,`6>E(!KT.DLKH)@"4<`H\].0!7
M7IMY0NP1QI(@`4?ZR"``)$&47DPA.EHHLD&LL<R2:,#!C^]4_T?R&)T`&%(B
MXO@%*U11"V%L@^,$<8<R5N&(-5`3<10H0AU(\0SX-R0<SU42FL`,)6$8&:$Z
M);$$Q"<3"B`?(F4!_E<0DE,24:`/S1`JC!$4[0`UNG$!$+<0F+!3&,=#E/`1
MZ%(K,-!Y+)$/JT`%`%<K!L`!7Y`(H$`3#K$+(]($_K`5`"`&&H$Y+-!$&<!I
M"@$/,D$`U")2*U`Y"-$-X19WXZ0$T583^N`*C>036.!M#:$+N18=-M,19/`J
M70(`HI`3[>`(4-`!%H<X98`-*%<0Z-`^(H`<JY"`&;$/B@(`F+`[`)`)#8$/
MF-45>_`K3(@0U>!;`R!%99@3JU!TA?\!.!&Q#G=0*]W3$7H%`'U0AW!D8R\!
M#\9P"4B05;6"`#307`A!*`#@3*10$C2@@@UA#R<$`+=@"B7A+`T10@A3!(38
M$,(4'0(@=#6Q"X!5$BBP"IS8$*]PA4SP$?L"`#"R`V<$"T41#K?P"%0P`2L7
M'`J6;230,+Z2`JHB$>>P*P00#?G0/B/3$/D&`!7P"K#5-`Y!?G`4CBZA#9=0
M!!W%`H10#AT1#Z0@!E1P#!_Q"U,A`O@@##SD,TZQ#LS0"Z*`.0"0$/T"`&PE
M$!*7%,>H$,<P(A&`*V%H`;Z'$+%P1APP%97($/<`,R4Q""[Q#KNP!G76`7,`
M>%91#VD%`,/_EX<G0&Y,X0I=D#P(@4X*`$]Y(%H8T0IM$QZR,P`"R1#A((KF
M]1#(0!X`$"XJT0R#$(NZ$0)V@'99\78`$`+7L`3MD5)J<0_M4P/J%4*HD!'*
M`0#P.)(`<`D.X7?14041404E00(A"1)751(.P`..0(1>40FZD0"-LS)7`Q?&
M04,'E%8(("L8@44&:`PC`E$-40RU@E<0D34#LQ)J\`!((`BQ(`Z4=A;Z0`.(
M@P`4AA:3"`#J(Q#:4"=),(4.490`X$'_<#X```<.H0]1YI@0@9L`@!HJ40\T
MMQ>?L)IYEA;:@HD#`0N$,7P9`0R[@@+AD0HE$0</@0YYX"H#X`D1_[$(NO$&
M`2,1^6!AT?$%K@@6@-4'`[$\`M"4&6$@!'`H9@0`W`D1Y5"#$N%C):&0YQD1
MC``!!X`"C+`7L`$`;C`0L%$!A!D1OB(%ZQ`T@/$22%D20#F@$0$.TV!.:#%(
M`&`$`K$+N5$$'!$-@%("XM,*-1$,Z&,&'#JC[0(`$<"/8,F2&S$/-ZD;#V"6
M+?$,7<(',\JA65<&GH`4%#!W&0$INL$#MID2X:`;QEFD`:.)<(>7'9%*`%``
M3U03]Z`'<1`'KF:EWD(/MA<="$!ETJ8;!I"@9AJG+[$*HB><'8$//W``+J!%
C<MJG+4&6)8$`9=H1[O"A?GJH*U$-8Z(`:0>#J([*%`$!`#L_
`
end

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>GRAPHIC
<SEQUENCE>4
<FILENAME>f79624def7962401.gif
<DESCRIPTION>GRAPHIC
<TEXT>
begin 644 f79624def7962401.gif
M1TE&.#EA/@(!`=4@`$!`07]_@&=D9::DI._O[S8U-=_?WY^?GV!@82`@(:^O
MKQ`0$<_/SS`P,8^/CW!P<5!04>+@X<S*RI62D[FWMX6"@W5R<RLJ*DY+2Q(1
M$EI86$)`0!\?'[^_OP```?_______P``````````````````````````````
M````````````````````````````````````````````````````````````
M`````````````````````````````````"'Y!`$``"``+``````^`@$!``;_
M0)!P2"P:C\BD<LEL.I_0J'1*K5JOV*QVR^UZO^"P>$PNF\_HM'K-;KO?\+A\
M3J_;[_B\OMD!&!E^(`H'"@X$0@X*A4D'`(Z/D)&2DY25EI>8F9J;G)V>GZ"A
MHJ.DI::GJ*FJJZR5#1X@!AVP1`2.L1!"'0&"O"`!'4@!'`+%QL?(R<K+S,W.
MS]#1TM/4U=;)!0D!V]S=WM_@X>+CY.7FY^CIZNOL[>[O\/'RY@BT(/9"`0I^
M#KX@"R`@!`/1(=>1``4^*%S(L*'#AQ`C2IQ(L:+%BQ@S:MSH4$"@/2!#BASY
M9=80?`H8]`&!8"`(``02$&D@+"''FSASZMS)L^=#_X\D@PH=2A2)22'V"#@@
MZ`>`2Z?X\!%!Z+.JU:M8LU8$6K2KUZ]WCMX;XFMERR$`#,@<LM8(5:UPX\J=
M>Y$KV+MX\YH12ZM#`T<-%@#H-P2@0%T&W=JDR[BQ8ZQV]4J>3+D*7R,K#1CL
M\*!7/@4U'XL>35ICY,JH4ZLF8E*I!P6'AJP4I*"#(40=;"=Y6[JW[]^G5PL?
MCE?L%]Z_DRMG')RX\^=!C7M!OKRZ=:O-H6O?'E9J%^K7PXOGF)V[^?-MI']?
MG''`L@$;(U@04"'"!PK%X&L=0&'BA&+]C;=3>>@5:.`8ZG$!GD4"%("-`!P-
MX(%]"FG`'E863$!1`1H(R/\3@0>&*&(6"6ZQX%80-E1,A!XPU.!O#GHXX$<C
MUFCC%25J<2)%*ZJ8HD82NKC8`!/H%X$$%?1'00056!`!DQ4H),$`%4BPT))-
MVB>!E1],:0&7#,5X'Y-.?A`!E?K)*!&(-[;I)F;>*7AA0Q,48.>==Q+3$0=X
MXJFA1!(>8V>%\%T@`04<:&#!?!Q4,,`&&Q190`436*!0`1H*T.BC`DR0`7R5
M?E`!!P[%J*FC&P@@`09=>@"FFC_1^.:LM+(6IXES,N3>,F(*^=Y$02[THD(1
M3'`!?`7H-X!-RRI4S`44&OM!L],FE.P'T"H48)@04KNL!G]N"VNLM99;;HY9
M[#C_48\N_MA>B\+:)$&'UUY;K4+4%C,AL2UZ:RU\\$(4H[_VCKNFK.8F7".Z
M6*B[IKO.0GQ1L,[:A`&R&./+K$W/_AG!!O?>>RT'EDY+X4(#;XP!R&:F:;"+
M""LLLX$,7^%P1`T^R.+)%BJTLK%?8JJQ0G5&+.T'%O1';=%"3^"!!N"6VN'2
M!4B00:HI0OVRL#'/[#5W-5MQ,T2[)N/R1?+19Q]^`L`7@:H33""!`%^**@"6
M=TNPZ):.<EE!IVF[5]^T;3OTW]U_3Y#VEO0M-(&X!K/Y]>2KA5W%V%MG3IKD
ME'=.F>548*[YZ(UQ?MXNX+CD.72@3R$ZZ;#'9;IY"&'C_\_JS[4NQ>NQ]W[5
M[-P%(+$`M^-.G.Y1\.[[\A]V+:+P'15OO'#(0Z$\\]C?!/QVT*LH_?2J5?_$
M]=F7C]'VVG7OXO?@HR:^$^2;+_^ZSH>HOK#LM__YK3KF.O__Y*G?@>[GK/SI
M3S+O:T+\`,A`9PG00+5#1@$,>,"\))`)"VP@`-''N@!X``#;`(`'@%'!RO6%
M1@QX!00.,8A"Q"81BPB-!F=X/L&TXH8XI,0K_@*`'>;PAT`,HA!3\8I8B(4`
MG3%``P*@&5WP0@&^(.%!_$?#*JI(&_/(HA:W^,%N!&:+8`RC&,=(1C#6XR2R
MB<T^"",$PPRD(#*THAS)]:8#>/_``+9270GWAT8C',`!9Q$"3-H"`II,<8Z(
M5-$#"Y0`!!CA%GMTGSWBM$*GH,4XM\H@3^:U`0HQ26@+*1E#)J`!`73H;9BB
M4MT:(DIB96@`%CA;!5*U,@%@H$,-T9M6*(`!4$9$ESCAH'/LB,<BS((!D:S,
M98I`")8\12U$(.14J#BQLVU$0NS!I4(JD(&3W8=5$;@`O@)&@0Q$:2$2\$":
M(L"!;6V@E0*PS[!:::9>PF58$:'`!JBYE46>IP&./`)`D\E'I!2!`:`!`1O_
M$9`W)J8(\8N`!CQ`T0Q(#".P]`"KG,40#%R@E1;8J-RF%3"2IDD#*T/91J6D
M3G163$K_#J%65O`9$9D&T$VS**8?[TA0!$Z2"`@5@DHVTQDH?B:.&BF`.9]D
M@0RL%$A4\L`Y?U2D43&$`AYH)<44PH&-OBV=5HJ`5!N2J(XLIEC_&=JTW!.@
M`<`R16ZM%(62M+(I80`#WOS`L.IC(?U0ZC\)<>O=/E"G>':*?FZ")!(:V5.]
MM,8!KSD$`Q9`40_(1!&V>6%NEH)4C%3``^*2D#4MXE:]MO1'*6H40SY;``IM
M]0.#0II][FK2AL162`O9Z#OO1:7[9&!:I\S`E'!9@81H@`/P$8"A/H`!>K[(
M:5$:`*DV$*#B]K:<V\Q`D7CDS^W,0H_,]$!L&@N6"RZ!?)!R_\@%GHI1_6`@
M`_C!%]8V($Y=9:"^KRT`R"+@(%-.2+2V91EN[W,L*FFH6>\4;`0NUM$TN<I?
M$5.130+FJOI6*\'NH=`M^]DFQ29A`10D[TC,JP1U":"R**[L\%*,XHOJRD@7
M*.L'M"E6_7`)J]$MZ0?,*:IM70!"&:!GD,V*+PL/S9>P_=.ES@E;"D!8KQ`;
M%H4I8.%E(=EGPN7NC;Z+P06,5\1%(?%NJ'DFMYK9S/I5[P;.?.:\QG2=?*HG
M0]([8Y3EF"$6J*^`D?9;3:VVFT0V4TN1=J^>W<<]V7)R2%$6LGQ%><(+:=&G
M-&9H)R,-/WN&B#!7X^$D$`#$8/:*F/\[>Y'/AG;0&K&`-N\#,E,R9*+]L64$
MJ&P?":T-I;4VLM,LA5(K&0MR%>+`7#U@)U^+,YQ\@A"R)V4FH3F*L/6M0'VU
MUE%AB]5*6&52!DJ)`>3&.$84..58#V8C+BL0(*$.,__2Q4^)*+4^\G$J1Z8T
M@%<]R:U<HC=\)'"F`)79K:'E#[',;!_^/@TB3BZME(P$<'R]JMY731/`RTP!
M>H,IX?QQ*\5;]J2%0'RM7=(XN6O4:240P`,'2#=11GU(CDBTLA;5G`4X0%TY
M;EJ2X%4"`J2I<I&P7#$Z43CIRFS%FU>FY$LP`,I['IUU-ZS=B62@T2=C;BCL
MG.DD^3E$H1[_]?]-73(0Z"X1E)YSK'='#)KL.NR^GA>R4P'I9K>#UJ>I=D2R
M'2]7IT+5XXZ'N9.%ZW4OW]W!HO245P'N?)>#W_,!^,!C;_!?R7L5%,#3Q)\]
M#&EW_-8@WY7"8X&QEI>[TVW6>,W[CO-%D;P5B!GZ.BS^%Z4W?>Q0/Q3/9P'T
MK5?\Z,46>]F3CO9"4?T5#N#EW.L>[;WWO>:`3Q+;9^'3(39^&5Z?^9W(IV\,
M02N8YM8V2CV$^X630-Q>;$VV*1DBLUX>\T<B_(857_INH'[R=77^FU1-`L=B
M2+;8,RP-9*M=*^(>9L(RA2.`*F)D#S$!>G)Z8E<9SJ<%T`=_\;=[_Y<S?\3"
M`5F&$U0F)><W(?PU8&+52@L&)O^G`0,03BB35S2E:2Z6.>L7$NV7+CPG@6<@
M?SGQ7G&6$^/V*C2'`7,S58OA`>YB`1356A]`*MO4-BO%8`/6'__!)45"2A`R
M)8/S'_7A?;#R@GOP:8;7!0](@S5(@:%C@4Y3)%F5$Y_52;IR`8!F8<,B(<"F
M@,<R)%@C+,Z5$)X22R^"`0'B(+IT-!Z%))'3@),1`.CV!3$(A@B2%,:D4T9T
M4,@T9A*A;VQF9E=3(=I5B6;V*A'A*?\W`'AUB4JF7$2"`?6W$!$09$/27\+R
M:`I!81.P4L707&YEA-BR:FJBA7D0@6#PA?^*N(@@0`"&.`0&\``$L`OYT`%(
M5$P(8``&$%`M!Q%$R&(H!F@*<0'46%GTY!`44DXIDBU.\U0K*##2M1!_`XJY
M=392%FGL4@P%LQ`:8(U9F(WT6(_V>(_XF(_ZN(_\V(_^^(\`&9`".9`$69#]
M&(QC(000P(P&P``!]8P*97@'T(5;QQ%.XS)8M8T6428SQC*@Y2S[(D]0UUHE
MJ#@6]G_Q\HJ15HX10ULM0UBQV(+A(0`-D!LV>9,XF9,ZN9,\V9,^^9-`>9.4
M]P!!690Y:4?`8)1*N91,V91.^910&95/"5E]Q%"(L`V<Q5``$(F`0&H5D8JX
MJ%<9V!X;!4KT127_=Y4JL8:`+J(DT:5L!`@?!N@B]04O8H4M:U8GQ^)4MF0F
M'9).P#8>NG@'AOAE8(!XO]@%R]25NH``AR%(!G"((#"#L+<1&R!L#W$!;%D1
MXD<IVR(?2:,0=:,WA_40Y[A]0G=HP&9^@L,D;>.:%+`D7=(XHA(E<\.1,C*8
M=<"+BUAVB<D%RS0;3&%)@H1)7CD1TUB/,JE\FT.(>%&89@``#_6;)?%3P6A(
M@O``#Y!0A40`#1`;WGF<$H%QFMAPS%D=NCD'O$D&K$>=8+!,DTD6$^D/,A%(
M'0"-%7F>7N><8`&=9X![[JF8UAF1@D0`MB`$?P0"#BD$"!")0*>?\Y.>_W&P
MGF70G@$*G+"@%```&T)0&PI03`;@H;)ADY((H?(CH7#@GVB0`)UQH1B*?"9Z
MHOSI%=JP!@[P?BY*(F+H.A88HP*"HFY@1X9I!A2:HY:QH[O3HSXJ'D#:!@":
M!BIJI$<*HTOZ>#-*%!:J!I^6E5*J=TB:/$I:I=;1I&OPI&KP`)39I4Y@@V*J
M?E<J%%FZ!KZHIFOZI=83IFVJ'&2:!F:Z!HE(ITO`IGDZ>V]*$G'*!G,*J$I`
M?0;9J([ZJ)`:J0!9J"/1IVR``)1ZH=17DU+9J9[ZJ:`:JJ+JH*EQJ.GA`;ZI
MJ'""=IFJJGIAJ6V`F*XJ&W8Z/JTZJV!AJA-(JO^XNJJ8=ZN]VA4#90?#&JR^
M"@8!`*S&*A0Y=0>ZVJO4IZS+2A*RZ@:PBJO1.JW:L7=U\*RSFJW:^AS5^@8U
M&J[@&J[#P:UV$*7&>J[HRFG2V@5%"JVU"C_Q^JZBEZISP*[TRJKX"J\BP87:
MZJ[_2G6HRGYIJJH$6[!Z,:YSD*@*RS^R,%ZR`(DE=J\,^P;JN@=_JJ@E\@#(
MA`"@`0S+R*#.B)\0):DJN[(LV[(N^[(P&[,R.[,T6[.1>@2ST0<+&@N.Y``2
M29%3P:FB.K1$6[1&>[1(>[1V=`!)"ZH`D`!-&[52.[6=2I5&H'0CVP]9"1!;
M*51=DZP9*QD=JP<;Z['_MV)'(MM0:!&9T20,&!NV:@"Q(.&P.5HB!``!"^!(
MQ/D2QGD0;PNW:#"V>]"L_7H$,*$6#K"=0_"=WRD$X>FW@$MX2]<5U]JE"3(;
M^W``].E,C>FVD1MY"2L2WBJE"?*X4'2@()"@.]N@GONY12&WE8JR9HL$#.``
MNA$+(JH+)-JZKCL4@BNZXH6M]:I`?]N[7P"[)`%JWSJ\&%2\QML%OSL2_*JF
M"_N\>H"\)#&OELN\Y^6\UIL%T4L2P^BJU?N]=G!R0`L6Z$N^W'NQY@L2XRNV
MH:NI[;L;WON^4Z"]7X&]U%F^^!L'TWL7"("==.J__^L&^@L6#'"P@&K`!\P&
M_P&,%W3[BP[\P&F0P'=1MO3KKQ8L!Q&<%]+9P/7+NQV,P,JK&I3GB$9:P25,
M!A_\JK+KHBS<PF&`P7HQNHDYPS1\'#@J')6;PR,,N3N\!B<\',0WI`&JPT.\
M!4+Z'#:LB$J\Q+<7PZOQPE`<Q&YQOTN,PY3QQ#08Q5)L!3^,&FA*NE@,45J\
MPUSL@),KPV<\%6E,PV.<&N$K?0Q#`""J1PS`JV@<QNQ9>=S!OW;,/PR@N+^@
MC`_`D!`I##;;R([\R)`<R9(\R91<R2J+!$H4&SL+D3Z+H.F;#T)+M:(\RJ1<
MRD/[`*]ARJK<`4BYRJ[\RDQIM48``;61#UO[$ESYM?]QW,%S+!P3W'HE@G('
MD`":\4R229E@Z\=@L,;4P\#N>;F!\`#)^A1]F\7*#`:]/!P`0,5@F"",V0>&
MW)V->YTD?,U:0+@'PLRA5R)KL0N:RQ:<2Q!4G,SFO`6_/!S9;'DE<A8D&PBJ
M&U"L*\3UK*/ZNAWJG'AVFY1"$*(=P)TW:;\#K07W3!PL^LQO3!:[C+\:C!XW
MBL02",81_4@9';!%?,4<'-)>6M#G8<7K?-'Y,-+?.]%.O`!<VLTN_0LP_;P;
M?2!U''<@C=(OD=,C(<@^?=/T#-1/L-,ATM-8]],A+=/;@;44;-1"_;EN5RYA
M-]4GC=1-P-3HH=1\Y]3U3-3_!P+58";6YNS5!7),-KW57)T$9!TBQ0I_:*W,
M:FT@!YUN=1W&<9T&LM`!?#P'^:S75/W62W#797"W*`83S@K(QK?72]S79]``
MDS8M'$#`=%#2P%S8AHT$B/W'XF(UGYRB/;S9;MW9"]W&=X``F<9<TRD'7JQR
MD+W#GTT&`#`\5>T6DFG:OXK:1;"^>*`4"\"6!9#;OZW:+7W:G1V_=$``!P`!
M'K``T,UDHD)1"7`;=5#;>S3;)1S;9O#<%)6V((#*%S,`$]6,#[``(*;";R#9
M!,4P7:@(.D4`BN#1OQ#*L)S?^KW?4(G*M:'*"H``E)6W_VV3]5!9`I$;^Q#>
MK_RT__S]X%0KRT?P`(&P0H<<C`9AX0=AR1S>X1[^X2`>XB(NXDG`&7Z@`"UZ
MH(9L5`*-VBP-!H6<`![0``[`WE/0!S,^VFA@UMM]*\*X$@'0A3*1%@NMR[X=
MC)I=!L4HX]=MXU?@D):%W6L`UF>=24S!MVBQP$2PVQA]Y"^N!0;@`*_`HH'-
M!<6HWDS$!CQ>00F2$E>^MU!!!)EDW-KJW580YJ^P`""+!L(HX\VH!N@<UMY1
MC)M5DT$.ST0>"T;NXJ7M!<X-W00>I#*^MV8PV,FD'@;`#3NG#RE.$RO>HM;<
MV78.!8\>WMP)!SC>`#KN!7D=2>@R&Q9.0G>KD!Y]U%S]Y?]0$."4!0$'8-]N
M`.77[>M;8.D]K@0&T(6Y,=^Y8=^VCM1);@6Z_D&]#A)GKN=.SL3!*^C*'=)-
MG`4Q/N,U'A1][@$!_06C7NR];=C$#E1H"N[7+KJ3KM*NT^BRS=E<W>H++>:6
MM>?%(4()L.I4<.YL;N](;>EXON]EKL#UH`W"GCSSVUC<;;[J7.J1OAK5GLA@
MCMSUONWU/,<4+][.,>[E;@7:C3L1;[TX'.V\WO"J<0"O0.E3X-[@<_+/>ZTJ
M/^T'@N/_3O*83=@<K\RF^NTT_N[G\8R6%0`L_P?.O/'ICM)/*O3A/BN9KMX8
M'P5KOCHT[[KM&>9,SN_FHA1^GO#_.+OTH9;UG]M(!T_FE./R'R3O+_':(F;V
MTSJQ)6Y9T0WRGJ/S`-^ACEWE/V^^"B#C%)7HC@O>C73JTV/T#+\$ZV[R!/_`
M=E1SQE)\`6[=9*\_4V_MC-#WY"7WN/II3\5.";#KO7[U7^\`8;]8H.[W3?_`
MLY!7GQ7U5#X];`_S"D7O[_WX^$L`"("$NH(/ID\'VQ`=_DZ1`H_UNF^\MD'A
ME$51L&\/L^]S%"7V>&#T(!8;N#X]GG^A")6L@B\80:Z,"^`N[`2-P0_;"6`G
M/2\2F=^,6UKVR?^NLA```UQ9VVR[0VI'&F`E`P`$EX4!!.IX.D7EDMET/J%1
MZ?21D4@R_X'IEMOM$AP)#P*0B#887O6:W7:[C^]I`""WW_%Y_7Y*Z#@>`#P&
M&R`"%(BF%!8&/0#2B@#J^"B[CBH^/BR0*CN;#AH&M9P"/!H\45/SXCKI5%]A
M8U$9#NC$/!(``@X@V3HZ$HN.DF0I?SL4$C8R,PL2`J!WCX][B[TZ0A,.F!@\
M,#(>K,7%69T4`GH5$)4(U`F@`AJFY^GK[>_Q\_7W^?O]_P$&/`<A5*-"AP+6
M`S6O3$*'#L]!(R.)4:-&&2(P^X#%8D>/%B6%E(0@6C0'#P$>:+0@P"\''BYH
M,H629DV;-^>]?/(@``).$-ZU!$$`0A&@3TI]5+J4:5.G3Z%&E?\ZE6I5JU>Q
M9M6ZM>,$C9DJ<!4[=I"59F31IE7;U`D#8@$@*`@WM,X#!47.(9TTCF_?2AUJ
M`:B8ZU"U3E4T>("$P,R>8Q%[AJS8,:0A:`>.O>-"8,&%`9]!?[Z00#,J/_0<
ME)0H4E)!IPL`N+;`C*/=><'\VN'LJ%BY)<$ZD-Q6Q`R`1`;V,G&5FWGS+@P&
MWH+]X&0Q!1Z\7CAEP,/P+8^C313\L7(TS+]*Y_'9=*[S+6ZG"8;VP$.!KYMN
M,<TEDF3)D],,XPN"#`;PP`%9?'/B@0X`(`:$1SQ88@&]W*O0/3\B:P0`DCI(
MKQC.EMDH"\:,^`4R\28#21++I$'/PA?_X>"D"@F^^F"#023AZ0`'_G-)-0A8
MRT\IV%A3K:5Y[E@*E@29(`"!!QUL,$(EIFQB.1BQW.R<`W"S!)#Q<#%$@0"+
M,>`8`#!B9A/R5C0OLRSAW*,!!([`(#30)L`E@$`$45''#LALPLQI:BF)SY!<
M6ZH!UG@J28';/*CQ@RI387*)!X+RKKCCDEOBRCA!7>*`BC+P8)0HH+-E$-BD
MB670#L(+22FO-"K`@T<]#%572E024BD'BW"K%CXITP6A+N4X;1HC6>O3(TDI
M1<72(AS0[("Y"#C%+KS:4Z[37;.L4P`/!-CDU"+,[,FU#4_*]0[X(`-2DH\6
M!8#%1P$=:@$-_VK$HEMP`=XC@2=!\*D``33(8(%`H1!VSWE7D@2:1Y%]A3YH
M&78L6B40:!2HHX0BRBAW0?@T8!@;V`"+"SR@0(`%_@C$(#$K]@+>:.1-U*`V
M)_XE8R8@\$`#`8@N6@"6@3U9Z3=42J0#>:O-PV%B(S:68D\6B;1&4UZQE(&2
MAOLEF--(+OG;I9WS8(`".(B@@`LD&(0P7IXS$>?6V-PPFF-J;H.!V(;<$.W!
MW7A&G*DA7E7B8]<P\TLAH355E6GQ,)EP6$Z+B,^";J1`Q,22!N%F:'+.N[\C
M@2$G@P)8;_V"LR^//8H`%BC;&L2=]8#(GA/QHQ:"&B',@8BT_LK4<_\[H?P.
MRU6QW;UCHI&U6&-;8D0`-0F1Q%<<1]I;;"P[L.^K`6"7W?PF68H3\10[RL6!
M0(O7:./DY\^#^51T80Z^Z!/?&8`'R,"3CJU&>XV(2:T\P"*^H2U\-2+?^2`X
MN]IER7&J(@2+J*8XJP%*25VK7^7*QX<#X,T1DO`.)>"3&KA01"D-8,2B%E`O
M]FG07B5Y6LN^$@%PG*^!XPMA!,W'F1/F!ADK#-[_6M*W8`'F8;G+B$8HH!@/
M>N)^E`B`G>Z$`>2I85"%DM<,H[(?O5V&&E/HQO5JE*?0A>HT*BR@^#3R0"#.
M<0DD&H=;'C:9&CXJ#RKIEQ0G]\'E_5`/`4#_HT8$L,7?_*)0$]E>4^J%Q)ZY
M*`\Z\PAIP%?$%>8.%SF"A@/@R`PYTI&.W!EB)WQ'!]<L*@#M0J4',('("4VQ
M%814SR&9(0`Z::Z`32'2XJ`Q#7$H"Q_.2\7^FLB^[B%DC48(929&2<HYVI$/
MJ2)#Q#CT,SX@(`.>RP0%LK`D0=JABGP``"XS,:Z/)(!%/=*F-+?01FB0T']D
M[-`:.N"9.UG`EO!4V@%\<CIH*/$)C@M$?FJ(&;]DRQL"P`!OQ$G%?MXA`>C\
MP,MZF;<:NND8%6I62!RC27EUA$B-^IX>_O;1?_E3=@#`@-&(QH%F+H&)P)/;
M_TY"T'&,T%ZGE-8X_^50SD*2JT;C"AU\-$E`%G[DEV,,9AD]H;8[%6@-R.23
M,C>*+Y9N518`&$"-"I`T/)*A(K`AR9BXBD^@OD&H>.@&4;\R+DR^@9B%FB>B
M%"42_TS#F$N('S/F=YI"T3-[QOI/7].:V$IX%:P\LJ`I=($9Q"K6"<HCYT39
M6@8.M*YU',C%763Q*EA%XU!E6(I(6,3,OV;B>!,AJ2>/]$[*SE85C/V*K::3
M1-K>P;)!Q:P<NCA)G39G&I#99/^@Q3.M[I:Y'OWJ;6?:7%^LU0UME:X75CNI
MZV[70K:M572YRX7>9C:\=L@N=<N;WDYXEQEA56\;QEO=W[Z72M"B[WUAX?]2
MF`I`IOB]!GK98%W_4HFSK0/P@!'<!;NJ9K@(CF\;!.Q@>R28PA7NRX,#/%\+
M;YC#':[4@=4080^/F,0EE@.&UR!B$Z^8Q2UN`HI#K&$7SYC&'(:Q%U1<8QWO
M>,`W+D([%%"V>."$R$4V\I&1G&0E+YG)37;RDZ$<Y7SHA`TB`\%1*KL6+6^9
MRUWV\I?!'&8QCYG,959+&[8%@KPX)W_PY(0T?1RP'"OMS:2,LSB,@RX9KU>1
M$:PS'>\,KCF?[,]S#'0Q*#7+YK19FH4&XJ%U->B`.3J"D(X%I4","D:3DM(0
MM#2H)`VP3O,PTWS),PB0XYY-TW'4YOMTG$(-KE;_R^[5JDBS7'B<:UWO>C-%
MN?)D>1UL8:^8;,,V]K&1G6QE+YO9S7;VLQ-L`#JQ(VAHX)@"`)J`;C&("0@X
M!S(P)2J%DB,Y!TC``KI%&KAH@QVM9$("#-"26A1A/8/PZ2L`>JD%L!M=#2#`
M07LA;6`9``TG.<2/Y;U26`B<VJ;HQ;6RO>U.0?Q1#T@#`>3=YZXEAP&AP#((
M2$,4AXO.X*"EMP*&A_(?#^\`)K=&OI5@;G0K@>#_+D,O,'X@FON;Y2;/>03]
M(`\E8,I)>X%W$CASG`1I0^<*V`L"[OT*,U4),$:`6;`@D+H.-,8()%D"`R"`
M`$CPA`#>\??A'+"7]X'`_P$39/OP@D*PH`.+1Z<H@M"S'@G9[F'N0R=`T940
M%Z0/`5T)BHNO.>.DL6L<%5-G1S@(/@JP@X#H9`"!W2_OH`2L62@+&AG:]U+U
M#ES][4$N&<&Z?BX>>?[7PO`Z$!OT8V(08$H*0$!ISDZE)=@^[T/Q`!$4X.N^
M5,GD/"G"`PZ@F6QYZES(5W0R?B-\:W`;+TH0^N4-H!E<*R'VUG?ZT)\$@;DT
MH,&4Z+X??CPE`LSU\NFAU/I38_U1*0'ZXZ"Z]B>!?/3[_F_@QPL">N]I0$#1
MW(W<Z&_H1H'\M*];H&$)R(\`=:YD&&]PNB_Z3B[F.H52O`T!(O`G2.(1^&)^
MQ/^..$KC]8J@`96`-!(`$GS#`:)N<L[&[@B.':XO$AR$X`R``.N``1:`0TPM
M=`S`UZX%`YF`4B!.^'1A!86AU/!@?G:$!*,O!Y5@.;R-Z[`O]!1NXYQ@!&?P
MQVI0`G<NU82A/5`P@BIP"HF!ZX)O`:2/4LP@&8C@"(A@@@Y`^A"M":QL\H9B
MA`QD"D]E\AX`9*P0`LK/&+X%5JA%Y^+-A:+$07CD\K2`*`AF5'(/ST)'**X,
M$M:P#9<``A@@!Y/``+0A$(/""N^P"8Y"#]$0$H<B[(@#!#"-^HQ@S^Q`%JDM
M$=$E'D@/#!-1%F6Q#"'H#$5G%&R/&P`)%NF/8&#%!1O_0_T4S1HVY@$2`?F8
MH.W\<.B&HQ:N!?66CR]L<2A0C_R`!@D=1!S!X!``8!L8X/8(X@>Y8136SQA[
MH4KB$=6"B?"T$8!"\!-`BQJ5X&M6#AVWH1BM$-Y"#_5ZXUND\>ZZ!`*$KPS)
M3PR[[AIA#UC`@&,"I`*K9`27``!`Z]0P#QJ9`*WNS@FJ!"*;!-YB+@(-<`FB
M!M7L<!:YCQB"D`FPP2B03@DM<0DNL@B>D`DT<B65HUO6KQ#Y(%J@P_IXDB6%
MP>Y&,`"+`@+'X1M)LB9M<B]0T"JE\@0G$&TJL">#S@F2HTI"LF!0SP5%!R%/
M$2\T<1T%!?50T"UI\(0(\<*2_^,E4>Z4#L`[N@\M_U$GO2T2C%(/OE+G_*`N
M@=*O`@\W0*$TLN4%58%2DE)TBG'E9"]8=-+N..\N6`\QIR\Y2#(O/\$[4-`O
M.S,8@-%\%B$`B("A&F%/N&^7E.\E@FP(_^^$G`3;@$T/P.!6WD$E&@$!`G,H
MG@$9_K$0TF`XRV[::+`OI"T!B*'>NF.NMNX\Z(\EB&"NXFTA?\PN]G(<5K,U
M$^4F(T$V5\XWNU!TR.['``J\3(,VWX$'@T<Y$\4`MC,1;)/M7&+ED,'E0HLQ
MB`$X!X$Q-*,Z?^$X/1'D9K,_$73O=LL^_8D!=G-IW#-V",`P))1"H6U#.;1#
-/?1#008T1+D@"```.S\_
`
end

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>GRAPHIC
<SEQUENCE>5
<FILENAME>f79624dexbox.gif
<DESCRIPTION>GRAPHIC
<TEXT>
begin 644 f79624dexbox.gif
M1TE&.#EA#``,`/?^``````$!`0("`@,#`P0$!`4%!08&!@<'!P@("`D)"0H*
M"@L+"PP,#`T-#0X.#@\/#Q`0$!$1$1(2$A,3$Q04%!45%186%A<7%Q@8&!D9
M&1H:&AL;&QP<'!T='1X>'A\?'R`@("$A(2(B(B,C(R0D)"4E)28F)B<G)R@H
M*"DI*2HJ*BLK*RPL+"TM+2XN+B\O+S`P,#$Q,3(R,C,S,S0T-#4U-38V-C<W
M-S@X.#DY.3HZ.CL[.SP\/#T]/3X^/C\_/T!`0$%!04)"0D-#0T1$1$5%149&
M1D='1TA(2$E)24I*2DM+2TQ,3$U-34Y.3D]/3U!04%%145)24E-34U145%55
M55965E=75UA86%E965I:6EM;6UQ<7%U=75Y>7E]?7V!@8&%A86)B8F-C8V1D
M9&5E969F9F=G9VAH:&EI:6IJ:FMK:VQL;&UM;6YN;F]O;W!P<'%Q<7)R<G-S
M<W1T='5U=79V=G=W=WAX>'EY>7IZ>GM[>WQ\?'U]?7Y^?G]_?X"`@(&!@8*"
M@H.#@X2$A(6%A8:&AH>'AXB(B(F)B8J*BHN+BXR,C(V-C8Z.CH^/CY"0D)&1
MD9*2DI.3DY24E)65E9:6EI>7EYB8F)F9F9J:FIN;FYR<G)V=G9Z>GI^?GZ"@
MH*&AH:*BHJ.CHZ2DI*6EI::FIJ>GIZBHJ*FIJ:JJJJNKJZRLK*VMK:ZNKJ^O
MK["PL+&QL;*RLK.SL[2TM+6UM;:VMK>WM[BXN+FYN;JZNKN[N[R\O+V]O;Z^
MOK^_O\#`P,'!P<+"PL/#P\3$Q,7%Q<;&QL?'Q\C(R,G)R<K*RLO+R\S,S,W-
MS<[.SL_/S]#0T-'1T=+2TM/3T]34U-75U=;6UM?7U]C8V-G9V=K:VMO;V]S<
MW-W=W=[>WM_?W^#@X.'AX>+BXN/CX^3DY.7EY>;FYN?GY^CHZ.GIZ>KJZNOK
MZ^SL[.WM[>[N[N_O[_#P\/'Q\?+R\O/S\_3T]/7U]?;V]O?W]_CX^/GY^?KZ
M^OO[^_S\_/W]_?[^_O___R'Y!`$``/X`+``````,``P`!PA>`/]%8T:PH,%_
M&0`H7,@0(3UF_R)&C*8N`T)P"O1(1"4@F$6+UB@0^H=*P2V$*/]94\!$P$F4
J%B/^`1!%XL>('#-EC'BSY,F0(S]&<REQY:B;RR1&M`8S@].G3P4$!``[
`
end

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>GRAPHIC
<SEQUENCE>6
<FILENAME>f79624debox.gif
<DESCRIPTION>GRAPHIC
<TEXT>
begin 644 f79624debox.gif
M1TE&.#EA#``,`/?^``````$!`0("`@,#`P0$!`4%!08&!@<'!P@("`D)"0H*
M"@L+"PP,#`T-#0X.#@\/#Q`0$!$1$1(2$A,3$Q04%!45%186%A<7%Q@8&!D9
M&1H:&AL;&QP<'!T='1X>'A\?'R`@("$A(2(B(B,C(R0D)"4E)28F)B<G)R@H
M*"DI*2HJ*BLK*RPL+"TM+2XN+B\O+S`P,#$Q,3(R,C,S,S0T-#4U-38V-C<W
M-S@X.#DY.3HZ.CL[.SP\/#T]/3X^/C\_/T!`0$%!04)"0D-#0T1$1$5%149&
M1D='1TA(2$E)24I*2DM+2TQ,3$U-34Y.3D]/3U!04%%145)24E-34U145%55
M55965E=75UA86%E965I:6EM;6UQ<7%U=75Y>7E]?7V!@8&%A86)B8F-C8V1D
M9&5E969F9F=G9VAH:&EI:6IJ:FMK:VQL;&UM;6YN;F]O;W!P<'%Q<7)R<G-S
M<W1T='5U=79V=G=W=WAX>'EY>7IZ>GM[>WQ\?'U]?7Y^?G]_?X"`@(&!@8*"
M@H.#@X2$A(6%A8:&AH>'AXB(B(F)B8J*BHN+BXR,C(V-C8Z.CH^/CY"0D)&1
MD9*2DI.3DY24E)65E9:6EI>7EYB8F)F9F9J:FIN;FYR<G)V=G9Z>GI^?GZ"@
MH*&AH:*BHJ.CHZ2DI*6EI::FIJ>GIZBHJ*FIJ:JJJJNKJZRLK*VMK:ZNKJ^O
MK["PL+&QL;*RLK.SL[2TM+6UM;:VMK>WM[BXN+FYN;JZNKN[N[R\O+V]O;Z^
MOK^_O\#`P,'!P<+"PL/#P\3$Q,7%Q<;&QL?'Q\C(R,G)R<K*RLO+R\S,S,W-
MS<[.SL_/S]#0T-'1T=+2TM/3T]34U-75U=;6UM?7U]C8V-G9V=K:VMO;V]S<
MW-W=W=[>WM_?W^#@X.'AX>+BXN/CX^3DY.7EY>;FYN?GY^CHZ.GIZ>KJZNOK
MZ^SL[.WM[>[N[N_O[_#P\/'Q\?+R\O/S\_3T]/7U]?;V]O?W]_CX^/GY^?KZ
M^OO[^_S\_/W]_?[^_O___R'Y!`$``/X`+``````,``P`!P@Z`/\)'$APX)L?
M"!,J_/<#F;B'$!\:8"BNX,`#%"T*Q/BCHD:.'BV"U/AOY,>,)SN2Y&C@@,N7
&+@$$!``[
`
end

</TEXT>
</DOCUMENT>
</SUBMISSION>
