EXHIBIT 4.3
RESTATED
ACCESS ONE COMMUNICATIONS CORP.
1999 STOCK OPTION PLAN
Adopted and Effective as of June 15, 1999
Restated as of August 9, 2000
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RESTATED
ACCESS ONE COMMUNICATIONS CORP.
1999 STOCK OPTION PLAN
This is a restatement of the Access One Communications Corp. 1999 Stock
Option Plan (the "Plan"). The purpose of such restatement is to reflect the
following: (i) the acquisition of Access One Communications Corp. ("Access One")
by Talk.com Inc. ("Talk.com") effective as of August 9, 2000; (ii) the
assumption of the Plan by Talk.com whereby Talk.com shall become the Plan's
sponsor; and (iii) the conversion of previously granted options to purchase
Access One common stock into options to purchase Talk.com common stock. The Plan
shall be administered such that the conversion of options previously granted
under the Plan shall not by way of this restatement be deemed a "modification"
within the meaning of section 424(h)(3) of the Internal Revenue Code.
1. PURPOSE OF THE PLAN.
This Plan is intended to promote the interests of the Company and its
shareholders by providing the Company's officers, directors, key employees and
consultants, on whose judgment, initiative, and efforts the successful conduct
of the business of the Company depends, and who are responsible for the
management, growth, and protection of the business, with appropriate incentives
and rewards to encourage them to continue in the employ of the Company and to
maximize their performance.
2. DEFINITIONS.
As used in the Plan, the following definitions apply to the terms
indicated below:
(a) "Board of Directors" shall mean the Board of Directors of the
Company.
(b) "Cause" shall mean, when used in connection with the
termination of a Participant's employment, the termination of the Participant's
employment on account of: (i) the willful and continued failure by the
Participant substantially to perform his or her duties and obligations to the
Company (other than any such failure resulting from incapacity due to physical
or mental illness), (ii) the willful violation by the Participant of (A) any
federal or state law or (B) any rule of the Company, which violation would
materially reflect on the Participant's character, competence, or integrity,
(iii) a breach by a Participant of the Participant's duty of loyalty to the
Company such as Participant's solicitation of customers or employees of the
Company on behalf of any other Person, (iv) the Participant's unauthorized
removal from the Company's premises of any document (in any medium or form)
relating to the Company, its business, or its customers, provided, however, that
no such removal shall be deemed "unauthorized" if it is in furtherance of an
individual's duties and obligations to the Company and such removal is a common
practice at the Company, (v) the Participant's unauthorized disclosure to any
Person of any confidential information regarding the Company, (vi) the willful
engaging by the Participant in any other misconduct which is materially
injurious to the Company or (vii) any event that constitutes "cause" (or any
similar term that constitutes the basis on which the Company may terminate the
employee's employment with the Company) for purposes of an employment agreement
between the Participant and the Company. For purposes of this Section 2(b), no
act, or failure to act, on a Participant's part shall be considered "willful"
unless done, or omitted to be done, by the Participant in bad faith and without
reasonable belief that the action or omission was in the best interests of the
Company. Any rights the Company may have hereunder in respect of the events
giving rise to Cause shall be in addition to the rights the Company may have
under any other agreement with the Participant or at law or in equity. If,
subsequent to the termination of a Participant's employment without Cause, it is
determined by the Board of Directors that the Participant's employment could
have been terminated for Cause, such Participant's employment shall, at the
election of the Committee in its sole discretion, be deemed to have been
terminated for Cause.
(c) "Change of Control" shall mean a sale of all or substantially
all of the Company's assets or capital stock, or any merger or consolidation
pursuant to which the Company's stockholders shall receive cash or securities of
another corporation and less than 50% of the outstanding capital stock of the
surviving corporation pursuant to such merger or consolidation shall be owned by
the stockholders of the Company.
(d) "Code" shall mean the Internal Revenue Code of 1986, as
amended.
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(e) "Committee" shall mean the Compensation Committee of the
Board; provided, however, the Compensation Committee shall not take any action
under the Plan unless it is at all times composed solely of not less than two
"Non-Employee Directors" within the meaning of Rule 16b-3, as promulgated under
the Securities Exchange Act of 1934, as amended. In the event the Compensation
Committee is not composed of three Non-Employee Directors when the Company is
subject to the Securities Act, or, in the event the Committee is unable to act,
the Board shall take any and all actions required or permitted to be taken by
the Committee under the Plan and shall serve as the Committee.
(f) "Company" shall mean Talk.com Inc., a Delaware corporation.
Where the context so requires, reference to Company shall also include any
affiliate or subsidiary thereof, as the case may be.
(g) "Company Stock" shall mean the common stock, par value $.01
per share, of the Company.
(h) "Disability" shall mean any physical or mental condition as a
result of which a Participant is disabled within the meaning of Section
422(c)(6) of the Code.
(i) "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
(j) "Fair Market Value" with respect to a share of Company Stock
on any relevant date shall be determined in accordance with the following
provisions:
(1) If, at the time an Option is granted under the Plan,
the Company is publicly traded, "Fair Market Value" shall be determined as of
the last business day for which the prices or quotes discussed in this sentence
are available prior to the date such Option is granted and shall mean (i) the
closing selling price per share on that date of the Company Stock on the
principal national securities exchange on which the Company Stock is traded, if
the Company Stock is then traded on a national securities exchange; or (ii) the
closing selling price per share on that date of the Company Stock on the NASDAQ
National Market List, if the Company Stock is not then traded on a national
securities exchange; or (iii) the closing bid price per share last quoted on
that date by an established quotation service for over-the-counter securities,
if the Company Stock is not reported on the NASDAQ National Market List.
(2) If the Company Stock is not publicly traded at the
time an Option is granted under the Plan, "Fair Market Value" shall be deemed to
be the fair value of the Company Stock as determined by the Committee after
taking into consideration all factors which it deems appropriate, including,
without limitation, recent sale and offer prices of the Company Stock in private
transactions negotiated at arm's length.
(k) "Incentive Award" shall mean an Option, a SAR, a Restricted
Stock, or Stock Bonus Award granted pursuant to the terms of the Plan.
(l) "Incentive Stock Option" shall mean an Option that is an
"incentive stock option" within the meaning of Section 422 of the Code and that
is identified as an Incentive Stock Option in the agreement by which it is
evidenced.
(m) "Issue Date" shall mean the date established by the Committee
on which certificates representing shares of Restricted Stock shall be issued by
the Company pursuant to the terms of Section 8(d) hereof.
(n) "Non-Qualified Stock Option" shall mean an Option that is not
an Incentive Stock Option.
(o) "Option" shall mean an option to purchase shares of Company
Stock granted pursuant to Section 6 hereof. Each Option, or portion thereof,
shall be identified as either an Incentive Stock Option or a Non-Qualified Stock
Option in the agreement by which such Option is evidenced.
(p) "Participant" shall mean an employee, officer, director or
outside director of the Company or any subsidiary of the Company or a consultant
to the Company or any subsidiary of the Company selected to participate in the
Plan and to whom an Incentive Award is granted pursuant to the Plan, and, upon
his or her death, that Person's successors, heirs, executors, and
administrators, as the case may be.
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(q) "Person" shall mean a "person," such as term is used in
Sections 13(d) and 14(d) of the Exchange Act.
(r) "Plan" shall mean this Restated Access One Communications
Corp. 1999 Stock Option Plan, as it may be amended from time to time.
(s) "Restricted Stock" shall mean a share of Company Stock that is
granted pursuant to the terms of Section 8 hereof and that is subject to the
restrictions set forth in Section 8(c) hereof for as long as such restrictions
continue to apply to such share.
(t) "Retirement" shall mean a Participant's termination of
employment (other than by reason of death or Disability and other than a
termination that is (or is deemed to have been) for Cause) on or after the later
of (i) the date the Participant attains age 65 and (ii) the date the Participant
has completed five years of service with the Company.
(u) "Securities Act" shall mean the Securities Act of 1933, as
amended.
(v) "SAR" shall mean a stock appreciation right granted pursuant
to Section 7 hereof.
(w) "Stock Bonus" shall mean a grant of a bonus payable in shares
of Company Stock pursuant to Section 9 hereof.
(x) "Vesting Date" shall mean the date and/or dates established by
the Committee on which an Incentive Award may vest. In the absence of provisions
in an individual grant agreement to the contrary, Options shall vest ratably
over a three (3) year period, at thirty-three and one-third percent (33.33%) per
year.
3. STOCK SUBJECT TO THE PLAN.
(a) Plan Awards.
Under the Plan, the Committee may, in its sole and absolute
discretion, grant any or all of the following types of Incentive Awards to a
Participant: an Option, a SAR, a Restricted Stock, or Stock Bonus Award.
(b) Individual Awards.
Incentive Awards granted under the Plan may be made up
entirely of one type of Incentive Award or any combination of types of Incentive
Awards available under the Plan, in the Committee's sole discretion.
(c) Aggregate Plan Share Reserve.
The total number of shares of Company Stock available for
grants of Incentive Awards under the Plan shall be 650,005 (as adjusted to
reflect the acquisition of Access One by the Company) subject to adjustment in
accordance with Section 11 of the Plan. These shares may be either authorized
but unissued, newly issued shares, or reacquired shares of Company Stock. If an
Incentive Award or portion thereof shall expire or terminate for any reason
without having been exercised in full, the unexercised shares covered by such
Incentive Award shall be available for future grants of Incentive Awards under
the Plan.
4. ADMINISTRATION OF THE PLAN.
The Plan shall be administered by the Committee. The Committee shall
from time to time designate the employees, officers, directors and outside
directors of the Company or any subsidiary of the Company or consultants to the
Company or any subsidiary of the Company who shall be granted Incentive Awards
and the amount and type of such Incentive Awards.
The Committee shall have the full authority and discretion to
administer the Plan, including authority to interpret and construe any provision
of the Plan and the terms of any Incentive Award issued under the Plan. The
Committee may also adopt any rules and regulations for administering the Plan as
it may deem necessary or appropriate. Decisions of the Committee shall be final
and binding on all parties.
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The Committee may, in its absolute discretion, without amendment to the
Plan, (i) accelerate the date on which any Option or SAR granted under the Plan
becomes exercisable or otherwise adjust any of the terms of such Option or SAR
(except that no such adjustment shall, without the consent of a Participant,
reduce the Participant's rights under any previously granted and outstanding
Incentive Award), (ii) accelerate the Vesting Date or Issue Date of any share of
Restricted Stock issued under the Plan, or waive any condition imposed
thereunder, and (iii) otherwise adjust or waive any condition imposed on any
Incentive Award made hereunder.
In addition, the Committee may, in its absolute discretion and without
amendment to the Plan, grant Incentive Awards of any type to Participants on the
condition that such Participants surrender to the Committee for cancellation
such other Incentive Awards of the same or any other type (including, without
limitation, Incentive Awards with higher exercise prices or values) as the
Committee specifies. Notwithstanding Section 3(c) herein, prior to the surrender
of such other Incentive Awards, Incentive Awards granted pursuant to the
preceding sentence of this Section 4 shall not count against the limit set forth
in such Section 3(c).
Whether an authorized leave of absence, or absence in military or
government service, shall constitute termination of employment shall be
determined by the Committee, subject to applicable laws.
No member of the Committee shall be liable for any action, omission or
determination relating to the Plan, and the Company (and any affiliate that may
adopt the Plan), jointly and severally, shall indemnify and hold harmless each
member of the Committee and each other director or employee of the Company (or
affiliate) to whom any duty or power relating to the administration or
interpretation of the Plan has been delegated against any cost or expense
(including counsel fees) or liability (including any sum paid in settlement of a
claim with the approval of the Committee) arising out of any action, omission or
determination unless such action, omission or determination was taken or made by
such member, director or employee in bad faith and without reasonable belief
that it was in the best interests of the Company and its affiliates, as the case
may be.
5. ELIGIBILITY.
The Persons who shall be eligible to receive Incentive Awards pursuant
to the Plan shall be those employees, officers, directors and outside directors
of the Company or consultants to the Company who are responsible for the
management, growth, and protection of the business of the Company; provided,
however, that only employees of the Company shall be eligible to receive
Incentive Awards consisting of Incentive Stock Options.
6. STOCK OPTION AWARDS.
The Committee may grant Options pursuant to the Plan. Such Options
shall be evidenced by agreements in such form as the Committee shall from time
to time approve. Options shall comply with and be subject to the following terms
and conditions:
(a) Identification of Options.
All Options granted under the Plan shall be clearly identified
in the agreement evidencing such Options as either Incentive Stock Options or as
Non-Qualified Stock Options or a combination of both.
(b) Exercise Price.
The exercise price of any Non-Qualified Stock Option granted
under the Plan shall be such price as the Committee shall determine, which may
be equal to or less than the Fair Market Value of a share of Company Stock on
the date such Non-Qualified Stock Option is granted; provided, that such price
may not be less than the minimum price required by law. The exercise price of
any Incentive Stock Option granted under the Plan shall be not less than 100% of
the Fair Market Value of a share of Company Stock on the date on which such
Incentive Stock Option is granted.
(c) Term and Exercise of Options.
(i) Each Option shall be exercisable on such date or
dates, during such period, and for such number of shares of Company Stock as
shall be determined by the Committee on the day on which such Option is
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granted and set forth in the Option agreement with respect to such Option;
provided, however that no Option shall be exercisable after the expiration of
ten years from the date such Option was granted; and, provided, further, that
each Option shall be subject to earlier termination, expiration or cancellation
as provided in the Plan.
(ii) Each Option shall be exercisable in whole or in part.
The partial exercise of an Option shall not cause the expiration, termination or
cancellation of the remaining portion thereof. Upon the partial exercise of an
Option, the agreement evidencing such Option, marked with such notations as the
Committee may deem appropriate to evidence such partial exercise, shall be
returned to the Participant exercising such Option together with the delivery of
the certificates described in Section 6(e) hereof.
(iii) An Option shall be exercised by delivering a written
notice to the Company's principal office to the attention of its Secretary. Such
notice shall specify the number of shares of Company Stock with respect to which
the Option is being exercised, shall be signed by the Participant, and shall be
accompanied by the agreement (or agreements) evidencing the Option and payment
in full of the applicable exercise price for shares of Company Stock purchased
in any combination of the forms specified below:
(A) in cash, by certified check, bank cashier's
check, or wire transfer,
(B) subject to the approval of the Committee, in
shares of Company Stock owned by the Participant and valued at their Fair Market
Value on the date of such exercise,
(C) subject to the approval of the Committee,
pursuant to a "cashless exercise" pursuant to procedures adopted by the
Committee whereby the Participant, by a properly written notice, directs (a) an
immediate market sale or margin loan respecting all or a part of the shares of
Company Stock to which the Participant is entitled upon exercise pursuant to an
extension of credit by the Company to the Participant of the exercise price, (b)
the delivery of the shares of the Company Stock from the Company directly to the
brokerage firm, and (c) the delivery of the exercise price from the sale or
margin loan proceeds from the brokerage firm directly to the Company, or
(D) such other methods as the Committee may
approve, from time to time.
Any payments in shares of Company Stock shall be effected by the delivery of
such shares to the Secretary of the Company, duly endorsed in blank or
accompanied by stock powers duly executed in blank, together with any other
documents and evidences as the Secretary of the Company shall require from time
to time
(d) Nonassignability.
During the lifetime of a Participant, each Option granted to
him or her shall be exercisable only by him or her. No Option shall be
assignable or transferable otherwise than by will or by the laws of descent and
distribution.
(e) Issuance of Certificates.
Certificates for shares of Company Stock purchased upon the
exercise of an Option shall be issued in the name of the Participant or his or
her beneficiary, as the case may be, and delivered to the Participant or his or
her beneficiary, as the case may be, as soon as practicable following the date
on which the Option is exercised.
(f) Limitations on Grant of Incentive Stock Options.
(i) The aggregate Fair Market Value of shares of Company
Stock with respect to which Incentive Stock Options granted hereunder are
exercisable for the first time by a Participant during any calendar year under
the Plan and any other stock option plan of the Company (or any "subsidiary
corporation" of the Company within the meaning of Section 424 of the Code) shall
not exceed $100,000. Such Fair Market Value shall be determined as of the date
on which each such Incentive Stock Option is granted. In the event that the
aggregate Fair Market Value of shares of Company Stock with respect to such
Incentive Stock Options exceeds $100,000, then Incentive Stock Options granted
hereunder to such Participant shall, to the extent and in the order in which
they were granted, automatically be deemed to be Non-Qualified Stock Options,
but all other terms and provisions of such Incentive Stock Options shall remain
unchanged.
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(ii) No Incentive Stock Option may be granted to an
individual if, at the time of the proposed grant, such individual owns stock
possessing more than 10% of the total combined voting power of all classes of
stock of the Company or any of its "subsidiary corporations" (within the meaning
of Section 424 of the Code), unless (I) the exercise price of such Incentive
Stock Option is at least 110% of the Fair Market Value of a share of Company
Stock at the time such Incentive Stock Option is granted and (II) such Incentive
Stock Option is not exercisable after the expiration of five years from the date
such Incentive Stock Option is granted.
(iii) No Incentive Stock Option may be granted to an
individual if, at the time of the proposed grant, such individual is not an
employee of the Company.
(g) Effect of Termination of Employment.
(i) In the event the employment of a Participant with the
Company shall terminate (as determined by the Committee in its sole discretion)
for any reason other than Retirement, Disability, death or for Cause, (A)
Options granted to such Participant, to the extent that they were exercisable at
the time of such termination, shall remain exercisable until 3 months after the
date of such termination, on which date they shall expire, and (B) Options
granted to such Participant, to the extent they were not exercisable at the time
of such termination, shall expire at the close of business on the date of such
termination; provided, however, that no Option shall be exercisable after the
expiration of its term.
(ii) In the event that the employment of a Participant
with the Company shall terminate on account of the Retirement, Disability or
death of the Participant, (A) Options granted to such Participant, to the extent
that they were exercisable at the time of such termination, shall remain
exercisable until the expiration of their term and (B) Options granted to such
Participant, to the extent that they were not exercisable at the time of such
termination, shall expire at the close of business on the date of such
termination. The effect of exercising any Incentive Stock Option on a day that
is more than 3 months after the date of such termination (or, in the case of a
termination of employment on account of Disability, on a day that is more than
one year after the date of such termination) will be to cause such Incentive
Stock Option to be treated as a Non-Qualified Stock Option.
(iii) In the event of the termination of a Participant's
employment for Cause, all outstanding Options granted to such Participant shall
automatically expire at the commencement of business as of the date of such
termination.
7. SARS.
The Committee may grant SARs pursuant to the Plan, which SARs shall be
evidenced by agreements in such form as the Committee shall from time to time
approve. SARs shall comply with and be subject to the following terms and
conditions:
(a) Exercise Price.
The exercise price of any SAR granted under the Plan shall be
determined by the Committee in its discretion at the time of the grant of such
SAR.
(b) Benefit Upon Exercise.
(i) The exercise of a SAR with respect to any number of
shares of Company Stock shall entitle a Participant to a cash payment, for each
such share, equal to the excess of (A) the Fair Market Value of a share of
Company Stock on the exercise date over (B) the exercise price of the SAR
(subject to applicable withholding payment requirements).
(ii) All payments under this Section 7(b) shall be made as
soon as practicable, but in no event later than five business days, after the
date of the exercise.
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(c) Term and Exercise of SARs.
(i) Each SAR shall be exercisable on such date or dates,
during such period, and for such number of shares of Company Stock as shall be
determined by the Committee and set forth in the SAR agreement with respect to
such SAR; provided, however, that no SAR shall be exercisable after the
expiration of ten years from the date such SAR was granted; and provided,
further, however, that each SAR shall be subject to earlier termination,
expiration or cancellation as provided in the Plan.
(ii) Each SAR may be exercised in whole or in part. The
partial exercise of a SAR shall not cause the expiration, termination or
cancellation of the remaining portion thereof. Upon the partial exercise of a
SAR, the agreement evidencing such SAR, marked with such notations as the
Committee may deem appropriate to evidence such partial exercise, shall be
returned to the Participant exercising such SAR together with the payment
described in Section 7 hereof.
(iii) A SAR shall be exercised by delivering written notice
to the Company's principal office, to the attention of its Secretary. Such
notice shall be accompanied by the applicable agreement (or agreements)
evidencing the SAR, shall specify the number of shares of Company Stock with
respect to which the SAR is being exercised, and shall be signed by the
Participant. The date upon which such written notice is received by the Company
shall be the exercise date for the SAR.
(iv) During the lifetime of a Participant, each SAR
granted to him or her shall be exercisable only by him or her. No SAR shall be
assignable or transferable otherwise than by will or by the laws of descent and
distribution.
(d) Termination of Employment.
(i) In the event that the employment of a Participant
with the Company shall terminate (as determined by the Committee in its sole
discretion) for any reason other than Retirement, Disability, death or for
Cause, (A) SARs granted to such Participant, to the extent that they were
exercisable at the time of such termination, shall remain exercisable until the
30th day after such termination, on which date they shall expire and (B) SARs
granted to such Participant, to the extent that they were not exercisable at the
time of such termination, shall expire at the close of business on the date of
such termination; provided, however, that no SAR shall be exercisable after the
expiration of its term.
(ii) In the event that the employment of a Participant
with the Company shall terminate on account of the Retirement, Disability or
death of the Participant, (A) SARs granted to such Participant, to the extent
that they were exercisable at the time of such termination, shall remain
exercisable until the expiration of their term and (B) SARs granted to such
Participant, to the extent that they were not exercisable at the time of such
termination, shall expire at the close of business on the date of such
termination.
(iii) In the event of the termination of the Participant's
employment for Cause, all outstanding SARs granted to such Participant shall
automatically expire at the commencement of business as of the date of such
termination.
(e) Tandem SARs.
SARs may be granted in tandem with Options (or on a
stand-alone basis). To the extent SARs are granted in tandem with Options and
SARs are exercised, the related Options shall be cancelled. Similarly, if the
Options are exercised, the related SARs shall be cancelled.
8. RESTRICTED STOCK.
The Committee may grant shares of Restricted Stock pursuant to the
Plan. Each grant of shares of Restricted Stock shall be evidenced by an
agreement in such form as the Committee shall from time to time approve. Each
grant of shares of Restricted Stock shall comply with and be subject to the
following terms and conditions:
(a) Issue Date and Vesting Date.
At the time of the grant of shares of Restricted Stock, the
Committee shall establish an Issue Date or Issue Dates and a Vesting Date or
Vesting Dates with respect to such shares. The Committee may divide such
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shares into classes and assign a different Issue Date and/or Vesting Date for
each class. Except as provided in Sections 8(c) and 8(f) hereof, upon the
occurrence of the Issue Date with respect to a share of Restricted Stock, a
share of Restricted Stock shall be issued in accordance with the provisions of
Section 8(d) hereof. Provided that all conditions to the vesting of a share of
Restricted Stock imposed pursuant to Section 8(b) hereof are satisfied, and
except as provided in Sections 8(c) and 8(f) hereof, upon the occurrence of the
Vesting Date with respect to a share of Restricted Stock, such share shall vest
and the restrictions of Section 8(c) hereof shall cease to apply to such share.
(b) Conditions to Vesting.
At the time of the grant of shares of Restricted Stock, the
Committee may impose such restrictions or conditions, not inconsistent with the
provisions hereof, to the vesting of such shares as it, in its absolute
discretion, deems appropriate. By way of example and not by way of limitation,
the Committee may require, as a condition to the vesting of any shares of
Restricted Stock, that the Participant or the Company achieve such performance
criteria as the Committee may specify at the time of the grant of such shares.
(c) Restrictions on Transfer Prior to Vesting.
Prior to the vesting of a share of Restricted Stock, no
transfer of a Participant's rights to such share, whether voluntary or
involuntary, by operation of law or otherwise, shall vest the transferee with
any interest, or right in, or with respect to, such share, but immediately upon
any attempt to transfer such rights, such share, and all the rights related
thereto, shall be forfeited by the Participant and the transfer shall be of no
force or effect.
(d) Issuance of Certificates.
(i) Except as provided in Sections 8(c) or 8(f) hereof,
reasonably promptly after the Issue Date with respect to shares of Restricted
Stock, the Company shall cause to be issued a stock certificate, registered in
the name of the Participant to whom such shares were granted, evidencing such
shares, provided, that the Company shall not cause to be issued such stock
certificate unless it has received a stock power duly endorsed in blank with
respect to such shares. Each such stock certificate shall bear the following
legend:
THE TRANSFERABILITY OF THIS CERTIFICATE AND THE SHARES OF STOCK
REPRESENTED HEREBY ARE SUBJECT TO THE RESTRICTIONS, TERMS, AND
CONDITIONS (INCLUDING FORFEITURE PROVISIONS AND RESTRICTIONS AGAINST
TRANSFER) CONTAINED IN THE RESTATED ACCESS ONE COMMUNICATIONS CORP.
1999 STOCK OPTION PLAN AND INCENTIVE AWARD AGREEMENT ENTERED INTO
BETWEEN THE REGISTERED OWNER OF SUCH SHARES AND ACCESS ONE
COMMUNICATIONS CORP. A COPY OF THE PLAN AND AGREEMENT IS ON FILE IN THE
OFFICE OF THE SECRETARY OF TALK.COM INC., 6805 ROUTE 202, NEW HOPE,
PENNSYLVANIA 18938.
Such legend shall not be removed from the certificate evidencing such shares
until such shares vest pursuant to the terms hereof.
(ii) Each certificate issued pursuant to Section 8(d)(i)
hereof, together with the stock powers relating to the shares of Restricted
Stock evidenced by such certificate, shall be deposited by the Company with a
custodian designated by the Company. The Company shall cause such custodian to
issue to the Participant a receipt evidencing the certificates held by it which
are registered in the name of the Participant.
(e) Consequences Upon Vesting.
Upon the vesting of a share of Restricted Stock pursuant to
the terms hereof, the restrictions of Section 8(c) hereof shall cease to apply
to such share. Reasonably promptly after a share of Restricted Stock vests
pursuant to the terms hereof, the Company shall cause to be issued and delivered
to the Participant to whom such shares were granted, a certificate evidencing
such share, free of the legend set forth in Section 8(d)(i) hereof, together
with any other property of the Participant held by the custodian pursuant to
Section 8(d)(ii) hereof.
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(f) Effect of Termination of Employment.
(i) In the event that the employment of a Participant
with the Company shall terminate for any reason other than Cause prior to the
vesting of shares of Restricted Stock granted to such Participant, shall be
forfeited on the date of such termination, provided however, that the Committee
may, in its sole and absolute discretion, vest the Participant in all or any
portion of shares of Restricted Stock which would otherwise be forfeited
pursuant to the provisions of this Section.
(ii) In the event of the termination of a Participant's
employment for Cause, all shares of Restricted Stock granted to such Participant
which have not vested as of the date of such termination shall immediately be
forfeited.
9. STOCK BONUSES.
The Committee may grant Stock Bonuses in such amounts as it shall
determine from time to time. A Stock Bonus shall be paid at such time and
subject to such conditions as the Committee shall determine at the time of the
grant of such Stock Bonus. Certificates for shares of Company Stock granted as a
Stock Bonus shall be issued in the name of the Participant to whom such grant
was made and delivered to such Participant as soon as practicable after the date
on which such Stock Bonus is required to be paid.
10. CHANGE OF CONTROL.
Subject to Section 11(e), in the event of a Change of Control, the
Company shall give each option holder at least fifteen (15) days notice prior to
the consummation of a Change of Control. In such event, the vesting schedule of
all options granted by the Company, shall accelerate and all of such options
shall become vested and exercisable in full at the end of one year from the date
of such Change of Control, provided the option holder remains in the employ of
the Company for such one year period. In the event the option holder's
employment is terminated voluntarily prior to full vesting, all such unexercised
and unvested options shall be terminated and otherwise cancelled. Further, in
the event of a Change of Control and such option holder's employment is
terminated by the Company without Cause, or his/her job responsibilities are
materially changed without his/her consent, all options granted by the Company
shall become immediately vested and must be exercised, if at all, within 3
months of such termination or change of responsibilities.
11. ADJUSTMENT UPON CHANGES IN COMPANY STOCK.
(a) Shares Available for Grants.
In the event of any change in the number of shares of Company
Stock outstanding by reason of any stock dividend or split, reverse stock split,
recapitalization, merger, consolidation, combination or exchange of shares or
similar corporate change, the maximum number of shares of Company Stock with
respect to which the Committee may grant Options, SARs, shares of Restricted
Stock, and Stock Bonuses under Section 3 hereof shall be appropriately adjusted
by the Committee. In the event of any change in the number of shares of Company
Stock outstanding by reason of any other event or transaction, the Committee
may, but need not, make such adjustments in the number of shares of Company
Stock with respect to which Options, SARs, shares of Restricted Stock, and Stock
Bonuses may be granted under Section 3 hereof as the Committee may deem
appropriate.
(b) Outstanding Restricted Stock.
Unless the Committee in its absolute discretion otherwise
determines, any securities or other property (including dividends paid in cash)
received by a Participant with respect to a share of Restricted Stock, the Issue
Date with respect to which occurs prior to such event, but which has not vested
as of the date of such event, as a result of any dividend, stock split, reverse
stock split, recapitalization, merger, consolidation, combination, exchange of
shares or similar corporate exchange will not vest until such share of
Restricted Stock vests and shall be promptly deposited with the custodian
designated pursuant to Section 8(d)(ii) hereof.
The Committee may, in its absolute discretion, adjust any
grant of shares of Restricted Stock, the Issue Date with respect to which has
not occurred as of the date of the occurrence of any of the following events, to
reflect any dividend, stock split, reverse stock split, recapitalization,
merger, consolidation, combination, exchange
<PAGE>
of shares or similar corporate change as the Committee may deem appropriate to
prevent the enlargement or dilution of rights of Participants under the grant.
(c) Outstanding Options and SARs - Increase
or Decrease in Issued Shares Without Consideration.
Subject to any required action by the shareholders of the
Company, in the event of any increase or decrease in the number of issued shares
of Company Stock resulting from a subdivision or consolidation of shares of
Company Stock or the payment of a stock dividend on the shares of Company Stock,
or any other increase or decrease in the number of such shares effected without
receipt of consideration by the Company, the Company shall proportionally adjust
the number of shares of Company Stock subject to each outstanding Option and
SAR, and the exercise price per share of Company Stock of each such Option and
SAR.
(d) Outstanding Options and SARs - Certain Mergers.
Subject to any required action by the shareholders of the
Company, in the event that the Company shall be the surviving corporation in any
merger or consolidation (except a merger or consolidation as a result of which
the holders of shares of Company Stock receive securities of another
corporation), each Option and SAR outstanding on the date of such merger or
consolidation shall pertain to and apply to the securities which a holder of the
number of shares of Company Stock subject to such Option or SAR would have
received in such merger or consolidation.
(e) Outstanding Options, SARs - Certain Other Transactions.
In the event of a dissolution or liquidation of the Company; a
sale of substantially all of the Company's assets, a merger or consolidation
involving the Company in which the Company is not the surviving corporation; or
a merger or consolidation involving the Company in which the Company is the
surviving corporation but the holders of shares of Company Stock receive
securities of another corporation and/or other property, including cash, the
Committee shall, in its absolute discretion, have the power to:
(i) cancel, effective immediately prior to the occurrence
of such event, each Option and SAR outstanding immediately prior to such event
(whether or not then exercisable), and, in full consideration of such
cancellation, pay to the Participant to whom such Option or SAR was granted an
amount in cash, for each share of Company Stock subject to such Option or SAR,
respectively, equal to the excess of (A) the value, as determined by the
Committee in its absolute discretion, of the property (including cash) received
by the holder of a share of Company Stock as a result of such event over (B) the
exercise price of such Option or SAR (subject to applicable withholding payment
requirements); or
(ii) provide for the exchange of each Option and SAR
outstanding immediately prior to such event (whether or not then exercisable)
for an option on or stock appreciation right with respect to, as appropriate,
some or all of the property for which such Option or SAR is exchanged and,
incident thereto, make an equitable adjustment as determined by the Committee in
its absolute discretion in the exercise price of the option or stock
appreciation right, or, if appropriate, provide for a cash payment to the
Participant to whom such Option or SAR was granted in partial consideration for
the exchange of the Option or SAR.
(f) Outstanding Options and SARs - Other Changes.
In the event of any change in the capitalization of the
Company or a corporate change other than those specifically referred to in
Section 11(c),(d) or (e) hereof, the Committee may in its absolute discretion,
make such adjustments in the number of shares subject to Options or SARs
outstanding on the date on which such change occurs and in the per share
exercise price of each such Option and SAR as the Committee may consider
appropriate to prevent dilution or enlargement or rights.
(g) No Other Rights.
Except as expressly provided in the Plan, no Participant shall
have any rights by reason of any subdivision or consolidation of Company Stock,
the payment of any dividend, any increase or decrease in the number of shares of
Company Stock or any dissolution, liquidation, merger or consolidation of the
Company or any
<PAGE>
other corporation. Except as expressly provided in the Plan, no issuance by the
Company of Company Stock, or securities convertible into shares of Company
Stock, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number of shares of Company Stock subject to an Incentive Award
or the exercise price of any Option or SAR.
12. RIGHTS AS A STOCKHOLDER.
(a) No Rights as a Stockholder.
No Person shall have any rights as a stockholder with respect
to any shares of Company Stock covered by or relating to any Incentive Award
granted pursuant to the Plan until the date the person becomes the owner of
record with respect to such shares. Except as otherwise expressly provided in
Section 11 hereof, no adjustment to any Incentive Award shall be made for
dividends or other rights for which the record date occurs prior to the date
such stock certificate is issued.
(b) Accrual of Dividends.
Whenever Restricted Shares are paid to a Participant or
beneficiary under the Plan, such Participant or beneficiary shall also be
entitled to receive, with respect to each Restricted Share paid, an amount equal
to any cash dividends, and number of shares of Company Stock equal to any stock
dividends, declared and paid with respect to a share of Company Stock between
the date the relevant Restricted Share award was granted and the date the
Restricted Shares are being distributed. At the discretion of the Committee,
interest may be paid on the amount of cash dividends withheld, including cash
dividends on stock dividends, at a rate and subject to such terms as determined
by the Committee.
13. NO SPECIAL EMPLOYMENT RIGHTS; NO RIGHTS TO INCENTIVE AWARD.
(a) No Special Employment Rights.
Nothing contained in the Plan or any Incentive Award shall
confer upon any Participant any right with respect to the continuation of his or
her employment by or service with the Company or any subsidiary of the Company
or interfere in any way with the right of the Company, subject to the terms of
any separate employment or consulting agreement to the contrary, at any time to
terminate such employment or service or to increase or decrease the compensation
of the Participant from the rate in existence at the time of the grant of an
Incentive Award.
(b) No Rights to Incentive Awards.
No Person shall have any claim or right to receive an
Incentive Award hereunder. The Committee's granting of an Incentive Award to a
Participant at any time shall neither require the Committee to grant an
Incentive Award to such Participant or any other Participant or other Person at
any time nor preclude the Committee from making subsequent grants to such
Participant or any other Participant or other Person.
14. SECURITIES MATTERS.
(a) The Company shall be under no obligation to effect the
registration pursuant to the Securities Act of any interests in the Plan or any
shares of Company Stock to be issued hereunder or to effect similar compliance
under any state laws. Notwithstanding anything herein to the contrary, the
Company shall not be obligated to cause to be issued or delivered any
certificates evidencing shares of Company Stock pursuant to the Plan unless and
until the Company is advised by its counsel that the issuance and delivery of
such certificates is in compliance with all applicable laws, regulations of
governmental authority, and the requirements of NASDAQ and any other securities
exchange on which shares of Company Stock are traded. The Committee may require,
as a condition of the issuance and delivery of certificates evidencing shares of
Company Stock pursuant to the terms hereof, that the recipient of such shares
make such covenants, agreements, and representations, and that such certificates
bear such legends, as the Committee, in its sole discretion, deems necessary or
desirable.
(b) The exercise of any Option granted hereunder shall be
effective only at such time as counsel to the Company shall have determined that
the issuance and delivery of shares of Company Stock pursuant to such exercise
is in compliance with all applicable laws, regulations of governmental
authority, and the requirements of
<PAGE>
NASDAQ and any other securities exchange on which shares of Company Stock are
traded. The Committee may, in its sole discretion, defer the effectiveness of
any exercise of an Option granted hereunder in order to allow the issuance of
shares of Company Stock pursuant thereto to be made pursuant to registration or
an exemption from registration or other methods for compliance available under
federal or state securities laws. The Committee shall inform the Participant in
writing of its decision to defer the effectiveness of the exercise of an Option
granted hereunder. During the period that the effectiveness of the exercise of
an Option has been deferred, the Participant may, by written notice, withdraw
such exercise and obtain a refund of any amount paid with respect thereto.
(c) All Company Stock issued pursuant to the terms of the Plan
shall constitute "restricted securities," as that term is defined in Rule 144
promulgated pursuant to the Securities Act, and may not be transferred except in
compliance with the registration requirements of the Securities Act or an
exemption therefrom.
(d) Certificates for shares of Company Stock, when issued, may
have substantially the following legend, or statements of other applicable
restrictions, endorsed thereon, and may not be immediately transferable:
THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS. THE SHARES MAY NOT BE OFFERED FOR SALE, SOLD, PLEDGED,
TRANSFERRED OR OTHERWISE DISPOSED OF UNTIL THE HOLDER HEREOF PROVIDES
EVIDENCE SATISFACTORY TO THE ISSUER (WHICH, IN THE DISCRETION OF THE
ISSUER, MAY INCLUDE AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER)
THAT SUCH OFFER, SALE, PLEDGE, TRANSFER OR OTHER DISPOSITION WILL NOT
VIOLATE APPLICABLE FEDERAL OR STATE LAWS.
This legend shall not be required for shares of Company Stock issued pursuant to
an effective registration statement under the Securities Act and in accordance
with applicable state securities laws.
15. WITHHOLDING TAXES.
(a) Cash Remittance.
Whenever shares of Company Stock are to be issued upon the
exercise of an Option, the occurrence of the Issue Date or Vesting Date with
respect to a share of Restricted Stock or the payment of a Stock Bonus, the
Company shall have the right to require the Participant to remit to the Company
in cash an amount sufficient to satisfy federal, state, and local withholding
tax requirements, if any, attributable to such exercise, occurrence or payment
prior to the delivery of any certificate or certificates for such shares. In
addition, upon the exercise of an SAR, the Company shall have the right to
withhold from any cash payment required to be made pursuant thereto an amount
sufficient to satisfy the federal, state and local withholding tax requirements,
if any, attributable to such exercise or grant.
(b) Stock Remittance.
Subject to Section 15(c) hereof, at the election of the
Participant, subject to the approval of the Committee, when shares of Company
Stock are to be issued upon the exercise of an Option, the occurrence of the
Issue Date or the Vesting Date with respect to a share of Restricted Stock, or
the grant of a Stock Bonus, in lieu of the remittance required by Section 15(a)
hereof, the Participant may tender to the Company a number of shares of Company
Stock determined by such Participant, the Fair Market Value of which at the
tender date the Committee determines to be sufficient to satisfy the minimum
federal, state and local withholding tax requirements, if any, attributable to
such exercise, occurrence or grant and not greater than the Participant's
estimated total federal, state and local tax obligations associated with such
exercise, occurrence or grant.
(c) Stock Withholding.
The Company shall have the right, when shares of Company Stock
are to be issued upon the exercise of an Option, the occurrence of the Issue
Date or the Vesting Date with respect to a share of Restricted Stock or the
grant of a Stock Bonus, in lieu of requiring the remittance required by Section
15(a) hereof, to withhold a number of such shares, the Fair Market Value of
which at the exercise date the Committee determines to be
<PAGE>
sufficient to satisfy the federal, state and local withholding tax requirements,
if any, attributable to such exercise, occurrence or grant and is not greater
than the Participant's estimated total, federal, state and local tax obligations
associated with such exercise, occurrence or grant.
16. AMENDMENT OR TERMINATION OF THE PLAN.
The Board may at any time, or from time to time, suspend or terminate
the Plan in whole or in part, or amend it in such respects as the Board may deem
appropriate. No amendment, suspension or termination of the Plan shall, without
the Participant's consent, alter or impair any of the rights or obligations
under any Option theretofore granted to an Participant under the Plan. The Board
may amend the Plan, subject to the limitations cited above, in such manner as it
deems necessary to permit the granting of Incentive Awards meeting the
requirements of future amendments or issued regulations, if any, to the Code or
to the Exchange Act.
17. NO OBLIGATION TO EXERCISE.
The grant to a Participant of an Option or a SAR shall impose no
obligation upon such Participant to exercise such Option or SAR.
18. TRANSFERS UPON DEATH.
Upon the death of a Participant, outstanding Incentive Awards granted
to such Participant may be exercised only by the executors or administrators of
the Participant's estate or by any Person or Persons who shall have acquired
such right to exercise by will or by the laws of descent and distribution. No
transfer by will or the laws of descent and distribution of any Incentive Award,
or the right to exercise any Incentive Award, shall be effective to bind the
Company unless the Committee shall have been furnished with (a) written notice
thereof and with a copy of the will and/or such evidence as the Committee may
deem necessary to establish the validity of the transfer and (b) an agreement by
the transferee to comply with all the terms and conditions of the Incentive
Award that are or would have been applicable to the Participant and to be bound
by the acknowledgments made by the Participant in connection with the grant of
the Incentive Award. Except as provided in this Section 18, no Incentive Award
shall be transferable, and shall be exercisable only by a Participant during the
Participant's lifetime.
19. EXPENSES AND RECEIPTS.
The expenses of the Plan shall be paid by the Company. Any proceeds
received by the Company in connection with any Incentive Award will be used for
general purposes.
20. FAILURE TO COMPLY.
In addition to the remedies of the Company elsewhere provided for
herein, a failure by a Participant (or beneficiary) to comply with any of the
terms and conditions of the Plan or the agreement executed by such Participant
(or beneficiary) evidencing an Incentive Award, unless such failure is remedied
by such Participant (or beneficiary) within ten days after having been notified
of such failure by the Committee, shall be grounds for the cancellation and
forfeiture of such Incentive Award, in whole or in part, as the Committee, in
its absolute discretion may determine.
21. ADOPTION AND EFFECTIVE DATE OF PLAN.
The Plan was adopted by unanimous written consent of the Board of
Directors of Access One Communications Corp., in lieu of a meeting of the Board,
effective as of June 15, 1999 and the Plan was subsequently ratified and
approved through action taken by the written consent of a majority of the
shareholders of the Company dated effective as of June 15, 1999, in lieu of a
meeting of such shareholders, all as permitted under New Jersey law.
22. TERM OF THE PLAN.
The right to grant Incentive Awards under the Plan will terminate upon
the expiration of ten years from the date the Plan was initially adopted.
23. APPLICABLE LAW.
Except to the extent preempted by an applicable federal law, the Plan
will be construed and administered in accordance with the laws of the State of
Delaware, without reference to the principles of conflicts of law.
