EXHIBIT 4.5
TELLIUM, INC.
FORM OF
DIRECTOR STOCK OPTION AGREEMENT
This Stock Option Agreement (this "Agreement"), made as of October 18,
2000 (the "Grant Date"), between Tellium, Inc., a Delaware corporation
(the "Company"), and ________ (the "Optionee").
WHEREAS, the Company wishes to afford the Optionee the opportunity
to purchase shares of its common stock, par value $.001 per share (the
"Common Stock"); and
WHEREAS, the Company has determined that it would be to the
advantage and in the best interest of the Company and its stockholders to
grant options to purchase the Common Stock to the Optionee.
NOW, THEREFORE, the parties hereto agree as follows:
1. GRANT OF OPTION.
The Company hereby grants to the Optionee the right and
option (the "Option") to purchase all or any part of an aggregate of ________
whole shares of Common Stock subject to, and in accordance with, the terms
and conditions set forth in this Agreement. The number of shares of Common
Stock issuable on the exercise of the Option shall be adjusted from time to
time as set forth herein. The Option is not intended to qualify as an
Incentive Stock Option within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code").
2. PURCHASE PRICE.
The price at which the Optionee shall be entitled to
purchase shares of Common Stock upon the exercise of the Option shall
initially be $1.55 per share and shall be adjusted from time to time as set
forth herein (the "Purchase Price").
3. DURATION OF OPTION.
The Option shall be exercisable to the extent and in the
manner provided herein for a period of 10 (ten) years from the Grant Date
(the "Exercise Term"); PROVIDED, HOWEVER, that the Option may become
unexercisable earlier as provided in Section 4.4 hereof.
4. EXERCISABILITY OF OPTION.
4.1 VESTING SCHEDULE. The Option will become exercisable in
accordance with the following schedule (the "Vesting Schedule"): (i) the Option
with respect to fifty percent
(50%) of the shares of Common Stock will vest immediately upon the Grant Date
and be immediately exercisable on and after the Grant Date; and (ii) the
Option with respect to the remaining fifty percent (50%) of the shares of
Common Stock will vest on the earlier of (1) the date of the annual meeting
of stockholders on which the Optionee's term as director of the Company
expires or (2) the first anniversary of the Grant Date (the "Second Vesting
Date"). Each such right of purchase shall be cumulative and shall continue,
unless sooner exercised or they expire as herein provided, during the
remaining period of the Exercise Term.
4.2 COMMENCEMENT OF EXERCISABILITY.
(a) Unless accelerated in the absolute discretion of
the Board of Directors of the Company (the "Board") or as
otherwise provided herein, the Option shall become exercisable
during its term in accordance with the Vesting Schedule.
(b) No portion of the Option which is unexercisable
at Termination of Service (as defined below) shall thereafter
become exercisable.
4.3 DURATION OF EXERCISABILITY. The installments provided
for in Section 4.1 are cumulative. Each such installment which becomes
exercisable pursuant to Section 4.1 shall remain exercisable until it becomes
unexercisable under Section 4.4.
4.4 EXPIRATION OF OPTION. The Option may not be exercised
to any extent by anyone after the first to occur of the following events:
(a) The expiration of the Exercise Term; or
(b) The expiration of three (3) business days from
the time of the Optionee's Termination of Service, including,
but not by way of limitation, a termination by reason of his
resignation or removal, unless such Termination of Service
results from his death or Disability; or
(c) The expiration of one (1) year from the date of
the Optionee's Termination of Service by reason of his death
or Disability. In the event of the Optionee's Termination of
Service by reason of his death, the Option shall be
exercisable during the one (1) year period by the legatee or
legatees under his will, or by his personal representatives or
distributees and such person or persons shall be substituted
for the Optionee each time the Optionee is referred to herein.
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For purposes of this Agreement, "Termination of Service"
shall mean the time when the Optionee ceases to serve as a director of the
Company for any reason, including, but not by way of limitation, a
termination by his resignation, removal, death or Disability, but shall
exclude the date of the annual meeting of stockholders on which the
Optionee's term as director of the Company expires. The Board, in its
absolute discretion, shall determine the effect of all matters and questions
relating to Termination of Service.
For purposes of this Agreement, "Disability" shall mean,
with respect to the Optionee, the suffering of any mental or physical
illness, disability or incapacity that shall in all material respects
preclude the Optionee from performing his duties as a director of the
Company; PROVIDED, HOWEVER, that such illness, disability or incapacity shall
be reasonably determined by the Board to be of a permanent nature based on
the foregoing standards.
5. MANNER OF EXERCISE AND PAYMENT.
5.1 The Option or any exercisable portion thereof may be
exercised solely by delivery to the Secretary of the Company or his office of
all of the following prior to the time when the Option or such portion
becomes unexercisable under Section 4.4:
(a) A written notice complying with the applicable
rules established by the Board stating that the Option, or a
portion thereof, is exercised. The notice shall be signed by
the Optionee or other person then entitled to exercise the
Option or such portion; and
(b) (i) Full cash payment to the Secretary of
the Company for the shares with respect to which such
Option or portion thereof is exercised; or
(ii) With the consent of the Board, (A)
shares of Common Stock owned by the Optionee and,
unless the Committee provides otherwise in its sole
discretion, held by the Optionee for at least six (6)
months, duly endorsed for transfer to the Company,
with a Fair Market Value on the date of delivery
equal to the aggregate exercise price of the Option
or exercised portion thereof, or (B) shares of Common
Stock issuable to the Optionee upon exercise of the
Option or portion thereof, with a Fair Market Value
on the date of delivery equal to the aggregate
exercise price of the Option or exercised portion
thereof; or
(iii) With the consent of the Board, a full
recourse promissory note bearing interest (at no less
than such rate as shall then preclude the imputation
of interest under the Code or successor provision)
and payable upon such terms as may be prescribed by
the Board. The Board may also prescribe the form of
such note and the security to be given for such note.
The Option may not be exercised, however, by delivery
of a promissory note or by a loan from the Company
when or where such loan or other extension of credit
is prohibited by law; or
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(iv) With the consent of the Board, property
of any kind which constitutes good and valuable
consideration; or
(v) With the consent of the Board, a notice
that the Optionee has placed a market sell order with
a broker with respect to shares of Common Stock then
issuable upon exercise of the Option or portion
thereof, and that the broker has been directed to pay
a sufficient portion of the net proceeds of the sale
to the Company in satisfaction of the Option exercise
price; or
(vi) With the consent of the Board, any
combination of the consideration provided in the
foregoing subparagraphs (i), (ii), (iii), (iv) and
(v); and
(c) A bona fide written representation and agreement,
in a form satisfactory to the Board, signed by the Optionee or
other person then entitled to exercise such Option or portion
thereof, stating that the shares of stock are being acquired
for his own account, for investment and without any present
intention of distributing or reselling said shares or any of
them except as may be permitted under the Securities Act of
1933, as amended (the "Securities Act") and then applicable
rules and regulations thereunder, and that the Optionee or
other person then entitled to exercise such Option or portion
thereof will indemnify the Company against and hold it free
and harmless from any loss, damage, expense or liability
resulting to the Company if any sale or distribution of the
shares by such person is contrary to the representation and
agreement referred to above. The Board may, in its absolute
discretion, take whatever additional actions it deems
appropriate to ensure the observance and performance of such
representation and agreement and to effect compliance with the
Securities Act and any other federal or state securities laws
or regulations. Without limiting the generality of the
foregoing, the Board may require an opinion of counsel
acceptable to it to the effect that any subsequent transfer of
shares acquired on the exercise of the Option or portion
thereof does not violate the Securities Act, and may issue
stop-transfer orders covering such shares. Share certificates
evidencing stock issued on exercise of the Option shall bear
an appropriate legend referring to the provisions of this
subsection (c) and the agreements herein. The written
representation and agreement referred to in the first sentence
of this subsection (c) shall, however, not be required if the
shares to be issued pursuant to such exercise have been
registered under the Securities Act, and such registration is
then effective in respect of such shares; and
(d) Full payment to the Company of all amounts which,
under federal, state or local tax law, it is required to
withhold upon exercise of the Option or portion thereof in
cash, or with the consent of the Board, (i) shares of Common
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Stock owned by the Optionee and, unless the Committee provides
otherwise in its sole discretion, held by the Optionee for at
least six (6) months, duly endorsed for transfer, with a Fair
Market Value equal to the minimum amount required to be
withheld, or (ii) shares of Common Stock issuable to the
Optionee upon exercise of the Option or portion thereof with a
Fair Market Value equal to the minimum amount required to be
withheld, may be used to make all or part of such payment; and
(e) In the event the Option or portion thereof shall
be exercised by any person or persons other than the Optionee,
appropriate proof of the right of such person or persons to
exercise the Option.
5.2 Subject to Section 5.1(d), upon receipt of notice of
exercise and full payment for the shares in respect of which the Option is
being exercised, the Company shall take such action as may be necessary to
effect the transfer to the Optionee of the number of shares of Common Stock
as to which such exercise was effective.
5.3 The Optionee shall not be deemed to be the holder of,
or to have any of the rights of a holder with respect to any shares subject
to the Option until (i) the Option shall have been exercised pursuant to the
terms of this Agreement and the Optionee shall have paid the full purchase
price for the number of shares in respect of which the Option was exercised,
(ii) the Company shall have issued and delivered the shares to the Optionee,
and (iii) the Optionee's name shall have been entered as a stockholder of
record on the books of the Company, whereupon the Optionee shall have full
voting and other ownership rights with respect to such shares.
5.4 For purposes of this Agreement, the term "Fair Market
Value" of a share of Common Stock as of a given date shall be (i) the closing
price of a share of Common Stock on the principal exchange on which shares of
Common Stock are then trading, if any (or as reported on any composite index
which includes such principal exchange), on the trading day previous to such
date, or if shares were not traded on the trading day previous to such date,
then on the next preceding date on which a trade occurred, or (ii) if Common
Stock is not traded on an exchange but is quoted on National Association of
Securities Dealers Automated Quotation System (NASDAQ) or a successor
quotation system, the mean between the closing representative bid and asked
prices for the Common Stock on the trading day previous to such date as
reported by NASDAQ or such successor quotation system, or if shares were not
traded on the trading day previous to such date, then on the next preceding
date on which a trade occurred; or (iii) if Common Stock is not publicly
traded on an exchange and not quoted on NASDAQ or a successor quotation
system, the fair market value of a share of Common Stock as established by
the Board acting in good faith.
6. EFFECT OF CHANGE IN CONTROL.
Notwithstanding anything contained in this Agreement to the
contrary, in the event of a Change in Control (as described below), all
unvested shares subject to the Option shall immediately vest and become fully
exercisable during the Exercise Term; PROVIDED, HOWEVER, that
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this acceleration of exercisability shall not take place if:
(a) This Option becomes unexercisable under
Section 4.4 prior to said effective date; or
(b) In connection with such an event, provision is
made for an assumption of this Option or a substitution
therefor of a new option by a successor corporation, or a
parent or subsidiary of such a corporation, in either case,
with appropriate adjustments as to the number of shares of
stock covered by this Option, the purchase price of such
shares of stock and/or the kind of stock or securities that
may be acquired upon exercise of this Option.
For purposes of this Agreement, the term "Change in Control"
shall mean the occurrence of any of the following:
(a) An acquisition (other than directly from the
Company) of any voting securities of the Company entitled to
vote generally in the election of the Board ("Voting
Securities") by any Person, immediately after which such
Person has Beneficial Ownership of fifty percent (50%) or more
of the then outstanding shares of Common Stock and any other
securities into which such shares are changed or for which
such shares are exchanged (the "Shares") or the combined
voting power of the Company's then outstanding Voting
Securities, PROVIDED, HOWEVER, in determining whether a Change
in Control has occurred pursuant to this Section 6, Shares or
Voting Securities which are acquired in a "Non-Control
Acquisition" (as hereinafter defined) shall not constitute an
acquisition which would cause a Change in Control. A
"Non-Control Acquisition" shall mean an acquisition by (i) an
employee benefit plan (or a trust forming a part thereof)
maintained by (A) the Company or (B) any corporation or other
Person of which a majority of its voting power or its voting
equity securities or equity interest is owned, directly or
indirectly, by the Company (for purposes of this definition, a
"Related Entity"), (ii) the Company or any Related Entity, or
(iii) any Person in connection with a "Non-Control
Transaction" (as hereinafter defined);
(b) The individuals who, as of the date hereof, are
members of the Board (the "Incumbent Board"), cease for any
reason to constitute at least a majority of the members of the
Board, or following a Merger (as hereinafter defined) which
results in a Parent Corporation, the board of directors of the
ultimate Parent Corporation (as hereinafter defined);
PROVIDED, HOWEVER, that if the election, or nomination for
election by the Company's common stockholders, of any new
director was approved by a vote of at least two-thirds of the
Incumbent Board, such new director shall, for purposes of this
Section 6, be considered as a member of the Incumbent Board;
PROVIDED FURTHER, HOWEVER, that no individual shall be
considered a member of the Incumbent Board if such individual
initially assumed office as a result of either an actual or
threatened "Election Contest" (as described in Rule 14a-11
promulgated under the Securities Exchange Act of 1934,
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as amended (the "Exchange Act")) or other actual or
threatened solicitation of proxies or consents by or on
behalf of a Person other than the Board (a "Proxy Contest")
including by reason of any agreement intended to avoid or
settle any Election Contest or Proxy Contest; or
(c) The consummation of:
(i) A merger, consolidation or
reorganization with or into the Company or in which
securities of the Company are issued (a "Merger"),
unless such Merger is a "Non-Control Transaction." A
"Non-Control Transaction" shall mean a Merger where:
(A) the stockholders of the Company,
immediately before such Merger own directly
or indirectly immediately following such
Merger at least fifty percent (50%) of the
combined voting power of the outstanding
voting securities of (x) the corporation
resulting from such Merger (the "Surviving
Corporation") if fifty percent (50%) or more
of the combined voting power of the then
outstanding voting securities of the
Surviving Corporation is not Beneficially
Owned, directly or indirectly by another
Person (a "Parent Corporation"), or (y) if
there are one or more Parent Corporations,
the ultimate Parent Corporation; and
(B) the individuals who were members
of the Incumbent Board immediately prior to
the execution of the agreement providing for
such Merger constitute at least a majority
of the members of the board of directors of
(x) the Surviving Corporation, if there is
no Parent Corporation, or (y) if there are
one or more Parent Corporations, the
ultimate Parent Corporation; and
(C) no Person other than (1) the
Company, (2) any Related Entity, (3) any
employee benefit plan (or any trust forming
a part thereof) that, immediately prior to
such Merger was maintained by the Company or
any Related Entity, or (4) any Person who,
together with its Affiliates, immediately
prior to such Merger, had Beneficial
Ownership of fifty percent (50%) or more of
the then outstanding Voting Securities or
Shares, owns, together with its Affiliates,
Beneficial Ownership of (i) fifty percent
(50%) or more of the combined voting power
of the outstanding voting securities or
common stock of (x) the Surviving
Corporation if there is no Parent
Corporation, or (y) if there are one or more
Parent Corporations, the ultimate Parent
Corporation.
(ii) A complete liquidation or
dissolution of the
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Company; or
(iii) The sale or other disposition of all
or substantially all of the assets of the Company to
any Person (other than a transfer to a Related Entity
or under conditions that would constitute a
Non-Control Transaction with the disposition of the
assets being regarded as a Merger for this purpose or
the distribution to the Company's stockholders of the
stock of a Related Entity or any other assets).
Notwithstanding the foregoing, a Change in Control shall
not be deemed to occur solely because any Person (the "Subject Person")
acquired Beneficial Ownership of more than the permitted amount of the then
outstanding Shares or Voting Securities as a result of the acquisition of
Shares or Voting Securities by the Company which, by reducing the number of
Shares or Voting Securities then outstanding, increases the proportional
number of shares Beneficially Owned by the Subject Persons, provided that if
a Change in Control would occur (but for the operation of this sentence) as a
result of the acquisition of Shares or Voting Securities by the Company, and
(1) before such share acquisition by the Company the Subject Person becomes
the Beneficial Owner of any new or additional Shares or Voting Securities in
contemplation of such share acquisition by the Company or (2) after such
share acquisition by the Company the Subject Person becomes the Beneficial
Owner of any new or additional Shares or Voting Securities which in either
case increases the percentage of the then outstanding Shares or Voting
Securities Beneficially Owned by the Subject Person, then a Change in Control
shall occur.
For purposes of this Section 6, "Person" shall mean
`person' as such term is used for purposes of Section 13(d) or 14(d) of the
Exchange Act, including without limitation, any individual, corporation,
limited liability company, partnership, trust, unincorporated organization,
government or any agency or political subdivision thereof, or any other
entity or any group of Persons.
For purpose of this Section 6, "Beneficial Ownership" shall
mean ownership within the meaning of Rule 13d-3 promulgated under the
Exchange Act.
7. RESTRICTIONS ON TRANSFER OF SHARES; RIGHT OF FIRST REFUSAL.
(a) Except for Transfers otherwise permitted by Section 7(c)
below, the Optionee agrees that he will not transfer, sell, assign,
pledge, hypothecate or otherwise dispose of (each, a "Transfer") any
shares of Common Stock purchased upon exercise of the Option or any
portion thereof (the "Exercise Shares") at any time without complying
with the right of first refusal set forth in Section 7(b) below.
(b) If at any time the Optionee receives a bona fide offer
("Offer") to purchase any or all of his Exercise Shares from a third
party (the "Offeror") which the Optionee wishes to accept, the Optionee
shall cause the Offer to be reduced to writing and shall notify the
Company in writing of his wish to accept the Offer. The Optionee's
notice shall contain an irrevocable offer to sell such Exercise Shares
to the Company (in the manner
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set forth below) at a purchase price equal to the price contained
in, and on the same terms and conditions of, the Offer, and shall be
accompanied by a true copy of the Offer (which shall identify the
Offeror). At any time within thirty (30) days after the date of the
receipt by the Company of the Optionee's notice, the Company shall
have the right and option to purchase all, but not less than all, of
the Exercise Shares covered by the Offer either (i) at the same
price and on the same terms and conditions as the Offer or (ii) if
the Offer includes any consideration other than cash, then, at the
sole option of the Company, at the all-equivalent cash price,
determined in good faith by the Board, by delivering a check or
checks in the appropriate amount to the Optionee against delivery of
certificates or instruments representing the Exercise Shares so
purchased, appropriately endorsed by the Optionee; provided that the
price to be paid as described above shall be paid first by reducing
the amount of any indebtedness due from the Optionee to the Company.
The Company may also elect (but shall have no obligation) to cause
its designee to purchase Exercise Shares covered by the Offer. If,
at the end of such 30-day period, the Company has not tendered the
purchase price for such Exercise Shares in the manner set forth
above, the Optionee may during the succeeding 30-day period sell not
less than all of the Exercise Shares covered by the Offer to the
Offeror on terms no less favorable to the Optionee than those
contained in the Offer. No sale may be made to any Offeror unless
the Offeror agrees in writing with the Company to be bound by the
provisions of this Section 7. Promptly after such sale, the Optionee
shall notify the Company of the consummation thereof and shall
furnish such evidence of the completion and time of completion of
such sale and of the terms thereof as may reasonably be requested by
the Company. If, at the end of 30 days following the expiration of
the 30-day period during which the Company may purchase the Exercise
Shares, the Optionee has not completed the sale of such Exercise
Shares as aforesaid, all the restrictions on Transfer contained in
this Agreement in effect at that time shall again be in effect with
respect to such Exercise Shares.
(c) The provisions of Sections 7(a) and 7(b) shall not apply
to the following Transfers of Exercise Shares:
(i) a Transfer made by the Optionee to the
Company; and
(ii) a Transfer made to any of the following
"Permitted Transferees":
(1) upon the death of the Optionee to his
executors, administrators, testamentary trustees,
legatees or beneficiaries (the "Optionee's Estate")
or a Transfer to the executors, administrators,
testamentary trustees, legatees or beneficiaries of a
person who has become a holder of Exercise Shares in
accordance with the terms of this Agreement;
(2) a Transfer made to a trust or
custodianship the beneficiaries of which include only
the Optionee, his spouse and his lineal descendants,
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including adopted children (an "Optionee's Trust");
or
(3) a Transfer to the Optionee's spouse and
his lineal descendants, including adopted children.
(d) No Transfer of Exercise Shares, whether or not permitted
by Sections 7(a), 7(b) or 7(c) hereof, shall be made or recorded on the
books of the Company, and any such Transfer shall be void and of no
effect, unless:
(i) Such Transfer of the Exercise Shares is made
pursuant to an effective registration statement under the
Securities Act, or pursuant to an exemption therefrom with
respect to which the Company may, upon request, require a
satisfactory opinion of counsel for the Optionee (which
counsel shall be acceptable to the Company) to the effect that
such Transfer is exempt from the provisions of Section 5 of
the Securities Act; and
(ii) The transferee of the Exercise Shares agrees to
be bound by, and executes a counterpart to, an agreement with
the Company with terms substantially similar to the terms set
forth in this Section 7.
(e) Immediately prior to any Transfer of Exercise Shares to an
Optionee's Trust, the Optionee shall provide the Company with a copy of
the instruments creating the Optionee's Trust with the identity of the
beneficiaries of the Optionee's Trust. The Optionee shall notify the
Company prior to any change in the identity of any beneficiary of the
Optionee's Trust.
(f) No Transfer of Exercise Shares in violation of this
Agreement shall be made or recorded on the books of the Company and any
such Transfer shall be void and of no effect.
(g) This Section 7 shall terminate upon a Qualified Offering
by the Company.
For purposes of this Agreement, "Qualified Offering" shall
mean a firm commitment underwritten initial public offering and sale of shares
of the Company's Common Stock under the Securities Act.
8. NONTRANSFERABILITY.
Neither the Option nor any interest or right therein or part
thereof shall be sold, pledged, assigned or transferred in any manner other than
by will or the laws of descent and distribution, unless and until the Option has
been exercised or the shares underlying the Option have been issued and all
restrictions applicable to such shares have lapsed. Neither the Option nor any
interest or right therein or part thereof shall be liable for the debts,
contracts or engagements of the Optionee or his successors in interest or shall
be subject to disposition by transfer, alienation, anticipation, pledge,
encumbrance, assignment or any other means whether such
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disposition be voluntary or involuntary or by operation of law by judgment,
levy, attachment, garnishment or any other legal or equitable proceedings
(including bankruptcy), and any attempted disposition thereof shall be null
and void and of no effect, except to the extent that such disposition is
permitted by the preceding sentence. Following transfer, for purposes of the
Option, a transferee of an Option shall be deemed to be the Optionee,
provided that the Option shall be exercisable by the transferee only to the
extent and for such periods that the Option would have been exercisable if
held by the original Optionee.
9. ADJUSTMENTS.
9.1 ADJUSTMENT OF PURCHASE PRICE. The Purchase Price and
the number of shares of Common Stock issuable on exercise of the Option shall
be adjusted as set forth in this Section 9 with the intent that the economic
and other rights of the Optionee shall not be impaired.
9.2 ADJUSTMENT FOR COMBINATION OR CONSOLIDATION OF COMMON
STOCK. In the event the outstanding shares of Common Stock shall be combined
or consolidated, by reclassification or otherwise, into a lesser number of
shares of Common Stock, the Purchase Price in effect immediately prior to
such combination or consolidation shall, concurrently with the effectiveness
of such combination or consolidation, be proportionately increased and the
number of shares of Common Stock issuable on exercise of the Option shall be
proportionately decreased.
9.3 ADJUSTMENT FOR STOCK DIVIDEND OR SUBDIVISION. In the
event the Company at any time or from time to time after the Grant Date shall
declare or pay any dividend on the Common Stock payable in Common Stock, or
effect a subdivision of the outstanding shares of Common Stock into a greater
number of shares of Common Stock by reclassification or otherwise than by
payment of a dividend in Common Stock, then and in any such event, the
Purchase Price in effect immediately prior to such subdivision or stock
dividend shall forthwith be proportionately decreased and the number of
shares of Common Stock issuable on exercise of the Option shall be
proportionately increased.
10. NO RIGHT TO CONTINUED MEMBERSHIP ON THE BOARD OF DIRECTORS.
Nothing in this Agreement shall be interpreted or construed
to confer any right with respect to continuance of membership on the Board,
nor shall this Agreement interfere in any way with the right of the Company's
stockholders or the Board to remove the Optionee from the Board at any time.
11. RESERVATION OF SHARES.
The Company shall at all times during the term of the
Option reserve and keep available such number of shares of Common Stock as
will be sufficient to satisfy the requirements of this Agreement.
12. SHARE LEGEND.
Each certificate representing shares of Common Stock issued
upon the exercise of
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the Option or portion thereof shall bear the following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE
TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR
OTHERWISE DISPOSED OF (A "TRANSFER") EXCEPT IN ACCORDANCE WITH
THE PROVISIONS OF A STOCK OPTION AGREEMENT. COPIES OF THE
STOCK OPTION AGREEMENT ARE ON FILE WITH THE COMPANY.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT") OR
STATE SECURITIES LAWS AND NO TRANSFER OF THESE SECURITIES MAY
BE MADE EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT, OR (B) PURSUANT TO AN EXEMPTION
THEREFROM WITH RESPECT TO WHICH THE COMPANY MAY, UPON REQUEST,
REQUIRE A SATISFACTORY OPINION OF COUNSEL FOR THE HOLDER THAT
SUCH TRANSFER IS EXEMPT FROM THE REQUIREMENTS OF THE ACT."
13. MODIFICATION OF AGREEMENT.
This Agreement may be modified, amended, suspended or
terminated, and any terms or conditions may be waived, but only by a written
instrument executed by the parties hereto.
14. SEVERABILITY.
Should any provision of this Agreement be held by a court of
competent jurisdiction to be unenforceable or invalid for any reason, the
remaining provisions of this Agreement shall not be affected by such holding and
shall continue in full force in accordance with their terms.
15. GOVERNING LAW.
The validity, interpretation, construction and performance of
this Agreement shall be governed by the laws of the State of Delaware without
giving effect to the conflicts of laws principles thereof.
16. SUCCESSORS IN INTEREST.
This Agreement shall inure to the benefit of and be binding
upon any successor to the Company. All obligations imposed upon the Optionee and
all rights granted to the Company under this Agreement shall be final, binding
and conclusive upon the Optionee's heirs, executors, administrators and
successors.
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17. TITLES.
Titles are provided herein for convenience only and are not to
serve as a basis for interpretation or construction of this Agreement.
18. NOTICES.
Any notice to be given under the terms of this Agreement to
the Company shall be addressed to the Company in care of its Secretary, and any
notice to be given to the Optionee shall be addressed to him at the address
given beneath his signature hereto. By a notice given pursuant to this Section
18, either party may hereafter designate a different address for notices to be
given to him. Any notice which is required to be given to the Optionee shall, if
the Optionee is then deceased, be given to the Optionee's personal
representative if such representative has previously informed the Company of his
status and address by written notice under this Section 18. Any notice shall be
deemed duly given when delivered in person or when deposited in the U.S. mail,
registered or certified, postage prepaid and mailed to the respective addresses
set forth herein, unless a party changes its address for receiving notices by
giving notice in accordance with this Section 18, in which case, to the address
specified in such notice.
19. ADMINISTRATION.
The Board shall have the power to interpret this Agreement.
All actions taken and all interpretations and determinations made by the Board
in good faith shall be final and binding upon the Optionee, the Company and all
other interested persons. No member of the Board shall be personally liable for
any action, determination or interpretation made in good faith with respect to
the Option.
13
IN WITNESS WHEREOF, the Agreement has been executed by the
parties hereto effective as of the date first written above.
TELLIUM, INC.
By:
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Name of the Optionee:
Address of the Optionee:
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