Exhibit 10.4
CENTENNIAL COMMUNICATIONS
CORP.
Non-Qualified Stock Option
Agreement
[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:
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(i)
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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, Anderson & Stowe 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
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(ii)
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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
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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.
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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, Anderson & Stowe VIII or any affiliate
thereof in a public offering or through a distribution to limited
partners.
For purposes hereof, “
Cause ” shall mean the following:
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(i)
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chronic use of alcohol or drugs
materially affecting your performance;
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(ii)
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conviction of, or plea of nolo
contendere to, a felony or crime involving moral
turpitude;
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(iii)
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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;
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(iv)
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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;
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(v)
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fraud on or misappropriation of
corporate assets or corporate opportunity; and
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(vi)
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acts of dishonesty or breach of
fiduciary obligation to the Company or violation of any Company
rule, regulation, procedure or policy.
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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
whic
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