NON-QUALIFIED STOCK OPTION
EXHIBIT
10.2
To:
__________________
Name
__________________
Address
Exercise
Price: $_________
Date
of
Grant: __________
1. You
(“Optionee”) are hereby granted, subject to the terms hereof, effective as of
the date of grant, an option to purchase [ ] shares of common stock, $.01 par
value (“Stock”), of Talk America Holdings, Inc. (the “Company”) at the exercise
price shown above pursuant to the Company’s 2003 Long Term Incentive Plan (the
“Plan”). This Option shall vest and become fully exercisable in
installments, as follows: (i) [ ] shares of common stock may be purchased on
the
first anniversary of the Date of Grant and, (ii) [ ] shares of common stock
may
be purchased on the second anniversary of the Date of Grant, and (iii) [ ]
shares of common stock may be purchased on the third anniversary of the Date
of
Grant. In addition, the Option will vest in full (less any component or portion
which would otherwise be vested or exercisable and any portion previously vested
and exercised) upon a
“Change
of Control”, as defined below. Notwithstanding the foregoing the Board of
Directors of the Company (the “Board”) or its designees may accelerate or waive
such vesting date with respect to any or all of the shares of Common Stock
covered by the Option. A
“Change
in Control” shall be deemed to have occurred if:
(a)
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any
person (as defined in Section 3(a)(9) under the Securities Exchange
Act of
1934, as amended (the “Exchange Act”)), other than the Company (or a
Significant Subsidiary as defined below) becomes the Beneficial Owner
(as
defined in Rule 13d-3 under the Exchange Act; provided, that a Person
shall be deemed to be the Beneficial Owner of all shares that any
such
Person has the right to acquire pursuant to any agreement or arrangement
or upon exercise of conversion rights, warrants, options or otherwise,
without regard to the 60 day period referred to in Rule 13d-3 under
the
Exchange Act), directly or indirectly, of securities of the Company
or any
Significant Subsidiary (as defined below) representing 50% or more
of the
combined voting power of the Company’s or such Significant Subsidiary’s
then outstanding securities;
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(b) |
during
any period of two years, individuals who at the beginning of such period
constitute the Board of Company and any new director (other than a
director designated by a person who has entered into an agreement with
the
Company to effect a transaction described in clauses (i), (iii), or
(iv)
of this paragraph) whose election by the Board or nomination for election
by stockholders was approved by a vote of at least two-thirds of the
directors then still in office who either were directors at the beginning
of the two-year period or whose election or nomination for election
was
previously so approved but excluding for this purpose any such new
director whose initial assumption of office occurs as a result of either
an actual or threatened election contest (as such terms are used in
Rule
14a-11 of Regulation 14A under the Exchange Act) or other actual or
threatened solicitation of proxies or consents by or on behalf of an
individual, corporation, partnership, group, associate or other entity
or
Person other than the Board, cease for any reason to constitute at
least a
majority of the Board of the Company;
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(c) |
the
consummation of a merger or consolidation of the Company or any subsidiary
owning directly or indirectly all or substantially all of the consolidated
assets of the Company ( a “Significant Subsidiary”) with any other entity,
including a merger or consolidation which would result in the voting
securities of the Company or a Significant Subsidiary outstanding
immediately prior thereto continuing to represent more than 50% of
the
combined voting power of the surviving or resulting entity outstanding
immediately after such merger or
consolidation;
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(d)
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the
stockholders of the Company approve a plan or agreement for the sale
or
disposition of all or substantially all of the consolidated assets
of the
Company in which case the Board shall determine the effective date
of the
Change of Control resulting therefrom;
and
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(e)
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any
other event occurs which the Board determines, in its discretion,
would
materially alter, the structure of the Company or its
ownership.
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2. The
Optionee may exercise the Option by giving written notice to the Secretary
of
the Company on forms supplied by the Company at its then principal executive
office, accompanied by payment of the exercise price for the total number of
shares the Optionee specifies that the Optionee wishes to purchase. The payment
may be in any of the following forms: (a) cash, which may be evidenced by a
check and includes cash received from a so-called “cashless exercise”; (b)
(unless prohibited by the Board) certificates representing shares of Common
Stock of the Company, which will be valued by the Secretary of the Company
at
the fair market value per share of the Company’s Common Stock on the date of
delivery of such certificates of the Company, accompanied by an assignment
of
the stock to the Company; or (c) (unless prohibited by the Board) any
combination of cash and Common Stock of the Company valued as provided in clause
(b). Any assignment of stock shall be in a form and substance satisfactory
to
the Secretary of the Company, including guarantees of signature(s) and payment
of all transfer taxes if the Secretary deems such guarantees necessary or
desirable.
3. The
Company agrees to use commercially reasonable efforts to file a Form S-8 and
register the shares issuable upon the exercise of the Options contemplated
herein under the Securities Act of 1933 and any applicable state securities
registration requirements and to cause such shares to be listed on NASDAQ (if
such shares are not already listed or so registered).
4. Your
Option will, to the extent not previously exercised by you, as to any shares
purchasable hereunder (i.e. vested) expire on the tenth anniversary of the
Date
of Xxxxx
5. In
the
event of any change in the outstanding shares of the Common Stock of the Company
by reason of a stock dividend, stock split, combination of shares,
recapitalization, merger, consolidation, transfer of assets, reorganization,
conversion or what the Board deems in its reasonable discretion to be similar
circumstances, the number and kind of shares subject to this Option and the
exercise price of such shares shall be appropriately adjusted in a manner to
be
determined in the reasonable discretion of the Board.
6. Except
as
otherwise provided by the Board or the Committee (as defined below), this Option
is not transferable except as designated by Optionee or by will or the laws
of
descent and distribution, and is exercisable during the Optionee’s lifetime only
by the Optionee, including, for this purpose, the Optionee’s legal guardian or
custodian in the event of disability. Until the exercise price has been paid
in
full pursuant to due exercise of this Option and the purchased shares are
delivered to the Optionee, the Optionee does not have any rights as a
stockholder of the Company. The Company reserves the right not to deliver to
the
Optionee the shares purchased by virtue of the exercise of this Option during
any period of time in which the Company deems, in its sole discretion, that
such
would violate a federal, state, local or securities exchange rule, regulation
or
law.
7. Notwithstanding
anything to the contrary contained herein, this Option is not exercisable
without the consent of the Company until all the following events occur and
during the following periods of time:
(a) |
Until
this Option and the optioned shares are approved and/or registered
with
such federal, state and local regulatory bodies or agencies and securities
exchanges as the Company may deem necessary or desirable;
or
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(b) |
During
any period of time in which the Company deems that the exercisability
of
this Option, the offer to sell the shares optioned hereunder, or the
sale
thereof, may violate a federal, state, local or securities exchange
rule,
regulation or law, or may cause the Company to be legally obligated
to
issue or sell more shares than the Company is legally entitled to issue
or
sell.
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(c)
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Until
the Optionee has paid or made suitable arrangements to pay (i) all
federal, state and local income tax withholding required to be withheld
by
the Company in connection with the Option exercise and (ii) the Optionee’s
portion of other federal, state and local payroll and other taxes
due in
connection with the Option
exercise.
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8. The
following two paragraphs shall be applicable if, on the date of exercise of
this
Option, the Common Stock to be purchased pursuant to such exercise has not
been
registered under the Securities Act of 1933, as amended, and under applicable
state securities laws, and shall continue to be applicable for so long as such
registration has not occurred:
(a)
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The
Optionee hereby agrees, warrants and represents that he will acquire
the
Common Stock to be issued hereunder for his own account for investment
purposes only, and not with a view to, or in connection with, any
resale
or other distribution of any of such shares, except as hereafter
permitted. The Optionee further agrees that he will not at any time
make
any offer, sale, transfer, pledge or other disposition of such Common
Stock to be issued hereunder without an effective registration statement
under the Securities Act of 1933, as amended, and under any applicable
state securities laws or an opinion of counsel acceptable to the
Company
to the effect that the proposed transaction will be exempt from such
registration. The Optionee shall execute such instruments,
representations, acknowledgments and agreements as the Company may,
in its
sole discretion, deem advisable to avoid any violation of federal,
state,
local or securities exchange rule, regulation or
law.
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(b)
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The
certificates for Common Stock to be issued to the Optionee hereunder
shall
bear the following legend:
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“The
shares represented by this certificate have not been registered under the
Securities Act of 1933, as amended, or under applicable state securities laws.
The shares have been acquired for investment and may not be offered, sold,
transferred, pledged or otherwise disposed of without an effective registration
statement under the Securities Act of 1933, as amended, and under any applicable
state securities laws or an opinion of counsel acceptable to the Company that
the proposed transaction will be exempt from such registration.”
The
foregoing legend shall be removed upon registration of the legended shares
under
the Securities Act of 1933, as amended, and under any applicable state laws
or
upon receipt of any opinion of counsel acceptable to the Company that said
registration is no longer required.
9. The
sole
purpose of the agreements, warranties, representations and legend set forth
in
the two immediately preceding paragraphs is to prevent violations of the
Securities Act of 1933, as amended, and any applicable state securities
laws.
10. It
is the
intention of the Company and the Optionee that this Option shall not be an
“Incentive Stock Option” as that term is used in Section 422 of the Code and the
regulations thereunder. This Option is granted pursuant to the Plan. The Board
and the Compensation Committee or similar committee thereof (the “Committee”)
shall
have plenary authority to interpret the Plan and Option, prescribe, amend and
rescind rules and regulations relating to it, and make all other determinations
deemed necessary or advisable for the administration and/or exercise of the
Option.
11. This
Option constitutes the entire understanding between the Company and the Optionee
with respect to the subject matter hereof and no amendment, modification or
waiver of this Option, in whole or in part, shall be binding upon the Company
unless in writing and signed by an authorized officer of the Company. This
Option and the performances of the parties hereunder shall be construed in
accordance with and governed by the laws of the State of Delaware.
Please
sign the copy of this Option and return it to the Company’s Secretary, thereby
indicating your understanding of and agreement with its terms and
conditions.
TALK
AMERICA HOLDINGS, INC.
By:
_______________________
Xxxxxxxx X. Xxxx XX
Executive Vice President-General
Counsel and Secretary
I
hereby
acknowledge receipt of a copy of the foregoing stock Option and, having read
it
hereby signify my understanding of, and my agreement with, its terms and
conditions.
________________
_______________
Optionee Date