Exhibit 10.9
 
TELANETIX, INC.
 
2010 STOCK INCENTIVE PLAN
 
FORM OF NONQUALIFIED STOCK OPTION AGREEMENT
 
THIS AGREEMENT (the "Agreement") is made effective as of [INSERT DATE], (the
"Grant Date"), between Telanetix, Inc., a Delaware corporation (the "Company"),
and [INSERT NAME] (the "Participant"):
 
RECITALS:
 
WHEREAS, the Company has adopted the Telanetix, Inc. 2010 Stock Incentive Plan
(the "Plan"), which Plan is incorporated herein by reference and made a part of
this Agreement.  Capitalized terms not otherwise defined herein shall have the
same meanings as in the Plan; and
 
WHEREAS, the Committee has determined that it would be in the best interests of
the Company and its shareholders to grant the option provided for herein to the
Participant pursuant to the Plan and the terms set forth herein.
 
NOW THEREFORE, in consideration of the mutual covenants hereinafter set forth,
the parties agree as follows:
 
1. Grant of the Option.  Subject to the approval of the Plan and the increase in
the Company’s authorized capital by the shareholders of the Company, the Company
hereby grants to the Participant the right and option (the "Option") to
purchase, on the terms and conditions hereinafter set forth, all or any part of
an aggregate of [INSERT SHARES] Shares, subject to adjustment as set forth in
the Plan.  Fifty percent (50%) of the Option shall have an Option Price of
$0.038520 per Share (the “Tranche 1 Option”).  Sixteen and sixty-fifth one
hundredths percent (16.65%) of the Option shall have an Option Price of
$0.07704 per Share (the “Tranche 2 Option”).  Sixteen and sixty-fifth one
hundredths percent (16.65%) of the Option shall have an Option Price of
$0.07704 per Share (the “Tranche 3 Option”).  Sixteen and seventieth one
hundredths percent (16.7%) of the Option shall have an Option Price of
$0.07704 per Share (the “Tranche 4 Option”).  The Option is intended to be a
non-qualified stock option, and is not intended to be treated as an option that
complies with Section 422 of the Internal Revenue Code of 1986, as amended.
 
2. Vesting.
 
(a) The Tranche 1 Option shall vest  (the “Tranche 1 Vesting Date”) with respect
to one hundred percent (100%) of the Shares subject to the Tranche 1 Option upon
Hale (as defined below) receiving cash proceeds in return on its Invested
Capital (whether such cash derives from interest payments, debt repayment,
dividends, distributions, sale of equity or otherwise) in the Company and its
subsidiaries which cash proceeds equal no less than one times its Invested
Capital (as defined below) plus a four percent (4%) annual return on such
Invested Capital, compounded annually (the “Tranche 1 Return”) and subject to
the Participant's continued employment in good standing with the Company on the
Tranche 1 Vesting Date.  Notwithstanding the foregoing and the failure of Hale
to have achieved the Tranche 1 Return, the Tranche 1 Option shall vest with
respect to ten percent (10%) of the Tranche 1 Option on the first anniversary of
the Grant Date and with respect to 2.5% of the Tranche 1 Option at the end of
each of the next eight quarters thereafter through the third anniversary of the
Grant Date (for an aggregate of 30% of the Tranche 1 Options), subject to the
Participant's continued employment in good standing with the Company on each
such vesting date.
 
 
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(b) The Tranche 2 Option shall vest (the “Tranche 2 Vesting Date”) with respect
to one hundred percent (100%) of the Shares subject to the Tranche 2 Option upon
Hale receiving cash proceeds in return on its Invested Capital (whether such
cash derives from interest payments, debt repayment, dividends, distributions,
sale of equity or otherwise) in the Company and its subsidiaries which cash
proceeds equal no less than two times its Invested Capital plus a four percent
(4%) annual return on such Invested Capital, compounded annually and subject to
the Participant's continued employment in good standing with the Company on the
Tranche 2 Vesting Date.
 
(c) The Tranche 3 Option shall vest (the “Tranche 3 Vesting Date”) with respect
to one hundred percent (100%) of the Shares subject to the Tranche 3 Option upon
Hale receiving cash proceeds in return on its Invested Capital (whether such
cash derives from interest payments, debt repayment, dividends, distributions,
sale of equity or otherwise) in the Company and its subsidiaries which cash
proceeds equal no less than three times its Invested Capital plus a four percent
(4%) annual return on such Invested Capital, compounded annually and subject to
the Participant's continued employment in good standing with the Company on the
Tranche 3 Vesting Date.
 
(d) The Tranche 4 Option shall vest (the “Tranche 4 Vesting Date”) with respect
to one hundred percent (100%) of the Shares subject to the Tranche 4 Option upon
Hale receiving cash proceeds in return on its Invested Capital (whether such
cash derives from interest payments, debt repayment, dividends, distributions,
sale of equity or otherwise) in the Company and its subsidiaries which cash
proceeds equal no less than four times its Invested Capital plus a four percent
(4%) annual return on such Invested Capital, compounded annually and subject to
the Participant's continued employment in good standing with the Company on the
Tranche 4 Vesting Date.
 
(e) At any time, the portion of the Option, which has become vested and
exercisable as described above, is hereinafter referred to as the "Vested
Portion".
 
(f) If the Participant's employment with the Company is terminated for any
reason, the Option shall, to the extent not then vested, be canceled by the
Company without consideration and the Vested Portion of the Option shall remain
exercisable for the period set forth in Section 3(a).
 
3. Exercise of Option.
 
(a) Period of Exercise.  Subject to the provisions of the Plan and this
Agreement, the Participant may exercise all or any part of the Vested Portion of
the Option at any time prior to the earliest to occur of:
 
 
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(i) the tenth anniversary of the Grant Date;
 
(ii) one year following the date of the Participant's termination of employment
due to death or "Disability";
 
(iii) ninety (90) days following the date of the Participant's termination of
employment by the Company or any of its subsidiaries without "Cause" (other than
by reason of death or "Disability); and
 
(iv) upon  the Participant's (x) termination of employment by the Company or any
of its subsidiaries for "Cause" or (y) termination by the Participant of his or
her employment for any reason.
 
For purposes of this agreement:
 
"Cause" has the meaning given to it in the Participant's employment agreement,
or if the Participant is not subject to an employment agreement then "Cause"
means as determined by the Board, (i) indictment of the Participant for a
felony; (ii) conduct by the Participant in connection with his employment duties
or responsibilities that is fraudulent or grossly negligent; (iii) willful
misconduct; (iv) the Participant's contravention in any material respect of
specific written lawful directions related to a material duty or responsibility
which is directed to be undertaken from the Board or the person to whom the
Participant reports; (v) any acts by the Participant which constitute
embezzlement, misappropriation or breach of fiduciary duty resulting or
intending to result in personal gain or enrichment at the expense of the
Company, its subsidiaries or Affiliates; (vi) the Participant's failure to
comply with any ongoing confidentiality, non-solicitation and non-competition
obligations between the Participant and the Company, its subsidiaries or
Affiliates; or (vii) the Participant's continued failure to comply with a
material policy of the Company, its subsidiaries or Affiliates after receiving
notice from the Board of such failure to comply.
 
"Disability" has the meaning given to it in the Participant's employment
agreement, or if the Participant is not subject to an employment agreement then
"Disability" means that as a result of a physical or mental injury or illness,
the Participant is unable to perform the essential functions of his or her job
with or without reasonable accommodation for a period of (i) ninety (90)
consecutive days or (ii) one hundred and twenty (120) days in a one (1) year
period.
 
(b) Method of Exercise.
 
(i) Subject to Section 3(a), the Vested Portion of the Option may be exercised
by delivering to the Company at its principal office written notice of intent to
so exercise; provided that, the Option may be exercised with respect to whole
Shares only.  Such notice shall specify the number of Shares for which the
Option is being exercised and shall be accompanied by payment in full of the
Option Price.  The payment of the Option Price may be made at the election of
the Participant (i) in cash or cash equivalents (including certified check or
bank check or wire transfer of immediately available funds), (ii) by tendering
previously acquired Shares (either actually or by attestation, valued at their
then Fair Market Value), (iii) by withholding Shares otherwise issuable in
connection with the exercise of the Option, or (iv) any combination of the
foregoing.  No Participant shall have any rights to dividends or other rights of
a stockholder with respect to Shares subject to an Option until the Participant
has given written notice of exercise of the Option, paid in full for such Shares
and, if applicable, has satisfied any other conditions imposed by the Committee.
 
 
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(ii) Notwithstanding any other provision of the Plan or this Agreement to the
contrary, the Option may not be exercised prior to the completion of any
registration or qualification of the Option or the Shares under applicable state
and federal securities or other laws, or under any ruling or regulation of any
governmental body or national securities exchange that the Committee shall in
its sole discretion determine to be necessary or advisable.
 
(iii) Upon the Company's determination that the Option has been validly
exercised as to any of the Shares, the Company shall issue certificates in the
Participant's name for such Shares, not later than ten (10) business days
following such determination.  However, the Company shall not be liable to the
Participant for damages relating to any delays in issuing the certificates to
him, any loss of the certificates, or any mistakes or errors in the issuance of
the certificates or in the certificates themselves.
 
(iv) In the event of the Participant's death, the Vested Portion of the Option
shall remain exercisable by the Participant's executor or administrator, or the
person or persons to whom the Participant's rights under this Agreement shall
pass by will or by the laws of descent and distribution as the case may be, to
the extent set forth in Section 3(a).  Any heir or legatee of the Participant
shall take rights herein granted subject to the terms and conditions hereof.
 
4. Adjustments in Event of Change in Common Stock.  In the event of any change
in the outstanding Shares after the Effective Date by reason of any Share
dividend or split, reorganization, recapitalization, merger, consolidation,
spin-off, combination, combination or transaction or exchange of Shares or other
corporate exchange, or any distribution to shareholders of Shares other than
regular cash dividends or any transaction similar to the foregoing, the
Committee, without liability to any person, shall make such substitution or
adjustment, if any, as it deems to be equitable, as to (i) the number or kind of
Shares or other securities issued or reserved for issuance pursuant to the
Option, (ii) the Option Price and/or (iii) any other affected terms of the
Option.
 
5. No Right to Continued Employment.  The granting of the Option evidenced
hereby and this Agreement shall impose no obligation on the Company or any
Affiliate to continue the employment of the Participant and shall not lessen or
affect the Company's or its Affiliate's right to terminate the employment of
such Participant for any reason at any time.
 
6. Legend on Certificates.  The certificates representing the Shares purchased
by exercise of the Option shall be subject to such stop transfer orders and
other restrictions as the Committee may deem advisable under the Plan or the
rules, regulations, and other requirements of the Securities and Exchange
Commission, any stock exchange upon which such Shares are listed, and any
applicable Federal or state laws, and the Committee may cause a legend or
legends to be put on any such certificates to make appropriate reference to such
restrictions.
 
 
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7. Transferability.  Except as permitted by the Committee, the Option may not be
assigned, alienated, pledged, attached, sold or otherwise transferred or
encumbered by the Participant otherwise than by will or by the laws of descent
and distribution, and any such purported assignment, alienation, pledge,
attachment, sale, transfer or encumbrance shall be void and unenforceable
against the Company or any Affiliate; provided that the designation of a
beneficiary shall not constitute an assignment, alienation, pledge, attachment,
sale, transfer or encumbrance.  No such permitted transfer of the Option to
heirs or legatees of the Participant shall be effective to bind the Company
unless the Committee shall have been furnished with written notice thereof and a
copy of such evidence as the Committee may deem necessary to establish the
validity of the transfer and the acceptance by the transferee or transferees of
the terms and conditions hereof.  During the Participant's lifetime, the Option
is exercisable only by the Participant.
 
8. Confidentiality.1
 
(a) During the course of the Participant's relationship with the Company, its
subsidiaries and predecessors, the Participant has had and will have access to,
certain trade secrets and confidential information relating to the Company and
its Affiliates and subsidiaries (the "Protected Parties") which is not readily
available from sources outside the Company.  The confidential and proprietary
information and, in any material respect, trade secrets of the Protected Parties
are among their most valuable assets, including but not limited to, their
customer, supplier and vendor lists, contract terms, databases, competitive
strategies, computer programs, frameworks, or models, their marketing programs,
their sales, financial, marketing, training and technical information, their
product development (and proprietary product data), business plans and
strategies (including, but not limited to, acquisition and divestiture plans),
environmental matters and other regulatory matters and any other information,
whether communicated orally, electronically, in writing or in other tangible
forms concerning how the Protected Parties create, develop, acquire or maintain
their products and marketing plans, target their potential customers and operate
their businesses.  The Protected Parties invested, and continue to invest,
considerable amounts of time and money in their process, technology, know-how,
obtaining and developing the goodwill of their customers, their other external
relationships, their data systems and data bases, and all the information
described above (hereinafter collectively referred to as "Confidential
Information"), and any misappropriation or unauthorized disclosure of
Confidential Information in any form would irreparably harm the Protected
Parties.  The Participant acknowledges that such Confidential Information
constitutes valuable, highly confidential, special and unique property of the
Protected Parties.  The Participant shall hold in a fiduciary capacity for the
benefit of the Protected Parties all Confidential Information relating to the
Protected Parties and their businesses, which shall have been obtained by the
Participant during the Participant's relationship with the Company or its
subsidiaries and Affiliates and which shall not be or become public knowledge
(other than by acts by the Participant or representatives of the Participant in
violation of this Agreement).  Except as required by law or an order of a court
or governmental agency with jurisdiction, the Participant shall not, during the
period the Participant is employed by the Company or its subsidiaries and
Affiliates or at any time thereafter, disclose any Confidential Information,
directly or indirectly, to any person or entity for any reason or purpose
whatsoever, nor shall the Participant use it in any way, except in the course of
the Participant's service to, and for the benefit of, the Protected Parties or
to enforce any rights or defend any claims hereunder or under any other
agreement to which the Participant is a party, provided that such disclosure is
relevant to the enforcement of such rights or defense of such claims and is only
disclosed in the formal proceedings related thereto.  The Participant shall take
all reasonable steps to safeguard the Confidential Information and to protect it
against disclosure, misuse, espionage, loss and theft.  The Participant
understands and agrees that the Participant shall acquire no rights to any such
Confidential Information.
                                                     
1           Provisions 8 through 13 shall apply to Director level and above.
 
 
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(b) All files, records, documents, drawings, specifications, data, computer
programs, evaluation mechanisms and analytics and similar items relating thereto
or to the Business (for the purposes of this Agreement, "Business" shall be as
defined in Section 10 hereof), as well as all customer lists, specific customer
information, compilations of product research and marketing techniques of the
Company and its subsidiaries and Affiliates, whether prepared by the Participant
or otherwise coming into the Participant's possession, shall remain the
exclusive property of the Company and its subsidiaries and Affiliates, and the
Participant shall not remove any such items from the premises of the Company and
its subsidiaries and Affiliates, except in furtherance of the Participant's
duties to the Company.
 
(c) It is understood that during the course of the Participant's relationship
with the Company, the Participant will promptly disclose to it, and assign to it
the Participant's interest in any invention, improvement or discovery made or
conceived by the Participant, either alone or jointly with others, which arises
out of the Participant's service to the Company.  At the Company's request and
expense, the Participant will assist the Company and its subsidiaries and
Affiliates during the period of the Participant's relationship with the Company
under this Agreement and thereafter in connection with any controversy or legal
proceeding relating to such invention, improvement or discovery and in obtaining
domestic and foreign patent or other protection covering the same.
 
(d) As requested by the Company and at the Company's expense, from time to time
and upon the termination of the Participant's relationship with the Company and
its subsidiaries for any reason, the Participant will promptly deliver to the
Company and its subsidiaries and Affiliates, as applicable, all copies and
embodiments, in whatever form, of all Confidential Information in the
Participant's possession or within his control (including, but not limited to,
memoranda, records, notes, plans, photographs, manuals, notebooks,
documentation, program listings, flow charts, magnetic media, disks, diskettes,
tapes and all other materials containing any Confidential Information)
irrespective of the location or form of such material.  If requested by the
Company, the Participant will provide the Company with written confirmation that
all such materials have been delivered to the Company as provided herein.
 
9. Non-Solicitation or Hire.  During the Participant's employment with the
Company or its Affiliates and for a period of one (1) year following the
termination of the Participant's employment for any reason, the Participant
shall not (x) directly or indirectly solicit or attempt to solicit or induce,
directly or indirectly, (a) any party who is a customer of the Company or its
subsidiaries or Affiliates, or who was a customer of the Company or its
subsidiaries or Affiliates at any time during the relevant period immediately
prior to the relevant date, for the purpose of marketing, selling or providing
to any such party any services or products offered by or available from the
Company or its subsidiaries or Affiliates and relating to the Business or (b)
any employee of the Company or any of its subsidiaries or Affiliates or any
person who was an employee of the Company or any of its subsidiaries or
Affiliates during the twelve (12) month period immediately prior to the date of
the Participant's termination of employment (a “Former Employee”) to terminate
such employee's employment relationship with the Protected Parties in order, in
either case, to enter into a similar relationship with the Participant, or any
other person or any entity or (y) hire any employee of the Company or any of its
subsidiaries or Affiliates or any Former Employee.
 
 
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10. Non-Competition.  During the Participant's employment with the Company or
its Affiliates and for a period of one (1) year following the termination of the
Participant's employment for any reason, the Participant shall not, whether
individually, as a director, manager, member, stockholder, partner, owner,
employee, consultant or agent of any business, or in any other capacity, other
than on behalf of the Company or a subsidiary or Affiliate, organize, establish,
own, operate, manage, control, engage in, participate in, invest in, permit his
name to be used by, act as a consultant or advisor to, render services for
(alone or in association with any person, firm, corporation or business
organization), or otherwise assist any person or entity that engages in or owns,
invests in, operates, manages or controls any venture or enterprise, which
engages in any business conducted by the Company or any of its subsidiaries on
the date of the Participant’s termination of employment or within twelve (12)
months of the Participant’s termination of employment in the geographic
locations where the Company and its subsidiaries engage or propose to engage in
such business (the "Business").  Notwithstanding the foregoing, nothing in this
Agreement shall prevent the Participant from owning for passive investment
purposes not intended to circumvent this Agreement, less than five percent (5%)
of the publicly traded common equity securities of any company engaged in the
Business (so long as the Participant has no power to manage, operate, advise,
consult with or control the competing enterprise and no power, alone or in
conjunction with other Affiliated parties, to select a director, manager,
general partner, or similar governing official of the competing enterprise other
than in connection with the normal and customary voting powers afforded the
Participant in connection with any permissible equity ownership).
 
11. Property.  The Participant acknowledges that all originals and copies of
materials, records and documents generated by him or coming into his possession
during his relationship with the Company or its subsidiaries and Affiliates are
the sole property of the Company and its subsidiaries and Affiliates ("Company
Property").  During the Participant's employment with the Company or its
Affiliates, and at all times thereafter, the Participant shall not remove, or
cause to be removed, from the premises of the Company or its subsidiaries or
Affiliates, copies of any record, file, memorandum, document, computer related
information or equipment, or any other item relating to the business of the
Company or its subsidiaries or Affiliates, except in furtherance of his duties
under the Agreement.  When the Participant's relationship with the Company
terminates, or upon request of the Company at any time, the Participant shall
promptly deliver to the Company all copies of Company Property in his possession
or control.
 
12. Nondisparagement.  The Participant shall not at any time (whether during or
after the Participant's employment by the Company or its Affiliates) publish or
communicate to any person or entity any Disparaging (as defined below) remarks,
comments or statements concerning the Company, its parents, subsidiaries and
Affiliates, and their respective present and former members, partners,
directors, officers, shareholders, employees, agents, attorneys, successors and
assigns.  "Disparaging" remarks, comments or statements are those that impugn
the character, honesty, integrity or morality or business acumen or abilities in
connection with any aspect of the operation of business of the individual or
entity being disparaged.
 
 
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13. Remedies; Specific Performance.  The Parties acknowledge and agree that the
Participant's breach or threatened breach of any of the restrictions set forth
in Sections 9, 10, 11, 12 or 13 will result in irreparable and continuing damage
to the Protected Parties for which there may be no adequate remedy at law and
that the Protected Parties shall be entitled to equitable relief, including
specific performance and injunctive relief as remedies for any such breach or
threatened or attempted breach.  The Participant hereby consents to the grant of
an injunction (temporary or otherwise) against the Participant or the entry of
any other court order against the Participant prohibiting and enjoining him from
violating, or directing him to comply with any provision of Sections 9, 10, 11,
12 or 13.  The Participant also agrees that such remedies shall be in addition
to any and all remedies, including damages, available to the Protected Parties
against him for such breaches or threatened or attempted breaches.  In addition,
without limiting the Protected Parties' remedies for any breach of any
restriction on the Participant set forth in Sections 9, 10, 11, 12 or 13, if the
Participant breaches the covenants applicable to the Participant contained in
Section 9, 10, 11, 12 or 13, the Option shall immediately terminate and any
Shares issued upon the exercise of the Option shall be forfeited.
 
14. Withholding.  The Participant may be required to pay to the Company or any
Affiliate and the Company shall have the right and is hereby authorized to
withhold, any applicable withholding taxes in respect of the Option, its
exercise or any payment or transfer under or with respect to the Option and to
take such other action as may be necessary in the opinion of the Committee to
satisfy all obligations for the payment of such withholding taxes.
 
15. Securities Laws.  Upon the acquisition of any Shares pursuant to the
exercise of the Option, the Participant will make or enter into such written
representations, warranties and agreements as the Committee may reasonably
request in order to comply with applicable securities laws or with this
Agreement.
 
16. Notices.  Any notice necessary under this Agreement shall be addressed to
the Company in care of its Secretary at the principal office of the Company and
to the Participant at the address appearing in the personnel records of the
Company for the Participant or to either party at such other address as either
party hereto may hereafter designate in writing to the other.  Any such notice
shall be deemed effective upon receipt thereof by the addressee.
 
17. Choice of Law.  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE WITHOUT REGARD TO CONFLICTS OF
LAWS.
 
 
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18. Waiver of Jury Trial.  THE PARTIES HEREBY WAIVE, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, TRIAL BY JURY IN ANY LITIGATION IN ANY COURT WITH RESPECT TO, IN
CONNECTION WITH, OR ARISING OUT OF THIS AGREEMENT OR THE VALIDITY,
INTERPRETATION OR ENFORCEMENT HEREOF.  THE PARTIES AGREE THAT THIS SECTION IS A
SPECIFIC AND MATERIAL ASPECT OF THIS AGREEMENT AND WOULD NOT ENTER INTO THIS
AGREEMENT IF THIS SECTION WERE NOT PART OF THIS AGREEMENT.
 
19. Termination of Award.  If the Plan is not approved by a majority of the
shareholders of the Company prior to the one year anniversary of the Grant Date,
this Award Agreement shall be terminated without the payment of consideration
and of no further force or effect.
 
**Signature Page Follows**
 
 
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20. Signature in Counterparts.  This Agreement may be signed in counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
 
IN WITNESS WHEREOF, the parties hereto have executed this Agreement.
 

 
TELANETIX, INC.
 
By:_____________________________________
 
Name:
Title:
   

 
Agreed and acknowledged as
of the date first above written:
 
____________________________________
Name:
 

 
 
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