Document:

Exhibit 10.2

EXHIBIT 10.2

 

EMPLOYMENT AGREEMENT 

THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of the 1st day of January, 2004, between Talk America Holdings, Inc., a Delaware corporation ("Company"), and Edward B. Meyercord, III ("Employee") , and amends and replaces that certain Employment Agreement dated March 28, 2001 among Talk.com Inc. and Edward B. Meyercord, III . 

Preliminary Statement 

WHEREAS, Employee has been an employee of Company and Company desires to continue to employ Employee and Employee desires to continue to be employed by Company; and 

WHEREAS, Company and Employee desire to enter into this Agreement that sets forth the terms and conditions of said continued employment. 

NOW THEREFORE, in consideration of the foregoing, the mutual covenants set forth herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the undersigned hereby agree as follows: 

1.    Employment . Company agrees to employ Employee, and Employee accepts such employment and agrees to serve Company, on the terms and conditions set forth herein. Except as otherwise specifically provided herein, Employee’s employment shall be subject to the employment policies and practices of Company in effect from time to time during the term of Employee’s employment hereunder (including without limitation its practices as to reporting and withholding). 

2.    Term of Agreement . The term of Employee’s employment hereunder shall continue in effect until December 31, 2006, except as hereinafter provided (the "Term"). 

 

      3.      Position and Duties . Except as may otherwise be agreed upon between Company and Employee, Employee shall perform such duties and have such responsibilities as Chief Executive Officer and President and Chief Executive Officer and President of Talk America Inc., a Pennsylvania corporation which is a wholly-owned subsidiary of Company, and such other duties and responsibilities consistent with the foregoing duties and responsibilities as may be reasonably assigned or delegated to him from time to time by the Company’s Board of Directors (the "Board"), including, without limitation, service as an employee, officer or director of affiliates (as that term is defined in Rule 405 of the Securities Act of 1933, as amended (the "Act")) of Company (the affiliates of Company, "Affiliates") without additional compensation. References in this Agreement to Employee’s employment with Company shall be deemed to refer to employment with Company or an Affiliate. Employee shall perform his duties and responsibilities to the best of his

	 
	 	 	 
	

	 

 

abilities in a diligent manner. Employee shall devote substantially all of his working time and efforts to the business and affairs of Company; provided, however, that nothing in this Agreement shall preclude the Employee from (i) engaging in charitable activities and community affairs; (ii) managing his personal investments and affairs, subject to the limitations of Section 10 hereof; and (iii) acting as a non-employee director of up to five (5) corporations or other entities, provided that such entities are not Competitors (as defined in Section 11) hereof. 

4.    Compensation and Related Matters . 

 

     4.1    Base Salary . During the Term, Company shall pay to Employee an annualized base salary of not less than $500,000, subject to review from time to time by the Board ("Base Salary"). Base Salary shall be paid in accordance with Company’s usual and customary payroll practices. 

4.2    Benefit Plans and Arrangements . Employee shall be entitled to participate in and to receive benefits under Company’s employee benefit plans and arrangements (including, but not limited to, bonus plans) as are made available to the Company’s senior executive officers during the Term, which employee benefit plans may be altered from time to time at the discretion of the Board (collectively with the benefits referred to in Section 4.3, the "Benefits"). Without limitation of the generality of the foregoing, the Benefits shall include a minimum of three (3) weeks of paid vacation each calendar year, which, if not used in its entirety in any year, may be carried over to the next succeeding calendar year, provided that Employee shall not be entitled to more than five (5) weeks of paid vacation in any calendar year. Employee acknowledges and agrees that bonuses, annual or otherwise, are performance-based and discretionary with the Board or a Committee thereof. 

4.3    Perquisites . During the Term of his employment hereunder, Employee shall be entitled to receive fringe benefits as are made available to the Company’s senior executive officers ; provided, that Employee shall, in any event, be provided with an automobile allowance as Company shall determine (but consistent with prior practices) . . 

4.4    Expenses . Company shall promptly reimburse Employee for all out-of-pocket expenses related to Company’s business that are actually paid or incurred by him in the performance of his services under this Agreement and that are incurred, reported and documented in accordance with Company’s policies. 

5.    Termination . The Term may be terminated under the following circumstances: 

5.1    Death . The Term shall terminate upon the Employee’s death. 

	 
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5.2    Disability . If Employee becomes physically or mentally disabled during the term hereof so that he is unable to perform services required of him pursuant to this Agreement for an aggregate of six (6) months in any twelve (12) months period (a "Disability"), Company, at its option, may terminate Employee's employment hereunder. 

5.3    Cause . Upon written notice, Company may terminate the Term for Cause. For purposes of this Agreement, Company shall have "Cause" to terminate Employee’s employment hereunder upon (i) material breach by Employee of any material provision of this Agreement if Employee fails to cure such breach in the 30 day period following written notice specifying in reasonable detail the nature of the breach ; (ii) willful misconduct by Employee as an employee of Company in connection with misappropriating any funds or property of Company or attempting to willfully obtain any personal profit from any transaction in which Employee has an interest that is adverse to the interests of Company without prior written disclosure thereof to, and consent from, the Board; or (iii) Employee’s gross neglect in the performance of the duties required to be performed by Employee under this Agreement if Employee fails to eliminate such neglect in the 30 day period following written notice specifying in reasonable detail the nature of the gross neglect. 

5.4    By Employee . 

(i)    Employee may terminate the Term upon forty-five (45) days’ prior written notice to Company, provided that, upon the giving of such notice by Employee, Company may establish an earlier date for the termination of the Term and such termination under this Section 5.4. 

(ii)    Employee may terminate employment hereunder for Good Reason immediately and with notice to Company. "Good Reason" for termination by Employee shall include, but is not limited to, the following: 

(a)    Material breach of any provision of this Agreement by Company, which breach shall not have been cured by Company within fifteen (15) days of receipt of written notice of said material breach; 

(b)    Failure by Company to maintain Employee in a position commensurate with that referred to in Section 3 of this Agreement; 

(c)    The assignment to Employee of any duties inconsistent with the Employee’s position, authority, duties or responsibilities as contemplated by Section 3 of this Agreement, or any other action by Company that results in a diminution of such position, authority, duties or responsibilities; or 

(d)    The relocation of Company’s offices at which Employee is principally employed to a location more than 50 miles 

 

	 
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away from New Hope, Pennsylvania, or Company’s requiring Employee to be based anywhere other than Company’s offices in New Hope, Pennsylvania except for required travel on Company’s business to the extent substantially consistent with Employee’s travel obligations during the year preceding the date of this Agreement (including, without limitation, periodic travel to and work at Company’s executive offices in Virginia). 

5.5    Without Cause . Company may otherwise terminate the Term at any time upon written notice to Employee. 

6.    Compensation In the Event of Termination . Except as otherwise provided in Section 7.3, in the event that Employee’s employment pursuant to this Agreement terminates prior to the end of the Term of this Agreement, Company shall make payments to Employee as set forth below: 

6.1    By Employee for Good Reason; By Company Without Cause . In the event that Employee’s employment hereunder is terminated: (i) by Employee for Good Reason or (ii) by Company without Cause, then Company shall (a) pay to Employee all amounts due to Employee pursuant to any bonus that was due to Employee as of the date of such termination, pursuant to the terms of such bonus (a "Due Bonus"), (b) continue to pay and provide Employee t he Base Salary and Benefits to which Employee would be entitled hereunder in the manner provided for herein for the period of time ending on the earlier of the date when the Term would otherwise have expired in accordance with Section 2 hereof and the second anniversary of the date of such termination, (c) reimburse Employee for expenses that may have been incurred, but which have not been paid as of the date of termination, subject to the requirements of Section 4.4 hereof and (d) one hundred percent (100%) of the outstanding stock options granted to the Employee that are unvested shall immediately vest and become exercisable. 

6.2    By Company for Cause; By Employee Without Cause . In the event that Company shall terminate Employee’s employment hereunder for Cause pursuant to Section 5.3 hereof or Employee shall terminate his employment hereunder without Good Reason, all compensation and Benefits, as specified in Section 4 of this Agreement, heretofore payable or provided to the Employee shall cease to be payable or provided, except for any Due Bonus and any Benefits that may have been earned and are due and payable but that have not been paid as of the date of termination and reimbursements for expenses that may have been incurred, reported and documented but that have not been paid as of the date of termination, subject to the requirements of Section 4.4 hereof. 

6.3    Death . In the event of Employee’s death, Company shall not be obligated to pay Employee or his estate or beneficiaries any compensation except for (a) any Due Bonus and any Benefits that may have been earned and are due and payable but that have not been paid as of the date of death and reimbursements for expenses that may have been incurred, reported and documented but that have not been paid as of the date of death, 

 

	 
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(b) reimbursement of expenses that may have been incurred, but that have not been paid as of the date of death, subject to the requirements of Section 4.4 hereof, and (c) all outstanding stock options granted to Employee that are unvested shall immediately vest and become exercisable and Employee’s estate or beneficiaries, as the case may be, shall have the right to exercise any of such stock options during the period commencing on the date of death and ending on the second anniversary of the date of such termination or for the remainder of the period set forth in the option agreement applicable to the option in question (the "Exercise Period"), if less. 

 

            6.4    Disability . In the event of Employee’s Disability, Company shall not be obligated to pay Employee or his estate or beneficiaries any additional compensation except for: (a) any Due Bonus and any Benefits for the period of time ending on the earlier of the date when the Term would otherwise expire in accordance with Section 2 hereof and the second anniversary f the date of such Disability; (b) reimbursement for expenses that may have been incurred, reported and documented but that have not been paid as of the date of Disability subject to the requirements of Section 4.4 hereof, and (c) Company will pay Employee, commencing on the day after the end of the Term (i) 100,000 dollars ($100,000) per year until the Employee reaches the age of 65 or, at Company's option, (ii) a lump sum thirty (30) days after the date of termination of employment as a result of Disability equal to the present value of the amount to be paid pursuant to Section 6.4(c)(i) above. Upon termination due to Disability, fifty percent (50%) of the outstanding stock options granted to Employee that are unvested shall immediately vest and become exercisable and Employee or his estate or beneficiaries, as the case may be, shall have the right to exercise any of such stock options during the period commencing on the date of Disability and ending on the second anniversary of the date of the Disability or for the remainder of the Exercise Period, if less. 

 

     6.5    No Mitigation . In the event of any termination of employment under Section 5 or Section 7.3, Employee shall be under no obligation to seek other employment; provided, however, to the extent that Employee does obtain other employment subsequent to the termination of Employee’s employment hereunder, Company’s obligations to continue to pay or provide Benefits under this Agreement for the period from and after the date of commencement of such other employment shall terminate. 

7.    Change in Control . 

7.1  Change in Control . For purposes of this Agreement, "Change in Control" shall be deemed to have occurred if: 

7.1.1  any Person (as defined in Section 3(a)(9) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")), other than Company or any Significant Subsidiary (as defined below), becomes the Beneficial Owner (as defined in Rule 13d-3 under the Exchange Act; provided, 

 

	 
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that a Person shall be deemed to be the Beneficial Owner of all shares that any such Person has the right to acquire pursuant to any agreement or arrangement or upon exercise of conversion rights, warrants, options or otherwise, without regard to the 60-day period referred to in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of Company or any Significant Subsidiary (as defined below) representing 50% or more of the combined voting power of the Company’s, or such Significant Subsidiary’s, as the case may be, then outstanding securities; 

7.1.2  during any period of two years, individuals who at the beginning of such period constitute the Board and any new director (other than a director designated by a person who has entered into an agreement with Company to effect a transaction described in 7.1.3, 7.1.4 or 7.1.5) whose election by the Board or nomination for election by stockholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the beginning of the two-year period or whose election or nomination for election was previously so approved, but excluding for this purpose any such new director whose initial assumption of office occurs as a result of either an actual or threatened election contest or other actual or threatened solicitation of proxies or consents by or on behalf of an individual, corporation, partnership, group, association or other entity other than the Board, cease for any reason to constitute at least a majority of the Board of either Company or a Significant Subsidiary; 

7.1.3  the consummation of a merger or consolidation of Company or any subsidiary of Company owning directly or indirectly all or substantially all of the consolidated assets of Company (a "Significant Subsidiary") with any other entity, other than a merger or consolidation that would result in the holder(s) of voting securities of Company or a Significant Subsidiary outstanding immediately prior thereto continuing to hold more than fifty percent (50%) of the combined voting power of the surviving or resulting entity outstanding immediately after such merger or consolidation; 

7.1.4  the stockholders of Company approve a plan or agreement for the sale or disposition of fifty percent (50%) or more of the consolidated assets of Company in which case the Board shall determine the effective date of the Change of Control resulting therefrom; 

7.1.5  any other event occurs that the Board determines, in its discretion, would materially alter the structure of Company or its ownership; or 

7.2    Options Vesting . In the event of a Change in Control of Company, all outstanding options granted to you by Company shall vest immediately and become exercisable as to all shares then subject thereto that are not then vested and exercisable. 

7.3    Termination after Change in Control . 

 

	 
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7.3.1    If a Change of Control shall occur during the Term of this Agreement, the term of Employee’s employment hereunder shall continue in effect until the later of the first anniversary of the date of the Change in Control and the date that the Term would otherwise have terminated without regard to the extension in this sentence, except for earlier termination as provided in Section 5 of this Agreement. The rights and obligations of Employee and Company under this Agreement upon or after any termination of the Term shall survive any such termination. 

7.3.2    Notwithstanding the provisions of Section 6 hereof, if a Change in Control has occurred and Employee’s employment hereunder is terminated within one year of such Change in Control: (i) by Employee for Good Reason or (ii) by Company without Cause, then Company shall (a) pay to Employee the Base Salary and Benefits through the date of termination plus all amounts due to Employee pursuant to any Due Bonus; (b) pay to Employee, as severance pay, a lump sum amount equal to the sum of (x) twenty-four months’ Base Salary plus (y) an amount equal to the average annual incentive bonus earned by Employee from Company during the last four (4) completed fiscal years of Company preceding the date of Change in Control, or if Employee was not an officer during any or all of such prior four (4) fiscal years, the average of the incentives received during the fiscal years when Employee was such an officer; (c) for a period of two years after the date of termination, arrange to provide Employee with life, disability, sickness and accident, health, vision and dental insurance benefits substantially similar to those that Employee was entitled prior to the Change in Control, as well as with the other fringe benefits and perquisites to which Employee was entitled pursuant to Section 4.3; and (d) reimburse Employee for expenses that may have been incurred, but which have not been paid as of the date of termination, subject to the requirements of Section 4.4 hereof. 

8.    Unauthorized Disclosure . Employee shall not, without the prior written consent of Company, disclose or use in any way, either during the Employee’s employment with Company or thereafter, except as required in the course of such employment, any confidential business or technical information or trade secret acquired in the course of such employment (including, without limitation of the generality of the foregoing, any and all information referred to in Section 10 hereof), whether or not conceived of or prepared by him, that is related to the actual or anticipated business, services, research and development of Company or any of its Affiliates or to existing or future products or services of Company or any of its Affiliates; provided, that the foregoing shall not apply to (i) information that is not unique to Company or that is generally known to the industry or the public other than as a result of Employee’s breach of this covenant, (ii) information known to the Employee prior to the date he first became an employee of Company or any of its Affiliates (except insofar as it is part of the information that is the exclusive property of Company as provided in Section 10), or (iii) information that Employee is required to disclose to or by any governmental or judicial authority; provided, however, if Employee should be required in the course of judicial or administrative proceedings to disclose any information, Employee shall give Company prompt written notice thereof so that Company may seek an appropriate protective order and/or waive in writing compliance with the confidentiality provisions of this Agreement. If, in the absence of a protective order or the receipt of a 

 

	 
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waiver by Company, Employee is nonetheless, in the written opinion of its counsel, compelled to disclose information to a court or tribunal or otherwise stand liable for contempt or suffer other serious censure or penalty, Employee may disclose such information to such court or tribunal without liability to any other party hereto. 

9.    Tangible Items . All files, records, documents, manuals, books, forms, reports, memoranda, studies, data, calculations, recordings, correspondence, in whatever form they may exist, and all copies, abstracts and summaries of the foregoing and all physical items related to the business of Company and its Affiliates, other than merely personal items, whether of a public nature or not, and whether prepared by Employee or not, and which are received by Employee from, or on behalf of Company or an Affiliate in the course of his employment hereunder are and shall remain the exclusive property of Company and its Affiliates and shall not be removed from their premises, except as required in the course of employment by Company, without the prior written consent of the Board, and the same shall be promptly returned by Employee on the termination of Employee’s employment with Company or at any time prior thereto upon the request of the Board. 

10.    Inventions and Patents . Employee agrees that all inventions, innovations, ideas, concepts, improvements, developments, methods, designs, analyses, drawings, reports, and all similar or related information that relates to the actual or anticipated business, services, research and development of Company or any of its Affiliates or existing or future products or services of Company or any of its Affiliates, tangible or intangible, and that are conceived, developed or made by or at the direction of Employee while employed by Company, and all rights to the results and proceeds of any thereof and all now known and hereafter existing rights of every kind and nature throughout the universe, in perpetuity and in all languages, pertaining to such results and proceeds and all elements thereof for all now known and hereafter existing uses, media and form will be owned exclusively by Company; and the foregoing is inclusive of a full irrevocable and perpetual assignment to Company. Employee acknowledges that there are, and may be, new uses, media, means and forms of exploitation throughout the universe employing current and/or future technology yet to be developed, and the parties specifically intend the foregoing full, irrevocable and perpetual grant of rights to Company to include all such now known and unknown uses, media and form of exploitation, throughout the universe. Employee agrees to execute at any time upon the Company’s request such further documents or do such other acts (whether before, during or after the Term) as may be required to evidence and/or confirm the Company’s ownership of any or all of the foregoing. The termination, completion or breach of this Agreement for any reason and by either party shall not affect the Company’s exclusive ownership of any or all of the foregoing. 

11.    Certain Restrictive Covenants . During the Term, and for a period ending twelve (12) months after the earlier of the Employee’s termination of employment hereunder and the end of the Term, Employee agrees that he will not act either directly or indirectly as a partner, officer, director, substantial stockholder or employee, or render advisory or other services for, or in connection with, or become interested in, or make any substantial financial

 

	 
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investment in any firm, corporation, business entity or business enterprise competitive with the business of Company, except with the express written consent of the Board ("Competitors"). Employee further agrees that in the event of the termination of his employment under Section 5, for a period of one year thereafter, he will not employ or offer to employ, call on, solicit, actively interfere with Company’s or any Affiliate’s relationship with, or attempt to divert or entice away, any employee of Company or any Affiliate. 

12.    Employee Representations . Employee hereby represents and warrants to Company that (i) the execution, delivery and performance of this Agreement by Employee does not and will not conflict with, breach, violate or cause a default under any employment, non-competition or confidentiality contract, agreement, instrument, order, judgment or decree to which Employee is a party or by which he is bound, (ii) except as disclosed to Company in writing prior to the execution of this Agreement, Employee is not a party to or bound by any employment agreement, non-compete agreement or confidentiality agreement with any other person or entity, and (iii) upon the execution and delivery of this Agreement by Company, this Agreement shall be the valid and binding obligation of Employee, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency and similar laws affecting the rights of creditor generally. 

13.    Company Representations . Company represents and warrants (i) that it is duly authorized and empowered to enter into this Agreement, (ii) that the execution, delivery and performance of this Agreement by Company does not and will not conflict with, breach, violate or cause a default under any contract, agreement, instrument, order, judgment or decree to which Company is a party or by which it is bound violate any agreement between it and any other person, firm or organization and (iii) upon the execution and delivery of this Agreement by the Employee, this Agreement shall be the valid and binding obligation of Company, enforceable in accordance in accordance with its terms, subject to applicable bankruptcy, insolvency and similar laws affecting the rights of creditor generally. 

14.    Remedies . Employee acknowledges that the restrictions and agreements contained in this Agreement are reasonable and necessary to protect the legitimate interests of Company, and that any violation of this Agreement will cause substantial and irreparable injury to Company that would not be quantifiable and for which no adequate remedy would exist at law and agrees that injunctive relief, in addition to all other remedies, shall be available therefor. 

15.    Effect of Agreement on Other Benefits . Except as specifically provided in this Agreement, the existence of this Agreement shall not be interpreted to preclude, prohibit or restrict Employee’s participation in any other employee benefit or other plans or programs provided to officers, directors or employees of Company. 

16.    Rights of Executive’s Estate . If Employee dies prior to the payment of all amounts due and owing to him under the terms of this Agreement, such amounts shall be paid to such beneficiary or beneficiaries as Employee may have last designated in writing filed with the Secretary of 

 

	 
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Company or, if Employee has made no beneficiary designation, to Employee’s estate. Such designated beneficiary or the executor of his estate, as the case may be, may exercise all of Employee’s rights hereunder. If any beneficiary designated by Employee shall predecease Employee, the designation of such beneficiary shall be deemed revoked, and any amounts that would have been payable to such beneficiary shall be paid to Employee’s estate. If any designated beneficiary survives Employee, but dies before payment of all amounts due hereunder, such payments shall, unless Employee has designated otherwise, be made to such beneficiary’s estate. In the event of Employee’s death or judicial determination of his incompetence, reference in this Agreement to Employee shall be deemed where appropriate, to refer to his beneficiary, estate or other legal representative. 

17.    Severability . It is the intent and understanding of the parties hereto that if, in any action before any court or agency legally empowered to enforce this Agreement, any term, restriction, covenant, or promise is found to be unreasonable and for that reason unenforceable, then such term, restriction, covenant, or promise shall not thereby be terminated but that it shall be deemed modified to the extent necessary to make it enforceable by such Court or agency and, if it cannot be so modified, that it shall be deemed amended to delete therefrom such provision or portion adjudicated to be invalid or unenforceable, such modification or amendment in any event to apply only with respect to the operation of this Agreement in the particular jurisdiction in which such adjudication is made. 

18.    Notice . For the purposes of this Agreement, notices, demands and all other communications provided for in the Agreement shall be in writing and shall be deemed to have been duly given when received if delivered in person or by overnight courier or if mailed by United States registered mail, return receipt requested, postage prepaid, to the following addresses: 

If to Employee: 

Edward B. Meyercord 

415 Ridgeview Road 

Princeton, NJ 08540 

If to Company: 

Talk America Holdings, Inc. 

6805 Route 202 

New Hope, Pennsylvania 18938 

Attn: EVP - General Counsel 

Either party may change its address for notices by written notice to the other party in accordance with this Section. 

	 
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19.    Miscellaneous . No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing signed by Employee and Company. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of Pennsylvania relating to contracts made and to be performed entirely therein. 

20.    Headings . The headings in this Agreement are inserted for convenience only and shall have no significance in the interpretation of this Agreement. 

21.    Successors . Company may not assign any of its rights or obligations under this Agreement hereunder. Employee may assign his rights, but not his obligations hereunder and all of Employee's rights hereunder shall inure to the benefit of his estate, personal representatives, designees or other legal representatives. All of the rights of Company hereunder shall inure to the benefit of, and be enforceable by the successors of Company. Any person, firm or corporation succeeding to the business of Company by merger, purchase, consolidation or otherwise shall be deemed to have assumed the obligations of Company hereunder; provided, however, that Company shall, notwithstanding such assumption by a successor, remain primarily liable and responsible for the fulfillment of its obligations under this Agreement. 

22.    Counterparts . This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument. 

23.    Insurance . Company shall maintain in effect during the Term policies of directors and officers’ liability, and similar insurance covering Employee in amounts and with coverage at least as favorable with respect to directors and executive officers of Company as in effect on the date hereof. 

24.    Waiver . No provision of his Agreement may be modified, waived or discharges unless such waiver, modification or discharge is agreed to in a writing executed by Employee and Company. No waiver by any party hereto at any time of any breach by another party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. 

25.    Governing Law . The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of Pennsylvania relating to contracts made and to be performed entirely therein. 

	 
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26.    Certain Words . As used in this Agreement, the words "herein," "hereunder," "hereof," and similar words shall be deemed to refer to this Agreement in its entirety, and not to any particular provision of this Agreement unless the context clearly requires otherwise. 

IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement as of the day and year first written above. 

TALK AMERICA HOLDINGS, INC. 

By: /s/ Aloysius T. Lawn IV                   

Name: Aloysius T. Lawn IV 

Title: EVP - General Counsel 

 

                        /s/ Edward B. Meyercord, III

                        Edward B. Meyercord, III 

Employee 

	

	 	12Unassociated Document

EXHIBIT 10.4

TALK AMERICA HOLDINGS, INC. 

INDEMNIFICATION AGREEMENT 

This Indemnification Agreement (" Agreement ") is made as of January 1, 2004, by and between Talk America Holdings, Inc., a Delaware corporation (the " Company "), and Edward B. Meyercord, III (" Indemnitee "). 

WHEREAS, pursuant to that certain employment agreement between the Company and Indemnitee dated January 1, 2004 (the " Employment Agreement ") Indemnitee is continuing his service as Chief Executive Officer and President of the Company and will perform a valuable service in such capacity for the Company; and 

WHEREAS, the Company desires to attract and retain the services of highly qualified individuals, such as Indemnitee, to serve the Company and, in order to induce Indemnitee to enter into the Employment Agreement, the Company agreed to enter into an agreement with Indemnitee providing for the indemnification of Indemnitee as provided herein. 

NOW, THEREFORE, in consideration of the foregoing, the mutual covenants set forth herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the undersigned hereby agree as follows: 

1.    Indemnification . 

(a)    Indemnification of Indemnitee . The Company shall indemnify and hold harmless Indemnitee to the fullest extent permitted by law if Indemnitee was or is or becomes a party to, or witness or other participant in, or is threatened to be made a party to, or witness or other participant in, any threatened, pending or completed action, suit, proceeding or alternative dispute resolution mechanism, or any hearing, inquiry or investigation that Indemnitee in good faith believes might lead to the institution of any such action, suit, proceeding or alternative dispute resolution mechanism, whether civil, criminal, administrative, investigative or other (collectively, hereinafter a " Claim ") by reason of, or arising in whole or in part out of, any event or occurrence related to the fact that Indemnitee is or was a director, officer, manager, employee, agent, representative or fiduciary of the Company, a subsidiary of the Company (a " Subsidiary ") or an affiliate (as defined in Rule 405 under the Securities Act of 1933, as amended) of the Company (an " Affiliate "), or is or was serving at the request of the Company or any Subsidiary or Affiliate as a director, officer, manager, employee, agent, representative or fiduciary of another corporation, limited liability company, partnership, joint venture, employee benefit plan, trust or other entity or enterprise (collectively, an " Other Entity "), or by reason of any action or inaction on the part of Indemnitee while serving in any of such capacities, whether or not the basis of the Claim is an alleged action in an official capacity as a director, officer, manager, employee, agent, representative or fiduciary of the Company, or any Subsidiary, Affiliate or Other Entity (any of the foregoing capacities referenced in this Section 1(a), an " Indemnified Capacity "), against any and all costs, expenses and other amounts actually and reasonably incurred and/or, as the case may be, paid (including, without limitation, attorneys’ fees and all other costs, expenses and obligations actually and reasonably incurred in connection with investigating, defending, being a witness in, or otherwise participating in (including on appeal),

 

	 
	 	 	 
	

	 

 

or preparing to defend, any Claim), and judgements, fines, penalties and amounts paid in connection with the settlement of any Claim and any federal, state, local or foreign taxes imposed on the Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement, including all interest, assessments and other charges paid or payable by the Indemnitee in connection with or in respect of such costs, expenses and other amounts (collectively, hereinafter, the " Expenses "). Without limiting the rights of Indemnitee under Section 2(a) below, the payment of Expenses actually paid by Employee shall be made by the Company as soon as practicable, but in any event no later than thirty (30) days after written demand by Indemnitee therefor is presented to the Company. Any event giving use to the right of Indemnitee to be indemnified hereinafter is referred to herein as an " Indemnifiable Event. " 

(b)    Reviewing Party . Notwithstanding the foregoing, (i) the obligations of the Company under Section 1(a) hereof shall be subject to the condition that the Reviewing Party (as defined in Section 10(e) hereof) shall not have determined (in a written opinion, in any case in which the Independent Legal Counsel (as defined in Section 10(d) hereof) is involved) that Indemnitee would not be permitted to be indemnified under applicable law, and (ii) the obligation of the Company to make an advance payment of Expenses to Indemnitee pursuant to Section 2(a) hereof (an " Expense Advance ") shall be subject to the condition that, if, when and to the extent that the Reviewing Party determines that Indemnitee would not be permitted to be so indemnified under applicable law, the Company shall be entitled to be reimbursed by Indemnitee (who hereby agrees to so reimburse the Company) for all such amounts theretofore paid; provided, however, that if Indemnitee has commenced or thereafter commences legal proceedings in a court of competent jurisdiction to secure a determination that Indemnitee could be indemnified under applicable law, any determination made by the Reviewing Party that Indemnitee would not be permitted to be indemnified under applicable law shall not be binding and Indemnitee shall not be required to reimburse the Company for any Expense Advance until a final judicial determination is made with respect thereto (as to which all rights of appeal therefrom have been exhausted or lapsed). Indemnitee's obligation to reimburse the Company for any Expense Advance shall be unsecured and no interest shall be charged thereon. If there has not been a Change in Control (as defined in Section 10(c) hereof), the Reviewing Party shall be selected by members of the Board of Directors who are not or were not, as the case may be, a party or parties, as the case may be, to the Claim in respect of which indemnification is sought, and if there has been a Change in Control (other than a Change in Control which has been approved by a majority of the Company’s Board of Directors who were directors immediately prior to such Change in Control), the Reviewing Party shall be the Independent Legal Counsel. If, within thirty (30) days after the Company's receipt of written notice from Indemnitee demanding such indemnification (the "30-Day Period") (i) the Reviewing Party determines that Indemnitee substantively would not be permitted to be indemnified in whole or in part under applicable law or makes no determination in that regard or, (ii) Indemnitee shall not have received full indemnification from the Company, Indemnitee shall have the right to commence litigation seeking a determination by a court of competent jurisdiction as to the propriety of indemnification under the circumstances involved or challenging any such determination (or lack thereof) by the Reviewing Party or any aspect thereof, including the legal or factual bases therefor or the failure of the Company to fully indemnify the Indemnitee, and the Company hereby consents to service of process and to appear in any such proceeding and hereby appoints the Secretary of the Company (or, if such office is not filled at a time in question, any Assistant Secretary of the Company or, if such office is not filled at a time in question, any Vice President of the 

 

	 
	 	2	 
	

	 

 

Company - each, a " Service Receiver ") as its agent for such service of process. Any determination by the Reviewing Party not otherwise so challenged shall be conclusive and binding on the Company and Indemnitee. 

(c)    Change in Control . The Company agrees that if there is a Change in Control (other than a Change in Control which has been approved by a majority of the Company’s Board of Directors who were directors immediately prior to such Change in Control), then, with respect to all matters thereafter arising concerning the rights of Indemnitee to payments of Expenses and Expense Advances under this Agreement or any other agreement or under the Company's Certificate of Incorporation or Bylaws as now or hereafter in effect, the Company shall seek legal advice only from the Independent Legal Counsel. Such counsel, among other things, shall render its written opinion to the Company and Indemnitee as to whether and to what extent Indemnitee would be permitted to be indemnified under applicable law. The Company agrees to pay the reasonable fees of the Independent Legal Counsel referred to above and to fully indemnify such counsel against any and all expenses (including attorneys' fees), claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto. 

(d)    Mandatory Payment of Expenses . Notwithstanding any other provision of this Agreement, to the extent that Indemnitee has been successful on the merits or otherwise, including, without limitation, the dismissal of an action without prejudice, in connection with any Claim, Indemnitee shall be indemnified against all Expenses actually and reasonably incurred by Indemnitee in connection therewith. 

2.    Expenses; Indemnification Procedure . 

(a)    Advancement of Expenses . The Company shall advance all Expenses incurred by Indemnitee so that the Company, and not Indemnitee, shall be obligated to pay such incurred Expenses. The advances of Expenses to be made hereunder shall be paid by the Company to Indemnitee as soon as practicable, but in any event no later than five (5) days after written demand by Indemnitee therefor to the Company. 

(b)     Notice and Cooperation by Indemnitee . Indemnitee shall, as a condition precedent to Indemnitee’s right to be indemnified under this Agreement, give the Company notice in writing as soon as practicable of any Claim made against Indemnitee for which indemnification will or could be sought under this Agreement; but the Indemnitee's failure to so notify the Company shall not relieve the Company from any liability that it may have to Indemnitee under this Agreement, except to the extent that the Company is able to establish that its ability to avoid liability under such Claim was prejudiced in a material respect by such failure. Notice to the Company shall be directed to a Service Receiver at the address of the Company shown on the signature page of this Agreement (or such other address as the Company shall designate in writing to Indemnitee). In addition, Indemnitee shall, at the expense of the Company, provide the Company with such information and cooperation with respect to a Claim, or any matters related to such Claim, as it may reasonably require in connection with the indemnification provided for herein and as shall be within Indemnitee’s power. Any costs or expenses (including attorneys' fees and disbursements) actually and reasonably incurred by Indemnitee in so cooperating shall be borne by the Company (irrespective of the determination as to 

 

	 
	 	3	 
	

	 

 

Indemnitee’s entitlement to indemnification), which shall pay any such amount within fifteen (15) days after receiving a request therefor from Indemnitee, and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom. 

(c)    No Presumptions; Burden of Proof . For purposes of this Agreement, the termination of any Claim by judgment, order, settlement (whether with or without court approval) or conviction, or upon a plea of nolo contendere , or its equivalent, shall not create a presumption that Indemnitee did not meet any particular standard of conduct or have any particular belief or that a court has determined that indemnification is not permitted by applicable law. In addition, neither the failure of the Reviewing Party to have made a determination as to whether Indemnitee has met any particular standard of conduct or had any particular belief, nor an actual determination by the Reviewing Party that Indemnitee has not met such standard of conduct or did not have such belief, prior to the commencement of legal proceedings by Indemnitee to secure a judicial determination that Indemnitee should be indemnified under applicable law, shall be a defense to a claim for indemnification by Indemnitee hereunder or create a presumption that Indemnitee has not met any particular standard of conduct or did not have any particular belief. In connection with any determination by the Reviewing Party or otherwise as to whether Indemnitee is entitled to be indemnified hereunder, the burden of proof shall be on the Company to establish that Indemnitee is not so entitled. 

(d)    Notice to Insurers . If, at the time of the receipt by the Company of a notice of a Claim pursuant to Section 2(b) hereof, the Company has one or more policies of liability insurance in effect which may cover such Claim, the Company shall give prompt notice of the commencement of such Claim to the applicable insurer(s) in accordance with the procedures set forth in the applicable policies. The Company shall thereafter take all action necessary or desirable to cause such insurers to pay, on behalf of Indemnitee, all amounts payable as a result of such Claim in accordance with the terms of such policies. 

(e)    Selection of Counsel . In the event that the Company shall be obligated hereunder to pay the Expenses with respect to any Claim, the Company, except as otherwise provided below, shall be entitled to assume the defense of such Claim at its own expense with counsel approved by Indemnitee, upon the delivery to Indemnitee of written notice of its election so to do. Indemnitee’s approval of such counsel shall not be unreasonably withheld. After delivery of such notice, approval of such counsel by Indemnitee and the retention of such counsel by the Company, the Company will not be liable to the Indemnitee under this Agreement for any fees of counsel subsequently incurred by the Indemnitee with respect to such Claim, other than as provided below. Indemnitee shall have the right to employ Indemnitee's own counsel in connection with a Claim, but the fees and expenses of such counsel incurred after written notice from the Company of its assumption of the defense thereof shall be at the expense of Indemnitee, unless (i) the employment of counsel by Indemnitee has been previously authorized by the Company, or, following a Change in Control (other than a Change in Control approved by a majority of the members of the Board of Directors who were directors immediately prior to such Change in Control), the employment of counsel by Indemnitee has been approved by the Independent Legal Counsel, (ii) Indemnitee shall have reasonably concluded that there may be a conflict of interest between the Company and Indemnitee in the conduct of any such defense, or (iii) the Company shall not, in fact, have employed or retained or continued to employ or retain counsel to assume the defense of such Claim, in each of which cases the fees and expenses of Indemnitee's counsel shall be at the expense of 

 

	 
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the Company. The Company shall not be entitled to assume or control the defense of any Claim brought by or on behalf of the Company or as to which the Indemnitee has reached the conclusion that there may be a conflict of interest between the Company and Indemnitee. The Company shall not settle any Claim in any manner which would impose any penalty or limitation on Indemnitee without the Indemnitee's written consent (which approval shall not be unreasonably withheld). 

(f)    Settlement of Claims . The Company shall not be required to indemnify Indemnitee under this Agreement for any amounts paid in settlement of any Claim effected without the Company's written consent; provided, however, that consent by the Company to the settlement of any claim shall not be unreasonably withheld. Notwithstanding the foregoing, however, if a Change in Control has occurred (other than a Change in Control approved by a majority of the members of the Board of Directors who were directors immediately prior to such Change in Control), then the Company shall be required to indemnify Indemnitee for amounts paid in settlement of any Claim if the Independent Legal Counsel has approved such settlement or has not made a determination with respect to such settlement within (30) days after the effective date of such Change in Control. 

3.    Additional Indemnification Rights; Non-Exclusivity . 

(a)    Scope . The Company hereby agrees to indemnify Indemnitee to the fullest extent permitted by law, notwithstanding that such indemnification is not specifically authorized by the Company’s Certificate of Incorporation or Bylaws or by statute. In the event of any change after the date of this Agreement in any applicable law, statute or rule which expands the right of the Company to indemnify Indemnitee, it is the intent of the parties hereto that Indemnitee shall enjoy under this Agreement the greater benefits afforded by such change. In the event of any change in any applicable law, statute or rule which narrows the right of the Company to indemnify the Indemnitee, such change, to the extent not otherwise required by such law, statute or rule to be applied to this Agreement, shall have no effect on this Agreement or the parties' rights and obligations hereunder. 

(b)    Non-Exclusivity . The indemnification provided by this Agreement shall be in addition to any rights to which Indemnitee may be entitled under the Company's Certificate of Incorporation or Bylaws, any agreement, vote of stockholders or directors, the General Corporation Law of the State of Delaware, or otherwise. The indemnification provided under this Agreement shall continue as to Indemnitee for any Indemnifiable Event while serving in an Indemnified Capacity even though Indemnitee may have ceased to serve in such Indemnified Capacity. 

4.    No Duplication of Payments . The Company shall not be liable under this Agreement to make any payment in connection with any Claim to the extent Indemnitee has otherwise actually received payment (under any insurance policy or otherwise) of the amounts otherwise indemnifiable hereunder. 

5.    Partial Indemnification . If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for a 

 

	 
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portion of any of the Expenses in connection with the investigation, appeal or settlement of any Claim, but not for the total amount thereof, the Company shall nevertheless indemnify Indemnitee for such portion of the Expenses. 

6.    Mutual Acknowledgment . Both the Company and Indemnitee acknowledge that, in certain instances, applicable law or public policy may prohibit the Company from indemnifying Indemnitee under this Agreement or otherwise. Indemnitee understands and acknowledges that the Company has undertaken or may be required in the future to undertake with the Securities and Exchange Commission to submit the question of indemnification to a court in certain circumstances for a determination of the Company’s right under public policy to indemnify Indemnitee. 

7.    Liability Insurance . To the extent the Company or any Subsidiary or Affiliate maintains liability insurance applicable to directors, officers, managers, employees, agents, representatives or fiduciaries of the Company or such Subsidiary or Affiliate (collectively, the "Covered Persons"), Indemnitee shall be covered by such policies in such a manner as to provide Indemnitee the same rights and benefits as are accorded to the most favorably insured of the Covered Persons who is then serving in the same capacity or capacities, as the case may be, as Indemnitee. 

8.    Exceptions . Any other provision herein to the contrary notwithstanding, the Company shall not be obligated pursuant to the terms of this Agreement: 

(a)    Excluded Action or Omissions . To indemnify Indemnitee for any Expenses resulting from acts, omissions or transactions from which Indemnitee may not be indemnified under applicable law, or for any Expenses resulting from Indemnitee's conduct which is finally adjudged to have been willful misconduct or knowingly fraudulent conduct; 

(b)    Claims Initiated by Indemnitee . To indemnify or advance Expenses to Indemnitee with respect to Claims initiated or brought voluntarily by Indemnitee and not by way of defense, regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, Expense Advance or insurance recovery, as the case may be, except (i) with respect to proceedings brought to establish or enforce (a) a right to, or for, Expense Advances and/or, as the case may be, (b) any other right of Indemnitee under this Agreement or any other agreement or insurance policy or under the Company's Certificate of Incorporation or Bylaws now or hereafter in effect, (ii) in specific cases, if the Board of Directors has approved the initiation or bringing of such suit or (iii) as otherwise required under applicable law or statute; 

(c)    Lack of Good Faith . To indemnify Indemnitee for any Expenses incurred by Indemnitee with respect to any proceeding instituted by Indemnitee to enforce or interpret this Agreement, if a court of competent jurisdiction determines that each of the material assertions made by the Indemnitee in such proceeding was not made in good faith or was frivolous; or 

(d)    Claims Under Section 16(b) . To indemnify Indemnitee for Expenses and the payment of profits arising from the purchase and sale or, sale and purchase, by Indemnitee of securities in violation of Section 16(b) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or any similar successor statute. 

 

	 
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9.    Period of Limitations . No legal action shall be brought and no cause of action shall be asserted by or in the right of the Company with respect to the matters addressed in this Agreement against Indemnitee, or Indemnitee’s estate, spouse, heirs, executors or personal or legal representatives after the expiration of two(2) years from the date of accrual of such cause of action, and any claim or cause of action of the Company shall be extinguished and deemed released unless asserted by the timely filing of a legal action within such two-year period; provided , however , that if any shorter period of limitations is otherwise applicable to any such cause of action, such shorter period shall govern. 

10.    Construction of Certain Phrases . 

(a)    Company . For purposes of this Agreement, references to the "Company" shall include, in addition to the resulting entity, any constituent entity (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, managers, employees, agents, representation or fiduciaries, so that if Indemnitee is or was a director, officer, employee, agent or fiduciary of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, manager, employee, agent or fiduciary of an Other Entity, Indemnitee shall stand in the same position under the provisions of this Agreement with respect to the resulting or surviving entity as Indemnitee would have stood with respect to such constituent entity if its separate existence had continued. The consummation of any transaction described in this Section 10(a) shall be subject to the requirements of Section 12, below. 

(b)    Miscellaneous Terms . For purposes of this Agreement, references to " fines " shall include any excise taxes assessed on Indemnitee with respect to an employee benefit plan; and references to "serving at the request of the Company or any Subsidiary or Affiliate" or words of similar import shall include any service as a director, officer, manager, employee, agent, representative or fiduciary of the Company which imposes duties on, or involves services by, such director, officer, manager, employee, representative, agent or fiduciary with respect to an employee benefit plan, or its participants or its beneficiaries; and if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan, Indemnitee shall be deemed to have acted in a manner "not opposed to the best interests of the Company" as referred to in this Agreement or under any applicable law or statute. 

(c)    Change in Control . For purposes of this Agreement, a " Change in Control " shall be deemed to have occurred if (i) any "person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act), other than a trustee or other fiduciary holding securities under an employee benefit plan of the Company or a corporation owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company, is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of Voting Securities (as defined below) of the Company representing more than twenty percent (20%) of the total voting power represented by the Company's then outstanding Voting Securities, (ii) during any period of two (2) consecutive years, individuals who at the beginning of such period constitute the Board of Directors of the Company and any new director (other than a director designated by a person who has entered into an agreement with the Company to effect 

 

	 
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a transaction described in clauses (i), (iii) and (iv) of this Section 10(c)) whose election by the Board of Directors or nomination for election by the Company's stockholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof, or (iii) the stockholders of the Company approve a merger or consolidation of the Company with any other corporation other than a merger or consolidation which would result in the Voting Securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into Voting Securities of the surviving entity) at least 80% of the total voting power of the resulting or surviving entity outstanding immediately after such merger or consolidation, or (iv) the stockholders of the Company approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company (in one transaction or a series of transactions) of all or substantially all of the Company's assets. For purposes of this Agreement, "Voting Securities" shall mean any securities the holders of which vote generally in the election of directors. 

(d)    Independent Legal Counsel . For purposes of this Agreement, " Independent Legal Counsel " shall mean an attorney or firm of attorneys, who shall not have otherwise performed services for the Company or Indemnitee within the then prior three years (other than with respect to matters concerning the rights of Indemnitee under this Agreement, or of other indemnitees under similar indemnity agreements) selected by the Company and approved by Indemnitee in writing, which approval shall not be unreasonably withheld. Notwithstanding the foregoing, the term "Independent Legal Counsel" shall not include any firm or person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee's right to indemnification under this Agreement. 

(e)    Reviewing Party . For purposes of this Agreement, a " Reviewing Party " shall mean (i) any person or group of persons consisting of a member or members of the Company's Board of Directors and/or, as the case may be, or any other person appointed by the Board of Directors who is not a party to the particular Claim for which Indemnitee is seeking indemnification, or (ii) Independent Legal Counsel. 

11.    Counterparts . This Agreement may be executed in one or more counterparts, each of which shall constitute an original and all of which, together, shall constitute one and the same document. 

12.    Binding Effect; Successors and Assigns . This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors and permitted assigns, heirs and personal and legal representatives. The Company may not assign its obligations under this Agreement to any individual or entity except by operation of law to an entity acquiring all or substantially all of the business and/or, as the case may be, assets of the Company (a "Successor") and, in any such case, the Company shall continue to be obligated hereunder. The Company shall require and cause any Successor by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place. This Agreement shall continue in effect regardless of whether Indemnitee continues to serve in an Indemnified Capacity . 

 

	 
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13.         Attorneys’ Fees . In the event that any action is instituted by Indemnitee in a court of competent jurisdiction under this Agreement or under any liability insurance policies maintained by the Company to enforce, or interpret any of the terms hereof or thereof, Indemnitee shall be entitled to be paid all Expenses actually and reasonably incurred by Indemnitee with respect to such action, regardless of whether Indemnitee is ultimately successful in such action, and shall be entitled to an advance of such Expenses in the manner provided in Section 2 (a), above, with respect to such action, unless, as a part of such action, the court in which such action is brought determines that each of the material assertions made by Indemnitee as a basis for such action was not made in good faith or was frivolous. In the event of an action instituted by or in the name of the Company under this Agreement to enforce or interpret any of the terms of this Agreement, Indemnitee shall be entitled to be paid all Expenses actually and reasonably incurred by Indemnitee in defense of such action (including costs and expenses incurred with respect to Indemnitee’s counterclaims and cross-claims made in such action), and shall be entitled to an advance of such Expenses in the manner provided in Section 2 (a), above, with respect to such action, unless as a part of such action such court determines that each of Indemnitee's material defenses to such action were made in bad faith or were frivolous. 

14.    Notice . Any notices or demands given in connection herewith shall be in writing and deemed given when (a) personally delivered, (b) sent by facsimile transmission to a number provided in writing by the addressee and a confirmation of the transmission is received by the sender or (c) two (2) days after being deposited for delivery with a recognized overnight courier, such as Fed Ex, and addressed or sent, as the case may be, to the address or facsimile number set forth below or to such other address or facsimile number as such party may in writing designate: 

If to Indemnitee:    Edward B. Meyercord III    

 

If to Company:      Talk America Holdings, Inc. 

            6805 Route 202 

New Hope, PA 18938 

Attn: Secretary 

15.    Consent to Jurisdiction . The Company and Indemnitee each hereby irrevocably consent to the jurisdiction of the courts of the Commonwealth of Pennsylvania for all purposes in connection with any action or proceeding which arises out of or relates to this Agreement and agree that any action instituted under this Agreement shall be commenced, prosecuted and continued only in the courts of the Commonwealth of Pennsylvania in and for the County of Philadelphia, which shall be the exclusive and only proper forum for adjudicating such a claim. 

16.          Severability . The provisions of this Agreement shall be severable in the event that any of the provisions hereof (including any provision within a single section, paragraph or sentence) are held by a court of competent jurisdiction to be invalid, void or otherwise unenforceable, and the remaining provisions shall remain enforceable to the fullest extent permitted by law. Furthermore, to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of this Agreement containing any provision held to be invalid, void or otherwise unenforceable, that is 

 

	 
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not itself held to be invalid, void or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable. 

17.    Choice of Law . This Agreement shall be governed by and its provisions construed and enforced in accordance with the laws of the State of Delaware, without regard to the conflict of laws principles thereof. 

18.    Subrogation . In the event of payment to, or on behalf of Indemnitee under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall, at Company’s expense, execute all documents required and shall do all acts that may be necessary to secure such rights and to enable the Company effectively to bring suit to enforce such rights. 

19.    Amendment and Termination . No amendment, modification, termination or cancellation of this Agreement shall be effective unless it is in writing signed by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed to, or shall constitute a waiver of, any other provisions hereof (whether or not similar thereto), nor shall such waiver constitute a continuing waiver. Except as specifically set forth herein, no failure to exercise, or any delay in exercising, any right or remedy hereunder shall constitute a waiver thereof. 

20.    Integration and Entire Agreement . This Agreement sets forth the entire understanding between the parties hereto and supersedes all previous written and oral negotiations, commitments, understandings and agreements relating to the subject matter hereof between the parties hereto. 

21.    No Construction as Employment Agreement . Nothing contained in this Agreement shall be construed as giving Indemnitee any right to be retained in the employ of the Company or any Subsidiaries. 

22.    Certain Words . As used in this Agreement, the words "herein," "hereunder," "hereof" and similar words shall be deemed to refer to this Agreement in its entirety, and not to any particular provision of this Agreement unless the context clearly requires otherwise. 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written. 

TALK AMERICA HOLDINGS, INC. 

By: /s/ Aloysius T. Lawn IV            

Title: EVP - General Counsel 

 

AGREED TO AND ACCEPTED 

INDEMNITEE: 

 

/s/ Edward B. Meyercord, III

Edward B. Meyercord, III

 

	

	 	 	 

	 
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