Exhibit 4.6
TRANSWITCH CORPORATION
Non-Qualified Stock Option Agreement
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TranSwitch Corporation, a Delaware corporation (the "Company"), hereby
grants as of __________, 199_ 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 Second Amended and Restated 1995 Stock Plan. This
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option is granted pursuant to and is governed by the Company's Second Amended
and Restated 1995 Stock Plan (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
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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
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Optionee has continued to serve the Company or any Related Corporation in the
capacity of an employee, officer, director or consultant (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:
[INSERT VESTING SCHEDULE]
The foregoing rights are cumulative and, while the Optionee continues to
maintain a Business Relationship with the Company, may be exercised up to and
including the date which is ten (10) 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.
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(a) Termination Other than for Cause: If the Optionee's Business
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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 after the
passage of ninety (90) days from the date the Business Relationship ceases, but
in no event later than 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
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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
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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.
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(a) Death: If the Optionee is a natural person who dies while
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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
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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
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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,
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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
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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. Any
fractional share with respect to which an installment of this option cannot be
exercised because of the limitation contained in the preceding sentence shall
remain subject to this option and shall be available for later purchase by the
Optionee in accordance with the terms hereof.
7. Payment of Price. (a) The option price shall be paid in the
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following manner:
(i) in United States dollars in cash or by check;
(ii) in the discretion of the Board of Directors/Committee,
subject to paragraph 7(b) below, through delivery of
shares of Common Stock having a fair market value
(determined by the Board of Directors of the Company or
a committee appointed by the Board) equal as of the date
of the exercise to the cash exercise price of the
Option;
(iii) in the discretion of the Board of Directors/Committee,
by delivery of the grantee's personal recourse note
bearing interest payable not less than annually at no
less than 100% of the lowest applicable Federal rate, as
defined in Section 1274(d) of the Code,
(iv) in the discretion of the Board of Directors/Committee,
consistent with applicable law, through the delivery of
an assignment to the Company of a sufficient amount of
the proceeds from the sale of the Common Stock acquired
upon exercise of the Option and an authorization to the
broker or selling agent to pay that amount to the
Company, which sale shall be at the participant's
direction at the time of exercise; or
(v) in the discretion of the Board of Directors/Committee,
by any combination of (i), (ii), (iii) and (iv) above.
(b) Limitations on Payment by Delivery of Common Stock: If the
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Optionee delivers Common Stock held by the Optionee ("Old Stock") to the Company
in full or partial payment of the option price, and the Old Stock so delivered
is subject to restrictions or limitations imposed by agreement between the
Optionee and the Company, an equivalent number of Option Shares shall be subject
to all restrictions and limitations applicable to the Old Stock to the extent
that the Optionee paid for the Option Shares by delivery of Old Stock, in
addition to
any restrictions or limitations imposed by this Agreement. Notwithstanding the
foregoing, the Optionee may not pay any part of the exercise price hereof by
transferring Common Stock to the Company unless the Optionee has owned such
Common Stock free of any substantial risk of forfeiture for at least six months.
8. Method of Exercising Option. Subject to the terms and conditions of
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this Agreement, this option may be exercised by written notice to the Company,
at its principal executive office, or to such transfer agent as the Company
shall designate. Such notice shall state the election to exercise this option
and the number of Option Shares for which it is being exercised and shall be
signed by the person or persons so exercising this option. Such notice shall be
accompanied by payment of the full purchase price of such shares, and the
Company shall deliver a certificate or certificates representing such shares as
soon as practicable after the notice shall be received. Such certificate or
certificates shall be registered in the name of the person or persons so
exercising this option (or, if this option shall be exercised by the Optionee
and if the Optionee shall so request in the notice exercising this option, shall
be registered in the name of the Optionee and another person jointly, with right
of survivorship). In the event this option shall be exercised, pursuant to
Section 5 hereof, by any person or persons other than the Optionee, such notice
shall be accompanied by appropriate proof of the right of such person or persons
to exercise this option.
9. Option Not Transferable. This option is not transferable or
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assignable except by will or by the laws of descent and distribution or pursuant
to a valid domestic relations order. Except as set forth in the previous
sentence, during the Optionee's lifetime, only the Optionee can exercise this
option.
10. No Obligation to Exercise Option. The grant and acceptance of this
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option imposes no obligation on the Optionee to exercise it.
11. No Obligation to Continue Business Relationship. Neither the Plan,
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this Agreement, nor the grant of this option imposes any obligation on the
Company or any Related Corporation to continue to maintain a Business
Relationship with the Optionee.
12. No Rights as Stockholder until Exercise. The Optionee shall have no
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rights as a stockholder with respect to the Option Shares until the date of
issuance of a stock certificate to the Optionee. Except as is expressly
provided in the Plan with respect to certain changes in the capitalization and
stock dividends of the Company, no adjustment shall be made for dividends or
similar rights for which the record date is before the date such stock
certificate is issued.
13. Capital Changes and Business Successions. The Plan contains
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provisions covering the treatment of options in a number of contingencies such
as stock splits and mergers. Provisions in the Plan for adjustment with respect
to stock subject to options and the related provisions with respect to
successors to the business of the Company are hereby made applicable hereunder
and are incorporated herein by reference.
14. Withholding Taxes. If the Company or any Related Corporation in its
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discretion determines that it is obligated to withhold any tax in connection
with the exercise of this option, the vesting or transfer of the Option Shares
acquired on the exercise of this option, or the making of a distribution or
other payment with respect to the Option Shares, the Optionee hereby agrees that
the Company or any Related Corporation may withhold from the Optionee's wages or
other remuneration the appropriate amount of tax. At the discretion of the
Company or Related Corporation, the amount required to be withheld may be
withheld in cash from such wages or other remuneration or in kind from the
Common Stock or other property otherwise deliverable to the Optionee on exercise
of this option. The Optionee further agrees that, if the Company or Related
Corporation does not withhold an amount from the Optionee's wages or other
remuneration sufficient to satisfy the withholding obligation of the Company or
Related Corporation, the Optionee will make reimbursement on demand, in cash,
for the amount underwithheld.
15. Provision of Documentation to Optionee. By signing this Agreement the
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Optionee acknowledges receipt of a copy of this Agreement and a copy of the
Plan.
16. Miscellaneous.
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(a) Notices: All notices hereunder shall be in writing and shall be
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deemed given when sent by certified or registered mail, postage prepaid, return
receipt requested, to the address set forth below. The addresses for such
notices may be changed from time to time by written notice given in the manner
provided for herein.
(b) Entire Agreement; Modification: This Agreement constitutes the
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entire agreement between the parties relative to the subject matter hereof, and
supersedes all proposals, written or oral, and all other communications between
the parties relating to the subject matter of this Agreement. This Agreement
may be modified, amended or rescinded only by a written agreement executed by
both parties.
(c) Severability: The invalidity, illegality or unenforceability of
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any provision of this Agreement shall in no way affect the validity, legality or
enforceability of any other provision.
(d) Successors and Assigns: This Agreement shall be binding upon and
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inure to the benefit of the parties hereto and their respective successors and
assigns, subject to the limitations set forth in Section 9 hereof.
(e) Governing Law: This Agreement shall be governed by and
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interpreted in accordance with the laws of the State of Delaware, without giving
effect to the principles of the conflicts of laws thereof. The preceding choice
of law provision shall apply to all claims, under any theory whatsoever, arising
out of the relationship of the parties contemplated herein.
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IN WITNESS WHEREOF, the Company and the Optionee have caused this
instrument to be executed as of the date first above written.
TranSwitch Corporation
0 Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxxx 00000
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Optionee
By:
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Print Name of Optionee [Name of officer]
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Street Address Title
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City State Zip Code