Exhibit 10.1

 

Sonus Networks, Inc.

2007 Stock Incentive Plan, as Amended

 

Nonstatutory Stock Option Award Agreement

 

This NONSTATUTORY STOCK OPTION AWARD AGREEMENT (the “Agreement”) is made
effective as of the        day of                 , 20        (the “Grant
Date”), between Sonus Networks, Inc., a Delaware corporation (the “Company”),
and                                        (the “Participant” or “you”).

 

RECITALS

 

WHEREAS, the Company has adopted the Sonus Networks, Inc. 2007 Stock Incentive
Plan, as Amended (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 set forth in the Plan); and

 

WHEREAS, the Board has determined that it is in the best interests of the
Company and its stockholders to grant to the Participant the option described
herein pursuant to the Plan and the terms set forth below;

 

NOW THEREFORE, in consideration of the mutual covenants hereinafter set forth,
the parties agree as follows:

 

1.             Grant of Option.  The Company hereby grants to the Participant
the right and option (the “Option”) to purchase, in whole or in part, an
aggregate of                      shares of Common Stock (the “Shares”).  The
Option is intended to be a Nonstatutory Stock Option.

 

2.             Option Price.  The price per Share subject to the Option shall be
$                per Share (the “Option Price”).

 

3.             Option Term.   The term of the Option shall be ten (10) years,
commencing on the Grant Date.  Unless earlier terminated as set forth herein or
in the Plan, this Option shall automatically terminate at 5:00 p.m., Eastern
Time, on the tenth anniversary of the Grant Date (the “Final Exercise Date”).

 

4.             Vesting Schedule.  Subject to the Participant’s continued service
to the Company through the applicable vesting date, the Option shall vest and
become exercisable as follows: 25% of the Shares shall vest on the first
anniversary of [the Grant Date / the date your employment with the Company
commences (the “Commencement Date”)]; and the remaining 75% of the Options shall
vest in equal monthly increments of 2.0833% of the Options thereafter through
the fourth anniversary of the [Grant Date / the Commencement Date] (the “Final
Vesting Date”).

 

5.             Acceleration of Vesting.  Notwithstanding Section 4 hereof, the
lesser of the number of Options that are unvested as of the date of an
Acquisition (as defined in the Plan) or 25% of the total number of Shares shall
vest and become exercisable effective immediately prior to the date of such
Acquisition.  Thereafter, the balance of Options that are unvested shall
continue to vest in

 

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the monthly amount set forth in Section 2 above and the Final Vesting Date shall
be accelerated by twelve (12) months.

 

6.     Exercise of Option.

 

(a)           Notice of Exercise.  The Participant or the Participant’s
representative may exercise the vested portion of the Option or any part thereof
prior to the Final Vesting Date by giving written notice to the Company in the
form prescribed by the Company from time to time (the “Notice of Exercise”). 
The Notice of Exercise shall be signed by the person exercising such Option.  In
the event that such Option is being exercised by the Participant’s
representative, the Notice of Exercise shall be accompanied by proof
(satisfactory to the Company) of such representative’s right to exercise such
Option.

 

(b)           Method of Exercise.  The Participant or the Participant’s
representative shall deliver to the Company, at the time the Notice of Exercise
is given, payment for the full amount of the aggregate Option Price for the
exercised Option in the manner provided in Section 5(f) of the Plan.  The
Participant or the Participant’s representative may purchase less than the
number of Shares covered hereby; provided that no partial exercise of this
Option may be for any fractional share.

 

(c)           Issuance of Shares.  Provided that the Company receives a properly
completed and executed Notice of Exercise and payment for the full amount of the
aggregate Option Price, the Company shall promptly cause to be issued the Shares
underlying the exercised Option, registered in the name of the person exercising
the applicable Option.  Physical certificates for the Shares underlying the
exercised Option registered in the name of the person exercising the applicable
Option will be issued upon written request to the Company.

 

(d)         Continuous Relationship with the Company Required.  Except as
otherwise provided in this Section 6, this Option may not be exercised unless
the Participant, at the time he or she exercises this Option, is and has been at
all times since the Grant Date, an employee, officer or director of, or
consultant or advisor to, the Company or any of its affiliates.

 

(e)           Termination of Relationship with the Company.  Upon a termination
of the Participant’s services for any reason, other than pursuant to Sections
6(f) and (g) below, any unvested portion of the Option shall immediately
terminate and be forfeited without consideration and the vested portion of the
Option shall remain exercisable until the earlier of: ninety (90) days following
such termination of service and (ii) the Final Exercise Date.  Notwithstanding
the foregoing, if the Participant, prior to the Final Exercise Date, breaches
the terms of any agreement (including, without limitation, any confidentiality,
non-competition or non-solicitation provision) between the Participant and the
Company, the right to exercise this Option shall terminate upon such breach.

 

(f)            Exercise Period Upon Death or Disability.   Upon a termination of
the Participant’s service because the Participant dies or becomes disabled
(within the meaning of Section 22(e)(3) of the Code), any unvested portion of
the Option shall immediately terminate and be forfeited without consideration
and the vested portion of the Option shall remain exercisable until the earlier
of: (i) 180 days following such termination of service and (ii) the Final
Exercise Date.

 

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(g)           Termination for Cause.  Upon a termination of the Participant’s
service by the Company for Cause (as defined below), the right to exercise this
Option, including the vested portion of the Option, shall terminate immediately
and be forfeited without consideration.  If the Participant is party to an
employment, consulting or severance agreement with the Company at the time of
his or her termination of employment with the Company or any affiliate that
contains a different definition of “cause” (or any derivation thereof), the
definition in such agreement will control for purposes of this Agreement. 
Otherwise, “Cause” as used in this Agreement means the occurrence of any of the
following: (1) gross negligence or willful misconduct by you in the performance
of your duties that is likely to have a material adverse effect on the Company
or its reputation; (2) your indictment for, formal admission to (including a
plea of guilty or non contendere to), or conviction of (A) a felony, (B) a crime
of moral turpitude, dishonesty, breach of trust or unethical business conduct,
or (C) any crime involving the Company; (3) your commission of an act of fraud
or dishonesty in the performance of your duties; (4) repeated failure by you to
perform your duties, which are reasonably and in good faith requested in writing
by the CEO or the Board of Directors of the Company; or (5)  material breach of
any written agreement between you and the Company, that you fail to remedy
within ten (10) days following written notice from the Company.

 

7.             Withholding.  The Participant may be required to pay the Company
or any of its affiliates 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 transfer, and to take such other action as may be
necessary in the opinion of the Board to satisfy all obligations for the payment
of such withholding taxes.

 

8.             Transferability of Option.  Unless otherwise provided by the
Board, the Option may not be sold, assigned, alienated, attached, transferred,
pledged or otherwise encumbered by the Participant, either voluntarily or by
operation of law, except by will or 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 of its
affiliates; 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 Board shall have been
furnished with written notice thereof and a copy of such evidence as the Board
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
lifetime of the Participant, the Option shall be exercisable only by the
Participant.

 

9.             Provisions of the Plan.  By entering into this Agreement, the
Participant agrees and acknowledges that the Participant has received and read a
copy of the Plan; that the Option is subject to the provisions of the Plan; and
that the terms and provisions of the Plan as it may be amended from time to time
are hereby incorporated herein by reference.  In the event of a conflict between
any term or provision contained herein and a term or provision of the Plan, the
applicable terms and provisions of the Plan will govern and prevail.

 

10.           Notices.  Any notification required by the terms of this Agreement
shall be given in writing and shall be deemed effective upon personal delivery
or within three (3) days of deposit with the United States Postal Service, by
registered or certified mail, with postage and fees prepaid.  A notice shall be
addressed to the Company, Attention: General Counsel, at its principal executive
office and to the Participant at the address that he or she most recently
provided to the Company.

 

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11.           Adjustments of Shares.  In the event of a Reorganization Event (as
defined in the Plan) or other transaction described in Section 9 of the Plan,
the Shares and the other terms of this Agreement shall be adjusted in the manner
provided for in Section 10 of the Plan.

 

12.           No Right to Continued Service.  The granting of the Option
evidenced hereby and this Agreement shall impose no obligation on the Company or
any of its affiliates to continue the service of the Participant and shall not
lessen or affect any right that the Company or any of its affiliates may have to
terminate the service of such Participant.

 

13.           Securities Laws; Legends on Certificates.  The issuance and
delivery of the Shares shall comply with (or be exempt from) all applicable
requirements of law, including without limitation the Securities Act of 1933, as
amended, the rules and regulations promulgated thereunder, state securities laws
and regulations, and the regulations of any stock exchange or other securities
market on which the Company’s securities may then be traded.  The Company shall
not be obligated to file any registration statement under any applicable
securities laws to permit the purchase or issuance of any Shares under the Plan
or Awards and accordingly, any certificates for Shares or documents granting
Awards may have an appropriate legend or statement of applicable restrictions
endorsed thereon.  If the Company deems it necessary to ensure that the issuance
of Shares under the Plan is not required to be registered under any applicable
securities laws, each Participant to whom such Shares would be issued shall
deliver to the Company an agreement or certificate containing such
representations, warranties and covenants as the Company may reasonable request
which satisfies such requirements.

 

14.           Erroneously Awarded Compensation.  All Awards, if and to the
extent subject to the Dodd-Frank Wall Street Reform and Consumer Protection Act,
shall be subject to any incentive compensation policy established from time to
time by the Company to comply with such Act.

 

15.           Entire Agreement.  This Agreement and the Plan constitute the
entire contract between the parties hereto with regard to the subject matter
hereof.  They supersede any other agreements, representations or understandings
(whether oral or written and whether express or implied) which relate to the
subject matter hereof.

 

16.           Waiver.  No waiver of any breach or condition of this Agreement
shall be deemed to be a waiver of any other or subsequent breach or condition
whether of like or different nature.

 

17.           Successors and Assigns.  The provisions of this Agreement shall
inure to the benefit of, and be binding upon, the Company and its successors and
assigns and upon the Participant, the Participant’s assigns and the legal
representatives, heirs and legatees of the Participant’s estate, whether or not
any such person shall have become a party to this Agreement and have agreed in
writing to be joined herein and be bound by the terms hereof.

 

18.           Choice of Law.  This Agreement shall be governed by the law of the
State of Delaware (regardless of the laws that might otherwise govern under
applicable Delaware principles of conflicts of law) as to all matters, including
but not limited to matters of validity, construction, effect, performance and
remedies.

 

19.           No Guarantees Regarding Tax Treatment.  The Participant (or his or
her beneficiaries) shall be responsible for all taxes with respect to the
Option.  The Board and the Company make no guarantees regarding the tax
treatment of the Option.  Neither the Board nor the Company has any obligation
to take any action to prevent the assessment of any tax under Section 409A of
the

 

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Code or Section 457A of the Code or otherwise and none of the Company, any of
its affiliates, or any of their employees or representatives shall have any
liability to the Participant with respect thereto.

 

20.           Amendment.  The Board may amend or alter this Agreement and the
Option granted hereunder at any time, subject to the terms of the Plan.

 

21.           Severability.  The provisions of this Agreement are severable and
if any one or more of the provisions are determined to be illegal or otherwise
unenforceable, in whole or in part, the remaining provisions shall nevertheless
be binding and enforceable.

 

22.           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.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement.

 

 

 

 

SONUS NETWORKS, INC.

 

 

 

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

Title:

 

 

 

Agreed and acknowledged as

 

 

of the date first above written:

 

 

 

 

 

 

 

 

 

 

 

PARTICIPANT

 

 

 

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