Exhibit 4.4
EXCEL SWITCHING CORPORATION
NON-QUALIFIED STOCK OPTION AGREEMENT
Excel Switching Corporation, a Massachusetts corporation (the
"Company"), hereby grants as of [DATE] to [NAME OF OPTIONEE] (the "Optionee"),
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 AMENDED AND RESTATED 1997 STOCK OPTION PLAN. This
option is granted pursuant to and is governed by the Company's Amended and
Restated 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 NON-QUALIFIED OPTION; OTHER OPTIONS. This option
shall be treated for federal income tax purposes as a Non-Qualified Option
(rather than an incentive stock option). This option is in addition to any other
options heretofore or hereafter granted to the Optionee 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 BUSINESS RELATIONSHIP CONTINUES. If the
Optionee has continued to serve the Company or any Related Corporation in the
capacity of an employee, officer, director or consultant (such service is
described herein as maintaining or being involved in a "Business Relationship
with the Company") on the following dates, the Optionee 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 - 20% of the Option Shares
the date hereof
Two years but less than three years from the - an additional 20% of the Option Shares
date hereof
Three years but less than four years from the - an additional 20% of the Option Shares
date hereof
Four years but less than five years from the - an additional 20% of the Option Shares
date hereof
Five 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 up to and
including the date which is ten years from the date this option is granted.
4. TERMINATION OF BUSINESS RELATIONSHIP.
(a) TERMINATION OTHER THAN FOR CAUSE. If the Optionee's
Business Relationship with the Company and all Related Corporations is
terminated, 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 60 days from the date the Business
Relationship ceases, but in no event later than the scheduled expiration date.
In such a case, the Optionee's only rights hereunder shall be those which are
properly exercised before the termination of this option.
(b) TERMINATION FOR CAUSE. If the Optionee's Business
Relationship with the Company is terminated for Cause (as defined in Section
4(c)), this option shall terminate upon the Optionee'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 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; or (iii) the unauthorized disclosure or misappropriation 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 non-competition
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; DISSOLUTION.
(a) DEATH. If the Optionee is a natural person who dies while
involved in a Business Relationship with the Company, this option may be
exercised, to the extent otherwise exercisable on the date of his or her death,
by the Optionee's estate, personal representative or beneficiary to whom this
option has been assigned pursuant to Section 9, at any time within 60 days after
the date of death, but not later than the scheduled expiration date.
(b) DISABILITY. If the Optionee is a natural person whose
Business Relationship with the Company is terminated 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 the Business Relationship was terminated, at
any time within 60 days after such termination, but not later than the scheduled
expiration date.
(c) EFFECT OF TERMINATION. At the expiration of such 60-day
period 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.
(d) DISSOLUTION. If the Optionee is a corporation,
partnership, trust or other entity that is dissolved, is liquidated, becomes
insolvent or enters into a merger or acquisition with respect to which the
Optionee is not the surviving entity, at a time when the Optionee is involved in
a Business Relationship with the Company, this option shall immediately
terminate as of the date of such event (and shall thereafter not be exercisable
to any extent whatsoever), and the only rights hereunder shall be those as to
which this option was properly exercised before such dissolution or other event.
6. PARTIAL EXERCISE. This option may be exercised in part at any
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 Optionee 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
Optionee in accordance with the terms hereof.
7. PAYMENT OF PRICE.
(a) FORM OF PAYMENT. The option price shall be paid in the
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
Optionee delivers Common Stock held by the Optionee ("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
Optionee 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 Optionee 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 Optionee 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 Optionee free of any substantial risk of forfeiture
for at least six months.
8. METHOD OF EXERCISING OPTION. Subject to the terms and
conditions of this Agreement, this option may be exercised by written notice to
the Company, at the principal executive office of the Company, 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 Optionee and if the Optionee shall so request in the notice
exercising this option, shall be registered in the name of the Optionee 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 Optionee, 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
assignable except by will or by the laws of descent and distribution or pursuant
to a valid domestic relations order. Except as set forth in the preceding
sentence, during the Optionee's lifetime, only the Optionee can exercise this
option.
10. NO OBLIGATION TO EXERCISE OPTION. The grant and acceptance of
this option imposes no obligation on the Optionee to exercise it.
11. NO OBLIGATION TO CONTINUE BUSINESS RELATIONSHIP. Neither the
Plan, this Agreement, nor the grant of this option imposes any obligation on the
Company or any Related Corporation to continue to maintain a Business
Relationship with the Optionee.
12. NO RIGHTS AS STOCKHOLDER UNTIL EXERCISE. The Optionee shall
have no rights as a stockholder with respect to the Option Shares until such
time as the Optionee has exercised this option by delivering a notice of
exercise and has paid in full the purchase price for the number of shares for
which this option is to be so exercised in accordance with Section 8. 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
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. WITHHOLDING TAXES. If the Company or any Related Corporation
in its 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 Optionee hereby agrees that the Company or any
Related Corporation may withhold from the Optionee'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 Optionee on exercise of this option. The
Optionee further agrees that, if the Company or Related Corporation does not
withhold an amount from the Optionee's wages or other remuneration sufficient to
satisfy the withholding obligation of the Company or Related Corporation, the
Optionee will make reimbursement on demand, in cash, for the amount
underwithheld.
15. PROVISION OF DOCUMENTATION TO EMPLOYEE. By signing this
Agreement the Optionee acknowledges receipt of a copy of this Agreement and a
copy of the Plan.
16. MISCELLANEOUS.
(a) ENTIRE AGREEMENT; MODIFICATION. This Agreement constitutes
the 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.
(b) SEVERABILITY. The invalidity, illegality or
unenforceability of any provision of this Agreement shall in no way affect the
validity, legality or enforceability of any other provision.
(c) SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns, subject to the limitations set forth in Section 9
hereof.
(d) GOVERNING LAW. This Agreement shall be governed by and
interpreted in accordance with the laws of the Commonwealth of Massachusetts,
without giving effect to the principles of the conflicts of laws thereof. The
preceding choice of law provision shall apply to all claims, under any theory
whatsoever, arising out of the relationship of the parties contemplated herein.
17. ACCELERATION OF VESTING OF OPTION FOR BUSINESS COMBINATIONS.
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.
18. POOLING-OF-INTERESTS ACCOUNTING. If the Company proposes to
engage in an Acquisition intended to be accounted for as a pooling-of-interests,
and in the event that the provisions of the Plan or of any Stock Right granted
thereunder, or any actions of the Board taken in connection with such
Acquisition, are determined by either the Company's Board, or by both the
acquiring company's board and the Company's Board, to cause such Acquisition to
fail to be accounted for as a pooling-of-interests, then such provisions,
grants, or actions shall be amended or rescinded by the Board, without the
consent of any Optionee, to be consistent with pooling-of-interests accounting
treatment for such Acquisition.
IN WITNESS WHEREOF, the Company and the Optionee have caused this
instrument to be executed as of the date first above written.
EXCEL SWITCHING CORPORATION
000 Xxxxxxxxxxxx Xxxxx
Xxxxxxx, XX 00000
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OPTIONEE
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Print Name of Optionee By:
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Xxxxxxxxxxx Xxxxxxx
-------------------------------- Vice President and General Counsel
Street Address
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City State Zip Code
