TRANSWITCH CORPORATION

2005 EMPLOYEE STOCK PURCHASE PLAN

as amended


 


Article 1 — Purpose.


 


This 2005 Employee Stock
Purchase Plan (the “Plan”) is intended to encourage stock ownership by all Eligible Employees (as defined in Article
3) of TranSwitch Corporation (the “Company”), a Delaware corporation, and its participating subsidiaries (as defined
in Article 17) so that they may share in the growth of the Company by acquiring or increasing their proprietary interest in the
Company. The Plan is designed to encourage Eligible Employees to remain in the employ of the Company and its participating subsidiaries.
The Plan is intended to constitute an “employee stock purchase plan” within the meaning of Section 423(b) of the Internal
Revenue Code of 1986, as amended (the “Code”).


 


Article 2 — Administration
of the Plan.


 


The Plan may be administered
by a committee appointed by the Board of Directors of the Company (the “Committee”). The Committee shall consist of
not less than two members of the Company’s Board of Directors. The Board of Directors may from time to time remove members
from, or add members to, the Committee. Vacancies on the Committee, howsoever caused, shall be filled by the Board of Directors.
The Committee may select one of its members as Chairman, and shall hold meetings at such times and places as it may determine.
Acts by a majority of the Committee, or acts reduced to or approved in writing by a majority of the members of the Committee, shall
be the valid acts of the Committee.


 


The interpretation and
construction by the Committee of any provisions of the Plan or of any option granted under it shall be final, unless otherwise
determined by the Board of Directors. The Committee may from time to time adopt such rules and regulations for carrying out the
Plan as it may deem best, provided that any such rules and regulations shall be applied on a uniform basis to all employees under
the Plan. No member of the Board of Directors or the Committee shall be liable for any action or determination made in good faith
with respect to the Plan or any option granted under it.


 


In the event the Board
of Directors fails to appoint or refrains from appointing a Committee, the Board of Directors shall have all power and authority
to administer the Plan. In such event, the word “Committee” wherever used herein shall be deemed to mean the Board
of Directors.


 


Article 3 — Eligible Employees.


 


All employees of the
Company or any of its participating subsidiaries whose customary employment is more than 20 hours per week and for more than five
months in any calendar year and who have completed at least six (6) months of employment (each an “Eligible Employee”)
shall be eligible to receive options under the Plan to purchase common stock of the Company, and all Eligible Employees shall have
the same rights and privileges hereunder. Persons who are Eligible Employees on the first business day of any Payment Period (as
defined in Article 5) shall receive their options as of such day. Persons who become Eligible Employees after any date on which
options are granted under the Plan shall be granted options on the first day of the next succeeding Payment Period on which options
are granted to Eligible Employees under the Plan. In no event, however, may an employee be granted an option if such employee,
immediately after the option was granted, would be treated as owning stock possessing five percent or more of the total combined
voting power or value of all classes of stock of the Company or of any parent corporation or subsidiary corporation, as the terms
“parent corporation” and “subsidiary corporation” are defined in Section 424(e) and (f) of the Code. For
purposes of determining stock ownership under this paragraph, the stock attribution rules of Section 424(d) of the Code shall apply,
and stock which the employee may purchase under outstanding options shall be treated as stock owned by the employee.


 



    	 



    	 



    




Article 4 — Stock Subject to
the Plan.


 


The stock subject to
the options under the Plan shall be shares of the Company’s authorized but unissued common stock, par value $.001 per share
(the “Common Stock”), or shares of Common Stock reacquired by the Company, including shares purchased in the open market.
The aggregate number of shares which may be issued pursuant to the Plan is 350,000, subject to adjustment as provided in Article
12. If any option granted under the Plan shall expire or terminate for any reason without having been exercised in full or shall
cease for any reason to be exercisable in whole or in part, the unpurchased shares subject thereto shall again be available under
the Plan.


 


Article 5 — Payment Period
and Stock Options.


 


The first Payment Period
during which Eligible Employee’s payroll deductions will be accumulated under the Plan shall commence on July 1, 2005 and
shall end on December 31, 2005. For the remainder of the duration of the Plan, Payment Periods shall consist of the six-month periods
commencing on January 1 and ending on June 30 and commencing on July 1 and ending on December 31 of each calendar year.


 


Twice each year, on
the first business day of each Payment Period, the Company will grant to each Eligible Employee who is then a participant in the
Plan an option to purchase on the last day of such Payment Period, at the Option Price hereinafter provided for, a maximum of 2,000
shares, on condition that such employee remains eligible to participate in the Plan throughout the remainder of such Payment Period.
The participant shall be entitled to exercise the option so granted only to the extent of the participant’s accumulated payroll
deductions on the last day of such Payment Period. If the participant’s accumulated payroll deductions on the last day of
the Payment Period would enable the participant to purchase more than 2,000 shares except for the 2,000-share limitation, the excess
of the amount of the accumulated payroll deductions over the aggregate purchase price of the 2,000 shares shall be promptly refunded
to the participant by the Company. In no event will interest accrue on payroll deductions or any amount refunded to the participant.
The Option Price per share for each Payment Period shall be the lesser of (i) 85% of the average market price of the Common Stock
on the first business day of the Payment Period and (ii) 85% of the average market price of the Common Stock on the last business
day of the Payment Period, in either event rounded up to avoid fractions of a dollar other than 1/4, 1/2 and 3/4. The foregoing
limitation on the number of shares subject to option and the Option Price shall be subject to adjustment as provided in Article
12.


 


For purposes of the
Plan, the term “average market price” on any date means (i) the average (on that date) of the high and low prices of
the Common Stock on the principal national securities exchange on which the Common Stock is traded, if the Common Stock is then
traded on a national securities exchange; or (ii) the last reported sale price (on that date) of the Common Stock on the Nasdaq
Stock Market, if the Common Stock is not then traded on a national securities exchange; or (iii) the average of the closing bid
and asked prices last quoted (on that date) by an established quotation service for over-the-counter securities, if the Common
Stock is not reported on the Nasdaq Stock Market; or (iv) if the Common Stock is not publicly traded, the fair market value of
the Common Stock as determined by the Committee after taking into consideration all factors which it deems appropriate, including,
without limitation, recent sale and offer prices of the Common Stock in private transactions negotiated at arm’s length.


 


For purposes of the
Plan, the term “business day” means a day on which there is trading on the Nasdaq Stock Market or the aforementioned
national securities exchange, whichever is applicable pursuant to the preceding paragraph; and if neither is applicable, a day
that is not a Saturday, Sunday or legal holiday in the State of Connecticut.


 


No employee shall be
granted an option which permits the employee’s right to purchase stock under the Plan, and under all other Section 423(b)
employee stock purchase plans of the Company and any parent or subsidiary corporations, to accrue at a rate which exceeds $25,000
of fair market value of such stock (determined on the date or dates that options on such stock were granted) for each calendar
year in which such option is outstanding at any time. The purpose of the limitation in the preceding sentence is to comply with
Section 423(b)(8) of the Code. If the participant’s accumulated payroll deductions on the last day of the Payment Period
would otherwise enable the participant to purchase Common Stock in excess of the Section 423(b)(8) limitation described in this
paragraph, the excess of the amount of the accumulated payroll deductions over the aggregate purchase price of the shares actually
purchased shall be promptly refunded to the participant by the Company, without interest.


 






    	 



    	 



    

 


Article 6 — Exercise of Option.


 


Each Eligible Employee
who continues to be a participant in the Plan on the last day of a Payment Period shall be deemed to have exercised his or her
option on such date and shall be deemed to have purchased from the Company such number of full shares of Common Stock reserved
for the purpose of the Plan as the participant’s accumulated payroll deductions on such date will pay for at the Option Price,
subject to the 2,000-share limit of the option and the Section 423(b)(8) limitation described in Article 5. If the individual is
not a participant on the last day of a Payment Period, then he or she shall not be entitled to exercise his or her option. Only
full shares of Common Stock may be purchased under the Plan. Unused payroll deductions remaining in a participant’s account
at the end of a Payment Period by reason of the inability to purchase a fractional share shall be promptly refunded to the participant
by the Company without interest.


 


Article 7 — Authorization for
Entering the Plan.


 


An Eligible Employee
may elect to enter the Plan by filling out, signing and delivering, in manual or electronic format, to the Company an authorization:


 


	 	A.	Stating the whole percentage to be deducted regularly from the employee’s pay; 


 


	 	B.	Authorizing the purchase of stock for the employee in each Payment Period in accordance with the terms of the Plan; and 


 


	 	C.	Specifying the exact name or names in which stock purchased for the employee is to be issued as provided under Article 11 hereof. 


 


Such authorization must
be received by the Company at least ten days before the first day of the next succeeding Payment Period and shall take effect only
if the employee is an Eligible Employee on the first business day of such Payment Period.


 


Unless a participant
files a new authorization or withdraws from the Plan, the deductions and purchases under the authorization the participant has
on file under the Plan will continue from one Payment Period to succeeding Payment Periods as long as the Plan remains in effect.


 


The Company will accumulate
and hold for each participant’s account the amounts deducted from his or her pay. No interest will be paid on these amounts.


 


Article 8 — Maximum Amount
of Payroll Deductions.


 


An employee may authorize
payroll deductions in an amount (expressed as a whole percentage) not less than one percent (1%) but not more than five percent
(5%) of the employee’s total cash compensation, including base pay or salary and any overtime, or commissions. Total cash
compensation will exclude bonus payments or other incentive compensation as determined in the Company’s sole discretion.


 


Article 9 — Change in Payroll
Deductions.


 


Deductions may not be
increased or decreased during a Payment Period. However, a participant may withdraw in full from the Plan.


 


Article 10 — Withdrawal from
the Plan.


 


An employee may withdraw
from the Plan (in whole but not in part) at any time by delivering a withdrawal notice to the Company no later than ten business
days prior to the last day of the Payment Period, in which case the Company will promptly refund the entire balance of the employee’s
deductions not previously used to purchase stock under the Plan.


 






    	 



    	 



    

 


 To re-enter the
Plan, an Eligible Employee who has previously withdrawn must file a new authorization at least ten business days before the first
day of the next Payment Period in which he or she wishes to participate. The Eligible Employee’s re-entry into the Plan
becomes effective at the beginning of such Payment Period, provided that he or she is an Eligible Employee on the first business
day of the Payment Period.


 


Article 11 — Issuance of Stock.


 


Certificates for stock
issued to participants shall be delivered or electronic transfer will be effected as soon as practicable after each Payment Period
by the Company’s transfer agent.


 


Stock purchased under
the Plan shall be issued only in the name of the participant, or if the participant’s authorization so specifies, in the
name of the participant and another person of legal age as joint tenants with rights of survivorship.


 


Article 12 — Adjustments.


 


Upon the happening of
any of the following described events, a participant’s rights under options granted under the Plan shall be adjusted as hereinafter
provided:


 


A. In the event that
the shares of Common Stock shall be subdivided or combined into a greater or smaller number of shares or if, upon a reorganization,
split-up, liquidation, recapitalization or the like of the Company, the shares of Common Stock shall be exchanged for other securities
of the Company, each participant shall be entitled, subject to the conditions herein stated, to purchase such number of shares
of Common Stock or amount of other securities of the Company as were exchangeable for the number of shares of Common Stock that
such participant would have been entitled to purchase except for such action, and appropriate adjustments shall be made in the
purchase price per share to reflect such subdivision, combination or exchange; and


 


B. In the event the
Company shall issue any of its shares as a stock dividend upon or with respect to the shares of stock of the class which shall
at the time be subject to option hereunder, each participant upon exercising such an option shall be entitled to receive (for the
purchase price paid upon such exercise) the shares as to which the participant is exercising his or her option and, in addition
thereto (at no additional cost), such number of shares of the class or classes in which such stock dividend or dividends were declared
or paid, and such amount of cash in lieu of fractional shares, as is equal to the number of shares thereof and the amount of cash
in lieu of fractional shares, respectively, which the participant would have received if the participant had been the holder of
the shares as to which the participant is exercising his or her option at all times between the date of the granting of such option
and the date of its exercise.


 


Upon the happening of
any of the foregoing events, the class and aggregate number of shares set forth in Article 4 hereof which are subject to options
which have been or may be granted under the Plan and the limitations set forth in the second paragraph of Article 5 shall also
be appropriately adjusted to reflect the events specified in paragraphs A. and B. above. Notwithstanding the foregoing, any adjustments
made pursuant to paragraphs A. or B. shall be made only after the Committee, based on advice of counsel for the Company, determines
whether such adjustments would constitute a “modification” (as that term is defined in Section 424 of the Code and
other interpretative guidance from the Internal Revenue Service). If the Committee determines that such adjustments would constitute
a modification, it may refrain from making such adjustments.


 


If the Company is to
be consolidated with or acquired by another entity in a merger, a sale of all or substantially all of the Company’s assets
or otherwise (an “Acquisition”), the Committee or the board of directors of any entity assuming the obligations
of the Company hereunder (the “Successor Board”) shall, with respect to options then outstanding under the Plan,
either (i) make appropriate provision for the continuation of such options by arranging for the substitution on an equitable basis
for the shares then subject to such options either (a) the consideration payable with respect to the outstanding shares of the
Common Stock in connection with the Acquisition, (b) shares of stock of the successor corporation, or a parent or subsidiary of
such corporation, or (c) such other securities as the Successor Board deems appropriate, the fair market value of which shall not
materially exceed the fair market value of the shares of Common Stock subject to such options immediately preceding the Acquisition;
or (ii) terminate each participant’s options in exchange for a cash payment equal to the excess of (a) the fair market value
on the date of the Acquisition, of the number of shares of Common Stock that the participant’s accumulated payroll deductions
as of the date of the Acquisition could purchase, at an option price determined with reference only to the first business day of
the applicable Payment Period and subject to the 2,000 share limit, Code Section 423(b)(8) and fractional-share limitations on
the amount of stock a participant would be entitled to purchase, over (b) the result of multiplying such number of shares by such
option price.


 






    	 



    	 



    

 


 


The Committee or Successor
Board shall determine the adjustments to be made under this Article 12, and its determination shall be conclusive.


 


Article 13 — No Transfer or
Assignment of Employee’s Rights.


 


An employee’s
rights under the Plan are the employee’s alone and may not be transferred or assigned to, or availed of by, any other person
other than by will or the laws of descent and distribution. Any option granted under the Plan to an employee may be exercised,
during the employee’s lifetime, only by the employee.


 


Article 14 — Termination of
Employee’s Rights.


 


Whenever a participant
ceases to be an Eligible Employee because of retirement, voluntary or involuntary termination, resignation, layoff, discharge,
death or for any other reason, his or her rights under the Plan shall immediately terminate, and the Company shall promptly refund,
without interest, the entire balance of his or her payroll deduction account under the Plan. Notwithstanding the foregoing, eligible
employment shall be treated as continuing intact while a participant is on military leave, sick leave or other bona fide leave
of absence, for up to 90 days, or for so long as the participant’s right to re-employment is guaranteed either by statute
or by contract, if longer than 90 days.


 


If a participant’s
payroll deductions are interrupted by any legal process, a withdrawal notice will be considered as having been received from the
participant on the day the interruption occurs.


 


Nothing in the Plan,
or the grant of a option hereunder, shall confer upon a participant any right to continue in the employ of the Company or shall
affect the right of the Company to terminate the employment of the participant, with or without cause.


 


Article 15 — Termination and
Amendments to Plan.


 


Unless terminated sooner
as provided below, the Plan shall terminate on December 31, 2014. The Plan may be terminated at any time by the Company’s
Board of Directors but such termination shall not affect options then outstanding under the Plan. It will terminate in any case
when all or substantially all of the unissued shares of stock reserved for the purposes of the Plan have been purchased. If at
any time shares of stock reserved for the purpose of the Plan remain available for purchase but not in sufficient number to satisfy
all then unfilled purchase requirements, the available shares shall be apportioned among participants in proportion to the amount
of payroll deductions accumulated on behalf of each participant that would otherwise be used to purchase stock, and the Plan shall
terminate. Upon such termination or any other termination of the Plan, all payroll deductions not used to purchase stock will be
refunded, without interest.


 


The Committee or the
Board of Directors may from time to time adopt amendments to the Plan provided that, without the approval of the stockholders of
the Company, no amendment may (i) increase the number of shares that may be issued under the Plan; (ii) change the class of employees
eligible to receive options under the Plan, if such action would be treated as the adoption of a new plan for purposes of Section
423(b) of the Code; or (iii) cause Rule 16b-3 under the Securities Exchange Act of 1934 to become inapplicable to the Plan.


 



    	 



    	 



    




 


Article 16 — Limits on Sale
of Stock Purchased under the Plan.


 


The Plan is intended
to provide shares of Common Stock for investment and not for resale. The Company does not, however, intend to restrict or influence
any employee in the conduct of his or her own affairs. An employee may, therefore, sell stock purchased under the Plan at any time
the employee chooses, subject to compliance with any applicable federal or state securities laws and subject to any restrictions
imposed under Article 21 to ensure that tax withholding obligations are satisfied. THE EMPLOYEE ASSUMES THE RISK OF ANY MARKET
FLUCTUATIONS IN THE PRICE OF THE STOCK.


 


Article 17 — Participating
Subsidiaries.


 


The term “participating
subsidiary” shall mean any present or future subsidiary of the Company, as that term is defined in Section 424(f) of the
Code, which is designated from time to time by the Board of Directors to participate in the Plan. The Board of Directors shall
have the power to make such designation before or after the Plan is approved by the stockholders.


 


Article 18 — Optionees Not
Stockholders.


 


Neither the granting
of an option to an employee nor the deductions from his or her pay shall constitute such employee a stockholder of the shares covered
by an option until such shares have been actually purchased by the employee.


 


Article 19 — Application of
Funds.


 


The proceeds received
by the Company from the sale of Common Stock pursuant to options granted under the Plan will be used for general corporate purposes.


 


Article 20 — Notice to Company
of Disqualifying Disposition.


 


By electing to participate
in the Plan, each participant agrees to notify the Company in writing immediately after the participant transfers Common Stock
acquired under the Plan, if such transfer occurs within two years after the first business day of the Payment Period in which such
Common Stock was acquired. Each participant further agrees to provide any information about such a transfer as may be requested
by the Company or any subsidiary corporation in order to assist it in complying with the tax laws. Such dispositions generally
are treated as “disqualifying dispositions” under Sections 421 and 424 of the Code, which have certain tax consequences
to participants and to the Company and its participating subsidiaries.


 


Article 21 — Withholding of
Additional Income Taxes.


 


By electing to participate
in the Plan, each participant acknowledges that the Company and its participating subsidiaries are required to withhold taxes with
respect to the amounts deducted from the participant’s compensation and accumulated for the benefit of the participant under
the Plan, and each participant agrees that the Company and its participating subsidiaries may deduct additional amounts from the
participant’s compensation, when amounts are added to the participant’s account, used to purchase Common Stock or refunded,
in order to satisfy such withholding obligations. Each participant further acknowledges that when Common Stock is purchased under
the Plan the Company and its participating subsidiaries may be required to withhold taxes with respect to all or a portion of the
difference between the fair market value of the Common Stock purchased and its purchase price, and each participant agrees that
such taxes may be withheld from compensation otherwise payable to such participant. It is intended that tax withholding will be
accomplished in such a manner that the full amount of payroll deductions elected by the participant under Article 7 will be used
to purchase Common Stock. However, if amounts sufficient to satisfy applicable tax withholding obligations have not been withheld
from compensation otherwise payable to any participant, then, notwithstanding any other provision of the Plan, the Company may
withhold such taxes from the participant’s accumulated payroll deductions and apply the net amount to the purchase of Common
Stock, unless the participant pays to the Company, prior to the exercise date, an amount sufficient to satisfy such withholding
obligations. Each participant further acknowledges that the Company and its participating subsidiaries may be required to withhold
taxes in connection with the disposition of stock acquired under the Plan and agrees that the Company or any participating subsidiary
may take whatever action it considers appropriate to satisfy such withholding requirements, including deducting from compensation
otherwise payable to such participant an amount sufficient to satisfy such withholding requirements or conditioning any disposition
of Common Stock by the participant upon the payment to the Company or such subsidiary of an amount sufficient to satisfy such withholding
requirements.


 



    	 



    	 



    




 


Article 22 — Governmental Regulations.


 


The Company’s
obligation to sell and deliver shares of Common Stock under the Plan is subject to the approval of any governmental authority required
in connection with the authorization, issuance or sale of such shares.


 


Government regulations
may impose reporting or other obligations on the Company with respect to the Plan. For example, the Company may be required to
identify shares of Common Stock issued under the Plan on its stock ownership records and send tax information statements to employees
and former employees who transfer title to such shares.


 


Article 23 — Governing Law.


 


The validity and construction
of the Plan shall be governed by the laws of the State of Delaware, without giving effect to the principles of conflicts of law
thereof.


 


Article 24 — Approval of Board
of Directors and Stockholders of the Company.


 


The Plan was adopted
by the Board of Directors on March 17, 2005 and was approved by the stockholders of the Company as of May 19, 2005.


 


Amendments 


	 	1.	The Plan was amended by the Board of Directors on August 6, 2009 to increase the maximum number of shares that may be purchased pursuant to the terms of the 2005 Plan by an Eligible Employee from 1,000 shares of Common Stock to 10,000 shares. This amendment took effect on January 1, 2010, the start of the next six month deduction period. 


 


	 	2.	The Plan was amended on November 24, 2009 as a result of the Company’s 1:8 stock split to (i) change the maximum number of shares that may be purchased pursuant to the terms of the 2005 Plan by an Eligible Employee from 10,000 shares of Common Stock to 1,250 shares and (ii) change the aggregate number of shares that may be issued under the Plan from 1,000,000 to 125,000. This amendment took effect on January 1, 2010, the start of the next six month deduction period. 


 


	 	3.	The Plan was amended by the Board of Directors on May 20, 2010 to increase the maximum number of shares that may be purchased pursuant to the terms of the 2005 Plan by an Eligible Employee from 1,250 shares of Common Stock to 2,000 shares and to change the minimum length of service required to participate in the Plan from one year to six months. This amendment took effect on July 1, 2010, the start of the next six month deduction period. 


 


	 	4.	On March 10, 2011, the Board of Directors adopted a recommendation to amend the Plan that would add 125,000 shares of Common Stock to the Plan, thereby making the aggregate number of shares which may be issued pursuant to the Plan 250,000. This recommendation was approved by the stockholders of the Company on May 19, 2011. 
	 	5.	On March 7, 2013, the Board of Directors adopted a recommendation to amend the Plan that would add 100,000 shares of Common Stock to the Plan, thereby making the aggregate number of shares which may be issued pursuant to the Plan 350,000. This recommendation was approved by the stockholders of the Company on May 23, 2013.