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Exhibit 4.10
TOLLGRADE COMMUNICATIONS, INC.
NON-EMPLOYEE DIRECTOR
NONSTATUTORY STOCK OPTION AGREEMENT
THIS AGREEMENT is made and entered into this _____ day of
____________, 199__, by and between TOLLGRADE COMMUNICATIONS, INC., a
Pennsylvania corporation (the "Company") and ______________________, an
individual (the "Holder").
WHEREAS, the Company desires to issue, and the Holder desires to
receive, an option to purchase shares of the common stock of the Company,
pursuant to the terms described herein.
NOW, THEREFORE, in consideration of the terms and conditions contained
herein and intending to be legally bound hereby, the parties agree as follows:
1. Grant of Option. The Company hereby confirms the grant to
the Holder on ____________ (the "Date of Grant") of an option (the "Option") to
purchase, in accordance with the terms hereof, up to __________ (________)
shares of common stock of the Company, par value $.20 per share (the "Common
Stock") at an option price of $________ per share, under and subject to the
terms and conditions of the Company's 1995 Long-Term Incentive Compensation
Plan, as amended (the "Plan") and this Agreement. The Plan is incorporated
herein by reference and made a part hereof as though set forth in full herein.
Terms which are capitalized herein but which are not defined herein have the
same meaning as in the Plan unless the context otherwise requires.
The Option confirmed hereby is a nonstatutory stock option as that
term is defined in Section 2.20 of the Plan. Subject to the terms of Section
6.9 of the Plan regarding the periods during which stock options may be
exercised upon termination of Board service, and Section 14.1 of the Plan
regarding the periods during which the Option may be exercised during a
Change-in-Control (as defined in the Plan), the Option shall be exercisable as
follows:
(a) From and after ______________, the Option shall be
exercisable for _________ shares covered hereby.
(b) From and after ______________, the Option shall be
exercisable for an additional ________________ shares covered hereby.
(c) From and after ____________, the Option shall be
exercisable for all of the shares covered hereby.
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The Option will expire at the close of business on _________________ .
2. Acceptance of Grant of Option. The Holder accepts the grant of the
Option confirmed hereby, acknowledges having received a copy of the Plan and
agrees to be bound by the terms and provisions of the Plan, as the Plan may be
amended from time to time; provided, however, that no alteration, amendment,
revocation or termination of the Plan shall, without the written consent of the
Holder, adversely affect the rights of the Holder with respect to the Option.
3. Non-Transferability. This Option shall not be transferrable
otherwise than by Will or the laws of descent or distribution, and the Option
shall be exercisable during the lifetime of the Holder only by the Holder.
4. Procedure for Exercise of Option. The Option may be exercised only
by (a) execution and delivery by the Holder to the Company of an exercise form
or forms prescribed by the Committee; and (b) surrender of this Agreement at the
principal office of the Company. Each exercise form must set forth the number of
shares of Common Stock for which the Option is exercised and must be dated and
signed by the person exercising the Option.
Subject to the last paragraph of this Section 4, the exercise is not
effective until the Company receives payment of the full option price for the
number of shares of Common Stock for which the Option is exercised. The Option
Price shall be paid to the Company in full in the manner specified in Section
6.6 of the Plan. To the extent the Holder pays the Option Price in whole or in
part by shares of already-owned Common Stock, as permitted by the Plan, the
Company shall advise any person exercising the Option in such manner as to the
amount of any cash required to be paid to the Company for any shares
representing a fraction of a share, and such person will be required to pay any
such cash directly to the Company before any distribution of certificates
representing shares of Common Stock will be made. The person exercising the
Option should execute the form of assignment on the back of the certificate or
should deliver an executed Assignment Separate from Certificate with respect to
each stock certificate delivered in payment of the Option Price.
If any person other than the Holder exercises the Option, the exercise
material must include proof satisfactory to the Company of the right of such
person to exercise the Option, and the signature on all certificates or stock
powers must be guaranteed by a commercial bank or trust company or by a firm
having membership in the New York Stock Exchange, Inc., the American Stock
Exchange, Inc., or the National Association of Securities Dealers, Inc.
The date of exercise of the Option is the date on which the exercise
form or forms, proof of right to exercise (if required) and payment of the
Option Price are received by the Company. For purposes of determining the date
of exercise where payment of the Option Price is made in shares of
already-owned Common Stock, any cash required to be paid to the Company with
respect to a fraction of a share shall not be taken into account when
determining whether payment of the Option Price has been made.
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5. Issuance of Certificates. Subject to Section 4 above and this
Section 5, the Company will issue a certificate or certificates representing the
number of shares of Common Stock for which the Option is exercised as soon as
practicable after the date of exercise. Unless otherwise directed, the
certificate(s) will be registered in the name of the person exercising the
Option and delivered to such person. If the Option Price is paid in whole or in
part with shares of already-owned Common Stock, the Company will issue at the
same time and return to the person exercising the Option a certificate
representing the number of any excess shares included in any certificate or
certificates delivered to the Company at the time of exercise.
The obligation of the Company to issue shares on exercise of an option
is subject to the effectiveness of a Registration Statement under the
Securities Act of 1933, as amended, with respect to such shares, if deemed
necessary or appropriate by counsel to the Company. The Company is not
obligated to file such a Registration Statement. If at the time of exercise of
the Option, no such Registration Statement is in effect, the issuance of shares
on exercise of the Option may also be made subject to restrictions on the
transfer of the shares, including the placing of an appropriate legend on the
certificates restricting the transfer thereof, and to such other restrictions
as the Committee, on the advice of counsel, may deem necessary or appropriate
to prevent a violation of applicable securities laws.
6. Withholding of Taxes. The Holder will be advised by the Company as
to the amount of any federal income, employment or excise taxes required to be
withheld by the Company on any compensation income resulting from the exercise
of the Option, and the Holder will pay such taxes directly to the Company upon
request. State, local or foreign income or employment taxes may also be required
to be withheld by the Company and the Holder will also be required to pay such
taxes directly to the Company upon request. If the Holder does not pay any taxes
required to be withheld directly to the Company within ten (10) days after any
such request, the Company may withhold such taxes from any other compensation to
which the Holder is entitled from the Company. The Holder will hold the Company
harmless in acting to satisfy its withholding obligations in this manner if it
becomes necessary to do so.
7. Interpretation of Plan and Agreement. This Agreement is an award
agreement referred to in Section 6.2 of the Plan. If there is any conflict
between the Plan and this Agreement, the provisions of the Plan shall control.
However, there may be provisions in this Agreement not contained in the Plan,
which provisions shall nevertheless be effective. In addition, to the extent
that provisions of the Plan are expressly modified for purposes of this
Agreement pursuant to authorization in the Plan, the provisions of this
Agreement shall control. Any dispute or disagreement which shall arise under or
in any way relate to the construction or interpretation of the Plan or this
Agreement shall be resolved by the Board, and the decision of the Board shall be
final, binding and conclusive for all purposes.
8. Effect of Agreement on Rights of Company and Holder. This Agreement
does not confer any rights on the Holder to continue as a Director.
9. Indemnification. The Holder indemnifies and holds harmless the
Company from and against any and all loss, damages, liability or expense,
including costs and reasonable
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attorneys' fees, to which the Company may be put or may incur by reason of or in
connection with any misrepresentation made by the Holder, any breach of the
Holder's warranties, or the Holder's failure to fulfill any of his or her
covenants or agreements set forth herein.
10. Binding Effect. This Agreement shall be binding upon the
successors and assigns of the Company and upon the legal representatives,
heirs and legatees of the Holder.
11. Entire Agreement. This Agreement constitutes the entire agreement
between the parties and supersedes all prior agreements and understandings, oral
or written, between the parties with respect to the subject matter of this
Agreement.
12. Amendment. This Agreement may be amended only a written instrument
signed by the Company and the Holder.
13. Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the Commonwealth of Pennsylvania.
IN WITNESS WHEREOF, the Company and the Holder have executed this
Agreement as of the date first written above.
TOLLGRADE COMMUNICATIONS, INC.
By:
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Title:
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WITNESS: HOLDER:
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