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:
 

   (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, 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     (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

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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.

 
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:
 

   (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.

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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

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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.

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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]:
 
    

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CENTENNIAL COMMUNICATIONS CORP.
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:                  
    

Michael Small

 
Send a completed copy of this Option Exercise Form to:
 
Centennial Communications Corp.
Corporate Office
3349 Route 138, Bldg. A
Wall, New Jersey 07719
Attention: Chief Financial Officer