Exhibit 4.9
EXCEL SWITCHING CORPORATION
INCENTIVE STOCK OPTION AGREEMENT
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Excel Switching Corporation, a Massachusetts corporation (the
"Company"), hereby grants as of [DATE] to [NAME OF EMPLOYEE] (the "Employee"),
an option to purchase a maximum of [NUMBER] shares (the "Option Shares") of its
Common Stock, $.01 par value ("Common Stock"), at the price of $[PRICE] per
share, on the following terms and conditions:
1. GRANT UNDER 1997 STOCK OPTION PLAN. This option is granted
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pursuant to and is governed by the Company's 1997 Stock Option Plan (the "Plan")
and, unless the context otherwise requires, terms used herein shall have the
same meaning as in the Plan. Determinations made in connection with this option
pursuant to the Plan shall be governed by the Plan as it exists on this date.
2. GRANT AS INCENTIVE STOCK OPTION; OTHER OPTIONS. This option is
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intended to qualify as an incentive stock option under Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"). This option is in
addition to any other options heretofore or hereafter granted to the Employee by
the Company or any Related Corporation (as defined in the Plan), but a duplicate
original of this instrument shall not effect the grant of another option.
3. VESTING OF OPTION IF EMPLOYMENT CONTINUES. If the Employee has
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continued to be employed by the Company or any Related Corporation on the
following dates, the Employee may exercise this option for the number of shares
of Common Stock set opposite the applicable date:
Less than one year from the date hereof - 0 shares
One year but less than two years from the - 20% of the Option Shares
date hereof
Two years but less than three years from - an additional 20% of the
the date hereof Option Shares
Three years but less than four years from - an additional 20% of the
the date hereof Option Shares
Four years or more from the date hereof - an additional 20% of the
Option Shares
Notwithstanding the foregoing, in accordance with and subject to the provisions
of the Plan, the Committee may, in its discretion, accelerate the date that any
installment of this Option becomes exercisable. The foregoing rights are
cumulative and (subject to Sections 4 or 5 hereof if the Employee ceases to be
employed by the Company and all Related Corporations) may be exercised on or
before the date which is ten years from the date this option is granted.
4. TERMINATION OF EMPLOYMENT.
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(A) TERMINATION OTHER THAN FOR CAUSE. If the Employee ceases to be
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employed by the Company and all Related Corporations, other than by reason
of death or disability as defined in Section 5 or termination for Cause as
defined in Section 4(c), no further installments of this option shall
become exercisable, and this option shall terminate (and may no longer be
exercised) after the passage of ninety days from the Employee's last day of
employment, but in no event later than the scheduled expiration date. In
such a case, the Employee's only rights hereunder shall be those which are
properly exercised before the termination of this option.
(B) TERMINATION FOR CAUSE. If the employment of the Employee is
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terminated for Cause (as defined in Section 4(c)), this option shall
terminate upon the Employee's receipt of written notice of such termination
and shall thereafter not be exercisable to any extent whatsoever.
(C) DEFINITION OF CAUSE. "Cause" shall mean conduct involving one or
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more of the following: (i) gross misconduct by the employee which is
materially injurious to the Company; or (ii) the commission of an act of
embezzlement, fraud or deliberate disregard of the rules or policies of the
Company which results in material economic loss, damage or injury to the
Company; or (iii) the unauthorized disclosure of any trade secret or
confidential information of the Company or any third party who has a
business relationship with the Company or the violation of any
noncompetition covenant or assignment of inventions obligation with the
Company; or (iv) the commission of an act which induces any customer or
prospective customer of the Company to break a contract with the Company or
to decline to do business with the Company; or (v) the conviction of the
employee of a felony involving any financial impropriety or which would
materially interfere with the employee's ability to perform his or her
services or otherwise be injurious to the Company; or (vi) the failure of
the employee to perform in a material respect his or her employment
obligations without proper cause. In making such determination, the Board
shall act fairly and in utmost good faith.
5. DEATH; DISABILITY.
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(A) DEATH. If the Employee dies while in the employ of the Company or
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any Related Corporation, this option may be exercised, to the extent
otherwise exercisable on the date of his or her death, by the Employee's
estate, personal representative or beneficiary to whom this option has been
assigned pursuant to Section 10, at any time within 180 days after the date
of death, but not later than the scheduled expiration date.
(B) DISABILITY. If the Employee ceases to be employed by the Company
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and all Related Corporations by reason of his or her disability (as defined
in the Plan), this option may be exercised, to the extent otherwise
exercisable on the date of the termination of his or her employment, at any
time within 180 days after such termination, but not later than the
scheduled expiration date.
(C) EFFECT OF TERMINATION. At the expiration of the 180-day period
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provided in paragraphs (a) or (b) of this Section 5 or the scheduled
expiration date, whichever is the earlier, this option shall terminate (and
shall no longer be exercisable) and the only rights hereunder shall be
those as to which the option was properly exercised before such
termination.
6. PARTIAL EXERCISE. This option may be exercised in part at any
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time and from time to time within the above limits, except that this option may
not be exercised for a fraction of a share unless such exercise is with respect
to the final installment of stock subject to this option and cash in lieu of a
fractional share must be paid, in accordance with Paragraph 13(G) of the Plan,
to permit the Employee to exercise completely such final installment. Any
fractional share with respect to which an installment of this option cannot be
exercised because of the limitation contained in the preceding sentence shall
remain subject to this option and shall be available for later purchase by the
Employee in accordance with the terms hereof.
7. PAYMENT OF PRICE. (a) The option price shall be paid in the
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following manner:
(i) in cash or by check;
(ii) subject to Section 7(b) below, by delivery of shares of the
Company's Common Stock having a fair market value (as
determined by the Committee) equal as of the date of exercise
to the option price;
(iii) by delivery of an assignment satisfactory in form and substance
to the Company of a sufficient amount of the proceeds from the
sale of the Option Shares and an instruction to the broker or
selling agent to pay that amount to the Company; or
(iv) by any combination of the foregoing.
(B) LIMITATIONS ON PAYMENT BY DELIVERY OF COMMON STOCK. If the
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Employee delivers Common Stock held by the Employee ("Old Stock") to the
Company in full or partial payment of the option price, and the Old Stock
so delivered is subject to restrictions or limitations imposed by agreement
between the Employee and the Company, an equivalent number of Option Shares
shall be subject to all restrictions and limitations applicable to the Old
Stock to the extent that the Employee paid for the Option Shares by
delivery of Old Stock, in addition to any restrictions or limitations
imposed by this Agreement. Notwithstanding the foregoing, the Employee may
not pay any part of the exercise price hereof by transferring Common Stock
to the Company unless such Common Stock has been owned by the Employee free
of any substantial risk of forfeiture for at least six months.
(C) PERMITTED PAYMENT BY RECOURSE NOTE. In addition, if this
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paragraph is initialed below by the person signing this Agreement on behalf
of the Company, the option price may be paid by delivery of the Employee's
personal recourse promissory note bearing interest payable not less than
annually at the applicable Federal rate, as defined in Section 1274(d) of
the Code.
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(initials)
8. METHOD OF EXERCISING OPTION. Subject to the terms and conditions
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of this Agreement, this option may be exercised by written notice to the Company
at its principal executive office, or to such transfer agent as the Company
shall designate. Such notice shall state the election to exercise this option
and the number of Option Shares for which it is being exercised and shall be
signed by the person or persons so exercising this option. Such notice shall be
accompanied by payment of the full purchase price of such shares, and the
Company shall deliver a certificate or certificates representing such shares
as soon as practicable after the notice shall be received. Such certificate or
certificates shall be registered in the name of the person or persons so
exercising this option (or, if this option shall be exercised by the Employee
and if the Employee shall so request in the notice exercising this option, shall
be registered in the name of the Employee and another person jointly, with right
of survivorship). In the event this option shall be exercised, pursuant to
Section 5 hereof, by any person or persons other than the Employee, such notice
shall be accompanied by appropriate proof of the right of such person or persons
to exercise this option.
9. OPTION NOT TRANSFERABLE. This option is not transferable or
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assignable except by will or by the laws of descent and distribution. During
the Employee's lifetime only the Employee can exercise this option.
10. NO OBLIGATION TO EXERCISE OPTION. The grant and acceptance of
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this option imposes no obligation on the Employee to exercise it.
11. NO OBLIGATION TO CONTINUE EMPLOYMENT. Neither the Plan, this
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Agreement, nor the grant of this option imposes any obligation on the
Company or any Related Corporation to continue the Employee in employment.
12. NO RIGHTS AS STOCKHOLDER UNTIL EXERCISE. The Employee shall have
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no rights as a stockholder with respect to the Option Shares until
such time as the Employee has exercised this option by delivering a notice of
exercise and has paid in full the purchase price for the shares so exercised in
accordance with Section 9. Except as is expressly provided in the Plan with
respect to certain changes in the capitalization of the Company, no adjustment
shall be made for dividends or similar rights for which the record date is prior
to such date of exercise.
13. CAPITAL CHANGES AND BUSINESS SUCCESSIONS. The Plan contains
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provisions covering the treatment of options in a number of contingencies such
as stock splits and mergers. Provisions in the Plan for adjustment with respect
to stock subject to options and the related provisions with respect to
successors to the business of the Company are hereby made applicable hereunder
and are incorporated herein by reference.
14. EARLY DISPOSITION. The Employee agrees to notify the Company in
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writing immediately after the Employee transfers any Option Shares, if such
transfer occurs on or before the later of (a) the date two years after the date
of this Agreement or (b) the date one year after the date the Employee acquired
such Option Shares. The Employee also agrees to provide the Company with any
information concerning any such transfer required by the Company for tax
purposes.
15. WITHHOLDING TAXES. If the Company or any Related Corporation in its
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discretion determines that it is obligated to withhold any tax in connection
with the exercise of this option, or in connection with the transfer of, or the
lapse of restrictions on, any Common Stock or other property acquired pursuant
to this option, the Employee hereby agrees that the Company or any Related
Corporation may withhold from the Employee's wages or other remuneration the
appropriate amount of tax. At the discretion of the Company or Related
Corporation, the amount required to be withheld may be withheld in cash from
such wages or other remuneration or in kind from the Common Stock or other
property otherwise deliverable to the Employee on exercise of this option. The
Employee further agrees that, if the Company or any Related Corporation does not
withhold an amount from the Employee's wages or other remuneration sufficient to
satisfy the withholding obligation of the Company or Related Corporation, the
Employee will make reimbursement on demand, in cash, for the amount
underwithheld.
16. PROVISION OF DOCUMENTATION TO EMPLOYEE. By signing this
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Agreement the Employee acknowledges receipt of a copy of this Agreement and a
copy of the Plan.
17. MISCELLANEOUS.
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(A) NOTICES. All notices hereunder shall be in writing and shall be
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deemed given when sent by certified or registered mail, postage prepaid,
return receipt requested, to the address set forth below. The addresses
for such notices may be changed from time to time by written notice given
in the manner provided for herein.
(B) ENTIRE AGREEMENT; MODIFICATION. This Agreement constitutes the
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entire agreement between the parties relative to the subject matter hereof,
and supersedes all proposals, written or oral, and all other communications
between the parties relating to the subject matter of this Agreement. This
Agreement may be modified, amended or rescinded only by a written agreement
executed by both parties.
(C) SEVERABILITY. The invalidity, illegality or unenforceability of
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any provision of this Agreement shall in no way affect the validity,
legality or enforceability of any other provision.
(D) SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
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inure to the benefit of the parties hereto and their respective successors
and assigns, subject to the limitations set forth in Section 10 hereof.
(E) GOVERNING LAW. This Agreement shall be governed by and
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interpreted in accordance with the laws of the [STATE], without giving
effect to the principles of the conflicts of laws thereof.
18. ACCELERATION OF VESTING OF OPTION FOR BUSINESS COMBINATIONS.
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Subject to and in accordance with Section 22 of the Plan, upon the merger,
consolidation, sale of all or substantially all of the Company's stock or assets
or other business combination involving the Company as otherwise set forth in
Section 22 of the Plan (an "Acquisition"), this option shall, immediately prior
to the consummation of such Acquisition, become vested and exercisable by the
Optionee as set forth in Section 22 of the Plan.
IN WITNESS WHEREOF, the Company and the Employee have caused this
instrument to be executed as of the date first above written.
____________________________________ EXCEL SWITCHING CORPORATION
EMPLOYEE 000 Xxxxxxxxxxxx Xxxxx
Xxxxxxx, XX 00000
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Print Name of Employee
By:__________________________________
____________________________________ Xxxxxx X. Xxxxxxx, President
Street Address
____________________________________
City State Zip Code
