Document:

Exhibit 10.3

 

CYOPTICS, INC.

 

2007 STOCK PLAN

 

1.                                       Purposes of the Plan.  The purposes of this Plan are to attract and retain the best available personnel for positions of substantial responsibility, to provide additional incentive to Employees, Directors and Consultants and to promote the success of the Company’s business.  The Plan permits the grant of Options and Restricted Stock as the Administrator may determine.

 

2.                                       Definitions.  As used herein, the following definitions shall apply:

 

(a)                                  “Administrator” means the Board or any of its Committees as shall be administering the Plan in accordance with Section 4 hereof.

 

(b)                                 “Applicable Laws” means the requirements relating to the administration of equity compensation plans under U.S. state corporate laws, U.S. federal and state securities laws, the Code, any stock exchange or quotation system on which the Common Stock is listed or quoted and the applicable laws of any other country or jurisdiction where Awards are granted under the Plan.

 

(c)                                  “Award” means, individually or collectively, a grant under the Plan of Options or Restricted Stock.

 

(d)                                 “Award Agreement” means the written or electronic agreement setting forth the terms and provisions applicable to each Award granted under the Plan.  The Award Agreement is subject to the terms and conditions of the Plan.

 

(e)                                  “Board” means the Board of Directors of the Company.

 

(f)                                    “Code” means the Internal Revenue Code of 1986, as amended.  Any reference to a section of the Code herein shall be a reference to any successor or amended section of the Code.

 

(g)                                 “Committee” means a committee of Directors or of other individuals satisfying Applicable Laws appointed by the Board, or by the compensation committee of the Board, in accordance with Section 4 hereof.

 

(h)                                 “Common Stock” means the Common Stock of the Company.

 

(i)                                     “Company” means CyOptics, Inc., a  Delaware corporation.

 

(j)                                     “Consultant” means any person who is engaged by the Company or any Parent or Subsidiary to render consulting or advisory services to such entity.

 

(k)                                  “Director” means a member of the Board.

 

(l)                                     “Disability” means total and permanent disability as defined in Section 22(e)(3) of the Code.

 

 

(m)                               “Employee” means any person, including officers and Directors, employed by the Company or any Parent or Subsidiary of the Company.  Neither service as a Director nor payment of a director’s fee by the Company shall be sufficient to constitute “employment” by the Company.

 

(n)                                 “Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

(o)                                 “Exchange Program” means a program under which (i) outstanding Options are surrendered or cancelled in exchange for Options of the same type (which may have lower or higher exercise prices and different terms), Options of a different type, and/or cash, and/or (ii) the exercise price of an outstanding Option is reduced.  The terms and conditions of any Exchange Program shall be determined by the Administrator in its sole discretion.

 

(p)                                 “Fair Market Value” means, as of any date, the value of Common Stock determined as follows:

 

(i)                                     If the Common Stock is listed on any established stock exchange or a national market system, including without limitation the Nasdaq Global Market, the Nasdaq Global Select Market or the Nasdaq Capital Market, its Fair Market Value shall be the closing sales price for such stock (or, if no closing sales price was reported on that date, as applicable, on the last trading date such closing sales price was reported) as quoted on such exchange or system on the day of determination, as reported in The Wall Street Journal or such other source as the Administrator deems reliable;

 

(ii)                                  If the Common Stock is regularly quoted by a recognized securities dealer but selling prices are not reported, its Fair Market Value shall be the mean between the high bid and low asked prices for the Common Stock on the day of determination (or, if no bids and asks were reported on that date, as applicable, on the last trading date such bids and asks were reported); or

 

(iii)                               In the absence of an established market for the Common Stock, the Fair Market Value thereof shall be determined in good faith by the Administrator.

 

(q)                                 “Incentive Stock Option” means an Option that by its terms qualifies and is otherwise intended to qualify as an incentive stock option within the meaning of Section 422 of the Code and the regulations promulgated thereunder.

 

(r)                                    “Nonstatutory Stock Option” means an Option that by its terms does not qualify or is not intended to qualify as an Incentive Stock Option.

 

(s)                                  “Option” means a stock option granted pursuant to the Plan.

 

(t)                                    “Parent” means a “parent corporation,” whether now or hereafter existing, as defined in Section 424(e) of the Code.

 

(u)                                 “Participant” means the holder of an outstanding Award.

 

(v)                                 “Plan” means this 2007  Stock Plan.

 

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(w)                               “Restricted Stock” means Shares issued pursuant to a Restricted Stock award under Section 7 of the Plan, or issued pursuant to the early exercise of an Option.

 

(x)                                   “Restricted Stock Purchase Agreement” means a written or electronic agreement between the Company and the Participant evidencing the terms and restrictions applying to Shares purchased under a Restricted Stock award.  The Restricted Stock Purchase Agreement is subject to the terms and conditions of the Plan and the notice of grant.

 

(y)                                 “Securities Act” means the Securities Act of 1933, as amended.

 

(z)                                   “Service Provider” means an Employee, Director or Consultant.

 

(aa)                            “Share” means a share of the Common Stock, as adjusted in accordance with Section 11 below.

 

(bb)                          “Subsidiary” means a “subsidiary corporation,” whether now or hereafter existing, as defined in Section 424(f) of the Code.

 

3.                                       Stock Subject to the Plan.  Subject to the provisions of Section 11 of the Plan, the maximum aggregate number of Shares that may be subject to Awards and sold under the Plan is 4,853,650 Shares.  The Shares may be authorized but unissued, or reacquired Common Stock.

 

If an Award has been granted under the Plan, Shares subject to such Award shall not be returned to the Plan and shall not become available for future distribution under the Plan.  Notwithstanding the foregoing and, subject to adjustment provided in Section 11, the maximum number of Shares that may be issued upon the exercise of Incentive Stock Options shall equal the aggregate Share number stated in this Section.

 

4.                                       Administration of the Plan.

 

(a)                                  Administrator.  The Plan shall be administered by the Board or a Committee appointed by the Board, which Committee shall be constituted to comply with Applicable Laws.

 

(b)                                 Powers of the Administrator.  Subject to the provisions of the Plan and, in the case of a Committee, the specific duties delegated by the Board to such Committee, and subject to the approval of any relevant authorities, the Administrator shall have the authority in its discretion:

 

(i)                                     to determine the Fair Market Value;

 

(ii)                                  to select the Service Providers to whom Awards may from time to time be granted hereunder;

 

(iii)                               to determine the number of Shares to be covered by each such Award granted hereunder;

 

(iv)                              to approve forms of agreement for use under the Plan;

 

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(v)                                 to determine the terms and conditions of any Award granted hereunder.  Such terms and conditions include, but are not limited to, the exercise price, the time or times when Awards may be exercised (which may be based on performance criteria), any vesting acceleration or waiver of forfeiture restrictions, and any restriction or limitation regarding any Award or the Common Stock relating thereto, based in each case on such factors as the Administrator, in its sole discretion, shall determine;

 

(vi)                              to institute an Exchange Program;

 

(vii)                           to prescribe, amend and rescind rules and regulations relating to the Plan, including rules and regulations relating to sub-plans established for the purpose of satisfying applicable foreign laws;

 

(viii)                        to modify or amend each Award (subject to Section 19(c) of the Plan) including but not limited to the discretionary authority to extend the post-termination exercise period of Awards and to extend the maximum term of an Option (subject to Section 6(a) regarding Incentive Stock Options);

 

(ix)                                to authorize any person to execute on behalf of the Company any instrument required to effect the grant of an Award previously granted by the Administrator;  and

 

(x)                                   to construe and interpret the terms of the Plan and Awards granted pursuant to the Plan.

 

(c)                                  Effect of Administrator’s Decision.  All decisions, determinations and interpretations of the Administrator shall be final and binding on all Participants.

 

5.                                       Eligibility.  Nonstatutory Stock Options and Restricted Stock may be granted to Service Providers.  Incentive Stock Options may be granted only to Employees.

 

6.                                       Stock Options.

 

(a)                                  Term of Option.  The term of each Option shall be stated in the Award Agreement; provided, however, that the term shall be no more than ten (10) years from the date of grant thereof.  In the case of an Incentive Stock Option granted to a Participant who, at the time the Option is granted, owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary, the term of the Option shall be five (5) years from the date of grant or such shorter term as may be provided in the Award Agreement.

 

(b)                                 Option Exercise Price and Consideration.

 

(i)                                     Exercise Price.  The per share exercise price for the Shares to be issued upon exercise of an Option shall be such price as is determined by the Administrator, but shall be subject to the following:

 

(A)                              In the case of an Incentive Stock Option

 

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a)                                      granted to an Employee who, at the time of grant of such Option, owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary, the exercise price shall be no less than one hundred and ten percent (110%) of the Fair Market Value per Share on the date of grant.

 

b)                                     granted to any other Employee, the per Share exercise price shall be no less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant.

 

(B)                                In the case of a Nonstatutory Stock Option, the per Share exercise price shall be no less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant.

 

(C)                                Notwithstanding the foregoing, Options may be granted with a per Share exercise price other than as required above in accordance with and pursuant to a transaction described in Section 424 of the Code.

 

(ii)                                  Forms of Consideration.  The consideration to be paid for the Shares to be issued upon exercise of an Option, including the method of payment, shall be determined by the Administrator (and, in the case of an Incentive Stock Option, shall be determined at the time of grant).  Such consideration may consist of, without limitation, (1) cash, (2) check, (3) promissory note, to the extent permitted by Applicable Laws, (4) other Shares, provided that such Shares have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as to which such Option shall be exercised and provided that accepting such Shares, in the sole discretion of the Administrator, shall not result in any adverse accounting consequences to the Company, (5) consideration received by the Company under a cashless exercise program implemented by the Company in connection with the Plan, (6) such other consideration and method of payment for the issuance of Shares to the extent permitted by Applicable Laws, or (7) any combination of the foregoing methods of payment.  In making its determination as to the type of consideration to accept, the Administrator shall consider if acceptance of such consideration may be reasonably expected to benefit the Company.

 

(c)                                  Exercise of Option.

 

(i)                                     Procedure for Exercise; Rights as a Stockholder.  Any Option granted hereunder shall be exercisable according to the terms hereof at such times and under such conditions as determined by the Administrator and set forth in the Award Agreement.  An Option may not be exercised for a fraction of a Share.

 

An Option shall be deemed exercised when the Company receives (i) written or electronic notice of exercise (in accordance with the Award Agreement) from the person entitled to exercise the Option, and (ii) full payment for the Shares with respect to which the Option is exercised, together with any applicable withholding taxes.  Full payment may consist of any consideration and method of payment authorized by the Administrator and permitted by the Award Agreement and the Plan.  Shares issued upon exercise of an Option shall be issued in the name of the Participant or, if requested by the Participant, in the name of the Participant and his or her spouse.  Until the Shares are issued (as evidenced by the appropriate entry on the books of the Company or of 

 

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a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a stockholder shall exist with respect to the Shares, notwithstanding the exercise of the Option.  The Company shall issue (or cause to be issued) such Shares promptly after the Option is exercised.  No adjustment shall be made for a dividend or other right for which the record date is prior to the date the Shares are issued, except as provided in Section 11 of the Plan.

 

Exercise of an Option in any manner shall result in a decrease in the number of Shares thereafter available for sale under the Option, by the number of Shares as to which the Option is exercised.

 

(ii)                                  Termination of Relationship as a Service Provider.  If a Participant ceases to be a Service Provider, such Participant may exercise his or her Option within such period of time as is specified in the Award Agreement, to the extent that the Option is vested on the date of termination (but in no event later than the expiration of the term of the Option as set forth in the Award Agreement).  In the absence of a specified time in the Award Agreement, the Option shall remain exercisable for three (3) months following the Participant’s termination.  Unless the Administrator provides otherwise, if on the date of termination the Participant is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option shall be forfeited and shall not revert to the Plan.  If, after termination, the Participant does not exercise his or her Option within the time specified by the Administrator, the Option shall terminate, and the Shares covered by such Option shall not revert to the Plan.

 

(iii)                               Disability of Participant.  If a Participant ceases to be a Service Provider as a result of the Participant’s Disability, the Participant may exercise his or her Option within such longer period of time as is specified in the Award Agreement, to the extent the Option is vested on the date of termination (but in no event later than the expiration of the term of such Option as set forth in the Award Agreement).  In the absence of a specified time in the Award Agreement, the Option shall remain exercisable for twelve (12) months following the Participant’s termination.  Unless the Administrator provides otherwise, if on the date of termination the Participant is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option shall be forfeited and shall not revert to the Plan.  If, after termination, the Participant does not exercise his or her Option within the time specified herein, the Option shall terminate, and the Shares covered by such Option shall not revert to the Plan.

 

(iv)                              Death of Participant.  If a Participant dies while a Service Provider, the Option may be exercised within such longer period of time as is specified in the Award Agreement, to the extent that the Option is vested on the date of death (but in no event later than the expiration of the term of such Option as set forth in the Award Agreement) by the Participant’s designated beneficiary, provided such beneficiary has been designated prior to the Participant’s death in a form acceptable to the Administrator.  If no such beneficiary has been designated by the Participant, then such Option may be exercised by the personal representative of the Participant’s estate or by the person(s) to whom the Option is transferred pursuant to the Participant’s will or in accordance with the laws of descent and distribution.  In the absence of a specified time in the Award Agreement, the Option shall remain exercisable for twelve (12) months following the Participant’s termination.  If, at the time of death, the Participant is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option shall be forfeited and shall not revert to the Plan.  If the Option is 

 

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not so exercised within the time specified herein, the Option shall terminate, and the Shares covered by such Option shall not revert to the Plan.

 

(v)                                 Incentive Stock Option Limit.  Each Option shall be designated in the Award Agreement as either an Incentive Stock Option or a Nonstatutory Stock Option.  However, notwithstanding such designation, to the extent that the aggregate Fair Market Value of the Shares with respect to which Incentive Stock Options are exercisable for the first time by the Participant during any calendar year (under all plans of the Company and any Parent or Subsidiary) exceeds one hundred thousand dollars ($100,000), such Options shall be treated as Nonstatutory Stock Options.  For purposes of this Section 6(c)(v), Incentive Stock Options shall be taken into account in the order in which they were granted.  The Fair Market Value of the Shares shall be determined as of the time the Option with respect to such Shares is granted.

 

7.                                       Restricted Stock.

 

(a)                                  Rights to Purchase.  Restricted Stock may be issued either alone, in addition to, or in tandem with other awards granted under the Plan and/or cash awards made outside of the Plan.  After the Administrator determines that it shall offer Restricted Stock under the Plan, it shall advise the offeree in writing or electronically of the terms, conditions and restrictions related to the offer, including the number of Shares that such person shall be entitled to purchase, the price to be paid (if any), and the time within which such person must accept such offer.

 

(b)                                 Repurchase Option.  Unless the Administrator determines otherwise, the Restricted Stock Purchase Agreement shall grant the Company a repurchase option exercisable within ninety (90) days of the voluntary or involuntary termination of the purchaser’s service with the Company for any reason (including death or Disability).  Unless the Administrator provides otherwise, the purchase price for Shares repurchased pursuant to the Restricted Stock Purchase Agreement shall be the original price paid by the purchaser and may be paid by cancellation of any indebtedness of the purchaser to the Company.  The repurchase option shall lapse at such rate as the Administrator may determine.

 

(c)                                  Other Provisions.  The Restricted Stock Purchase Agreement shall contain such other terms, provisions and conditions not inconsistent with the Plan as may be determined by the Administrator in its sole discretion.

 

(d)                                 Rights as a Stockholder.  Once the Restricted Stock is exercised, the purchaser shall have rights equivalent to those of a stockholder and shall be a stockholder when his or her purchase is entered upon the records of the duly authorized transfer agent of the Company.  No adjustment shall be made for a dividend or other right for which the record date is prior to the date the Restricted Stock is exercised, except as provided in Section 11 of the Plan.

 

8.                                       Tax Withholding.  Prior to the delivery of any Shares pursuant to an Award (or exercise thereof), the Company shall have the power and the right to deduct or withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy federal, state, local, foreign or other taxes (including the Participant’s FICA obligation) required to be withheld with respect to such Award (or exercise thereof).  The Administrator, in its sole discretion and pursuant to such procedures as it may specify from time to time, shall determine in what manner it shall allow a 

 

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Participant to satisfy such tax withholding obligation and may permit the Participant to satisfy such tax withholding obligation, in whole or in part by one (1) or more of the following: (a) paying cash (or by check), (b) electing to have the Company withhold otherwise deliverable Shares having a Fair Market Value equal to the minimum amount statutorily required to be withheld, or (c) selling a sufficient number of such Shares otherwise deliverable to a Participant through such means as the Company may determine in its sole discretion (whether through a broker or otherwise) equal to the minimum amount statutorily required to be withheld.

 

9.                                       Limited Transferability of Awards.  Unless determined otherwise by the Administrator, Awards may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or the laws of descent and distribution, and may be exercised during the lifetime of the Participant, only by the Participant.

 

10.                                 Leaves of Absence; Transfers.

 

(a)                                  Unless the Administrator provides otherwise, or except as otherwise required by Applicable Laws, vesting of Awards granted hereunder to officers, Directors and Consultants shall be suspended during any unpaid leave of absence.

 

(b)                                 A Service Provider shall not cease to be a Service Provider in the case of (i) any leave of absence approved by the Company, or (ii) transfers between locations of the Company or between the Company, its Parent, any Subsidiary, or any successor.

 

(c)                                  For purposes of Incentive Stock Options, no such leave may exceed three (3) months, unless reemployment upon expiration of such leave is guaranteed by statute or contract.  If reemployment upon expiration of a leave of absence approved by the Company is not so guaranteed, then six (6) months following the first (1st) day of such leave, any Incentive Stock Option held by the Participant shall cease to be treated as an Incentive Stock Option and shall be treated for tax purposes as a Nonstatutory Stock Option.

 

11.                                 Adjustments upon Changes in Capitalization, Merger or Asset Sale.

 

(a)                                  Changes in Capitalization.  Subject to any required action by the stockholders of the Company, the number of shares of Common Stock covered by each outstanding Option or Restricted Stock, and the number of shares of Common Stock which have been authorized for issuance under the Plan but as to which no Options or Restricted Stock have yet been granted, as well as the price per share of Common Stock covered by each such outstanding Option or Restricted Stock, shall be proportionately adjusted for any increase or decrease in the number of issued shares of Common Stock resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of the Common Stock, or any other increase or decrease in the number of issued shares of Common Stock effected without receipt of consideration by the Company.  The conversion of any convertible securities of the Company shall not be deemed to have been “effected without receipt of consideration.”  Such adjustment shall be made by the Board, whose determination in that respect shall be final, binding and conclusive.  Except as expressly provided herein, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares of Common Stock subject to an Option or Restricted Stock.

 

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(b)                                 Dissolution or Liquidation.  In the event of a proposed dissolution or liquidation of the Company, the Administrator shall notify each Participant as soon as practicable prior to the effective date of such proposed transaction.  The Administrator in its discretion may provide for a Participant to have the right to exercise his or her Option until fifteen (15) days prior to such transaction as to all of the Shares subject to the Option, including Shares as to which the Option would not otherwise be exercisable.  In addition, the Administrator may provide that any Company repurchase option applicable to any Shares purchased upon exercise of an Award shall lapse as to all such Shares, provided the proposed dissolution or liquidation takes place at the time and in the manner contemplated.  To the extent it has not been previously exercised, an Award shall terminate immediately prior to the consummation of such proposed action.

 

(c)                                  Merger, Acquisition, or Asset Sale.  In the event of a stock sale, merger or consolidation of the Company in which more than 50% of the voting power of the Company’s securities is transferred to a third party or third parties, or a sale of all or substantially all of the Company’s assets (each such event, a “Transaction”), each outstanding Award shall be assumed or an equivalent option or right substituted by the successor corporation or a Parent or Subsidiary of the successor corporation.  In the event that the successor corporation refuses to assume or substitute for the Option or Restricted Stock, the Participant shall fully vest in and have the right to exercise the Option, as to all of the Shares subject to the Option, including Shares as to which it would not otherwise be vested or exercisable, and restrictions on all of the Participant’s Restricted Stock shall lapse.  If an Award becomes fully vested and exercisable in lieu of assumption or substitution in the event of a Transaction, the Administrator shall notify the Participant in writing or electronically that the Award shall be fully exercisable for a period of fifteen (15) days from the date of such notice, and all Awards not assumed or substituted for shall terminate upon the expiration of such period.  For the purposes of this paragraph, the Award shall be considered assumed if, following a Transaction, the option or right confers the right to purchase or receive, for each Share of Common Stock subject to the Award immediately prior to the Transaction, the consideration (whether stock, cash, or other securities or property) received in the merger or sale of assets by holders of Common Stock for each Share held on the effective date of the Transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Shares); provided, however, that if such consideration received in the Transaction is not solely common stock of the successor corporation or its Parent, the Administrator may, with the consent of the successor corporation, provide for the consideration to be received upon the exercise of the Award, for each Share of Common Stock subject to the Award, to be solely common stock of the successor corporation or its Parent equal in fair market value to the per share consideration received by holders of Common Stock in the merger or sale of assets.

 

12.                                 Time of Granting Awards.  The date of grant of an Award shall, for all purposes, be the date on which the Administrator makes the determination granting such Award, or such later date as is determined by the Administrator.  Notice of the determination shall be given to each Service Provider to whom an Award is so granted within a reasonable time after the date of such grant.

 

13.                                 No Effect on Employment or Service.  Neither the Plan nor any Award shall confer upon any participant any right with respect to continuing the Participant’s relationship as a Service Provider with the Company, nor shall it interfere in any way with his or her right or the Company’s right to terminate such relationship at any time, with or without cause, and with or without notice.

 

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14.                                 Conditions Upon Issuance of Shares.

 

(a)                                  Legal Compliance.  Shares shall not be issued pursuant to the exercise of an Award unless the exercise of such Award and the issuance and delivery of such Shares shall comply with Applicable Laws and shall be further subject to the approval of counsel for the Company with respect to such compliance.

 

(b)                                 Investment Representations.  As a condition to the exercise of an Award, the Administrator may in its discretion require the person exercising such Award to represent and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares.

 

15.                                 Inability to Obtain Authority.  The inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority shall not have been obtained.

 

16.                                 Reservation of Shares.  The Company, during the term of this Plan, shall at all times reserve and keep available such number of Shares as shall be sufficient to satisfy the requirements of the Plan.

 

17.                                 Stockholder Approval.  The Plan shall be subject to approval by the stockholders of the Company within twelve (12) months after the date the Plan is adopted.  Such stockholder approval shall be obtained in the degree and manner required under Applicable Laws.

 

18.                                 Term of Plan.  Subject to stockholder approval in accordance with Section 17, the Plan shall become effective upon its adoption by the Board.  Unless sooner terminated under Section 19, it shall continue in effect for a term of ten (10) years from the later of (a) the effective date of the Plan, or (b) the earlier of the most recent Board or stockholder approval of an increase in the number of Shares reserved for issuance under the Plan.

 

19.                                 Amendment and Termination of the Plan.

 

(a)                                  Amendment and Termination.  The Board may at any time amend, alter, suspend or terminate the Plan.

 

(b)                                 Stockholder Approval.  The Board shall obtain stockholder approval of any Plan amendment to the extent necessary and desirable to comply with Applicable Laws.

 

(c)                                  Effect of Amendment or Termination.  No amendment, alteration, suspension or termination of the Plan shall impair the rights of any Participant, unless mutually agreed otherwise between the Participant and the Administrator, which agreement must be in writing (which may include e-mail) and signed by the Participant and the Company.  Termination of the Plan shall not affect the Administrator’s ability to exercise the powers granted to it hereunder with respect to Options granted under the Plan prior to the date of such termination.

 

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CYOPTICS, INC.

 

2007 STOCK PLAN

 

STOCK OPTION AGREEMENT

 

Unless otherwise defined herein, the terms defined in the 2007 Stock Plan (the “Plan”) shall have the same defined meanings in this Stock Option Agreement (the “Option Agreement”).

 

I.                                         NOTICE OF STOCK OPTION GRANT

 

Name:

 

Address:

 

The undersigned Participant has been granted an Option to purchase Common Stock of the Company, subject to the terms and conditions of the Plan and this Option Agreement, as follows:

 

	
Date   of Grant
    	
 
    
	
 
    	
 
    
	
Vesting   Commencement Date
    	
 
    
	
 
    	
 
    
	
Exercise   Price per Share
    	
$
    
	
 
    	
 
    
	
Total   Number of Shares Granted
    	
 
    
	
 
    	
 
    
	
Total   Exercise Price
    	
$
    
	
 
    	
 
    
	
Type   of Option:
    	
o     Incentive   Stock Option
    
	
 
    	
 
    
	
 
    	
o     Nonstatutory   Stock Option
    
	
 
    	
 
    
	
Term/Expiration   Date:
    	
 
    

 

Vesting Schedule:

 

This Option shall be exercisable, in whole or in part, according to the following vesting schedule:

 

Fifty percent (50%) of the Shares subject to the Option shall vest on the Vesting Commencement Date, and fifty (50%) of the Shares subject to the Option shall vest on the one (1) year anniversary of the Vesting Commencement Date, subject to Participant continuing to be a Service Provider through each such date.

 

 

Notwithstanding the foregoing, in the event of Participant’s termination as a Service Provider without Cause, the Option shall become immediately vested and exercisable as to all of the Shares subject to the Option, including Shares which would not otherwise be vested or exercisable.

 

For purposes of this Option Agreement, “Cause” shall mean (i) the commission of any act of fraud, embezzlement or dishonesty by the Participant; (ii) conviction of, or a plea of “guilty” or “no contest” to, a felony under the laws of the United States or any state thereof; (iii) any unauthorized use or disclosure by Participant of confidential information or trade secrets of the Company (or any Parent or Subsidiary); (iv) any act of personal dishonesty taken by Participant in connection with his responsibilities as a Service Provider which is intended to result in substantial personal enrichment of Participant,  (v) a willful act by Participant which constitutes misconduct and is injurious to the Company, or (vi) continued violations by Participant of Participant’s obligations to the Company after there has been delivered to the Employee a written demand for performance from the Company.  The foregoing definition shall not be deemed to be inclusive of all the acts or omissions which the Company (or any Parent or Subsidiary) may consider as grounds for the dismissal or discharge of any Participant in the service of the Company (or any Parent or Subsidiary).

 

Termination Period:

 

This Option shall be exercisable for six (6) months after Participant ceases to be a Service Provider, including termination due to Participant’s death or Disability.  Notwithstanding the foregoing sentence, 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 11(c) of the Plan.

 

II.                                     AGREEMENT

 

1.                                       Grant of Option.  The Administrator of the Company hereby grants to the Participant named in the Notice of Stock Option Grant in Part I of this Agreement (“Participant”), an option (the “Option”) to purchase the number of Shares 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”), and subject to the terms and conditions of the Plan, which is incorporated herein by reference.  Subject to Section 19(c) of the Plan, in the event of a conflict between the terms and conditions of the Plan and this Option Agreement, the terms and conditions of the Plan shall 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 as defined in Section 422 of the Code.  Nevertheless, to the extent that it exceeds the $100,000 rule of Code Section 422(d), this Option shall be treated as a Nonstatutory Stock Option (“NSO”).

 

2.                                       Exercise of Option.

 

(a)                                  Right to Exercise.  This Option shall be exercisable during its term in accordance with the Vesting Schedule set out in the Notice of Stock Option Grant and with the applicable provisions of the Plan and this Option Agreement.

 

(b)                                 Method of Exercise.  This Option shall be exercisable by delivery of an exercise notice in the form attached as Exhibit A (the “Exercise Notice”) or in a manner and

 

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pursuant to such procedures as the Administrator may determine, which shall state the election to exercise the Option, the number of Shares with respect to which the Option is being exercised, and such other representations and agreements as may be required by the Company.  The Exercise Notice shall be accompanied by payment of the aggregate Exercise Price as to all Exercised Shares, together with any applicable tax withholding.  This Option shall be deemed to be exercised upon receipt by the Company of such fully executed Exercise Notice accompanied by the aggregate Exercise Price, together with any applicable tax withholding.

 

No Shares shall be issued pursuant to the exercise of an Option unless such issuance and such exercise comply with Applicable Laws.  Assuming such compliance, for income tax purposes the Shares shall be considered transferred to Participant on the date on which the Option is exercised with respect to such Shares.

 

3.                                       Participant’s Representations.  In the event the Shares have not been registered under the Securities Act of 1933, as amended, at the time this Option is exercised, Participant shall, if required by the Company, concurrently with the exercise of all or any portion of this Option, deliver to the Company his or her Investment Representation Statement in the form attached hereto as Exhibit B.

 

4.                                       Lock-Up Period.  Participant hereby agrees that Participant shall not offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any Common Stock (or other securities) of the Company or enter into any swap, hedging or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any Common Stock (or other securities) of the Company held by Participant (other than those included in the registration) for a period specified by the representative of the underwriters of Common Stock (or other securities) of the Company not to exceed one hundred eighty (180) days following the effective date of any registration statement of the Company filed under the Securities Act (or such other period as may be requested by the Company or the underwriters to accommodate regulatory restrictions on (i) the publication or other distribution of research reports and (ii) analyst recommendations and opinions, including, but not limited to, the restrictions contained in NASD Rule 2711(f)(4) or NYSE Rule 472(f)(4), or any successor provisions or amendments thereto).

 

Participant agrees to execute and deliver such other agreements as may be reasonably requested by the Company or the underwriter which are consistent with the foregoing or which are necessary to give further effect thereto.  In addition, if requested by the Company or the representative of the underwriters of Common Stock (or other securities) of the Company, Participant shall provide, within ten (10) days of such request, such information as may be required by the Company or such representative in connection with the completion of any public offering of the Company’s securities pursuant to a registration statement filed under the Securities Act.  The obligations described in this Section 4 shall not apply to a registration relating solely to employee benefit plans on Form S-1 or Form S-8 or similar forms that may be promulgated in the future, or a registration relating solely to a Commission Rule 145 transaction on Form S-4 or similar forms that may be promulgated in the future.  The Company may impose stop-transfer instructions with respect to the shares of Common Stock (or other securities) subject to the foregoing restriction until the end

 

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of said one hundred eighty (180) day (or other) period.  Participant agrees that any transferee of the Option or shares acquired pursuant to the Option shall be bound by this Section 4.

 

5.                                       Method of Payment.  Payment of the aggregate Exercise Price shall be by any of the following, or a combination thereof, at the election of the Participant:

 

(a)                                  cash;

 

(b)                                 check;

 

(c)                                  consideration received by the Company under a formal cashless exercise program adopted by the Company in connection with the Plan; or

 

(d)                                 surrender of other Shares which (i) if acquired either directly or indirectly from the Company, have been owned by Participant for at least the period required to avoid a charge to the Company’s reported earnings, (ii) shall be valued at its Fair Market Value on the date of exercise, and (iii) must be owned free and clear of any liens, claims, encumbrances or security interests, if accepting such Shares, in the sole discretion of the Administrator, shall not result in any adverse accounting consequences to the Company.

 

6.                                       Restrictions on Exercise.  This Option may not be exercised until such time as the Plan has been approved by the stockholders of the Company, or if the issuance of such Shares upon such exercise or the method of payment of consideration for such shares would constitute a violation of any Applicable Law.

 

7.                                       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.  The terms of the Plan and this Option Agreement shall be binding upon the executors, administrators, heirs, successors and assigns of Participant.

 

8.                                       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 Option.

 

9.                                       Tax Obligations.

 

(a)                                  Tax Withholding.  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, local and foreign 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 the Shares if such withholding amounts are not delivered at the time of exercise.

 

(b)                                 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 (i) the date two (2) years after the Date of Grant, or (ii) the date one (1) year after the date of exercise, Participant shall immediately notify the

 

4

 

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.

 

(c)                                  Code Section 409A.  Under Code Section 409A, an Option that vests after December 31, 2004 that was granted with a per Share exercise price that is determined by the Internal Revenue Service (the “IRS”) to be less than the Fair Market Value of a Share on the date of grant (a “discount option”) may be considered “deferred compensation.”  An Option that is a “discount option” may result in (i) income recognition by Participant prior to the exercise of the Option, (ii) an additional twenty percent (20%) federal income tax, and (iii) potential penalty and interest charges.  The “discount option” may also result in additional state income, penalty and interest tax to the Participant.  Participant acknowledges that the Company cannot and has not guaranteed that the IRS will agree that the per Share exercise price of this Option equals or exceeds the Fair Market Value of a Share on the date of grant in a later examination.  Participant agrees that if the IRS determines that the Option was granted with a per Share exercise price that was less than the Fair Market Value of a Share on the date of grant, Participant shall be solely responsible for Participant’s costs related to such a determination.

 

10.                                 Entire Agreement; Governing Law.  The Plan is incorporated herein by reference.  The Plan and this Option 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 Agreement is governed by the internal substantive laws but not the choice of law rules of Pennsylvania.

 

11.                                 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 (OR THE PARENT OR SUBSIDIARY EMPLOYING OR RETAINING PARTICIPANT) AND NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS OPTION OR ACQUIRING SHARES HEREUNDER. PARTICIPANT FURTHER ACKNOWLEDGES AND AGREES THAT THIS 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 SHALL NOT INTERFERE IN ANY WAY WITH PARTICIPANT’S RIGHT OR THE RIGHT OF THE COMPANY (OR THE PARENT OR SUBSIDIARY EMPLOYING OR RETAINING PARTICIPANT) TO TERMINATE PARTICIPANT’S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT CAUSE.

 

5

 

Participant acknowledges receipt of a copy of the Plan and represents that he or she is familiar with the terms and provisions thereof, and hereby accepts this Option subject to all of the terms and provisions thereof.  Participant has reviewed the Plan and this Option in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Option and fully understands all provisions of the Option.  Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions arising under the Plan or this Option.  Participant further agrees to notify the Company upon any change in the residence address indicated below.

 

	
PARTICIPANT
    	
 
    	
CYOPTICS, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Signature
    	
 
    	
By
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Print   Name
    	
 
    	
Print   Name
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Title
    
	
 
    	
 
    	
 
    
	
Residence   Address
    	
 
    	
 
    

 

6

 

EXHIBIT A

 

2007 STOCK PLAN

 

EXERCISE NOTICE

 

CyOptics, Inc.

 

 

 

Attention: [TITLE]

 

1.                                       Exercise of Option.  Effective as of today,                                 ,         , the undersigned (“Participant”) hereby elects to exercise Participant’s option (the “Option”) to purchase                                  shares of the Common Stock (the “Shares”) of CyOptics, Inc. (the “Company”) under and pursuant to the 2007  Stock Plan (the “Plan”) and the Stock Option Agreement dated                             ,            (the “Option Agreement”).

 

2.                                       Delivery of Payment.  Participant herewith delivers to the Company the full purchase price of the Shares, as set forth in the Option Agreement, and any and all withholding taxes due in connection with the exercise of the Option.

 

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

 

4.                                       Rights as Stockholder.  Until the issuance of the Shares (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a stockholder shall exist with respect to the Common Stock subject to an Award, notwithstanding the exercise of the Option.  The Shares shall be issued to Participant as soon as practicable after the Option is exercised in accordance with the Option Agreement.  No adjustment shall be made for a dividend or other right for which the record date is prior to the date of issuance except as provided in Section 11 of the Plan.

 

5.                                       Company’s Right of First Refusal.  Before any Shares held by Participant or any transferee (either being sometimes referred to herein as the “Holder”) may be sold or otherwise transferred (including transfer by gift or operation of law), the Company or its assignee(s) shall have a right of first refusal to purchase the Shares on the terms and conditions set forth in this Section 5 (the “Right of First Refusal”).

 

(a)                                  Notice of Proposed Transfer.  The Holder of the Shares shall deliver to the Company a written notice (the “Notice”) stating: (i) the Holder’s bona fide intention to sell or otherwise transfer such Shares; (ii) the name of each proposed purchaser or other transferee (“Proposed Transferee”); (iii) the number of Shares to be transferred to each Proposed Transferee; and (iv) the bona fide cash price or other consideration for which the Holder proposes to transfer the

 

 

Shares (the “Offered Price”), and the Holder shall offer the Shares at the Offered Price to the Company or its assignee(s).

 

(b)                                 Exercise of Right of First Refusal.  At any time within thirty (30) days after receipt of the Notice, the Company and/or its assignee(s) may, by giving written notice to the Holder, elect to purchase all, but not less than all, of the Shares proposed to be transferred to any one or more of the Proposed Transferees, at the purchase price determined in accordance with subsection (c) below.

 

(c)                                  Purchase Price.  The purchase price (“Purchase Price”) for the Shares purchased by the Company or its assignee(s) under this Section 5 shall be the Offered Price.  If the Offered Price includes consideration other than cash, the cash equivalent value of the non-cash consideration shall be determined by the Board of Directors of the Company in good faith.

 

(d)                                 Payment.  Payment of the Purchase Price shall be made, at the option of the Company or its assignee(s), in cash (by check), by cancellation of all or a portion of any outstanding indebtedness of the Holder to the Company (or, in the case of repurchase by an assignee, to the assignee), or by any combination thereof within thirty (30) days after receipt of the Notice or in the manner and at the times set forth in the Notice.

 

(e)                                  Holder’s Right to Transfer.  If all of the Shares proposed in the Notice to be transferred to a given Proposed Transferee are not purchased by the Company and/or its assignee(s) as provided in this Section 5, then the Holder may sell or otherwise transfer such Shares to that Proposed Transferee at the Offered Price or at a higher price, provided that such sale or other transfer is consummated within one hundred and twenty (120) days after the date of the Notice, that any such sale or other transfer is effected in accordance with any applicable securities laws and that the Proposed Transferee agrees in writing that the provisions of this Section 5 shall continue to apply to the Shares in the hands of such Proposed Transferee.  If the Shares described in the Notice are not transferred to the Proposed Transferee within such period, a new Notice shall be given to the Company, and the Company and/or its assignees shall again be offered the Right of First Refusal before any Shares held by the Holder may be sold or otherwise transferred.

 

(f)                                    Exception for Certain Family Transfers.  Anything to the contrary contained in this Section 5 notwithstanding, the transfer of any or all of the Shares during Participant’s lifetime or on Participant’s death by will or intestacy to Participant’s immediate family or a trust for the benefit of Participant’s immediate family shall be exempt from the provisions of this Section 5.  “Immediate Family” as used herein shall mean spouse, lineal descendant or antecedent, father, mother, brother or sister.  In such case, the transferee or other recipient shall receive and hold the Shares so transferred subject to the provisions of this Section 5, and there shall be no further transfer of such Shares except in accordance with the terms of this Section 5.

 

(g)                                 Termination of Right of First Refusal.  The Right of First Refusal shall terminate as to any Shares upon the earlier of (i) the first sale of Common Stock of the Company to the general public, or (ii) a Change in Control in which the successor corporation has equity securities that are publicly traded.

 

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

 

7.                                       Restrictive Legends and Stop-Transfer Orders.

 

(a)                                  Legends.  Participant understands and agrees that the Company shall cause the legends set forth below or legends substantially equivalent thereto, to be placed upon any certificate(s) evidencing ownership of the Shares together with any other legends that may be required by the Company or by state or federal securities laws:

 

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “ACT”) AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR, IN THE OPINION OF COUNSEL SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE THEREWITH.

 

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AND A RIGHT OF FIRST REFUSAL HELD BY THE ISSUER OR ITS ASSIGNEE(S) AS SET FORTH IN THE EXERCISE NOTICE BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE ISSUER. SUCH TRANSFER RESTRICTIONS AND RIGHT OF FIRST REFUSAL ARE BINDING ON TRANSFEREES OF THESE SHARES.

 

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER FOR A PERIOD OF TIME FOLLOWING THE EFFECTIVE DATE OF THE UNDERWRITTEN PUBLIC OFFERING OF THE COMPANY’S SECURITIES SET FORTH IN AN AGREEMENT BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THESE SHARES AND MAY NOT BE SOLD OR OTHERWISE DISPOSED OF BY THE HOLDER PRIOR TO THE EXPIRATION OF SUCH PERIOD WITHOUT THE CONSENT OF THE COMPANY OR THE MANAGING UNDERWRITER.

 

(b)                                 Stop-Transfer Notices.  Participant agrees that, in order to ensure compliance with the restrictions referred to herein, the Company may issue appropriate “stop transfer” instructions to its transfer agent, if any, and that, if the Company transfers its own securities, it may make appropriate notations to the same effect in its own records.

 

(c)                                  Refusal to Transfer.  The Company shall not be required (i) to transfer on its books any Shares that have been sold or otherwise transferred in violation of any of the provisions of

 

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this Exercise Notice, or (ii) to treat as owner of such Shares or to accord the right to vote or pay dividends to any purchaser or other transferee to whom such Shares shall have been so transferred.

 

8.                                       Successors and Assigns.  The Company may assign any of its rights under this Exercise Notice to single or multiple assignees, and this Exercise Notice shall inure to the benefit of the successors and assigns of the Company.  Subject to the restrictions on transfer herein set forth, this Exercise Notice shall be binding upon Participant and his or her heirs, executors, administrators, successors and assigns.

 

9.                                       Interpretation.  Any dispute regarding the interpretation of this Exercise Notice shall be submitted by Participant or by the Company forthwith to the Administrator which shall review such dispute at its next regular meeting.  The resolution of such a dispute by the Administrator shall be final and binding on all parties.

 

10.                                 Governing Law; Severability.  This Exercise Notice is governed by the internal substantive laws but not the choice of law rules, of Pennsylvania.  In the event that any provision hereof becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Exercise Notice shall continue in full force and effect.

 

11.                                 Entire Agreement.  The Plan and Option Agreement are incorporated herein by reference.  This Exercise Notice, the Plan, the Option Agreement and the Investment Representation Statement 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 the Participant’s interest except by means of a writing signed by the Company and Participant.

 

	
Submitted   by:
    	
 
    	
Accepted   by:
    
	
PARTICIPANT
    	
 
    	
CYOPTICS, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Signature
    	
 
    	
By
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Print   Name
    	
 
    	
Print   Name
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Title
    
	
 
    	
 
    	
 
    
	
Address:
    	
 
    	
Address:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Date   Received
    

 

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EXHIBIT B

 

INVESTMENT REPRESENTATION STATEMENT

 

	
PARTICIPANT
    	
:
    	
 
    
	
 
    	
 
    	
 
    
	
COMPANY
    	
:
    	
CYOPTICS, INC.
    
	
 
    	
 
    	
 
    
	
SECURITY
    	
:
    	
COMMON   STOCK
    
	
 
    	
 
    	
 
    
	
AMOUNT
    	
:
    	
 
    
	
 
    	
 
    	
 
    
	
DATE
    	
:
    	
 
    

 

In connection with the purchase of the above-listed Securities, the undersigned Participant represents to the Company the following:

 

(a)                                  Participant is aware of the Company’s business affairs and financial condition and has acquired sufficient information about the Company to reach an informed and knowledgeable decision to acquire the Securities.  Participant is acquiring these Securities for investment for Participant’s own account only and not with a view to, or for resale in connection with, any “distribution” thereof within the meaning of the Securities Act of 1933, as amended (the “Securities Act”).

 

(b)                                 Participant acknowledges and understands that the Securities constitute “restricted securities” under the Securities Act and have not been registered under the Securities Act in reliance upon a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of Participant’s investment intent as expressed herein.  In this connection, Participant understands that, in the view of the Securities and Exchange Commission, the statutory basis for such exemption may be unavailable if Participant’s representation was predicated solely upon a present intention to hold these Securities for the minimum capital gains period specified under tax statutes, for a deferred sale, for or until an increase or decrease in the market price of the Securities, or for a period of one year or any other fixed period in the future.  Participant further understands that the Securities must be held indefinitely unless they are subsequently registered under the Securities Act or an exemption from such registration is available.  Participant further acknowledges and understands that the Company is under no obligation to register the Securities. Participant understands that the certificate evidencing the Securities shall be imprinted with any legend required under applicable state securities laws.

 

(c)                                  Participant is familiar with the provisions of Rule 701 and Rule 144, each promulgated under the Securities Act, which, in substance, permit limited public resale of “restricted securities” acquired, directly or indirectly from the issuer thereof, in a non-public offering subject to the satisfaction of certain conditions.  Rule 701 provides that if the issuer qualifies under Rule 701 at the time of the grant of the Option to Participant, the exercise shall be exempt from registration under the Securities Act.  In the event the Company becomes subject to the reporting requirements of

 

 

Section 13 or 15(d) of the Securities Exchange Act of 1934, ninety (90) days thereafter (or such longer period as any market stand-off agreement may require) the Securities exempt under Rule 701 may be resold, subject to the satisfaction of certain of the conditions specified by Rule 144, including: (1) the resale being made through a broker in an unsolicited “broker’s transaction” or in transactions directly with a market maker (as said term is defined under the Securities Exchange Act of 1934); and, in the case of an affiliate, (2) the availability of certain public information about the Company, (3) the amount of Securities being sold during any three (3) month period not exceeding the limitations specified in Rule 144(e), and (4) the timely filing of a Form 144, if applicable.

 

In the event that the Company does not qualify under Rule 701 at the time of grant of the Option, then the Securities may be resold in certain limited circumstances subject to the provisions of Rule 144, which requires the resale to occur not less than one (1) year after the later of the date the Securities were sold by the Company or the date the Securities were sold by an affiliate of the Company, within the meaning of Rule 144; and, in the case of acquisition of the Securities by an affiliate, or by a non-affiliate who subsequently holds the Securities less than two (2) years, the satisfaction of the conditions set forth in sections (1), (2), (3) and (4) of the paragraph immediately above.

 

(d)                                 Participant further understands that in the event all of the applicable requirements of Rule 701 or 144 are not satisfied, registration under the Securities Act, compliance with Regulation A, or some other registration exemption shall be required; and that, notwithstanding the fact that Rules 144 and 701 are not exclusive, the Staff of the Securities and Exchange Commission has expressed its opinion that persons proposing to sell private placement securities other than in a registered offering and otherwise than pursuant to Rules 144 or 701 shall have a substantial burden of proof in establishing that an exemption from registration is available for such offers or sales, and that such persons and their respective brokers who participate in such transactions do so at their own risk.  Participant understands that no assurances can be given that any such other registration exemption shall be available in such event.

 

	
 
    	
PARTICIPANT
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
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Date
    

 

2Exhibit 10.5

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (the “Agreement”) is entered into as of January 1, 2005 (the “Effective Date”), by and between CyOptics, Inc. a Delaware corporation (the “Company”), and Ettore J. Coringrato, Jr. (the “Executive”).

 

RECITALS

 

WHEREAS, the Executive is currently serving as the Company’s Vice President of Business Development;

 

WHEREAS, the Company and the Executive are parties to that certain Employment Agreement dated as of February 19, 2003 (the “Prior Agreement”);

 

WHEREAS, the Company desires to retain Executive as an employee of the Company and Executive desires to be retained in that capacity on the terms and conditions set forth herein;

 

WHEREAS, the Executive and the Company have entered into a Stock Option Agreement dated May 22, 2003 whereby the Executive has been granted an option to purchase up to 250,000 shares of the Company’s Common Stock (the “May 2003 Option”); and

 

WHEREAS, the Executive and Company desire to expand the scope of the Executive’s role at the Company pursuant to the terms hereof and to replace and supersede the terms of the Prior Agreement;

 

NOW THEREFORE, in consideration of the mutual covenants contained herein, the Company and the Executive agree as follows:

 

ARTICLE I 

 

Term of Agreement

 

1.1           Term. Unless Executive’s employment hereunder is terminated earlier pursuant to Article V of this Agreement, Executive’s employment hereunder shall begin on the Effective Date and continue for an unspecified period (the “Employment Term”) on an “at will” basis meaning that either Executive or the Company will be entitled to terminate Executive’s employment at any time and for any reason, with or without Cause (defined below), subject to the provisions of this Agreement. Any contrary representations or agreements relating to the subject matter hereof that may have been made to the Executive shall be superseded by this Agreement. This Agreement shall constitute the full and complete agreement between the Executive and the Company with respect to the matters hereof, which may only be changed in an express written agreement signed by the Executive and a duly authorized officer of the Company.

 

Confidential

 

1

 

ARTICLE II 

 

Position, Duties and Place of Employment

 

2.1           Position. The Executive shall hereafter be employed as the President and Chief Executive Officer of the Company.

 

2.2           Duties. In the performance of all of his responsibilities as President and Chief Executive Officer hereunder, the Executive shall be subject to all of the Company’s policies, rules and regulations applicable to its employees of comparable status, shall report directly to, and be subject to the direction and control of, the Board of Directors of the Company (the “Board”), and shall perform such duties as shall reasonably be assigned to him by the Board and are consistent with those duties assigned employees of comparable status. The Executive’s duties shall include, but not be limited to the (i) setting of the overall strategy and vision for the organization, (ii) communication with current customers and development of new customers, (iii) supervision of the senior management team, (iv) recommendation of the yearly budget for Board approval and management of the organization’s resources within those budget guidelines, (v) communication with overall organization of business directions, priorities and progress/results, (vi) setting of the culture of the organization in support of business objectives, (vii) management of the human resources of the Company according to authorized personnel policies and procedures, (viii) support of the operation and administration of the Company’s Board , and (vix) presentation of the Company and its mission, programs, products and services in a strong, positive image to customers, strategic partners, industry analysts, and other relevant stakeholders. Excluding periods of vacation and sick leave to which the Executive is entitled, the Executive agrees that during the Employment Term he shall devote substantially all of his business time to the business and affairs of the Company and to the duties and responsibilities assigned to him hereunder. Executive shall travel to the Company’s facilities, including the wafer fab located in Yokneam, Israel, at a frequency as necessary to accomplish the above duties, but not less than once per calendar quarter. Notwithstanding the foregoing, the Executive may (i) with the written permission of the Company’s Chairman of the Board (which shall not be unreasonably withheld), serve on corporate boards of other entities, (ii) with the written permission of the Company’s Chairman of the Board (which shall not be unreasonably withheld), serve on civic or charitable boards or committees, (iii) manage personal investments, and (iv) deliver lectures and teach at educational institutions, in each case so long as such activities do not significantly interfere with the performance of the Executive’s duties and responsibilities hereunder.

 

2.3           Executive’s principal place of employment shall be at 7360 Windsor Drive, Allentown, Pennsylvania 18106, USA.

 

ARTICLE III

 

Compensation

 

3.1           Base Salary. The Company agrees to pay or cause to be paid to the Executive during the first year of the Employment Term a base salary at the rate of $205,000 per annum and thereafter at a rate mutually agreed to by Executive and the Board and which reflects Executive’s level of contribution to the Company or such larger amount as the Board may from time to time determine (hereinafter referred to as the “Base Salary”). Such Base Salary shall be payable in accordance with the Company’s customary practices applicable to its executives. Such rate of salary, or increased rate of salary, if any, as the case may be, shall be reviewed at least

 

2

 

annually by the Board and may be further increased (but not decreased) in such amounts as the Board in its sole discretion may determine.

 

ARTICLE IV

 

Other Benefits

 

4.1           Long-Term Incentives; Other Perquisites.

 

(1)           The Executive shall be eligible to participate, on terms comparable to those applicable to other 
 senior executives of the Company, in any long-term incentive compensation plans, including the Management Bonus Plan, maintained by the Company which provide opportunities to receive compensation in addition to annual base salary to senior executives of the Company.

 

(2)           Stock Options. On the Effective Date of this Agreement, Executive shall be granted a new stock option to purchase up to 750,000 shares of the Company’s Common Stock under the Company’s Stock Option Plan, at the current strike price being offered to other Company employees at the date of grant, and during the Executive’s employment under this Agreement such additional stock option grants as may be determined from time to time by the Board and/or the Compensation Committee thereof, if any.

 

(3)           Bonus Plan. On an annual basis and within forty-five (45) days of the beginning of each fiscal year, the Board and the Executive shall agree on a milestone-driven bonus plan (the “Bonus Plan”). This Bonus Plan shall be based on a set of mutually defined objectives. For the 2005 calendar year, the bonus will be set based on “organic” revenue growth as follows:

 

	
 
    	
Revenue Target ($M)
    	
 
    	
Bonus Level ($K)
    	
 
    
	
 
    	
24-26
    	
 
    	
150
    	
 
    
	
 
    	
13-23
    	
 
    	
90
    	
 
    
	
 
    	
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4.2           Executive Benefits. Subject to the terms of such plans, the Executive will be covered under all retirement, savings, health benefit and other employee benefit plans maintained from time to time by the Company for its senior executives. Executive shall have, as a minimum, (i) life insurance and accidental death and disability insurance equal to two (2) times his Base Salary in effect at such time; (ii) travel accident insurance of three (3) times his Base Salary with a $750,000 cap; (iii) short term disability insurance at 70% of his weekly salary with a $2,000 per week cap; and (iv) long term disability at 60% of his monthly salary with a $10,000 per month cap.

 

4.3           Vacation and Sick Leave. The Executive shall be entitled to annual paid vacation and other paid absences in accordance with the policies as periodically established by the Board for similarly situated executives of the Company, which shall in no event be less than four (4) weeks vacation, three (3) management personal days and ten (10) holidays in each calendar year and pro rata for part of a year. The Executive shall be entitled to sick leave (without loss of pay) in accordance with the Company’s policies as in effect from time to time. Executive may carry forward to the next year any unused portion (up to a maximum of 15 days) of Executive’s vacation.

 

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4.4           Expenses. The Company shall reimburse the Executive for all reasonable travel, entertainment and other business expenses incurred by him in accordance with Company policy regarding travel, entertainment and business expenses in connection with the performance of the Executive’s duties under this Agreement during the Employment Term, such reimbursement to be made in accordance with the Company’s policy and practice relating to reimbursement of senior executives.

 

ARTICLE V 

Termination of Employment

 

5.1           Termination for Cause. The Company may terminate the Executive’s employment under this Agreement at any time for Cause. “Cause” shall exist for such termination if Executive (i) is adjudicated guilty of a felony, any act involving moral turpitude, or a misdemeanor where imprisonment is imposed by a court of competent jurisdiction; (ii) commits any act of fraud or intentional misrepresentation; (iii) continues to willfully and deliberately fail or refuse to use Executive’s reasonable best efforts to perform Executive’s reasonable duties in compliance with this Agreement which failure or refusal is having a material adverse impact upon the business or assets of the Company or (iv) has materially breached any covenant set forth in the Agreement or willfully violated any direction of the Board, provided, however, that the Company shall not be deemed to have Cause pursuant to clauses (ii), (iii) or (iv) unless the Company gives the Executive written notice that the specified event or conduct has occurred and the Executive fails to cure the event or conduct within thirty (30) days after receipt of such notice (provided, that, such event or conduct is capable of being cured). Termination of the Executive for Cause shall be communicated by a Notice of Termination. For purposes of this Agreement, a “Notice of Termination” shall mean delivery to the Executive of a copy of a resolution duly adopted by the affirmative vote of not less than a majority of the entire membership of the Company’s Board at a meeting of the Board called and held for the purpose (after reasonable notice to the Executive and reasonable opportunity for the Executive, together with the Executive’s counsel, to be heard before the Board prior to such vote), that the Executive failed to cure such conduct or event during the thirty-day period following the date on which the Company gave written notice of the conduct or event referred to in clause (ii), (iii) or (iv).

 

5.2           Termination Without Cause. The employment under this Employment Agreement may be terminated by a vote of not less than a majority of all of the directors on the Company’s Board. If Executive’s employment is so terminated without Cause, Executive shall, at Executives option, be able to take another assignment within the Company at terms comparable for such position and assuming such position exists within the Company. If such other internal position is not available or Executive so chooses to proceed with the termination of his employment, the Executive shall continue to receive his then current Base Salary otherwise payable pursuant to Section 3.1 as if his employment had continued for a period of six (6) months from the date of termination (“Payment Period”) and any annual bonus accrued in a prior year but unpaid as of the termination date plus any accrued portion of the current year’s bonus. In addition, at the Company’s expense, Executive shall continue to participate in all of the Company’s health plans and programs during the Payment Period as if he remained employed for such period, such benefits to be comparable in quality and location to those provided immediately prior to such termination. At the Executive’s option, his Base Salary and bonus (es) due during the Payment Period may be paid in a lump sum.

 

5.3           Resignation for Good Reason. Executive may terminate his employment hereunder for Good Reason, provided Executive shall have delivered a Notice of Resignation for Good Reason to the Corporation at least thirty (30) days prior to the effective date of termination, “Good Reason” shall mean the occurrence of one or more of the following circumstances:

 

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1.             the dissolution or complete liquidation of the Company;

 

2.             the filing of a voluntary petition by the Company, or an involuntary petition against the Company, under Chapter 7 of the Bankruptcy Code;

 

3.             without the Executive’s express written consent, the Company’s assignment to the Executive of duties inconsistent with the Executive’s duties as defined in Section 2.2, any change in the Executive’s title as President and Chief Executive Officer as defined in Section 2.1 or any material reduction in Executive’s duties or responsibilities, except as may have occurred in connection with an acquisition or merger of the Company and the termination of the Executive’s employment for Cause, Disability or as a result of the Executive’s death or by the Executive other than for Good Reason;

 

4.             the Executive’s involuntary relocation to a new principal work location not within a 25 mile radius of his former location;

 

5.             the failure of the Company to obtain the specific assumption of this Agreement by any successor or assign of the Company or any person, or entity acquiring substantially all of the Company’s assets; or

 

6.             any material breach by the Company of a material provision of this Agreement and Company fails to cure such material breach within thirty (30) days of notice of such breach from the Executive.

 

In the event of a resignation for Good Reason, Executive shall continue to receive his then current Base Salary otherwise payable under Section 3.1 as if his employment had continued for a period of six (6) months from the date of resignation for Good Reason (the “Payment Period”) and any annual bonus accrued in a prior year but unpaid as of the termination date plus any accrued portion of current’s year bonus. In addition, at the Company’s expense, Executive shall continue to participate in all of the Company’s health plans and programs during the Payment Period as if he had remained employed for such period, such benefits to be comparable in quality and location to those provided immediately prior to the resignation for good reason. At the Executive’s option, his Base Salary and bonus(es) due during the Payment Period may be paid in a lump sum.

 

5.4           Voluntary Resignation. Executive shall also have the right to resign voluntarily from Employment during the Employment Term by written notice to the Employer at least thirty (30) days prior to the effective date of his resignation. Executive shall have no claim for compensation or any other benefits from and after the effective date of his resignation.

 

5.5           Return of Company Property. Upon termination of or resignation from employment, Executive shall return to the Company all Company property in his possession.

 

5.6           Any other provision of this Agreement notwithstanding, no severance payment or benefit shall be paid to the Executive unless he (i) has executed a general release (in a form prescribed by the Company) of all known and unknown claims that he may then have against the Company or persons affiliated with the Company and (ii) has agreed not to prosecute any legal action or other proceeding based upon any of such claims.

 

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ARTICLE VI 

PROPRIETARY INFORMATION OBLIGATIONS

 

6.1           Agreement. Executive has entered into the Company’s Confidential Information and Inventions Assignment Agreement as of August 6, 2004. The Executive agrees that the Confidential Information and Inventions Assignment Agreement constitutes a separate agreement independently supported by good and adequate consideration and, notwithstanding anything in the Agreement to the contrary, shall be severable from the other provisions of, and shall survive, this Agreement.

 

ARTICLE VII 

 

DISABILITY OR DEATH OF THE EXECUTIVE

 

7.1           Disability. If Executive is incapacitated or disabled by accident, sickness or physical or mental illness, and, as a result, is absent from his duties hereunder on a full-time basis for one hundred and eighty (180) consecutive days and, within thirty (30) days after written notice of the Company’s intention to terminate his employment is given, Executive shall not have returned to the performance of his duties on a full-time basis (“Disability”), the Company may, at its option, terminate the employment of Executive under this Agreement for Disability. In such case, the date of termination shall be thirty (30) days after notice of the Company’s intention to terminate Executive was given, provided that Executive shall not have returned to the performance of his duties on a full-time basis during such thirty (30) day period. Notwithstanding the Company’s right to terminate Executive’s employment at any time and for any reason, if Executive’s employment is terminated due to Disability, Executive shall be entitled to receive his full compensation for a period of six (6) months following the termination, which compensation shall, at Executive’s option, be paid in regular installments or in a lump sum. In addition, during the six (6) month period following termination of Executive’s employment and at the Company’s expense, Executive shall continue to participate in all of the Company’s health plans and programs during the Payment Period as if he remained employed for such period, such benefits to be comparable in quality and location to those provided immediately prior to such termination. Nothing herein shall limit Executive’s right to receive any payments to which he may be entitled under any disability or executive benefit plan of the Company or under any other disability or insurance policy or plan.

 

7.2           Death. If Executive should die during the term of this Agreement, this Agreement shall be deemed to have terminated as of the date of his death provided, however, that the cash compensation and benefits payable hereunder shall be paid to his estate or beneficiary for a period of twelve (12) months following his date of death.

 

ARTICLE VIII 

 

EXECUTIVE’S STOCK OPTION AGREEMENT

 

8.1           All of Executive’s Stock Option Grants, including the May 2003 Option, shall have a three (3) year vesting schedule as follows: 1/3 of the Shares subject to the Option shall vest one (1) year from the Vesting Commencement Date and the remaining Shares subject to the Option shall vest at 1/12 per month during the second and third year, subject to the Executive’s continuing to be an employee on such dates.

 

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8.2           If the Executives employment is terminated without Cause, the Executive has submitted his Resignation for Good Reason, or the Executive’s employment is terminated for Disability or Death, the Executives Stock Option Grants shall continue to vest in line with the corresponding severance period (as described in Article V and Article VII hereof, as applicable) and the Executive or in the event of the Executive’s Death, the Executive’s estate or a person or persons who acquire the right to the Option by bequest or inheritance, shall have the right to exercise the Stock Options within such period of time as specified in the Stock Option Agreement.

 

ARTICLE IX 

 

TAXES

 

9.1           Taxes. Any amounts payable to the Executive hereunder shall be paid to the Executive subject to all applicable taxes required to be withheld by the Company pursuant to federal, state or local law, The Executive or his Beneficiary, if applicable, shall be solely responsible for all taxes imposed on the Executive or his Beneficiary by reason of his receipt of any amounts of compensation or benefits payable to the Executive hereunder. Beneficiary means the person or trust designated in writing by the Executive to receive any payments due under this Agreement in the event of the Executive’s death and if no such person or trust is designated, the Executive’s estate.

 

9.2           Excise Tax Payments. In the event that the severance and other benefits provided to Executive (i) constitute “parachute payments” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended and (ii) but for this Section 9.2, such severance and benefits would be subject to the excise tax imposed by Section 4999 of the Code, then Executive’s severance benefits shall be payable either:

 

(a)           in full, or

 

(b)           as to such lesser amount which would result in no portion of such severance and other benefits being subject to excise tax under Section 4999 of the Code, whichever of the foregoing amounts, taking into account the applicable federal, state and local income taxes and the excise tax imposed by Section 4999, results in the receipt by Executive on an after-tax basis, of the greatest amount of severance benefits under Article V. Unless the Company and Executive otherwise agree in writing, any determination required under this Section 9.2 shall be made in writing by independent public accountants agreed to by the Company and Executive (the “Accountants”), whose determination shall be conclusive and binding upon Executive and the Company for all purposes. For purposes of making the calculations required by this Section 9.2, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code. The Company and Executive shall furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make a determination under this Section 9.2. The Company shall bear all costs the Accountants may reasonably incur in connection with any calculations contemplated by this Section 9.2.

 

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ARTICLE X 

 

MISCELLANEOUS

 

10.1         Arbitration. Any controversy or claim arising out of or relating to this Agreement or the breach of this Agreement that cannot be resolved by the Executive and the Company, including any entitlement under Section 10.2, shall, at the instance of either the Executive or the Company, be submitted to arbitration in Pennsylvania in accordance with Pennsylvania law and the procedures of the American Arbitration Association (the “AAA”). The determination of the arbitrator(s) shall be conclusive and, subject to the provision for indemnification in Section 10.2, binding on the Company and the Executive and, subject to Section 10.9, judgment may be entered on the arbitrator(s)’ award in any court having jurisdiction.

 

10.2         Fees, Expenses and Indemnification.

 

(a)           The Company shall pay all reasonable legal fees and related expenses (including the costs of experts, evidence and counsel) incurred by the Executive as a result of (i) the Executive’s hearing before the AAA as contemplated in Section 10.1 of this Agreement or (ii) the Executive’s seeking to obtain or enforce any right or benefit provided by this Agreement, provided the Executive substantially prevails in the proceeding.

 

(b)           The Company shall indemnify the Executive to the fullest extent permitted by the laws of the State of Delaware, as in effect at the time of the subject act or omission, and shall advance to the Executive reasonable attorney’s fees and expenses as such fees and expenses are incurred (subject to an undertaking from the Executive to repay such advances if it shall be finally determined that by a judicial decision which is not subject to appeal that the Executive was not entitled to the reimbursement of such fees and expenses) and he will be entitled to the protection of the insurance policies the Company shall maintain for the benefit of its directors and officers against all costs, charges and expenses incurred or sustained by him in connection with any action, suit or proceeding or which he may be made a party by reason of his being or having been a director, officer or employee of the Company or any of its subsidiaries or his serving or having served any other enterprise as a director, officer or employee at the request of the Company (other than any dispute, claim or controversy arising under or relating to this Agreement).

 

10.3         Assignment, Succession. This Agreement shall be binding upon the Company and its successors and assigns and the Executive and his Beneficiary.

 

10.4         Severability. If all or any part of this Agreement is declared by any court or governmental authority to be unlawful or invalid, such unlawfulness or invalidity shall not serve to invalidate any portion of this Agreement not declared to be unlawful or invalid. Any paragraph or part of a paragraph so declared to be unlawful or invalid shall, if possible, be construed in a manner that will give effect to the terms of such paragraph or part of a paragraph to the fullest extent possible while remaining lawful and valid.

 

10.5         Amendment and Waiver. This Agreement shall not be altered, amended or modified except by written instrument executed by the Company and the Executive. A waiver of any term, covenant, agreement or condition contained in this Agreement shall not be deemed a waiver of any other term, covenant, agreement or condition, and any waiver of any default in any such term, covenant, agreement or condition shall not be deemed a waiver of any later default thereof or of any other term, covenant, agreement or condition.

 

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10.6         Notices. All notices and other communications required hereunder shall be in writing and delivered by hand or by first class registered or certified mail, return receipt requested, postage prepaid, addressed as follows:

 

If to the Company:

Erel N. Margalit

Chairman of the Board

CyOptics, Inc.

7360 Windsor Drive

Allentown, PA 18106

 

If to the Executive:

Ettore J. Coringrato, Jr. 

 

Any party may from time to time designate a new address by notice given in accordance with this Paragraph. Notice and communications shall be effective when actually received by the addressee.

 

10.7         Counterpart Originals. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.

 

10.8         Entire Agreement. This Agreement and the Exhibits attached hereto and made a part hereof form the entire agreement and supersedes any and all prior agreements (including the Prior Agreement), representations, understandings (whether oral or written or whether express or implied) between the parties hereto with respect to the subject matter contained in this Agreement.

 

10.9         Applicable Law. This Agreement and the rights and obligations of the  parties hereto shall be governed by and construed and enforced in accordance with the laws of the State of Pennsylvania, without giving effect to the conflicts of law principles thereof. Subject to the parties’ agreement to arbitrate disputes set forth in Section 10.1, the Executive and the Company hereby irrevocably and unconditionally consent to submit to the exclusive jurisdiction of the courts of the State of Pennsylvania or the United States of America located in the State of Pennsylvania for any actions, suits or proceedings arising out of or relating to this Agreement and the transactions contemplated hereby (and the parties agree not to commence any action, suit or proceeding relating hereto except in such courts), and further agree that service of any process, summons, notice or documents by United States registered mail to either party in accordance with Section 10.6 hereof shall be effective service or process for any action, suit or proceeding brought against the party in any such court and, absent any statue, rule or order to the contrary, that each party shall have thirty (30) days from actual receipt of any complaint to answer or otherwise plead with respect thereto. The parties hereby irrevocably and unconditionally waive any objection to the laying of venue of any action, suite or proceeding arising out of this Agreement or the transactions contemplated hereby in the courts of the State of Pennsylvania or the United States of America located in the State of Pennsylvania, and hereby further irrevocably and unconditionally waive and agree not to plead or claim in any court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum.

 

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IN WITNESS WHEREOF, the parties have executed this Agreement on the date first above written.

 

 

	
 
    	
By: 
    	
/s/ Erel N. Margalit
    
	
 
    	
 
    	
Erel N. Margalit
    
	
 
    	
 
    	
Chairman of the Board 
    
	
 
    	
 
    	
CyOptics, Inc.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
/s/ Ettore J. Coringrato
    
	
 
    	
 
    	
Ettore J. Coringrato, Jr.
    

 

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