EXHIBIT 10.65

 

PATH 1 NETWORK TECHNOLOGIES, INC.

STOCK OPTION GRANT NOTICE

(2004 EQUITY INCENTIVE PLAN)

 

Path 1 Network Technologies, Inc. (the “Company”), pursuant to its 2004 Equity
Incentive Plan (the “Plan”), hereby grants to Optionholder an option to purchase
the number of shares of the Company’s Common Stock set forth below. This option
is subject to all of the terms and conditions as set forth herein and in the
Stock Option Agreement, the Plan and the Notice of Exercise, all of which are
attached hereto and incorporated herein in their entirety.

 

Optionholder:

 

 

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Date of Grant:

 

 

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Vesting Commencement Date:

 

 

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Number of Shares Subject to Option:

 

 

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Exercise Price (Per Share):

 

 

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Total Exercise Price:

 

 

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Expiration Date:

 

 

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Type of Grant:        ¨  Incentive Stock Option1               ¨  Nonstatutory
Stock Option

 

[DRAFTING NOTE: Options that are exercisable by non-exempt employees (those
subject to wage overtime rules) within six months after the date of grant may
affect the calculations of overtime wages. Therefore, options granted to
non-exempt employees should not be exercisable for at least six months from the
grant date; provided, that the employees may exercise if their employment is
terminated due to a change in control, their death or retirement.]

 

Exercise Schedule:

   ¨   Same as Vesting Schedule            ¨  Early Exercise Permitted

Vesting Schedule:

   [1/4th of the shares vest one year after the Vesting Commencement Date.     
1/48th of the shares vest monthly thereafter over the next three years.]

Payment:

   By one or a combination of the following items (described in the Stock Option
Agreement):      ¨  By cash or check      ¨  Pursuant to a Regulation T Program
if the Shares are publicly traded      ¨  By delivery of already-owned shares if
the Shares are publicly traded

 

Additional Terms/Acknowledgements: The undersigned Optionholder acknowledges
receipt of, and understands and agrees to, this Stock Option Grant Notice, the
Stock Option Agreement and the Plan. Optionholder further acknowledges that as
of the Date of Grant, this Stock Option Grant Notice, the Stock Option Agreement
and the Plan set forth the entire understanding between Optionholder and the
Company regarding the acquisition of stock in the Company and supersede all
prior oral and written agreements on that subject with the exception of (i)
options previously granted and delivered to Optionholder under the Plan, and
(ii) the following agreements only:

 

Other Agreements:

  

 

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1         If this is an Incentive Stock Option, it (plus other outstanding
Incentive Stock Options) cannot be first exercisable for more than $100,000 in
value (measured by exercise price) in any calendar year. Any excess over
$100,000 is a Nonstatutory Stock Option.

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PATH 1 NETWORK TECHNOLOGIES, INC.

   OPTIONHOLDER:

By:                                      
                                                                           

                                         
                                        
                                           Signature    Signature

Title:                                     
                                                                        

   Date:                                         
                                                                     

Date:                                     
                                                                         

    

 

ATTACHMENTS:  Stock Option Agreement, 2004 Equity Incentive Plan and Notice of
Exercise

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ATTACHMENT I

 

STOCK OPTION AGREEMENT

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PATH 1 NETWORK TECHNOLOGIES, INC.

2004 EQUITY INCENTIVE PLAN

 

STOCK OPTION AGREEMENT

(INCENTIVE STOCK OPTION OR NONSTATUTORY STOCK OPTION)

 

Pursuant to your Stock Option Grant Notice (“Grant Notice”) and this Stock
Option Agreement, Path 1 Network Technologies, Inc. (the “Company”), has granted
you an option under its 2004 Equity Incentive Plan (the “Plan”) to purchase the
number of shares of the Company’s Common Stock indicated in your Grant Notice at
the exercise price indicated in your Grant Notice. Defined terms not explicitly
defined in this Stock Option Agreement but defined in the Plan shall have the
same definitions as in the Plan.

 

The details of your option are as follows:

 

1.    VESTING.    Subject to the limitations contained herein, your option will
vest as provided in your Grant Notice, provided that vesting will cease upon the
termination of your Continuous Service.

 

2.    NUMBER OF SHARES AND EXERCISE PRICE.    The number of shares of Common
Stock subject to your option and your exercise price per share referenced in
your Grant Notice may be adjusted from time to time for Capitalization
Adjustments.

 

3.    EXERCISE PRIOR TO VESTING (“EARLY EXERCISE”).    If permitted in your
Grant Notice (i.e., the “Exercise Schedule” indicates that “Early Exercise” of
your option is permitted) and subject to the provisions of your option, you may
elect at any time that is both (i) during the period of your Continuous Service
and (ii) during the term of your option, to exercise all or part of your option,
including the nonvested portion of your option; provided, however, that:

 

(a)    a partial exercise of your option shall be deemed to cover first vested
shares of Common Stock and then the earliest vesting installment of unvested
shares of Common Stock;

 

(b)    any shares of Common Stock so purchased from installments that have not
vested as of the date of exercise shall be subject to the purchase option in
favor of the Company as described in the Company’s form of Early Exercise Stock
Purchase Agreement;

 

(c)    you shall enter into the Company’s form of Early Exercise Stock Purchase
Agreement with a vesting schedule that will result in the same vesting as if no
early exercise had occurred; and

 

(d)    if your option is an Incentive Stock Option, then, to the extent that the
aggregate Fair Market Value (determined at the time of grant) of the shares of
Common Stock with respect to which your option plus all other Incentive Stock
Options you hold are exercisable for the first time by you during any calendar
year (under all plans of the Company and its Affiliates) exceeds one hundred
thousand dollars ($100,000), your option(s) or portions thereof

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that exceed such limit (according to the order in which they were granted) shall
be treated as Nonstatutory Stock Options.

 

4.    METHOD OF PAYMENT.    Payment of the exercise price is due in full upon
exercise of all or any part of your option. You may elect to make payment of the
exercise price in cash or by check or in any other manner permitted by your
Grant Notice, which may include one or more of the following:

 

(a)    In the Company’s sole discretion at the time your option is exercised and
provided that at the time of exercise the Common Stock is publicly traded and
quoted regularly in The Wall Street Journal, pursuant to a program developed
under Regulation T as promulgated by the Federal Reserve Board that, prior to
the issuance of Common Stock, results in either the receipt of cash (or check)
by the Company or the receipt of irrevocable instructions to pay the aggregate
exercise price to the Company from the sales proceeds.

 

(b)    Provided that at the time of exercise the Common Stock is publicly traded
and quoted regularly in The Wall Street Journal, by delivery of already-owned
shares of Common Stock either that you have held for the period required to
avoid a charge to the Company’s reported earnings (generally six (6) months) or
that you did not acquire, directly or indirectly from the Company, that are
owned free and clear of any liens, claims, encumbrances or security interests,
and that are valued at Fair Market Value on the date of exercise. “Delivery” for
these purposes, in the sole discretion of the Company at the time you exercise
your option, shall include delivery to the Company of your attestation of
ownership of such shares of Common Stock in a form approved by the Company.
Notwithstanding the foregoing, you may not exercise your option by tender to the
Company of Common Stock to the extent such tender would violate the provisions
of any law, regulation or agreement restricting the redemption of the Company’s
stock.

 

5.    WHOLE SHARES.    You may exercise your option only for whole shares of
Common Stock.

 

6.    SECURITIES LAW COMPLIANCE.    Notwithstanding anything to the contrary
contained herein, you may not exercise your option unless the shares of Common
Stock issuable upon such exercise are then registered under the Securities Act
or, if such shares of Common Stock are not then so registered, the Company has
determined that such exercise and issuance would be exempt from the registration
requirements of the Securities Act. The exercise of your option also must comply
with other applicable laws and regulations governing your option, and you may
not exercise your option if the Company determines that such exercise would not
be in material compliance with such laws and regulations.

 

7.    TERM.    You may not exercise your option before the commencement or after
the expiration of its term. The term of your option commences on the Date of
Grant and expires upon the earliest of the following:

 

(a)    three (3) months after the termination of your Continuous Service for any
reason other than your Disability or death, provided that if during any part of
such three (3) month period your option is not exercisable solely because of the
condition set forth in Section 6,

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your option shall not expire until the earlier of the Expiration Date or until
it shall have been exercisable for an aggregate period of three (3) months after
the termination of your Continuous Service;

 

(b)    twelve (12) months after the termination of your Continuous Service due
to your Disability;

 

(c)    eighteen (18) months after your death if you die either during your
Continuous Service or within three (3) months after your Continuous Service
terminates;

 

(d)    the Expiration Date indicated in your Grant Notice; or

 

(e)    the day before the tenth (10th) anniversary of the Date of Grant.

 

If your option is an Incentive Stock Option, note that to obtain the federal
income tax advantages associated with an Incentive Stock Option, the Code
requires that at all times beginning on the date of grant of your option and
ending on the day three (3) months before the date of your option’s exercise,
you must be an employee of the Company or an Affiliate, except in the event of
your death or your permanent and total disability, as defined in Section 22(e)
of the Code. (The definition of disability in Section 22(e) of the Code is
different from the definition of the Disability under the Plan). The Company has
provided for extended exercisability of your option under certain circumstances
for your benefit but cannot guarantee that your option will necessarily be
treated as an Incentive Stock Option if you continue to provide services to the
Company or an Affiliate as a Consultant or Director after your employment
terminates or if you otherwise exercise your option more than three (3) months
after the date your employment with the Company or an Affiliate terminates.

 

8.    EXERCISE.

 

(a)    You may exercise the vested portion of your option (and the unvested
portion of your option if your Grant Notice so permits) during its term by
delivering a Notice of Exercise (in a form designated by the Company) together
with the exercise price to the Secretary of the Company, or to such other person
as the Company may designate, during regular business hours, together with such
additional documents as the Company may then require.

 

(b)    By exercising your option you agree that, as a condition to any exercise
of your option, the Company may require you to enter into an arrangement
providing for the payment by you to the Company of any tax withholding
obligation of the Company arising by reason of (1) the exercise of your option,
(2) the lapse of any substantial risk of forfeiture to which the shares of
Common Stock are subject at the time of exercise, or (3) the disposition of
shares of Common Stock acquired upon such exercise.

 

(c)    If your option is an Incentive Stock Option, by exercising your option
you agree that you will notify the Company in writing within fifteen (15) days
after the date of any disposition of any of the shares of the Common Stock
issued upon exercise of your option that occurs within two (2) years after the
date of your option grant or within one (1) year after such shares of Common
Stock are transferred upon exercise of your option.

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9.    TRANSFERABILITY.    Your option is not transferable, except by will or by
the laws of descent and distribution, and is exercisable during your life only
by you. Notwithstanding the foregoing, by delivering written notice to the
Company, in a form satisfactory to the Company, you may designate a third party
who, in the event of your death, shall thereafter be entitled to exercise your
option.

 

10.    OPTION NOT A SERVICE CONTRACT.    Your option is not an employment or
service contract, and nothing in your option shall be deemed to create in any
way whatsoever any obligation on your part to continue in the employ of the
Company or an Affiliate, or of the Company or an Affiliate to continue your
employment. In addition, nothing in your option shall obligate the Company or an
Affiliate, their respective stockholders, Boards of Directors, Officers or
Employees to continue any relationship that you might have as a Director or
Consultant for the Company or an Affiliate.

 

11.    WITHHOLDING OBLIGATIONS.

 

(a)    At the time you exercise your option, in whole or in part, or at any time
thereafter as requested by the Company, you hereby authorize withholding from
payroll and any other amounts payable to you, and otherwise agree to make
adequate provision for (including by means of a “cashless exercise” pursuant to
a program developed under Regulation T as promulgated by the Federal Reserve
Board to the extent permitted by the Company), any sums required to satisfy the
federal, state, local and foreign tax withholding obligations of the Company or
an Affiliate, if any, which arise in connection with the exercise of your
option.

 

(b)    Upon your request and subject to approval by the Company, in its sole
discretion, and compliance with any applicable legal conditions or restrictions,
the Company may withhold from fully vested shares of Common Stock otherwise
issuable to you upon the exercise of your option a number of whole shares of
Common Stock having a Fair Market Value, determined by the Company as of the
date of exercise, not in excess of the minimum amount of tax required to be
withheld by law (or such lower amount as may be necessary to avoid variable
award accounting). If the date of determination of any tax withholding
obligation is deferred to a date later than the date of exercise of your option,
share withholding pursuant to the preceding sentence shall not be permitted
unless you make a proper and timely election under Section 83(b) of the Code,
covering the aggregate number of shares of Common Stock acquired upon such
exercise with respect to which such determination is otherwise deferred, to
accelerate the determination of such tax withholding obligation to the date of
exercise of your option. Notwithstanding the filing of such election, shares of
Common Stock shall be withheld solely from fully vested shares of Common Stock
determined as of the date of exercise of your option that are otherwise issuable
to you upon such exercise. Any adverse consequences to you arising in connection
with such share withholding procedure shall be your sole responsibility.

 

(c)    You may not exercise your option unless the tax withholding obligations
of the Company and/or any Affiliate are satisfied. Accordingly, you may not be
able to exercise your option when desired even though your option is vested, and
the Company shall have no obligation to issue a certificate for such shares of
Common Stock or release such shares of Common Stock from any escrow provided for
herein unless such obligations are satisfied.

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12.    NOTICES.    Any notices provided for in your option or the Plan shall be
given in writing and shall be deemed effectively given upon receipt or, in the
case of notices delivered by mail by the Company to you, five (5) days after
deposit in the United States mail, postage prepaid, addressed to you at the last
address you provided to the Company.

 

13.    GOVERNING PLAN DOCUMENT.    Your option is subject to all the provisions
of the Plan, the provisions of which are hereby made a part of your option, and
is further subject to all interpretations, amendments, rules and regulations,
which may from time to time be promulgated and adopted pursuant to the Plan. In
the event of any conflict between the provisions of your option and those of the
Plan, the provisions of the Plan shall control.

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ATTACHMENT II

 

2004 EQUITY INCENTIVE PLAN

 

[PREVIOUSLY FILED]

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ATTACHMENT III

 

NOTICE OF EXERCISE

 

NOTICE OF EXERCISE

 

Path 1 Network Technologies, Inc.

6215 Ferris Square

Suite 140

San Diego, CA 92121

 

Date of Exercise:                         

 

Ladies and Gentlemen:

 

This constitutes notice under my stock option that I elect to purchase the
number of shares for the price set forth below.

 

Type of option (check one):

      Incentive ¨   Nonstatutory ¨

Stock option dated:

                                        
                                                

Number of shares as

to which option is

exercised:

                                        
                                                

Certificates to be

issued in name of:

                                        
                                                

Total exercise price:

  $                                      
                                              

Cash payment delivered

herewith:

  $                                     
                                               

 

By this exercise, I agree (i) to provide such additional documents as you may
require pursuant to the terms of the 2004 Equity Incentive Plan, (ii) to provide
for the payment by me to you (in the manner designated by you) of your
withholding obligation, if any, relating to the exercise of this option, and
(iii) if this exercise relates to an incentive stock option, to notify you in
writing within fifteen (15) days after the date of any disposition of any of the
shares of Common Stock issued upon exercise of this option that occurs within
two (2) years after the date of grant of this option or within one (1) year
after such shares of Common Stock are issued upon exercise of this option.

 

Very truly yours,

 

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