EXHIBIT 10.4

 

OPTION AGREEMENT

 

Terms and Conditions

 

Term.  This Stock Option shall terminate and no portion will be exercisable on
the earliest of the following:  (i) the expiration date, (ii) 90 days after the
Optionee ceases to be an employee of the Company or one of its subsidiaries for
reasons other than dismissal for Cause, disability or death, (iii) the date the
Optionee ceases to be an employee of the Company or one of its subsidiaries if
such termination of employment is because of dismissal for Cause, (iv) 12 months
from the date the Optionee ceases to be an employee if such termination of
employment is because the Optionee has become permanently disabled (within the
meaning of Section 22(e)(3) of the Code), or (v) 12 months from the date of
death in the event of the death of the Optionee.  For purposes hereof, “Cause”
shall mean a determination by the Committee that the Optionee shall be dismissed
as a result of (i) any material breach by the Optionee of any agreement between
the Optionee and the Company; (ii) the conviction of, indictment for or plea of
nolo contendere by the Optionee to a felony or a crime involving moral
turpitude; or (iii) any material misconduct or willful and deliberate
non-performance (other than by reason of disability) by the Optionee of the
Optionee’s duties to the Company.  In the case of a termination of employment,
all vesting shall cease, and only the portion of the Stock Option that has
become vested and exercisable may be exercised.

 

Manner of Exercise.

 

From time to time on or prior to the expiration of this Stock Option, the
Optionee may give notice to the Company of his election to purchase some or all
of the shares of Ezenia! Inc. (“Stock”) purchasable at the time of such notice. 
This notice shall specify the number of shares of Stock to be purchased.

 

Payment of the purchase price for the shares may be made by one or more of the
following methods:  (i) in cash, by certified or bank check or other instrument
acceptable to the Committee; or (ii) by the Optionee delivering to the Company a
properly executed exercise notice together with irrevocable instructions to a
broker to promptly deliver to the Company cash or a check payable and acceptable
to the Company to pay the option purchase price, provided that in the event the
Optionee chooses to pay the option purchase price as so provided, the Optionee
and the broker shall comply with such procedures and enter into such agreements
of indemnity and other agreements as the Company shall prescribe as a condition
of such payment procedure.  Payment instruments will be received subject to
collection.

 

The shares of Stock purchased upon exercise of this Stock Option shall be
transferred to the Optionee on the records of the Company or of the transfer
agent upon compliance to the satisfaction of the Committee with all requirements
under applicable laws or regulations in connection with such issuance and with
the requirements hereof and of the Plan.  The determination of the Committee as
to such compliance shall be final and binding on the Optionee.  The Optionee
shall not be deemed to be the holder of, or to have any of the rights of a
holder with respect to, any shares of Stock subject to this Stock Option unless
and until this Stock Option shall have been exercised pursuant to the terms
hereof, the Company or the transfer agent shall have transferred the shares to
the Optionee, and the Optionee’s name shall have been entered as the stockholder
of record on the books of the Company.  Thereupon, the Optionee shall have full
voting, dividend and other ownership rights with respect to such shares of
Stock.

 

Incorporation of Plan.  Notwithstanding anything herein to the contrary, this
Stock Option shall be subject to and governed by all the terms and conditions of
the Ezenia! Inc. 2004 Equity Incentive Plan.  Capitalized terms in this
Agreement shall have the meaning specified in the Plan, unless a different
meaning is specified herein.

 

Transferability.  This Agreement is personal to the Optionee, is non-assignable
and is not transferable in any manner, by operation of law or otherwise, other
than by will or the laws of descent and distribution.  This Stock Option is
exercisable, during the Optionee’s lifetime, only by the Optionee, and
thereafter, only by the Optionee’s legal representative or legatee.

 

Tax Withholding.  The Optionee shall, not later than the date as of which the
exercise of this Stock Option

 

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becomes a taxable event for Federal income tax purposes, pay to the Company or
make arrangements satisfactory to the Committee for payment of any Federal,
state, and local taxes required by law to be withheld on account of such taxable
event.  The Company shall have the authority to cause the minimum required tax
withholding obligation to be satisfied, in whole or in part, by withholding from
shares of Stock to be issued to the Optionee a number of shares of Stock with an
aggregate Market Value that would satisfy the withholding amount due.

 

No Obligation to Continue Employment.  Neither the Company nor any of its
subsidiaries is obligated by or as a result of the Plan or this Agreement to
continue the Optionee in employment and neither the Plan nor this Agreement
shall interfere in any way with the right of the Company or any Subsidiary to
terminate the employment of the Optionee at any time.

 

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