EXHIBIT 10.7
DASAN ZHONE SOLUTIONS, INC.
AMENDED AND RESTATED
2001 STOCK INCENTIVE PLAN
STOCK OPTION AGREEMENT
THIS AGREEMENT, is made as of the day of ______, 201_, by and between DASAN
Zhone Solutions, Inc., a Delaware corporation (the “Company”), and the
individual named on the Notice of Grant who is employed by, or providing
services to, the Company or one of its affiliates and who is a signatory hereto
(the “Optionee”).
WHEREAS, the Board of Directors and stockholders of the Company have duly
adopted and approved the DASAN Zhone Solutions, Inc. Amended and Restated 2001
Stock Incentive Plan (the “Plan”) in order to provide additional incentive to
certain employees, officers, consultants and directors of the Company and its
Subsidiaries; and
WHEREAS, the Committee appointed to administer the Plan has determined that it
would be to the advantage and best interest of the Company and its stockholders
to grant the Option provided for herein to the Optionee as an inducement to
enter into or remain in the service of the Company or its Subsidiaries and as an
incentive for increased efforts during such service, and has advised the Company
thereof and instructed the undersigned officers to issue this Option;
NOW, THEREFORE, in consideration of the mutual promises and covenants contained
herein, the parties hereto agree as follows:
1.
Grant of Option.

1.1    In consideration of the Optionee’s agreement to remain in the employ of
the Company or its Subsidiaries and for other good and valuable consideration,
on the date hereof, the Company irrevocably grants to the Optionee the right and
option (the “Option”) to purchase all or any part of that number of whole Shares
as is set forth in the Notice of Grant attached hereto upon the terms and
conditions set forth in this Agreement and such Notice of Grant. If designated
in the Notice of Grant as an Incentive Stock Option, the Option is intended to
qualify as an “incentive stock option” within the meaning of Section 422 of the
Code and shall be so construed; provided, however, that nothing in this
Agreement shall be interpreted as a representation, guarantee or undertaking on
the part of the Company that the Option is or will be determined to be an
incentive stock option within the meaning of Section 422 of the Code.
1.2    In consideration of the granting of this Option by the Company, the
Optionee agrees to render faithful and efficient services to the Company or a
Subsidiary, with such duties and responsibilities as the Company shall from time
to time prescribe, for a period of at least one (1) year (or such shorter period
as may be fixed in the Notice of Grant) from the Date of Grant set forth is the
Notice of Grant.

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1.3    This Agreement shall be construed in accordance and consistent with, and
subject to, the provisions of the Plan (the provisions of which are incorporated
herein by reference) and, except as otherwise expressly set forth herein, the
capitalized terms used in this Agreement shall have the same definitions as set
forth in the Plan. In the event any provision of this Agreement shall conflict
with any of the terms in the Plan as constituted on the Date of Grant, the terms
of the Plan as constituted on the Date of Grant shall control.
2.
Purchase Price.

The price at which the Optionee shall be entitled to purchase Shares upon the
exercise of the Option shall be equal to the Option Price per Share set forth in
the Notice of Grant attached hereto.
3.
Duration of Option.

The Option shall be exercisable to the extent and in the manner provided herein
for a period of [ ] ([ ]) years from the Date of Grant (the “Exercise Term”);
provided, however, that the Option may be earlier terminated as provided in
Section 6 hereof. Notwithstanding any provision of this Option to the contrary,
if designated in the Notice of Grant as an Incentive Stock Option, in no event
may this Option be exercised after five (5) years in the event this Option is
granted to a Ten-Percent Stockholder.
4.
Exercisability of Option.

4.1    Unless otherwise provided in this Agreement or the Plan, the Option shall
become vested and exercisable in accordance with the Vesting Schedule set forth
in the Notice of Grant. Each installment that becomes vested and exercisable
shall be cumulative and shall remain exercisable during the remaining period of
the Exercise Term, unless sooner exercised or terminated as herein provided.
4.2    Anything contained in this Agreement to the contrary notwithstanding, to
the extent the Option is intended to qualify as an Incentive Stock Option, as
set forth in the Notice of Grant, the Option shall not be exercisable as an
Incentive Stock Option, and shall be treated as a Nonqualified Stock Option, to
the extent that the aggregate Fair Market Value (determined as of the date of
grant of each option) of Shares with respect to which Incentive Stock Options
granted under the Plan and “incentive stock options” (within the meaning of
Section 422 of the Code) granted under all other plans of the Company or its
Subsidiaries (in either case determined without regard to this Section 4.2) are
exercisable by the Optionee for the first time during any calendar year exceeds
$100,000. In applying the limitation in the preceding sentence in the case of
multiple option grants, options which were intended to be Incentive Stock
Options shall be treated as Nonqualified Stock Options according to the order in
which they were granted such that the most recently granted options are first
treated as Nonqualified Stock Options.
5.
Manner of Exercise and Payment.

5.1    Subject to the terms and conditions of this Agreement and the Plan
(including without limitation, any alternative method of exercise and payment),
the Option may be exercised by delivery to the Secretary of the Company, at its
principal executive office of a written notice signed by the Optionee (or the
person or persons then entitled to exercise the Option) complying with the
applicable rules established by

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the Committee. Such notice shall state that the Optionee is electing to exercise
the Option in whole or in part and the number of whole Shares in respect of
which the Option is being exercised, provided, however, that any partial
exercise of the Option shall be for not less than five hundred (500) Shares (or
the minimum installment, if a smaller number of Shares). If requested by the
Committee, the Optionee or such other person or persons shall (i) deliver this
Agreement to the Secretary of the Company who shall endorse thereon a notation
of such exercise and (ii) provide satisfactory proof as to the right of such
person or persons to exercise the Option.
5.2    The notice of exercise described in Section 5.1 hereof shall be
accompanied by the full purchase price for the Shares in respect of which the
Option is being exercised, in cash, by check, or with the consent of the
Committee, (i) by Shares that have been held by the Optionee for at least six
(6) months prior to the exercise of the Option, duly endorsed for transfer to
the Company, that have a Fair Market Value on the day preceding the date of
exercise equal to the cash amount for which such Shares are substituted or
(ii) by Shares issuable to the Optionee upon exercise of the Option, with a Fair
Market Value on the date of delivery equal to the cash amount for which such
Shares are substituted, or (iii) by a combination of cash and the transfer of
Shares.
5.3    Upon receipt of notice of exercise and full payment for the Shares in
respect of which the Option is being exercised and all amounts which under
federal, state or local law the Company (or other employer corporation) is
required to withhold upon exercise of the Option in accordance with Section 12
hereof, the Company shall, subject to Section 14 of the Plan, take such action
as may be necessary to effect the transfer to the Optionee of the number of
Shares as to which such exercise was effective.
5.4    The Optionee shall not be deemed to be the owner of any Shares subject to
the Option unless and until (i) the Option shall have been exercised pursuant to
the terms of this Agreement and the Optionee shall have paid the full purchase
price for the number of Shares in respect of which the Option was exercised and
all amounts which under federal, state or local law the Company (or other
employer corporation) is required to withhold upon exercise of the Option,
(ii) the Company shall have issued and delivered the Shares to the Optionee, and
(iii) the Optionee’s name shall have been entered as a stockholder of record on
the books of the Company, whereupon the Optionee shall have full voting,
dividend and other ownership rights with respect to such Shares.
6.
Termination of Employment. The following provisions apply to the Option upon a
termination or change in the status of the employment of the Optionee:

6.1    Disability or Retirement. If the Optionee suffers a Disability or retires
on or after the Optionee’s Normal Retirement Date, (i) the Option or portion
thereof which the Optionee was entitled to exercise on the date of the
Optionee’s Termination of Employment shall continue to be exercisable in whole
or in part by the Optionee or his or her guardian or legal representative at any
time within one (1) year after the Disability Date or date of Termination of
Employment by reason of retirement, as the case may be, but in no event after
the expiration of the Exercise Term and (ii) unless otherwise determined by the
Committee, the unvested portion of the Option shall terminate on the Disability
Date or the date of such Termination of Employment by reason of retirement. To
the extent the Option is an Incentive Stock Option, it shall only

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qualify as such for a period of three (3) months from the date of the Optionee’s
Termination of Employment by reason of Disability or retirement and it shall be
a Nonqualified Stock Option thereafter.
6.2    Death. If the Optionee dies while still employed by the Company or any
Subsidiary, the Option shall immediately become vested and exercisable with
respect to those Shares that otherwise would have vested during the one-year
period following the Optionee’s death and shall be deemed to have become vested
and exercisable on the day preceding the date of the Optionee’s death. The
portion of the Option which the Optionee was entitled to exercise on the date of
the Optionee’s death (which shall include the portion of the Option that becomes
vested and exercisable pursuant to the preceding sentence) (i) shall continue to
be exercisable in whole or in part at any time by the Optionee’s Beneficiary
within one (1) year after the Optionee’s death but in no event after the
expiration of the Exercise Term and (ii) unless otherwise determined by the
Committee, the unvested portion of the Option shall terminate on the date of
such death. If the Optionee dies after his or her Termination of Employment,
then the Option or the portion thereof which the Optionee was entitled to
exercise on the date of the Optionee’s death may be exercised by his or her
Beneficiary within the period specified in Sections 6.1 or 6.4, as the case may
be. In the event of the Optionee’s death, the Option shall be exercisable, to
the extent provided in the Plan and this Agreement, by the legatee or legatees
under his will, or by his personal representatives or distributees and such
person or persons shall be substituted for the Optionee each time the Optionee
is referred to herein.
6.3    Termination for Cause. If the Optionee’s Termination of Employment arises
as a result of a termination for Cause, any unexercised portion of the Option
(whether or not vested and exercisable) shall terminate and expire concurrently
with the Optionee’s Termination of Employment, and no rights hereunder may be
exercised by the Optionee.
6.4    Other Termination of Employment. Upon the Optionee’s Termination of
Employment under circumstances other than those described in Sections 6.1 and
6.2 and for any reason other than a termination for Cause, (i) the Option or
portion thereof which the Optionee was entitled to exercise on the date of the
Optionee’s Termination of Employment shall continue to be exercisable in whole
or in part at any time by the Optionee within three (3) months after the
Optionee’s Termination of Employment but in no event after the expiration of the
Exercise Term and (ii) unless otherwise determined by the Committee, the
unvested portion of the Option shall terminate on the date of such Termination
of Employment.
7.
Effect of Change in Control.

Notwithstanding anything contained in this Agreement to the contrary, in the
event of a Change in Control, the Option shall continue; provided, however, that
the Committee, in its sole discretion and on such terms and conditions as it
deems appropriate, may provide for any or all of the following alternatives
(separately or in any combination):
(a)    for the payment in cash upon the surrender to the Company for
cancellation of the Option or portion of the Option to the extent vested and not
yet exercised in an amount equal to the excess, if any, of (1) (A) in the case
of a Nonqualified Stock Option, the greater of (i) the Fair Market Value, on the
date preceding the date of surrender, of the Shares subject to the Option or
portion thereof surrendered or (ii) the Adjusted Fair Market Value of the Shares
subject to the Option or portion thereof surrendered or (B) in the

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case of an Incentive Stock Option, the Fair Market Value, on the date preceding
the date of surrender, of the Shares subject to the Option or portion thereof
surrendered, over (2) the aggregate purchase price for such Shares under the
Option or portion thereof surrendered.
(b)    for the replacement of the Option with other rights or property selected
by the Committee in its sole discretion;
(c)    for the accelerated vesting of all or a portion of the Option;
(d)    for the assumption of the Option by the successor or survivor
corporation, or a parent or subsidiary thereof, or the substitution by such
corporation for the Option of a new option covering the stock of the successor
or survivor corporation, or a parent or subsidiary thereof, with appropriate
adjustments as to the number and kind of shares and prices; or
(e)    for adjustments in the terms and conditions of the Option and/or the
number and type of Shares or other securities or property subject to the Option.
(f)    In the case of a Change in Control which is also intended to constitute a
Pooling Transaction, the Committee shall take such actions, if any, as are
specifically recommended by an independent accounting firm retained by the
Company to the extent reasonably necessary in order to assure that the Pooling
Transaction will qualify as such, including, without limitation (i) deferring
the vesting, exercise or payment of the Option, (ii) providing that the payment
of the Option shall be made in the form of cash, Shares or securities of a
successor or acquirer of the Company, or a combination of the foregoing, and
(iii) providing for the extension of the term of the Option to the extent
necessary to accommodate the foregoing, but in no event beyond the Exercise
Term.
8.
Nontransferability.

The Option granted hereunder shall not be transferable by the Optionee other
than by will or the laws of descent and distribution or, if the Option is a
designated as a Nonqualified Stock Option in the Notice of Grant, to a spouse or
former spouse pursuant to a domestic relations order (within the meaning of Rule
16a-12 promulgated under the Exchange Act (a “Domestic Relations Transfer”). The
Option may be exercised during the lifetime of the Optionee only by the Optionee
or his or her guardian or legal representative; provided, however, if the Option
is designated as a Nonqualified Stock Option and transferred to a spouse or a
former spouse pursuant to a Domestic Relations Transfer, the Option may be
exercised by such spouse or former spouse and provided, further, however, that,
if the Option is designated as a Nonqualified Stock Option, the Committee, in
its sole discretion, may provide that this Option may be otherwise transferable
and exercisable by a transferee. Following transfer, for purposes of this
Agreement, a transferee of an Option shall be deemed to be the Optionee;
provided that the Option shall be exercisable by the transferee only to the
extent and for such periods that the Option would have been exercisable if held
by the Optionee. The terms of the Option shall be final, binding and conclusive
upon the beneficiaries, executors, administrators, heirs and successors of the
Optionee.

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9.
No Right to Continued Employment.

Nothing in this Agreement or the Plan shall be interpreted or construed to
confer upon the Optionee any right to continue in the employ of the Company or
any Subsidiary, nor shall this Agreement or the Plan interfere with or restrict
in any way the rights of the Company or any Subsidiary, which are hereby
expressly reserved, to terminate the Optionee’s employment at any time, with or
without Cause.
10.
Adjustments.

In the event of a Change in Capitalization, the Committee may make appropriate
adjustments to the number and class of Shares or other stock or securities
subject to the Option and the purchase price for such Shares or other stock
or securities. The Committee’s adjustment shall be made in accordance with the
provisions of Section 14 of the Plan and shall be effective and final, binding
and conclusive for all purposes of the Plan and this Agreement.
11.
Effect of a Merger Consolidation or Liquidation.

Subject to Section 7 hereof, in the event of (i) the liquidation or dissolution
of the Company or (ii) a merger or consolidation of the Company (a
“Transaction”), the Option shall continue in effect in accordance with its terms
and the Option shall be treated as provided for in the agreement entered into in
connection with the Transaction or, if not so provided in such agreement, the
Optionee shall be entitled to receive in respect of all Shares subject to the
Option, upon exercise of the Option, the same number and kind of stock,
securities, cash, property or other consideration that each holder of Shares was
entitled to receive in the Transaction in respect of a Share; provided, however,
that such stock, securities, cash, property, or other consideration shall remain
subject to all of the conditions and restrictions applicable to the Option prior
to such Transaction.
12.
Withholding of Taxes.

At such times as the Optionee recognizes taxable income in connection with the
receipt of Shares or cash hereunder (a “Taxable Event”), the Optionee shall pay
to the Company in cash an amount equal to the federal, state and local income
taxes and other amounts as may be required by law to be withheld by the Company
in connection with the Taxable Event (the “Withholding Taxes”) prior to the
issuance, or release from escrow, of such Shares or the payment of such cash.
The Company shall have the right to deduct from any payment of cash to the
Optionee an amount equal to the Withholding Taxes in satisfaction of the
obligation to pay Withholding Taxes. In satisfaction of the Withholding Taxes,
the Optionee may make a written election (the “Tax Election”), which may be
accepted or rejected in the sole discretion of the Committee, (i) to have
withheld a portion of the Shares issuable to him or her upon exercise of the
Option, having an aggregate Fair Market Value, on the date preceding the date of
such issuance, equal to the minimum Withholding Taxes required to be withheld or
(ii) to deliver Shares that have been held by the Optionee for at least six
(6) months, duly endorsed for transfer to the Company, having an aggregate Fair
Market Value on the day preceding the date of exercise equal to the minimum
Withholding Taxes required to be withheld.

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13.
Disqualifying Disposition.

To the extent that this Option is designated as an Incentive Stock Option in the
Notice of Grant and the Optionee disposes of the Shares acquired upon exercise
of this Option within two (2) years following the Date of Grant as specified in
the Notice of Grant or within one (1) year following the issuance thereof to the
Optionee (a “Disqualifying Disposition”), the Optionee shall immediately prior
to such Disqualifying Disposition notify the Company in writing of the date and
terms of such Disqualifying Disposition and provide such other information
regarding the Disqualifying Disposition as the Company may reasonably require.
14.
Optionee Bound by the Plan.

The Optionee hereby acknowledges receipt of a copy of the Plan and agrees to be
bound by all the terms and provisions thereof.
15.
Modification of Agreement.

This Agreement may be modified, amended, suspended or terminated, and any terms
or conditions may be waived, by the Company provided, however, that any such
modification, amendment, suspension, termination or waiver that adversely alters
or impairs any rights or obligations under this Option may be made only by a
written instrument executed by the parties hereto.
16.
Severability.

Whenever possible, each provision in this Agreement shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
of this Agreement shall be held by a court of competent jurisdiction to be
prohibited by or invalid or unenforceable under applicable law, then (a) such
provision shall be deemed amended to accomplish the objectives of the provision
as originally written to the fullest extent permitted by law and (b) all other
provisions of this Agreement shall remain in full force and effect.
17.
Governing Law.

The validity, interpretation, construction and performance of this Agreement
shall be governed by the laws of the State of Delaware without giving effect to
the conflicts of laws principles thereof.
18.
Successors in Interest.

This Agreement shall inure to the benefit of and be binding upon any successor
to the Company. This Agreement shall inure to the benefit of the Optionee’s
legal representatives. All obligations imposed upon the Optionee and all rights
granted to the Company under this Agreement shall be final, binding and
conclusive upon the Optionee’s heirs, executors, administrators and successors.

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19.
Resolution of Disputes.

Any dispute or disagreement which may arise under, or as a result of, or in any
way relate to, the interpretation, construction or application of this Agreement
shall be determined by the Committee. Any determination made hereunder shall be
final, binding and conclusive on the Optionee and Company for all purposes.
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this
Agreement, or caused this Agreement to be duly executed and delivered in their
name and on their behalf, as of the day and year first above written.

 
DASAN ZHONE SOLUTIONS, INC.
 
By:
 
 
Print Name:
 
 
Title:
 
 
Address:
 
 
 
Name of Optionee: [INSERT NAME]

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