CENTENNIAL COMMUNICATIONS CORP. Non-Qualified Stock Option Agreement
Exhibit 10.4
CENTENNIAL
COMMUNICATIONS CORP.
[Date]
Employee/Optionee: [Name]
Number of shares
of [Number]
Common Stock subject
to this Agreement:
Pursuant to the Centennial Communications Corp. and its
Subsidiaries 1999 Stock Option and Restricted Stock Purchase
Plan (the “Plan”), the Board of Directors of
Centennial Communications Corp. (the “Company”)
has granted to you on this date an option (the
“Option”) to purchase in the aggregate, on the
terms and subject to the conditions set forth herein,
[Number] shares of the Company’s Common Stock,
$.01 par value (“Common Stock”). Such
shares (as the same may be adjusted as described in
Section 10 below) are herein referred to as the
“Option Shares”. The Option shall constitute
and be treated at all times by you and the Company as a
“non-qualified stock option” for Federal income tax
purposes and shall not constitute and shall not be treated as an
“incentive stock option” as defined under
Section 422(b) of the Internal Revenue Code of 1986, as
amended (the “Code”). The terms and conditions
of the Option are set out below.
1. Date of Grant. The Option is granted
to you on [Date] (the “Grant Date”).
2. Termination of Option. Your right to
exercise the Option (and to purchase the Option Shares) shall
expire and terminate in all events on the earlier of
(i) ten years from the Grant Date or (ii) the date
provided in Section 8 below in the event you cease to be
employed by the Company or any “Subsidiary” or
“Parent” thereof (“Subsidiary” and
“Parent” are defined herein as defined in the
Plan).
3. Option Price. The purchase price to be
paid upon the exercise of the Option is [Exercise Price] per
share, the fair market value of a share of Common Stock (as
determined by the Board of Directors of the Company) on the
Grant Date (subject to adjustment as provided in Section 10
hereof).
4. Vesting. (a) Commencing on
[Vesting Date] (one year anniversary of Grant Date) and
on each of the three anniversaries of such date, in the event
that you are employed on a full-time basis by the Company or any
subsidiary or parent thereof on such date, you shall become
entitled to exercise the Option with respect to 25% of the
Option Shares (rounded to the nearest whole share) until the
Option expires and terminates pursuant to Section 2 hereof.
(b) Notwithstanding Section 4(a) hereof, if a Change
of Control (as defined below) occurs, then 100% of the Option
Shares shall become vested and exercisable (until the Option
expires and terminates pursuant to Section 2 hereof) upon
the earlier of (i) the date which is six months following
the date of the Change of Control and (ii) the date of your
termination of employment (x) by the Company or any
Subsidiary or Parent thereof, or any successor to the
Company’s assets or business, other than for Cause (as
defined below) or (y) by you for Good Reason (as defined
below). Notwithstanding the foregoing, the provisions of this
Agreement, including Sections 4(a) and 8, shall continue to
apply after a Change of Control.
For purposes hereof, “Change of Control” shall
mean:
| (i) | any transaction pursuant to which any person or group (as such terms are defined in the Securities Exchange Act of 1934, as amended, (the “Exchange Act”)), other than Welsh, Carson, Xxxxxxxx & Xxxxx VIII, L.P. or any affiliate or affiliates of such stockholders, becomes the beneficial holder (as defined in the Exchange Act) directly or indirectly, of more than 50% of the then-outstanding voting equity securities of the Company; or | |
| (ii) | any consolidation, merger, reorganization, sale of assets or similar transaction (each, a “Business Combination”) involving the Company or any of its Subsidiaries as a result of which more than 50% of the capital stock of the Company outstanding immediately after the effective date of such Business |
| Combination is owned of record or beneficially by persons other than the holders of the Company’s capital stock immediately prior to such Business Combination. |
Notwithstanding the foregoing, the following shall not
constitute a Change of Control: (i) a tax free spin-off
transaction involving the Company or any of its Subsidiaries or
(ii) the sale of common stock of the Company, by Welsh,
Carson, Xxxxxxxx & Xxxxx VIII or any affiliate thereof
in a public offering or through a distribution to limited
partners.
For purposes hereof, “Cause” shall mean the
following:
| (i) | chronic use of alcohol or drugs materially affecting your performance; |
| (ii) | conviction of, or plea of nolo contendere to, a felony or crime involving moral turpitude; | |
| (iii) | failure to comply within a period of ten business days with a reasonable directive of your direct supervisor and/or the Chief Executive Officer of the Company relating to your duties or your performance and consistent with your position, after written notice that such failure will be deemed to be “Cause,” to the extent such failure can be cured within ten business days and if not so curable, fails to commence curing during said ten-day period and diligently pursue the curing of same until cured; |
| (iv) | your gross neglect or gross misconduct in carrying out your duties as an employee, resulting, in either case, in material economic harm to the Company, unless you believed in good faith that such act or non-act was in the best interests of the Company; | |
| (v) | fraud on or misappropriation of corporate assets or corporate opportunity; and | |
| (vi) | acts of dishonesty or breach of fiduciary obligation to the Company or violation of any Company rule, regulation, procedure or policy. |
For purposes hereof “Good Reason” shall mean
the following: (i) the assignment to you of any duties,
responsibility or authority, or the material diminishment of
your duties, responsibility or authority, without your consent,
which assignment or diminishment is inconsistent with your
status, position or title immediately prior to such Change of
Control, (ii) the change of your status, position or title
without your consent, which change does not represent a
promotion from your status, position or title immediately prior
to such Change of Control, (iii) the reduction in the level
of your reporting responsibility, without your consent, as it
existed immediately prior to such Change of Control,
(iv) the reduction in your base salary, without your
consent, from your base salary as in effect immediately prior to
the date of such Change of Control, (v) the relocation of
your normal place of employment, without your consent, to a
location more than twenty-five miles away from its site
immediately prior to such Change of Control or (vi) the
failure by the Company or any Subsidiary or Parent thereof to
continue in effect, without your consent, any material
compensation plan or health and welfare plan in which you
participated immediately prior to such Change of Control, unless
a substitute or alternative plan arrangement reasonably
satisfactory to you has been made with respect to such plan,
and, in each such case, such assignment, diminution, change,
reduction, relocation or failure to continue a plan shall
continue unremedied for a period of 15 days after written
notice thereof from you to the Company. Notwithstanding the
foregoing, a termination of your employment for retirement,
Disability or Cause shall not constitute Good Reason.
5. Additional Provisions Relating to
Exercise. (a) Once you become entitled to
exercise the Option (and purchase Option Shares) as provided in
Section 4 hereof, such right will continue until the date
on which such Option expires and terminates pursuant to
Section 2 hereof, unless otherwise stipulated herein.
Notwithstanding anything contained herein to the contrary, no
new rights to exercise the Option with respect to any Option
Shares shall be acquired under Section 4 hereof after the
date on which you cease to be employed on a full-time basis by
the Company or any Subsidiary or Parent thereof.
(b) The Compensation Committee of the Board of Directors of
the Company (the “Committee”), in its sole discretion,
may at any time accelerate the time set forth in Section 4
at which the Option may be exercised by you with respect to any
Option Shares.
6. Exercise of Option. To exercise the
Option, you must deliver a completed copy of the attached Option
Exercise Form to the address indicated on the Form, specifying
the number of Option Shares being purchased as a result of such
exercise, together with payment of the full option price for the
Option Shares being purchased.
Payment of the option price must be made in cash or by check or
such other consideration acceptable to the Committee in its sole
discretion. You may also exercise the Option in accordance with
such other procedures adopted by the Committee from time to time.
7. Transferability of Option. You may not
transfer the Option (other than by will or the laws of descent
and distribution). The Option may be exercised during your
lifetime only by you.
8. Termination of Employment. (a) In
the event that (i) your employment by the Company or any
Subsidiary or Parent thereof is terminated by such entity for
“cause” or (ii) you terminate your employment by
such entity for any reason whatsoever other than as a result of
your death or disability, then the Option may only be exercised
within one month after the date on which you ceased to be so
employed, and only to the extent that you could have otherwise
exercised the Option as of the date on which you ceased to be so
employed.
(b) In the event that you cease to be employed on a
full-time basis by the Company or any Subsidiary or Parent
thereof for any reason other than a termination specified in
Section 8(a) above, then the Option may only be exercised
within three months after the date on which you ceased to be so
employed, and only to the extent that you could have otherwise
exercised the Option as of the date on which you ceased to be so
employed.
(c) In the event that you cease to be employed on a
full-time basis by the Company or any Subsidiary or Parent
thereof by reason of a “disability”, then the Option
may only be exercised within one year after the date you cease
to be so employed, and only to the same extent that you were
entitled to exercise the Option on the date you ceased to be so
employed by reason of such disability and had not previously
done so.
(d) In the event that you die while employed by the Company
or any Subsidiary or Parent thereof (or die within a period of
one month after ceasing to be employed by the Company or any
Subsidiary or Parent thereof for any reason described in
Section 8(a) above, within a period of three months after
ceasing to be so employed for any reason described in
Section 8(b) above or within a period of one year after
ceasing to be so employed for any reason described in
Section 8(c) above), then the Option may only be exercised
within one year after your death. In such event, the Option may
be exercised during such one year period by the executor or
administrator of your estate or by any person who shall have
acquired the Option through bequest or inheritance, but only to
the same extent that you were entitled to exercise the Option
immediately prior to the time of your death and you had not
previously done so.
(e) Notwithstanding any provision contained in this
Section 8 to the contrary, in no event may the Option be
exercised to any extent by anyone after the tenth anniversary of
the Grant Date.
9. Representations. (a) You
acknowledge receipt of a copy of the Information Statement
Regarding the Centennial Communications Corp. and its
Subsidiaries 1999 Stock Option and Restricted Stock Purchase
Plan, prepared and distributed by the Company pursuant to the
Registration Statements on
Form S-8
filed by the Company with the Securities and Exchange Commission
on or about December 7, 1999 and November 28, 2001.
(b) You further represent and warrant that you understand
the Federal, state and local income tax consequences of the
granting of the Option to you, the acquisition of rights to
exercise the Option with respect to any Option Shares, the
exercise of the Option and purchase of Option Shares, and the
subsequent sale or other disposition of any Option Shares. In
addition, you understand that the Company will be required to
withhold Federal, state or local taxes (including social
security and Medicare taxes) in respect of any compensation
income realized by you as a result of the exercise of the
Option, which compensation income shall generally equal the
excess of the fair market value of any Option Shares received
upon exercise of the Option at the time of exercise over the
exercise price of the Option. To the extent that the Company is
required to withhold any such taxes, you hereby agree that the
Company may deduct from any payments of any kind otherwise due
to you an amount equal to the total Federal, state and local
taxes required to be so withheld, or if such payments are
inadequate to satisfy such Federal, state and local taxes, or if
no such payments are due or to become due to you, then you agree
to provide the Company with cash funds or make other
arrangements satisfactory to the Company regarding such payment.
It is understood that all matters with respect to the total
amount of taxes to be withheld in respect of any such
compensation income shall be determined by the Board of
Directors in its sole discretion.
10. Adjustment. (a) In the event
that the Committee determines that dilution or enlargement of
benefits under the Plan and the outstanding Awards thereunder
will occur as a result of any reorganization, merger or
consolidation, recapitalization, reclassification, stock split,
split-up,
combination or exchange of shares, distribution, declaration of
any dividends (whether payable in Common Stock, cash or other
property) or other similar
transaction or event, the Committee shall, subject to the
provisions of Section 10(c) below if the circumstances
therein specified are applicable, make such equitable changes or
adjustments as it deems necessary or appropriate in order to
prevent such dilution or enlargement of benefits under the Plan
and the outstanding Awards thereunder, to any or all of
(i) the number of shares of Common Stock (and the option
price per share) subject to the unexercised portion of any
outstanding Option (to the nearest possible full share);
provided, however, that the limitations of Section 424 of
the Code shall apply with respect to adjustments made to ISOs,
(ii) the number of shares of Common Stock to be acquired
pursuant to an Award, and (iii) the number of shares of
Common Stock for which Options
and/or
Awards may be granted under the Plan, as set forth in
Section 4.1 hereof. All such adjustments shall be
effective, final, binding and conclusive on all persons.
(b) If any capital reorganization or reclassification of
the capital stock of the Company or any consolidation or merger
of the Company with another entity, or the sale of all or
substantially all its assets to another entity, shall be
effected in such a way that holders of Common Stock shall be
entitled to receive stock, securities or assets (including cash)
with respect to or in exchange for Common Stock, then, subject
to the provisions of Section 10(c) below if the
circumstances therein specified are applicable, each holder of
an Option shall thereafter have the right to purchase, upon the
exercise of the Option in accordance with the terms and
conditions specified in the option agreement governing such
Option and in lieu of the shares of Common Stock immediately
theretofore receivable upon the exercise of such Option, such
shares of stock, securities or assets (including, without
limitation, cash) as may be issued or payable with respect to or
in exchange for a number of outstanding shares of such Common
Stock equal to the number of shares of such Common Stock
immediately theretofore so receivable had such reorganization,
reclassification, consolidation, merger or sale not taken place.
(c) Notwithstanding Sections 10(a) and 10(b) hereof,
in the event of (i) any offer to holders of the
Company’s Common Stock generally relating to the
acquisition of all or substantially all of their shares,
including, without limitation, through purchase, merger or
otherwise, or (ii) any proposed transaction generally
relating to the acquisition of substantially all of the assets
or business of the Company (herein sometimes referred to as an
“Acquisition”), the Committee may, in its sole
discretion, cancel any outstanding Options (provided, however,
that the limitations of Section 424 of the Code shall apply
with respect to adjustments made to ISO’s) and pay or
deliver, or cause to be paid or delivered, to the holder thereof
an amount in cash or securities having a value (as determined by
the Committee acting in good faith) equal to the product of
(A) the number of shares of Common Stock (the “Option
Shares”) subject to the Options so cancelled multiplied by
(B) the amount, if any, by which (1) the formula or
fixed price per share paid to holders of shares of Common Stock
pursuant to such Acquisition exceeds (2) the option price
applicable to such Option Shares.
11. Continuation of Employment. Neither
the Plan nor the Option shall confer upon you any right to
continue in the employ of the Company or any Subsidiary or
Parent thereof, or limit in any respect the right of the Company
or any Subsidiary or Parent thereof to terminate your employment
or other relationship with the Company or any Subsidiary or
Parent thereof, as the case may be, at any time.
12. Plan Documents. This Agreement is
qualified in its entirety by reference to the provisions of the
Plan, which are hereby incorporated herein by reference.
13. General Provisions. (a) This
Option Agreement shall be governed by and construed in
accordance with the laws of the State of New York. If any one or
more provisions of this Agreement shall be found to be illegal
or unenforceable in any respect, the validity and enforceability
of the remaining provisions hereof shall not in any way be
affected or impaired thereby.
(b) This Option Agreement and the Plan contain the entire
agreement between the Company and you relating to the Option.
Except as expressly provided in this Agreement or the Plan with
respect to certain actions permitted to be taken by the Board of
Directors of the Company or the Committee (as defined in the
Plan) with respect to this Agreement and the terms of the
Option, this Agreement may not be amended, modified, changed or
waived other than by written instrument signed by the parties
hereto.
(c) This Option Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original,
but all of which together shall constitute one and the same
instrument.
Please acknowledge receipt of this Agreement by signing the
enclosed copy of this Agreement in the space provided below and
returning it promptly to the Secretary of the Company.
CENTENNIAL COMMUNICATIONS CORP.
| By |
|
Accepted and Agreed to
as of [Date]:
CENTENNIAL
COMMUNICATIONS CORP.
STOCK OPTION AND RESTRICTED STOCK PURCHASE PLAN
STOCK OPTION AND RESTRICTED STOCK PURCHASE PLAN
OPTION
EXERCISE FORM
I,
,
a Participant under the Centennial Communications Corp. and its
Subsidiaries 1999 Stock Option and Restricted Stock Purchase
Plan (the “Plan”), do hereby exercise the right
to
purchase shares
of Common Stock, $.01 par value, of Centennial
Communications Corp. pursuant to the Option granted to me on
June 4, 2008 under the Plan. Enclosed herewith is
$ ,
an amount equal to the total exercise price for the shares of
Common Stock being purchased pursuant to this Option Exercise
Form.
| Date: |
Xxxxxxx Xxxxx |
Send a
completed copy of this Option Exercise Form to:
Centennial Communications Corp.
Corporate Xxxxxx
0000 Xxxxx 000, Xxxx. X
Xxxx, Xxx Xxxxxx 00000
Attention: Chief Financial Officer
