Exhibit 4.14
STOCK OPTION AGREEMENT
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[Incentive Stock Option Plan]
THIS STOCK OPTION AGREEMENT is made as of the ______ day of _____, 19__,
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by and between CLARINET COMMUNICATIONS CORP. ("the Corporation") and
(Name) ("Employee").
WITNESSETH
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WHEREAS, the Corporation has adopted the 1995 Incentive Stock Option Plan
of Clarinet Communications Corp. (the "Plan"), pursuant to which the
Corporation's Board of Directors ("the Board") has been authorized to grant
one or more options to purchase shares of the Corporation's common stock to
Employees of the Corporation as an inducement to serve as Employees of the
Corporation and its subsidiaries; and
WHEREAS, the Employee is an Employee of the Corporation whose services
the Corporation wishes to retain; and
WHEREAS, on (Grant Date), the Board awarded Employee an option under the
Plan to purchase (Total Shares) shares of the Corporation's common stock,
which option shall be subject to such terms and conditions as will permit it
to qualify as an "incentive stock option" pursuant to Section 422 of the
Internal Revenue Code; and
WHEREAS, the parties desire to incorporate the terms and conditions of
such stock option award into a formal agreement;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
1. Grant of Options to Purchase Shares.
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The Employee is hereby granted the option to (Total Shares) shares of
the Corporation's common stock ("the Optioned stock") subject to the terms and
conditions of the 1995 Incentive Stock Option Plan of Clarinet Communications
Corp., and the following additional terms and conditions:
a. Option Price. The purchase price of each share of common stock
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subject to an option granted under the Plan shall (Exercise Price) DOLLARS,
the fair market value of each share of common stock on the date the option was
granted, as determined by the Board.
b. Vesting. The options subject to this grant shall vest over a period
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of four (4) years from the date (Vest Date). One-fourth (1/4) of the total
options granted shall vest after the first year, and annually thereafter in
equal installments. The Employee may purchase shares subject to this option
only after such shares have become vested.
c. Term and Expiration of Option. The length of time for which the
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option shall be outstanding (the Option Term) is TEN (10) years from the date
of grant and shall therefore expire on (Expiration Date).
2 Incentive Stock Option Under Section 422 of the Internal Revenue Code.
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This option is hereby declared an "incentive stock option" pursuant to
Section 422 of the Internal Revenue Code and the regulations promulgated
thereunder.
3. Nontransferability of Option.
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During the lifetime of the Employee, any option granted under the Plan
shall be exercisable only by the Employee and shall not be assignable or
transferable by the Employee other than by Will or the laws of descent and
distribution.
4. Exercise of Option.
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To exercise any option granted under the Plan, the Employee must, prior
to the expiration of the Option Term, provide the Board with written
notification of such exercise on such form as the Board shall deem
appropriate. A copy of such form is attached hereto as Exhibit A. Within
fifteen (15) days after such notification, payment in full of the option price
for the acquired common stock must be made, either in cash or in the form of a
certified check or bank draft. No option shall be exercisable while there is
outstanding and unexercised any incentive stock option previously granted the
Employee hereunder.
5. Effect of Termination of Employment.
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Should the Employee cease to be an Employee of the Corporation for any
reason other than death, disability or termination of employment for cause,
then the Employee shall have a thirty (30) day period (an "Accelerated Term")
after such cessation of service in which to exercise any outstanding options
granted the Employee under the Plan, but only to the extent such outstanding
options were exercisable on the date of the Employee's cessation of service as
an Employee and subject to the proviso that no such option shall be
exercisable after the expiration of the option term applicable thereto.
6. Effect of Employee's Disability.
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Should the Employee cease to be employed by the Corporation by reason of
the Employee's disability, then all outstanding options granted the Employee
under the Plan which were fully exercisable on the date of the Employee's
cessation of service may be exercised at any time within one (1) year
thereafter (an Accelerated Term) subject to the proviso that no such option
shall be exercisable after the expiration of the Option Term applicable
thereto. Disability shall be defined as the permanent incapacity of a
participant, by reason of physical or mental illness, to perform his or her
usual duties for the Corporation or a subsidiary. Disability shall be
determined by the Board, after consideration of such medical evidence as it
may require.
7. Effect of Termination for Cause.
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Should the Employee's employment with the Corporation be terminated for
cause, then any outstanding options held by the Employee by reason of grants
made under the Plan shall terminate as of the date of the Employee's
termination for cause.
8. Effect of Employee's Death.
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If the Employee should die while in the Corporation's employ, or prior to
the expiration of an Accelerated Term, then any outstanding options granted
the Employee under the Plan which were fully exercisable on the date of the
Employee's death may be exercised at any time within three (3) months after
the Employee's death by the personal representative of the Employee's estate
or by any person or persons to whom the option is transferred pursuant to the
Employee's Will or in accordance with the laws of descent and distribution,
subject to the proviso that no such option shall be exercisable by any person
after the expiration of the Option Term or any Accelerated Term applicable
thereto.
9. Other Option Terms.
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The stock issued pursuant to this Plan is subject to restrictions on
transfer of shares. The options may not be exercised by the Employee unless
in accordance with the laws of the State of California and the Securities Act
of 1933, as amended. Employee understands that the Corporation is under no
obligation to register, list or qualify the shares to effect such a
compliance. Any option granted pursuant to the Plan shall contain any other
terms or conditions that the Board of Directors and/or the Corporation's legal
counsel deem necessary.
10. Restrictions on Transfer of Shares.
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All options and shares issued pursuant to the Plan shall be subject to
the following restrictions:
a. Neither the optionee nor the optionee's heirs, executors, or
administrators shall sell, exchange, give, transfer, pledge, hypothecate, or
otherwise dispose of any options or shares in the Corporation or any interest
in the options or shares except as provided in the Plan.
b. Upon termination of employment or death of optionee, the
unvested shares acquired by optionee pursuant to this Plan shall be subject to
a right of repurchase by the Corporation on the terms and conditions as set
forth for the right of first refusal below."
c. Any purported sale or transfer of shares by the optionee
shall be subject to a right by the Corporation to a right of first refusal to
repurchase such shares at the greater of the price paid for such shares by the
Optionee, book value, as determined by subparagraph d, below, or upon
substantially the same terms and conditions of the proposed purchase by the
purchaser. In the event optionee wishes to transfer some or all of optionee's
fully-vested option shares, optionee must first disclose in writing all
material terms of such transfer to the Corporation. The Corporation will then
have the right to purchase from optionee, within the thirty (30)-day period
following receipt of such written notice (or such longer period as may be
agreed to by the Company and optionee), all (or any part of the shares with
optionee's consent) of the shares acquired upon exercise of option on
substantially the same terms and conditions as stated in the written notice.
The right of first refusal shall terminate upon the date of the first
registration of an equity security of the Company under Section 12 of the
Exchange Act.
d. For the purposes of the right of repurchase and right of
first refusal, book value will be calculated as set forth in Paragraph 10.d of
the 1995 Stock Option Plan.
e. The restrictions on transfer of shares set forth herein shall not
be applicable in the event of merger or acquisition of the Corporation by
terms of which a general offer to purchase shares is extended to all
shareholders of the Corporation.
11. Amendment and Termination of the Plan.
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The Board of Directors may at any time amend or terminate the Plan. No
option may be granted after termination. The amendment or termination of the
Plan shall not, however, alter any optionee's rights or obligations under an
option previously granted, unless the optionee consents to that alteration.
12. Accrual of Shareholder's Rights.
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The Employee shall have no rights as a stockholder with respect to the
Optioned Stock until such time as the Employee shall have exercised the option
in accordance with the terms of this Agreement, paid the required option price
and received the stock certificate(s) representing the purchased shares of the
Optioned Stock.
13. No Right of Employment.
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Nothing in this Plan or any grant made pursuant to this Plan shall confer
on the Employee any right to continue in the employment of the Corporation, or
limit in any way the right of the Corporation to terminate the Employee's
employment or other relationship at any time, with or without cause.
14. Tax Consequences.
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Exercise of stock options may have adverse tax consequences. Employee
should consult a tax adviser before exercising any option or disposing of any
shares.
15. Notices.
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Any notice required or permitted to be given under this Agreement shall
be valid and effective only if (i) actually delivered or sent by registered or
certified mail, return receipt requested and postage prepaid, to the party to
be notified, and (ii) the date of such delivery or mailing is on or before the
due date for such notice.
16. Miscellaneous.
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This Agreement shall be governed in all respects by the laws of the State
of California. Any modification of this Agreement must be in writing and
signed by a duly authorized officer of the Corporation.
In the event of a public offering of Clarinet stock, or of a merger of
ClariNet with another firm with that firm's stock provided in payment for the
ClariNet stock, the employee agrees to abide by any stock sale 'lockup'
agreements negotiated by ClariNet as required terms of the deal
IN WITNESS WHEREOF, the Corporation has caused its duly authorized officer to
execute and deliver this Agreement and the Employee has executed this
Agreement on (Date).
EMPLOYEE CLARINET COMMUNICATIONS CORP.
By
Its
TO: The Board of Directors, Clarinet Communications Corp.
FROM:
RE: Exercise of Stock Options
The undersigned hereby exercises his/her option to purchase
shares of the common stock of Clarinet Communications Corp., subject to the
terms and conditions of the foregoing Stock Option Agreement.
EMPLOYEE
DATE