Exhibit 10.7


 


OCCAM NETWORKS, INC.


 


2006 EQUITY INCENTIVE PLAN


 


STOCK OPTION AWARD AGREEMENT


 


Unless
otherwise defined herein, the terms defined in the 2006 Equity Incentive Plan
(the “Plan”) will have the same defined meanings in this Stock Option Award Agreement
(the “Award Agreement”).


 


I.      NOTICE OF STOCK OPTION GRANT


 


Name:


 


Address:


 


You
have been granted an option to purchase Common Stock of the Company, subject to
the terms and conditions of the Plan and this Award Agreement, as follows:


 


	
  Grant Number:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date of Grant:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Vesting Commencement
  Date:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Exercise Price per
  Share:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Total Number of Shares
  Granted:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Total Exercise Price:

  	
   

  	
  $

  
	
   

  	
   

  	
   

  
	
  Type of Option:

  	
   

  	
  Incentive
  Stock Option

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Nonstatutory
  Stock Option

  
	
   

  	
   

  	
   

  
	
  Term/Expiration Date:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Vesting Schedule:

  	
   

  	
   

  



 


Subject
to accelerated vesting as set forth below or in the Plan, this Option may be
exercised, in whole or in part, in accordance with the following schedule:


 


Twenty-five
percent (25%) of the Shares subject to the Option will vest twelve
(12) months after the Vesting Commencement Date, and 1/48 of the Shares
subject to the Option will vest each month thereafter on the same day of the
month as the Vesting Commencement Date (and if there is no corresponding day,
on the last day of the month), subject to Participant continuing to be a
Service Provider through such dates.


 


Termination
Period:


 


This
Option shall be exercisable, to the extent vested, for three (3) months
after Participant ceases to be a Service Provider, unless such termination is
due to Participant’s death or Disability, in which case this Option shall be
exercisable, to the extent vested, for twelve (12) months after
Participant ceases to be Service Provider. Notwithstanding the foregoing, in no
event may this Option be exercised after the Term/Expiration Date as provided
above and may be subject to earlier termination as provided in Section 15(c) of
the Plan.


 

















 


II.      AGREEMENT  


 


A. Grant of Option.


 


The Administrator hereby grants to the individual
named in the Notice of Stock Option Grant attached as Part I of this Award
Agreement (the “Participant”) an option (the “Option”) to purchase the number
of Shares, as set forth in the Notice of Stock Option Grant, at the exercise
price per share set forth in the Notice of Stock Option Grant (the “Exercise
Price”), subject to the terms and conditions of the Plan, which is incorporated
herein by reference. Subject to Section 20(c) of the Plan, in the
event of a conflict between the terms and conditions of the Plan and the terms
and conditions of this Award Agreement, the terms and conditions of the Plan
will prevail.


 


If
designated in the Notice of Stock Option Grant as an Incentive Stock Option (“ISO”),
this Option is intended to qualify as an Incentive Stock Option under Section 422
of the Code. However, if this Option is intended to be an Incentive Stock
Option, to the extent that it exceeds the $100,000 rule of Code Section 422(d) it
will be treated as a Nonstatutory Stock Option (“NSO”).


 


B. Administrator
Discretion.


 


The
Administrator, in its discretion, may accelerate the vesting of the balance, or
some lesser portion of the balance, of the unvested Option at any time, subject
to the terms of the Plan.  If so
accelerated, such Option shall be considered as having vested as of the date
specified by the Administrator.


 


C. Exercise
of Option.


 


1. Right
to Exercise. This Option is exercisable during its term in accordance with
the Vesting Schedule set out in the Notice of Stock Option Grant and the
applicable provisions of the Plan and this Award Agreement.


 


2. Method
of Exercise. This Option is exercisable by delivery of an exercise notice,
in the form attached as Exhibit A (the “Exercise Notice”) or in
such other form and manner as determined by the Administrator, which will state
the election to exercise the Option, the number of Shares in respect of which
the Option is being exercised (the “Exercised Shares”), and such other
representations and agreements as may be required by the Company pursuant to
the provisions of the Plan. The Exercise Notice will be properly completed by
Participant and delivered to the Company. The Exercise Notice will be
accompanied by payment of the aggregate Exercise Price as to all Exercised
Shares together with any applicable withholding taxes. This Option will be
deemed to be exercised upon receipt by the Company (or its designated
representative) of such fully executed Exercise Notice accompanied by such
aggregate Exercise Price.


 


No
Shares will be issued pursuant to the exercise of this Option unless such
issuance and exercise comply with Applicable Laws. Assuming such compliance,
for income tax purposes the Exercised Shares will be considered transferred to
Participant on the date the Option is exercised with respect to such Exercised
Shares.  This Option may not be exercised
for a fraction of a share.


 


D. Method
of Payment.


 


Payment
of the aggregate Exercise Price shall be by Net Exercise.  For this purpose, “Net-Exercise” means a
procedure by which Participant will be issued a number of Shares determined in
accordance with a formula X = Y(A-B) / A, where:


 


X =
the number of Shares to be issued to Participant upon exercise of the Option;


 


Y =
the total number of Shares with respect to which Participant has elected to
exercise the Option;


 


A =
the Fair Market Value of one (1) Share;


 

















 


B =
the Exercise Price set forth in the Notice of Stock Option Grant.


 


E. Non-Transferability
of Option.


 


This
Option may not be transferred in any manner otherwise than by will or by the
laws of descent or distribution and may be exercised during the lifetime of
Participant only by Participant.


 


F. Term
of Option.


 


This
Option may be exercised only within the term set out in the Notice of Stock
Option Grant, and may be exercised during such term only in accordance with the
Plan and the terms of this Award Agreement.


 


G. Tax
Obligations.


 


1. Withholding
Taxes. Participant agrees to make appropriate arrangements with the Company
(or the Parent or Subsidiary employing or retaining Participant) for the satisfaction
of all Federal, state, and local income and employment tax withholding
requirements applicable to the Option exercise. Participant acknowledges and
agrees that the Company may refuse to honor the exercise and refuse to deliver
Shares if such withholding amounts are not delivered at the time of exercise.


 


2. Notice
of Disqualifying Disposition of ISO Shares. If the Option granted to
Participant herein is an ISO, and if Participant sells or otherwise disposes of
any of the Shares acquired pursuant to the ISO on or before the later of (a) the
date  two (2) years
after the Grant Date, or (b) the date one (1) year after the date of exercise,
Participant will immediately notify the Company in writing of such disposition.
Participant agrees that Participant may be subject to income tax withholding by
the Company on the compensation income recognized by Participant.


 


H. Rights as Stockholder.


 


Neither
Participant nor any person claiming under or through Participant shall have any
of the rights or privileges of a stockholder of the Company in respect of any
Shares deliverable hereunder unless and until certificates representing such
Shares (which may be in book entry form) shall have been issued, recorded on
the records of the Company or its transfer agents or registrars, and delivered
to Participant (including through electronic delivery to a brokerage
account).  After such issuance,
recordation and delivery, Participant shall have all the rights of a
stockholder of the Company with respect to voting such Shares and receipt of
dividends and distributions on such Shares.


 


I. Entire
Agreement; Governing Law.


 


The
Plan is incorporated herein by reference. The Plan and this Award Agreement
constitute the entire agreement of the parties with respect to the subject matter
hereof and supersede in their entirety all prior undertakings and agreements of
the Company and Participant with respect to the subject matter hereof, and may
not be modified adversely to Participant’s interest except by means of a writing signed by the Company and Participant. This
Award Agreement is governed by the internal substantive laws, but not the
choice of law rules, of California.


 


J. Address
for Notices.


 


Any
notice to be given to the Company under the terms of this Award Agreement shall
be addressed to the Company, in care of its Secretary at the Company’s
headquarters, 77 Robin Hill Road, Santa Barbara, CA 93117, Attn: Stock
Administration, or at such other address as the Company may hereafter designate
in writing.


 


K. NO
GUARANTEE OF CONTINUED SERVICE.


 


PARTICIPANT
ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO THE VESTING
SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS A SERVICE PROVIDER AT THE WILL
OF THE COMPANY (AND NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED AN OPTION
OR PURCHASING SHARES HEREUNDER). 


 

















 


PARTICIPANT FURTHER
ACKNOWLEDGES AND AGREES THAT THIS AWARD AGREEMENT, THE TRANSACTIONS
CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT
CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE
PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND WILL NOT
INTERFERE WITH PARTICIPANT’S RIGHT OR THE COMPANY’S RIGHT TO TERMINATE
PARTICIPANT’S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT
CAUSE.


 


L. Grant
is Not Transferable.


 


This
Option may not be transferred in any manner otherwise than by will or by the
laws of descent or distribution and may be exercised during the lifetime of
Participant only by Participant.


 


M. Binding
Agreement.


 


Subject
to the limitation on the transferability of this grant contained herein, this
Award Agreement shall be binding upon and inure to the benefit of the heirs,
legatees, legal representatives, successors and assigns of the parties hereto.


 


N. Additional
Conditions to Issuance of Stock.


 


If at
any time the Company shall determine, in its discretion, that the listing,
registration or qualification of the Shares upon any securities exchange or
under any state or federal law, or the consent or approval of any governmental
regulatory authority is necessary or desirable as a condition to the issuance
of Shares to Participant (or his or her estate), such issuance shall not occur
unless and until such listing, registration, qualification, consent or approval
shall have been effected or obtained free of any conditions not acceptable to
the Company.  The Company shall make all
reasonable efforts to meet the requirements of any such state or federal law or
securities exchange and to obtain any such consent or approval of any such
governmental authority.


 


O. Plan
Governs.


 


This
Award Agreement is subject to all terms and provisions of the Plan.  In the event of a conflict between one or
more provisions of this Award Agreement and one or more provisions of the Plan,
the provisions of the Plan shall govern. 
Capitalized terms used and not defined in this Award Agreement shall
have the meaning set forth in the Plan.


 


P. Administrator
Authority.


 


The
Administrator shall have the power to interpret the Plan and this Award
Agreement and to adopt such rules for the administration, interpretation
and application of the Plan as are consistent therewith and to interpret or
revoke any such rules (including, but not limited to, the determination of
whether or not any Shares subject to the Option have vested).  All actions taken and all interpretations and
determinations made by the Administrator in good faith shall be final and
binding upon Participant, the Company and all other interested persons.  The Administrator shall not be personally
liable for any action, determination or interpretation made in good faith with
respect to the Plan or this Award Agreement.


 


Q. Electronic
Delivery.


 


The
Company may, in its sole discretion, decide to deliver any documents related to
Options awarded under the Plan or future Options that
may be awarded under the Plan by electronic means or request Participant’s
consent to participate in the Plan by electronic means.  Participant hereby consents to receive such
documents by electronic delivery and agrees to participate in the Plan through
any on-line or electronic system established and maintained by the Company or
another third party designated by the Company.


 


R. Captions.


 


Captions
provided herein are for convenience only and are not to serve as a basis for
interpretation or construction of this Award Agreement.


 

















 


S. Agreement
Severable.


 


In the
event that any provision in this Award Agreement shall be held invalid or
unenforceable, such provision shall be severable from, and such invalidity or
unenforceability shall not be construed to have any effect on, the remaining
provisions of this Award Agreement.


 


T. Modifications
to the Agreement.


 


This
Award Agreement constitutes the entire understanding of the parties on the
subjects covered.  Participant expressly warrants
that he or she is not accepting this Award Agreement in reliance on any
promises, representations, or inducements other than those contained
herein.  Modifications to this Award
Agreement or the Plan can be made only in an express written contract executed
by a duly authorized officer of the Company.  
Notwithstanding anything to the contrary in the Plan or this Award
Agreement, the Company reserves the right to revise this Agreement as it deems
necessary or advisable, in its sole discretion and without the consent of
Participant, to avoid imposition of any additional tax or income recognition
under Section 409A of the Code prior to the actual payment of Shares
pursuant to this award.


 


U. Amendment,
Suspension or Termination of the Plan.


 


By
accepting this Award, Participant expressly warrants that he or she has
received an Option under the Plan, and has received, read and understood a
description of the Plan.  Participant
understands that the Plan is discretionary in nature and may be amended, suspended
or terminated by the Company at any time.


 


V. Governing
Law.


 


This
Award Agreement shall be construed in accordance with and governed by the laws
of the State of California, other than its conflicts of laws provisions


 


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Left Blank]


 

















 


By
Participant’s signature and the signature of the Company’s representative
below, Participant and the Company agree that this Option is granted under and
governed by the terms and conditions of the Plan and this Award Agreement.
Participant has reviewed the Plan and this Award Agreement in their entirety,
has had an opportunity to obtain the advice of counsel prior to executing this
Award Agreement and fully understands all provisions of the Plan and Award
Agreement. Participant hereby agrees to accept as binding, conclusive and final
all decisions or interpretations of the Administrator upon any questions
relating to the Plan and Award Agreement. Participant further agrees to notify
the Company upon any change in the residence address indicated below.


 


 


	
  PARTICIPANT:

  	
   

  	
  OCCAM NETWORKS, INC.:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature

  	
   

  	
  By

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Print Name

  	
   

  	
  Title

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Residence Address

  	
   

  	
   

  
	
   

  	
   

  	
   

  



 

















 


EXHIBIT A


 


OCCAM NETWORKS, INC.


 


2006 EQUITY INCENTIVE PLAN


 


EXERCISE NOTICE


 


Occam Networks, INC.


6868 Cortona Drive


Santa Barbara, CA 93117


Attention: Stock
Administration


 


1. Exercise
of Option. Effective as of today,                         ,
            , the
undersigned (“Purchaser”) hereby elects to purchase                     
shares (the “Shares”) of the Common Stock of Occam Networks Inc. (the “Company”)
under and pursuant to the 2006 Equity Incentive Plan (the “Plan”) and the Stock
Option Award Agreement dated                 
(the “Award Agreement”). The purchase price for the Shares will be $                    ,
as required by the Award Agreement.


 


2. Delivery
of Payment. Purchaser herewith delivers to the Company the full purchase
price for the Shares and any required withholding taxes to be paid in
connection with the exercise of the Option in accordance with Part II(D) and II(G) of the Award Agreement.


 


3. Representations
of Purchaser. Purchaser acknowledges that Purchaser has received, read and
understood the Plan and the Award Agreement and agrees to abide by and be bound
by their terms and conditions.


 


4. Rights
as Stockholder. Until the issuance (as evidenced by the appropriate entry
on the books of the Company or of a duly authorized transfer agent of the
Company) of the Shares, no right to vote or receive dividends or any other
rights as a stockholder will exist with respect to the Optioned Stock,
notwithstanding the exercise of the Option. The Shares so acquired will be
issued to Participant as soon as practicable after exercise of the Option.


 


5. Tax
Consultation. Purchaser understands that Purchaser may suffer adverse tax
consequences as a result of Purchaser’s purchase or disposition of the Shares.
Purchaser represents that Purchaser has consulted with any tax consultants
Purchaser deems advisable in connection with the purchase or disposition of the
Shares and that Purchaser is not relying on the Company for any tax advice.


 


6. Entire
Agreement; Governing Law. The Plan and Award Agreement are incorporated
herein by reference. This Agreement, the Plan and the Award Agreement
constitute the entire agreement of the parties with respect to the subject
matter hereof and supersede in their entirety all prior undertakings and
agreements of the Company and Purchaser with respect to the subject matter
hereof, and may not be modified adversely to the Purchaser’s interest except by
means of a writing signed by the Company and Purchaser. This agreement is
governed by the internal substantive laws, but not the choice of law rules, of
California.


 


 


	
  Submitted by:

  	
   

  	
  Accepted by:

  
	
   

  	
   

  	
   

  
	
  PURCHASER:

  	
   

  	
  OCCAM NETWORKS, INC.:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature

  	
   

  	
  By

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Print Name

  	
   

  	
  Its

  
	
   

  	
   

  	
   

  
	
  Address: