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EXHIBIT 10.41 ADVANCED FIBRE COMMUNICATIONS STOCK OPTION AGREEMENT WITNESSETH: RECITALS A. The Board of Directors of the Corporation has adopted the
Advanced Fibre Communications 1993 Stock Option/Stock Issuance Plan, as amended
(the Plan) for the purpose of attracting and retaining the services of
selected key employees (including officers and directors), non-employee members
of the Board of Directors and consultants who contribute to the financial
success of the Corporation or its parent or subsidiary corporations. B. Optionee is an individual who is to render valuable services to the
Corporation or its parent or subsidiary corporations, and this Agreement is
executed pursuant to, and is intended to carry out the purposes of, the Plan in
connection with the Corporations grant of a stock option to Optionee. NOW, THEREFORE, it is hereby agreed as follows: 1. GRANT OF OPTION. Subject to and upon the terms and conditions
set forth in this Agreement, the Corporation hereby grants to Optionee, as of
the grant date (the Grant Date) specified in the accompanying Notice of Grant
of Stock Option (the Grant Notice), a stock option to purchase up to that
number of shares of the Corporations Common Stock (the Option Shares) as is
specified in the Grant Notice. The Option Shares shall be purchasable from time
to time during the option term at the option price per share (the Option
Price) specified in the Grant Notice. 2. OPTION TERM. This option shall have a maximum term of ten (10)
years measured from the Grant Date and shall expire at the close of business on
the expiration date (the Expiration Date) specified in the Grant Notice,
unless sooner terminated in accordance with Paragraph 5, 6 or 18. 3. LIMITED TRANSFERABILITY. This option shall be neither
transferable nor assignable by Optionee other than by will or by the laws of
descent and distribution following Optionees death and may be exercised, during
Optionees lifetime, only by Optionee. 4. DATES OF EXERCISE. This option shall become exercisable for the
Option Shares in one or more installments as is specified in the
Grant Notice. As the option




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becomes exercisable in one or more installments, the installments shall
accumulate and the option shall remain exercisable for such installments until
the Expiration Date or the sooner termination of the option term under
Paragraphs 5, 6 or 18 of this Agreement. 5. TERMINATION OF OPTION TERM. The option term specified in
Paragraph 2 shall terminate (and this option shall cease to be exercisable)
prior to the Expiration Date should any of the following provisions become
applicable: (i) Should Optionee cease to remain in Service for any
reason (other than death or Disability) while this option is outstanding, then
the period for exercising this option shall be reduced to a three (3)-month
period commencing with the date of such cessation of Service, but in no event
shall this option be exercisable at any time after the Expiration Date. Upon
the expiration of such three (3)-month period or (if earlier) upon the
Expiration Date, this option shall terminate and cease to be outstanding. (ii) Should Optionee die while this option is outstanding,
then the personal representative of Optionees estate or the person or persons
to whom the option is transferred pursuant to Optionees will or in accordance
with the laws of descent and distribution shall have the right to exercise this
option. Such right shall lapse and this option shall cease to be exercisable
upon the EARLIER of (a) the expiration of the twelve (12)-month period measured
from the date of Optionees death or (b) the Expiration Date. Upon the
expiration of such twelve (12)-month period or (if earlier) upon the Expiration
Date, this option shall terminate and cease to be outstanding. (iii) Should Optionee cease Service by reason of Disability
while this option is outstanding, then Optionee shall have a period of six (6)
months (commencing with the date of such cessation of Service) during which to
exercise this option. However, should such Disability be deemed to constitute
Permanent Disability, then the period during which this option is to remain
exercisable shall be extended by an additional six (6) months so that the
exercise period shall be limited to the twelve (12)-month period following the
date of Optionees cessation of Service by reason of such Permanent Disability.
In no event shall this option be exercisable at any time after the Expiration
Date. Upon the expiration of the applicable six (6) or twelve (12)-month period
or (if earlier) upon the Expiration Date, this option shall terminate and cease
to be outstanding. NOTE: Exercise of this option on a date later than three (3)
months following cessation of Service due to Disability will
result in loss of favorable incentive stock option treatment,
UNLESS such Disability constitutes Permanent Disability. In the
event that incentive stock option treatment is not available,
this option will be taxed as a non-statutory option upon
exercise. 2.




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(iv) During the limited period of post-Service
exercisability applicable under subparagraph (i), (ii) or (iii) above, this
option may not be exercised in the aggregate for more than the number of Option
Shares in which Optionee is, at the time of his/her cessation of Service, vested
in accordance with the vesting schedule specified in the Grant Notice. To the
extent Optionee is not vested in the Option Shares at the time of his/her
cessation of Service, this option shall immediately terminate and cease to be
outstanding with respect to those shares. (v) For purposes of this Paragraph 5 and for all other
purposes under this Agreement: A. DISABILITY shall mean the inability of an individual to engage in
any substantial gainful activity by reason of any medically determinable
physical or mental impairment and shall be determined by the Plan Administrator
on the basis of such medical evidence as the Plan Administrator deems warranted
under the circumstances. PERMANENT DISABILITY shall mean the inability to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or which has lasted or can be expected to last for a continuous period of
not less than twelve (12) months. B. Optionee shall be deemed to remain in SERVICE for so long as
Optionee continues to render periodic services to the Corporation or any parent
or subsidiary corporation, whether as an Employee, a non-employee member of the
board of directors, or a consultant. C. Optionee shall be deemed to be an EMPLOYEE of the Corporation and
to continue in the Corporations employ for so long as Optionee remains in the
employ of the Corporation or one or more of its parent or subsidiary
corporations, subject to the control and direction of the employer entity as to
both the work to be performed and the manner and method of performance. D. A corporation shall be considered to be a SUBSIDIARY corporation
of the Corporation if it is a member of an unbroken chain of corporations
beginning with the Corporation, provided each such corporation in the chain
(other than the last corporation) owns, at the time of determination, stock
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain. E. A corporation shall be considered to be a PARENT corporation of
the Corporation if it is a member of an unbroken chain ending with the
Corporation, provided each such corporation in the chain (other than the
Corporation) owns, at the time of determination, stock possessing 50% or more of
the total combined voting power of all classes of stock in one of the other
corporations in such chain. 3.




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6. SPECIAL TERMINATION OF OPTION. A. In the event of one or more of the following stockholder-approved
transactions (a Corporate Transaction): (i) a merger or consolidation in which the Corporation is not
the surviving entity, except for a transaction the principal purpose of
which is to change the State of the Corporations incorporation; or (ii) the sale, transfer or other disposition of all or
substantially all of the assets of the Corporation in complete liquidation
or dissolution of the Corporation; or (iii) any reverse merger in which the Corporation is the surviving
entity but in which all of the Corporations outstanding voting stock is
transferred to the acquiring entity or its wholly-owned subsidiary, then this option, to the extent not previously exercised, shall terminate upon
the consummation of the Corporate Transaction and cease to be exercisable,
unless it is expressly assumed by the successor corporation or parent thereof. B. This Agreement shall not in any way affect the right of the
Corporation to adjust, reclassify, reorganize or otherwise make changes in its
capital or business structure or to merge, consolidate, dissolve, liquidate or
sell or transfer all or any part of its business or assets. 7. ADJUSTMENT IN OPTION SHARES. A. In the event any change is made to the Corporations outstanding
Common Stock by reason of any stock split, stock dividend, combination of
shares, exchange of shares, or other change affecting the outstanding Common
Stock as a class without receipt of consideration, then appropriate adjustments
shall be made to (i) the total number of Option Shares subject to this option,
(ii) the number of Option Shares for which this option is to be exercisable from
and after each installment date specified in the Grant Notice and (iii) the
Option Price payable per share in order to reflect such change and thereby
preclude a dilution or enlargement of benefits hereunder. B. If this option is to be assumed in connection with a Corporate
Transaction described in Paragraph 6 or is otherwise to remain outstanding, then
this option shall be appropriately adjusted, immediately after such Corporate
Transaction, to apply and pertain to the number and class of securities which
would have been issuable to Optionee in the consummation of such Corporate
Transaction had the option been exercised immediately prior to such Corporate
Transaction, and appropriate adjustments shall also be 4.




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made to the Option Price
payable per share, PROVIDED the aggregate Option Price payable hereunder shall remain the same. 8. PRIVILEGE OF STOCK OWNERSHIP. The holder of this option shall
not have any of the rights of a shareholder with respect to the
Option Shares until such individual shall have exercised the option and paid the Option Price. 9. MANNER OF EXERCISING OPTION. A. In order to exercise this option with respect to all or any part
of the Option Shares for which this option is at the time exercisable, Optionee
(or in the case of exercise after Optionees death, Optionees executor,
administrator, heir or legatee, as the case may be) must take the following
actions: (i) Execute and deliver to the Secretary of the Corporation a
stock purchase agreement (the Purchase Agreement) in
substantially the
form of Exhibit B to the Grant Notice. (ii) Pay the aggregate Option Price for the purchased shares in
one or more of the following alternative forms: 1. full payment in cash or check; or 2. any other form which the Plan Administrator may,
in its discretion, approve at the time of exercise in accordance
with the provisions of paragraph 15 of this Agreement.(1) Should the Corporations outstanding Common Stock be registered
under Section 12(g) of the Securities Exchange Act of 1934, as amended (the
1934 Act) at the time the option is exercised, then the Option Price may
also be paid as follows: 3. in shares of Common Stock held by Optionee for the
requisite period necessary to avoid a charge to the Corporations
earnings for financial reporting purposes and valued at Fair
Market Value (as defined below) on the Exercise Date; or 4. to the extent exercised for vested Option Shares,
through a special sale and remittance procedure pursuant to which   (1)
    
    Authorization of a loan or installment payment method under such
provisions may, under currently proposed Treasury Regulations, result in the
loss of incentive stock option treatment under the Federal tax laws. 5.




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Optionee is to provide irrevocable written instructions (a) to a
Corporation-designated brokerage firm to effect the immediate
sale of the purchased shares and remit to the Corporation, out of
the sale proceeds available on the settlement date, sufficient
funds to cover the aggregate Option Price payable for the
purchased shares plus all applicable Federal, state and local
income and employment taxes required to be withheld by the
Corporation by reason of such purchase and (b) to the Corporation
to deliver the certificates for the purchased shares directly to
such brokerage firm in order to effect the sale transaction. (iii) Furnish to the Corporation appropriate documentation that
the person or persons exercising the option, if other than Optionee, have
the right to exercise this option. Except to the extent the sale and remittance procedure is
utilized in connection with the exercise of the option, payment of the
Option Price must accompany the Purchase Agreement delivered to the
Corporation. B. For purposes of this Agreement, the Exercise Date shall be the
date on which the executed Purchase Agreement shall have been delivered to the
Corporation, and the Fair Market Value of a share of Common Stock on any
relevant date shall be determined in accordance with subparagraphs (i) through
(iii) below: (i) If the Common Stock is not at the time listed or admitted to
trading on any stock exchange but is traded on the Nasdaq National Market
System, the Fair Market Value shall be the closing selling price per share
of Common Stock on the date in question, as the price is reported by the
National Association of Securities Dealers through the Nasdaq National
Market System or any successor system. If there is no closing selling
price for the Common Stock on the date in question, then the Fair Market
Value shall be the closing selling price on the last preceding date for
which such quotation exists. (ii) If the Common Stock is at the time listed or admitted to
trading on any stock exchange, then the Fair Market Value shall be the
closing selling price per share of Common Stock on the date in question on
the stock exchange determined by the Plan Administrator to be the primary
market for the Common Stock, as such price is officially quoted in the
composite tape of transactions on such exchange. If there is no closing
selling price for the Common Stock on the date in question, then the Fair
Market Value shall be the closing selling price on the last preceding date
for which such quotation exists. (iii) If the Common Stock is at the time neither listed nor
admitted to trading on any stock exchange nor traded on the Nasdaq National
Market System, 6.




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then such Fair Market Value shall be determined by the Plan Administrator after
taking into account such factors as the Plan Administrator shall deem
appropriate. C. As soon after the Exercise Date as practical, the Corporation
shall mail or deliver to Optionee or to the other person or persons exercising
this option a certificate or certificates representing the shares so purchased
and paid for, with the appropriate legends affixed thereto. D. In no event may this option be exercised for any fractional
shares. 10. REPURCHASE RIGHTS. THE OPTIONEE HEREBY AGREES THAT ALL OPTION
SHARES ACQUIRED UPON THE EXERCISE OF THIS OPTION SHALL BE SUBJECT TO CERTAIN
RIGHTS OF THE CORPORATION AND ITS ASSIGNS TO REPURCHASE SUCH SHARES IN
ACCORDANCE WITH THE TERMS AND CONDITIONS SPECIFIED IN THE PURCHASE AGREEMENT. 11. COMPLIANCE WITH LAWS AND REGULATIONS. A. The exercise of this option and the issuance of Option Shares
upon such exercise shall be subject to compliance by the Corporation and the
Optionee with all applicable requirements of law relating thereto and with all
applicable regulations of any stock exchange on which shares of the
Corporations Common Stock may be listed at the time of such exercise and
issuance. B. In connection with the exercise of this option, Optionee shall
execute and deliver to the Corporation such representations in writing as may be
requested by the Corporation in order for it to comply with the applicable
requirements of Federal and state securities laws. 12. SUCCESSORS AND ASSIGNS. Except to the extent otherwise provided
in Paragraph 3 or 6, the provisions of this Agreement shall inure to the benefit
of, and be binding upon, the successors, administrators, heirs, legal
representatives and assigns of Optionee and the successors and assigns of the
Corporation. 13. LIABILITY OF CORPORATION. A. If the Option Shares covered by this Agreement exceed, as of the
Grant Date, the number of shares of Common Stock which may without shareholder
approval be issued under the Plan, then this option shall be void with respect
to such excess shares, unless shareholder approval of an amendment sufficiently
increasing the number of shares of Common Stock issuable under the Plan is
obtained in accordance with the provisions of Article IV, Section 3 of the Plan. 7.




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B. The inability of the Corporation to obtain approval from any
regulatory body having authority deemed by the Corporation to be necessary to
the lawful issuance and sale of any Common Stock pursuant to this option shall
relieve the Corporation of any liability with respect to the non-issuance or
sale of the Common Stock as to which such approval shall not have been obtained.
The Corporation, however, shall use its best efforts to obtain all such
approvals. 14. NOTICES. Any notice required to be given or delivered to the
Corporation under the terms of this Agreement shall be in writing and addressed
to the Corporation in care of the Corporate Secretary at its principal corporate
offices. Any notice required to be given or delivered to Optionee shall be in
writing and addressed to Optionee at the address indicated below Optionees
signature line on the Grant Notice. All notices shall be deemed to have been
given or delivered upon personal delivery or upon deposit in the U.S. mail,
postage prepaid and properly addressed to the party to be notified. 15. LOANS. The Plan Administrator may, in its absolute discretion
and without any obligation to do so, assist the Optionee in the exercise of this
option by (i) authorizing the extension of a loan to the Optionee from the
Corporation or (ii) permitting the Optionee to pay the exercise price for the
purchased Common Stock in installments over a period of years. The terms of any
such loan or installment method of payment (including the interest rate, the
requirements for collateral and the terms of repayment) shall be established by
the Plan Administrator in its sole discretion. 16. CONSTRUCTION. This Agreement and the option evidenced hereby are
made and granted pursuant to the Plan and are in all respects limited by and
subject to the express terms and provisions of the Plan. All decisions of the
Plan Administrator with respect to any question or issue arising under the Plan
or this Agreement shall be conclusive and binding on all persons having an
interest in this option. 17. GOVERNING LAW. The interpretation, performance, and enforcement
of this Agreement shall be governed by the laws of the State of
California
without resort to that States conflict-of-laws rules. 18. SHAREHOLDER APPROVAL. If the Option Shares covered by this Agreement exceed, as of the
Grant Date, the number of shares of Common Stock which may without shareholder
approval be issued under the Plan, then this option shall be void with respect
to such excess shares, unless shareholder approval of an amendment sufficiently
increasing the number of shares of Common Stock issuable under the Plan is
obtained in accordance with the provisions of the Plan. 8.




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19. ADDITIONAL TERMS APPLICABLE TO AN INCENTIVE STOCK OPTION. In the
event this option is designated an incentive stock option in the
Grant Notice, the following terms and conditions shall also apply to the grant: A. This option shall cease to qualify for favorable tax treatment as
an incentive stock option under the Federal tax laws if (and to the extent) this
option is exercised for one or more Option Shares: (i) more than three (3)
months after the date Optionee ceases to be an Employee for any reason other
than death or Permanent Disability (as defined in Paragraph 5) or (ii) more than
one (1) year after the date Optionee ceases to be an Employee by reason of
Permanent Disability. B. Should this option be designated as immediately exercisable in
the Grant Notice, then this option shall not become exercisable in the calendar
year in which granted if (and to the extent) the aggregate Fair Market Value
(determined at the Grant Date) of the Corporations Common Stock for which this
option would otherwise first become exercisable in such calendar year would,
when added to the aggregate Fair Market Value (determined as of the respective
date or dates of grant) of the Corporations Common Stock for which this option
or one or more other incentive stock options granted to the Optionee prior to
the Grant Date (whether under the Plan or any other option plan of the
Corporation or its parent or subsidiary corporations) first become exercisable
during the same calendar year, exceed One Hundred Thousand Dollars ($100,000) in
the aggregate. To the extent the exercisability of this option is deferred by
reason of the foregoing limitation, the deferred portion will first become
exercisable in the first calendar year or years thereafter in which the One
Hundred Thousand Dollar ($100,000) limitation of this Paragraph 19.B would not
be contravened, but such deferral shall in all events end immediately prior to
the effective date of a Corporate Transaction in which this option is not to be
assumed, whereupon the option shall become exercisable as a non-statutory option
for the balance of the Option Shares. C. Should this option be designated as exercisable in installments
in the Grant Notice, then no installment under this option (whether annual or
monthly) shall qualify for favorable tax treatment as an incentive stock option
under the Federal tax laws if (and to the extent) the aggregate Fair Market
Value (determined at the Grant Date) of the Corporations Common Stock for which
such installment first becomes exercisable hereunder will, when added to the
aggregate Fair Market Value (determined as of the respective date or dates of
grant) of the Corporations Common Stock for which one or more other incentive
stock options granted to the Optionee prior to the Grant Date (whether under the
Plan or any other option plan of the Corporation or any parent or subsidiary
corporation) first become exercisable during the same calendar year, exceed One
Hundred Thousand Dollars ($100,000) in the aggregate. Should such One Hundred
Thousand Dollar ($100,000) limitation be exceeded in any calendar year, this
option shall nevertheless become exercisable for the excess shares in such
calendar year as a non-statutory option. 9.




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20. WITHHOLDING. Optionee hereby agrees to make appropriate
arrangements with the Corporation or parent or subsidiary corporation employing
Optionee for the satisfaction of all Federal, state or local income tax
withholding requirements and Federal social security employee tax requirements
applicable to the exercise of this option. 10.