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Exhibit 10.1
TRANSWITCH
CORPORATION
Director Non-Qualified
Stock Option Agreement
TranSwitch Corporation, a
Delaware corporation (the “Company”), hereby grants as
of
to
(the “Optionee”), an option to purchase a maximum of
shares (the “Option Shares”) of its Common Stock,
$.001 par value (“Common Stock”), at the
price of
per share, on the following terms and conditions:
1. Grant Under 1995
Stock Option Plan . This option is granted pursuant to and
is governed by the Company’s Third Amended and Restated 1995
Stock Plan, as amended from time to time (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 a director (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:
This option will vest as
follows:
The foregoing rights are cumulative and,
unless the Optionee’s Business Relationship with the Company
is terminated by reason of death, disability or dissolution as
defined in Section 5 or termination for Cause as defined in
Section 4(c), may be exercised up to and including the date
which is seven (7) years from the date this option is granted.
All of the foregoing rights are subject to Sections 4
and 5, as appropriate, if the Optionee ceases to maintain a
Business Relationship with the Company, dies, becomes disabled or
undergoes dissolution while involved in a Business Relationship
with the Company.
4. Termination of
Business Relationship .
(a) Termination Other
than for Cause : If the Optionee’s Business
Relationship with the Company is terminated, other than by reason
of death, disability or dissolution 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 on 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) the substantial and
continuing failure of the Optionee, after notice thereof, to render
services to the Company or Related Corporation in accordance with
the terms or requirements of the Optionee’s Business
Relationship with the Company; (ii) disloyalty, gross
negligence, willful misconduct, dishonesty or breach of fiduciary
duty to the Company or Related Corporation; (iii) the
commission of an act of embezzlement or fraud; (iv) deliberate
disregard of the rules or policies of the Company or Related
Corporation which results in direct or indirect loss, damage or
injury to the Company or Related Corporation; (v) the
unauthorized disclosure of any trade secret or confidential
information of the Company or Related Corporation; or (vi) the
commission of an act which constitutes unfair competition with the
Company or Related Corporation or which induces any customer or
supplier to break a contract with the Company or Related
Corporation.
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 180 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 180 days after
such termination, but not later than the scheduled expiration
date.
(c) Effect of
Termination : At the expiration of such 180-day period
provided in paragraph (a) or (b) of this Section 5
or the scheduled expiration date, whichever is the earlier, this
option shall terminate 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 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.
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