CIENA CORPORATION Nonstatutory Stock Option Agreement For Non-employee Directors (Annual Option)
Exhibit 10.4
CIENA CORPORATION
Shares:
Exercise Price:
Date of Grant:
This Nonstatutory Stock Option Agreement For Non-Employee Directors (Annual Option) (the
“Option Agreement”) is made and entered into as of , 20 , by and between Ciena Corporation
(the “Company”) and (the “Optionee”).
The Company has granted to the Optionee an option to the number of shares set of Stock set
forth above, upon the terms and conditions set forth in this Option Agreement (the “Option”).
A. Definitions.
1. Definitions. Whenever used herein, the following terms shall have their respective meanings
set forth below.
a. “Date of Grant” means , 20 .
b. “Number of Option Shares” means the number of shares of Stock set forth above, as adjusted
from time to time pursuant to Section H.
c. “Exercise Price” means the price per share of Stock set forth above, as adjusted from time
to time pursuant to Section H.
d. “Initial Exercise Date” means the Initial Vesting Date.
e. “Initial Vesting Date” means the date occurring one year after the Date of Grant.
f. “Option Expiration Date” means the date ten years after the Date of Grant.
g. “Board” means the Board of Directors of the Company. If one or more Committees have been
appointed by the Board to administer the Plan, “Board” shall also mean such Committee(s).
h. “Code” means the Internal Revenue Code of 1986, as amended, and any applicable regulations
promulgated thereunder.
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i. “Committee” means the Compensation Committee of the Board of Directors or another committee
of the Board duly appointed to administer the Plan and having such powers as shall be specified by
the Board. Unless the powers of the Committee have been specifically limited, the Committee shall
have all the powers of the Board granted in the Plan, including, without limitation, the power to
amend or terminate the Plan at any time, subject to the terms of the Plan and any applicable
limitations imposed by law.
j. “Company” means Ciena Corporation, a Delaware corporation, or any successor corporation
thereto.
k. “Consultant” means any person, including an advisor, engaged by a Participating Company to
render services other than as an Employee or a Director.
l. “Director” means a member of the Board or of the board of directors of any other
Participating Company.
m. “Disability” means the permanent and total disability of the Optionee within the meaning of
Section 22(e)(3) of the Code.
n. “Employee” means any person treated as an employee (including an officer or a Director who
is also treated as an employee) in the records of a Participating Company; provided, however, that
neither service as a Director nor payment of a director’s fee shall be sufficient to constitute
employment for purposes of the Plan.
o. “Exchange Act” means the Securities Exchange Act of 1934, as amended.
p. “Fair Market Value” “Fair Market means, as of any date, the value of a share of the Stock
determined as follows:
| (i) | if the Stock is then quoted on the Nasdaq National Market, its closing price on the Nasdaq National Market on the date of determination as reported in The Wall Street Journal; | |
| (ii) | if the Stock is publicly traded and is then listed on a national securities exchange, its closing price on the date of determination on the principal national securities exchange on which the Stock is listed or admitted to trading as reported in The Wall Street Journal; | |
| (iii) | if the Stock is publicly traded but is not quoted on the Nasdaq National Market nor listed or admitted to trading on a national securities exchange, the average of the closing bid and asked prices on the date of determination as reported in The Wall Street Journal; | |
| (iv) | if none of the foregoing is applicable, by the Committee in good faith. |
q. “Parent Corporation” means any present or future “parent corporation” of the Company, as
defined in Section 424(e) of the Code.
r. “Participating Company” means the company or any Parent Corporation or Subsidiary
Corporation.
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s. “Participating Company Group” means, at any point in time, all corporations collectively
which are then Participating Companies.
t. “Plan” means the Ciena Corporation 2000 Equity Incentive Plan.
u. “Rule 16b-3” means Rule 16b-3 as promulgated under the Exchange Act, as amended from time
to time, or any successor rule or regulation.
v. “Securities Act” means the Securities Act of 1933, as amended.
w. “Service” means the Optionee’s service with the Participating Company Group, whether in the
capacity of an Employee, a Director or a Consultant. The Optionee’s Service shall not be deemed to
have terminated merely because of a change in the capacity in which the Optionee renders Service to
the Participating Company Group or a change in the Participating Company for which the Optionee
renders such Service, provided that there is no interruption or termination of the Optionee’s
Service. The Optionee’s Service shall be deemed to have terminated either upon an actual
termination of Service or upon the corporation for which the Optionee performs Service ceasing to
be a Participating Company.
x. “Stock” means the common stock, par value $0.01, of the Company, as adjusted from time to
time in accordance with Section H.
y. “Subsidiary Corporation” means any present or future “subsidiary corporation” of the
Company, as defined in Section 424(f) of the Code.
B. Tax Status of the Option. This Option is intended to be a nonstatutory stock option and
shall not be treated as an incentive stock option within the meaning of Section 422(b) of the Code.
C. Administration. All questions of interpretation concerning this Option Agreement shall
be determined by the Board, including any duly appointed Committee of the Board. All determinations
by the Board shall be final and binding upon all persons having an interest in the Option. Any
officer of a Participating Company shall have the authority to act on behalf of the Company with
respect to any matter, right, obligation, or election which is the responsibility of or which is
allocated to the Company herein, provided the officer has apparent authority with respect to such
matter, right, obligation, or election.
D. Exercise of the Option.
1. Right to Exercise. Except as otherwise provided herein, the Option shall be exercisable on
and after the Initial Exercise Date and prior to the termination of the Option (as provided in
Section A) in an amount not to exceed the Number of Option Shares less the number of shares
previously acquired upon exercise of the Option. In no event shall the Option be exercisable for
more shares than the Number of Option Shares.
2. Method of Exercise. Exercise of the Option shall be by written notice to the Company which
must state the election to exercise the Option, the number of whole shares of Stock for which the
Option is being exercised and such other representations and agreements as to the Optionee’s
investment intent with respect to such shares as may be required pursuant to the provisions of this
Option Agreement. The written notice must be signed by the Optionee and must be delivered in
person, by certified or registered mail, return receipt requested, by confirmed facsimile
transmission, or by such other
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means as the company may permit, to the Chief Financial Officer of the company, or other
authorized representative of the Participating Company Group, prior to the termination of the
Option, accompanied by full payment of the aggregate Exercise Price for the number of shares of
Stock being purchased. The Option shall be deemed to be exercised upon receipt by the Company of
such written notice and the aggregate Exercise Price.
3. Payment of Exercise Price.
a. Forms of Consideration Authorized. Except as otherwise provided below, payment of the
aggregate Exercise Price for the number of shares of Stock for which the Option is being exercised
shall be made (i) in cash, by check, or cash equivalent, (ii) by tender to the Company of whole
shares of Stock owned by the Optionee having a Fair Market Value not less than the aggregate
Exercise Price, (iii) by means of a Cashless Exercise, as defined in Section D.3.c, or (iv) by any
combination of the foregoing.
b. Tender of Stock. Notwithstanding the foregoing, the Option may not be exercised by tender
to the company of shares of Stock to the extent such tender of Stock would constitute a violation
of the provisions of any law, regulation or agreement restricting the redemption of the Company’s
stock. The Option may not be exercised by tender to the Company of shares of Stock unless such
shares either have been owned by the Optionee for more than six months or were not acquired,
directly or indirectly, from the Company.
c. Cashless Exercise. A “Cashless Exercise” means an exercise of the Option through
arrangement, satisfactory to the Company, with a broker by which the broker sells a portion of the
underlying shares to generate enough proceeds to pay the exercise price and remits the exercise
price to the Company. The Company reserves, at any and all times, the right, in its sole
discretion, to decline to approve or terminate any such program or procedure.
4. Tax Withholding. At the time the Option is exercised, in whole or in part, or at any time
thereafter as requested by the Company, the Optionee agrees to make adequate provision for any sums
required to satisfy the federal, state, local and foreign tax withholding obligations of the
Participating Company Group, if any, which arise in connection with the Option, including, without
limitation, obligations arising upon (i) the exercise, in whole or in part, of the Option, (ii) the
transfer, in whole or in part, of any shares acquired upon exercise of the Option, or (iii) the
lapsing of any restriction with respect to any shares acquired upon exercise of the Option.
5. Restrictions on Grant of the Option and Issuance of Shares. The grant of the Option and the
issuance of shares of Stock upon exercise of the Option shall be subject to compliance with all
applicable requirements of federal, state or foreign law with respect to such securities. The
Option may not be exercised if the issuance of shares of Stock upon the exercise would constitute a
violation of any applicable federal, state or foreign securities laws or other law or regulations
or the requirements of any stock exchange or market system upon which the Stock may then be listed.
In addition, the Option may not be exercised unless (i) a registration statement under the
Securities Act shall at the time of exercise of the Option be in effect with respect to the shares
issuable upon exercise of
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the Option or (ii) in the opinion of legal counsel to the Company, the shares issuable upon
exercise of the Option may be issued in accordance with the terms of an applicable exemption from
the registration requirements of the Securities Act. THE OPTIONEE IS CAUTIONED THAT THE OPTION MAY
NOT BE EXERCISED UNLESS THE FOREGOING CONDITIONS ARE SATISFIED. ACCORDINGLY, THE OPTIONEE MAY NOT
BE ABLE TO EXERCISE THE OPTION WHEN DESIRED EVEN THOUGH THE OPTION IS VESTED. The inability of the
Company to obtain from any regulatory body having jurisdiction the authority, if any, deemed by the
Company’s legal counsel to be necessary to the lawful issuance and sale of any shares subject to
the Option 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. As a condition to
the exercise of the Option, the Company may require the Optionee to satisfy any qualifications that
may be necessary or appropriate, to evidence compliance with any applicable law or regulation and
to make any representation or warranty with respect thereto as may be requested by the Company.
6. Fractional Shares. The Company shall not be required to issue fractional shares upon the
exercise of the Option.
E. Nontransferability of the Option. The Option may be exercised during the lifetime of the
Optionee only the by Optionee or the Optionee’s guardian or legal representative and may not be
assigned or transferred in any manner except by will or by the laws of descent and distribution.
Following the death of the Optionee, the Option, to the extent provided in Section D.2 may be
exercised by the Optionee’s legal representative or by any person empowered to do so under the
deceased Optionee’s will or under the then applicable laws of descent and distribution.
F. Termination of the Option. The Option shall terminate and may no longer be exercised on
the first to occur of (a) the Option Expiration Date, or (b) the last date for exercising the
Option following termination of the Optionee’s Service as described in Section G.
G. Effect of Termination of Service.
1. Option Exercisablity.
a. Disability. If the Optionee’s Service with the Participating Company Group is terminated
because of the Disability of the Optionee, the Option, to the extent unexercised and exercisable on
the date on which the Optionee’s Service terminated, may be exercised by the Optionee (or the
Optionee’s guardian or legal representative) at any time prior to the expiration of twelve months
after the date on which the Optionee’s Service terminated, but in any event no later than the
Option Expiration Date.
b. Death. If the Optionee’s Service with the Participating Company Group is terminated because
of the death of the Optionee, the Option, to the extent unexercised and exercisable on the date on
which the Optionee’s Service terminated, may be exercised by the Optionee’s legal representative or
other person who acquired the right to exercise the Option by reason of the Optionee’s death at any
time prior to the expiration of twelve months after the date one which the Optionee’s Service
terminated, but in any event no later than the Option Expiration Date. The Optionee’s Service shall
be deemed
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to have terminated on account of death if the Optionee dies within three months after the
Optionee’s termination of Service.
c. Other Termination of Service. If the Optionee’s Service with the Participating Company
Group terminates for any reason, except Disability or death, the Option, to the extent unexercised
and exercisable by the Optionee on the date on which the Optionee’s Service terminated, may be
exercised by the Optionee within three months after the date on which the Optionee’s Service
terminated, but in any event no later than the Option Expiration Date.
2. Extension if Exercise Prevented by Law. Notwithstanding the foregoing, if the exercise of
the Option within the applicable time periods set forth in Section G.1 is prevented by the
provisions of Section D.5, the Option shall remain exercisable until three (3) months after the
date the Optionee is notified by the Company that the Option is exercisable, but in any event no
later than the Option Expiration Date.
3. Extension if Optionee Subject to Section 16(b). Notwithstanding the foregoing, if a sale,
within the applicable time periods set forth in Section G.1, of shares acquired upon the exercise
of the Option would subject the Optionee to suit under Section 16(b) of the Exchange Act, the
Option shall remain exercisable until the earliest to occur of (i) the tenth day following the date
on which a sale of such shares by the Optionee would no longer be subject to such suit, (ii) the
one hundred and ninetieth day after the Optionee’s termination of Service, or (iii) the Option
Expiration Date.
H. Adjustments for Changes in Capital Structure. In the event of any stock dividend, stock
split, reverse stock split, recapitalization, combination, reclassification, or similar change in
the capital structure of the Company, appropriate adjustments shall be made in the number, Exercise
Price and class of shares of stock subject to the Option. If a majority of the shares which are of
the same class as the shares that are subject to the Option are exchanged for, converted into, or
otherwise become (whether or not pursuant to an Ownership Change Event) shares of another
corporation (the “New Shares”), the Board may unilaterally amend the Option to provide that the
Option is exercisable for New Shares. In the event of any such amendment, the Number of Option
Shares and the Exercise Price shall be adjusted in a fair and equitable manner, as determined by
the Board, in its sole discretion. Notwithstanding the foregoing, any fractional share resulting
from an adjustment pursuant to this Section H shall be rounded down to the nearest whole number,
and in no event may the Exercise Price be decreased to an amount less than the par value, if any,
of the stock subject to the Option.
I. Rights as a Stockholder. The Optionee shall have no rights as a stockholder with respect
to any shares covered by the Option until the date of the issuance of a certificate for the shares
for which the Option has been exercised (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company). No adjustment shall be made for
dividends, distributions or other rights for which the record date is prior to the date such
certificate is issued, except as provided in Section H.
J. Legends. The Company may at any time place legends referencing any applicable federal,
state or foreign securities law restrictions on all certificates representing shares of stock
subject to the provisions of this Option Agreement. The Optionee shall, at the
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request of the Company, promptly present to the Company any and all certificates representing
shares acquired pursuant to the Option in the possession of the Optionee in order to carry out the
provisions of this Section.
K. Binding Effect. Subject to the restrictions on transfer set forth herein, this Option
Agreement shall insure to the benefit of and be binding upon the parties hereto and their
respective heirs, executors, administrators, successors and assigns.
L. Termination or Amendment. The Board may terminate or amend the Plan or the Option at any
time; provided, however, that no such termination or amendment may adversely affect the Option or
any unexercised portion hereof without the consent of the Optionee unless such termination or
amendment is necessary to comply with any applicable law or government regulation. No amendment or
addition to this Option Agreement shall be effective unless in writing.
M. Integrated Agreement. This Option Agreement constitutes the entire understanding and
agreement of the Optionee and the Participating Company Group with respect to the subject matter
contained herein, and there are no agreements, understandings, restrictions, representations, or
warranties among the Optionee and the Participating Company Group with respect to such subject
matter other than those as set forth or provided for herein. To the extent contemplated herein, the
provisions of this Option Agreement shall survive any exercise of the Option and shall remain in
full force and effect.
N. Applicable Law. This Option Agreement shall be governed by the laws of the State of
Maryland as such laws are applied to agreements between Maryland residents entered into and to be
performed entirely within the State of Maryland.
| CIENA CORPORATION | ||||||
| By: | ||||||
| Title: | ||||||
The Optionee represents that the Optionee is familiar with the terms and provisions of this
Option Agreement and hereby accepts the Option subject to all of the terms and provisions thereof.
The Optionee hereby agrees to accept as binding, conclusive and final all decisions or
interpretations of the Board upon any questions arising under this Option Agreement.
| OPTIONEE | ||||
| Date: |
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