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Exhibit 10.16
ACME PACKET, INC.
INCENTIVE STOCK OPTION AGREEMENT
This
INCENTIVE STOCK OPTION AGREEMENT, dated as of May 19, 2004
(this
"AGREEMENT"), is between ACME PACKET, INC., a Delaware corporation
(the
"COMPANY"), and Andrew Ory (the "OPTIONEE"). Capitalized terms used
herein
without definition shall have the meaning ascribed to such terms in
the
Company's 2000 Equity Incentive Plan, a copy of which is attached
hereto as
EXHIBIT A (the "PLAN").
1.
GRANT OF OPTION.
Pursuant to the Plan, the Company grants to the
Optionee an option (the "OPTION") to purchase from the Company all
or any number
of an aggregate of 100,000 shares, subject to adjustment pursuant
to Section 8
of the Plan (the "OPTION SHARES"), of the Company's common stock,
$.001 par
value per share, at a price of $.33 per share. The Option is
granted as of May
19, 2004 (the "GRANT DATE").
2.
CHARACTER OF
OPTION. The Option is intended to be treated as an
"incentive stock option" within the meaning of Section 422 of the
Internal
Revenue Code of 1986, as amended (the "CODE").
3.
DURATION OF
OPTION. Unless subject to earlier expiration or
termination pursuant to the terms of the Plan, the Option shall
expire on the
five year anniversary of the Grant Date.
4.
EXERCISE OF
OPTION.
(a)
VESTING SCHEDULE.
Until its expiration or termination, the Option may
be exercised, in the manner specified in Section 7.1(g) of the
Plan, for 25% of
the Option Shares on May 19, 2005, and for the balance of the
Option Shares in
monthly installments, with each installment being as nearly equal
as practicable
(as determined by the Company in its reasonable discretion), at the
end of each
calendar month beginning June 30, 2005 and ending May 31, 2008. The
provisions
of this Section 4(a) shall be subject to the provisions of Section
7.l(e) of
the Plan.
(b)
ACCELERATION OF
VESTING
Notwithstanding anything in Section 4(a) above to the contrary but
subject
to the provisions of Section 7.1(e) of the Plan, in the event a
Sale of the
Company Transaction (as defined below in Section 4(d) below) occurs
and the
Option is not exercisable in full for all of the Option Shares
immediately prior
to such Sale of the Company Transaction, then the exercisability of
the Option
shall be accelerated such that, immediately prior to such Sale of
the Company
Transaction, the Option shall become exercisable for an additional
number of
Option Shares equal to fifty percent (50%) of the then Unvested
Option Shares
(as defined below in Section 4(d) below). The foregoing provisions
of this
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Section 4(b) shall be implemented ratably across all Unvested
Option Shares that
are subject to the Option immediately prior to such Sale of the
Company
Transaction regardless o
