TOLLGRADE COMMUNICATIONS, INC. 2006 LONG-TERM INCENTIVE COMPENSATION PLAN EMPLOYEE NONSTATUTORY STOCK OPTION AGREEMENT
Exhibit 10.2
TOLLGRADE COMMUNICATIONS, INC.
2006 LONG-TERM INCENTIVE COMPENSATION PLAN
2006 LONG-TERM INCENTIVE COMPENSATION PLAN
THIS AGREEMENT is made and entered into this day of
, 200___, by and between
TOLLGRADE COMMUNICATIONS, INC., a Pennsylvania corporation (the “Company”) and
, an employee of the Company (the “Holder”).
WHEREAS, the Company desires to issue, and the Holder desires to receive, an option to
purchase shares of the common stock of the Company, pursuant to the terms described herein.
NOW, THEREFORE, in consideration of the terms and conditions contained herein and intending to
be legally bound hereby, the parties agree as follows:
1. Grant of Option. The Company hereby confirms the grant to the Holder on
(the “Date of Grant”) of an option (the “Option”) to purchase, from time to
time in accordance with the terms hereof, ( ) shares of common stock of the
Company, par value $.20 per share (the “Common Stock”) at an option price of $ per
share, under and subject to the terms and conditions of the Company’s 2006 Long-Term Incentive
Compensation Plan, as amended (the “Plan”) and this Agreement. The Plan is incorporated herein by
reference and made a part hereof as though set forth in full herein. Terms which are capitalized
herein but which are not defined herein have the same meaning as in the Plan unless the context
otherwise requires.
The Option confirmed hereby is a nonqualified stock option as that term is defined in Section
2.20 of the Plan. Subject to the terms of Section 6.8 of the Plan regarding the periods during
which stock options may be exercised upon termination of employment, and Section 13.1 of the Plan
regarding the periods during which the Option may be exercised during a Change in Control (as
defined in the Plan), the Option shall be exercisable as follows:
(a) From and after , the Option shall be exercisable for
( )
shares covered hereby.
(b) From and after , the Option shall be exercisable for an
additional
(
) shares covered hereby.
(c) From and after , the Option shall be exercisable for all of the
shares covered hereby.
The Option will expire at the close of business on
.
2. Acceptance of Grant of Option. The Holder accepts the grant of the Option
confirmed hereby, acknowledges having received a copy of the Plan and agrees to be bound by the
terms and provisions of the Plan, as the Plan may be amended from time to time; provided, however,
that no alteration, amendment, revocation or termination of the Plan shall, without the written
consent of the Holder, adversely affect the rights of the Holder with respect to the Option.
3. Non-Transferability. This Option shall not be transferable otherwise than by Will
or the laws of descent or distribution, and the Option shall be exercisable during the lifetime of
the Holder only by the Holder.
4. Procedure for Exercise of Option. The Option may be exercised only by (a)
execution and delivery by the Holder to the Company of an exercise form or forms prescribed by the
Committee; and (b) surrender of this Agreement at the principal office of the Company. Each
exercise form must set forth the number of shares of Common Stock for which the Option is exercised
and must be dated and signed by the person exercising the Option.
Subject to the last paragraph of this Section 4, the exercise is not effective until the
Company receives payment of the full option price for the number of shares of Common Stock for
which the Option is exercised. The Option Price shall be paid to the Company in full in the manner
specified in Section 6.6 of the Plan. To the extent the Holder pays the Option Price in whole or
in part by shares of already-owned Common Stock, as permitted by the Plan, the Company shall advise
any person exercising the Option in such manner as to the amount of any cash required to be paid to
the Company for any shares representing a fraction of a share, and such person will be required to
pay any such cash directly to the Company before any distribution of certificates representing
shares of Common Stock will be made. The person exercising the Option should execute the form of
assignment on the back of the certificate or should deliver an executed Assignment Separate from
Certificate with respect to each stock certificate delivered in payment of the Option Price.
If any person other than the Holder exercises the Option, the exercise material must include
proof satisfactory to the Company of the right of such person to exercise the Option, and the
signature on all certificates or stock powers must be guaranteed by a commercial bank or trust
company or by a firm having membership in the New York Stock Exchange, Inc., the American Stock
Exchange, Inc., or the National Association of Securities Dealers, Inc.
The date of exercise of the Option is the date on which the exercise form or forms, proof of
right to exercise (if required) and payment of the Option Price are received by the Company. For
purposes of determining the date of exercise where payment of the Option Price is made in shares of
already-owned Common Stock, any cash required to be paid to the Company with respect to a fraction
of a share shall not be taken into account when determining whether payment of the Option Price has
been made.
5. Issuance of Certificates. Subject to Section 4 above and this Section 5,
the Company will issue a certificate or certificates representing the number of shares of Common
Stock for which the Option is exercised as soon as practicable after the date of exercise. Unless
otherwise directed, the certificate(s) will be registered in the name of the person exercising the
Option and
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delivered to such person. If the Option Price is paid in whole or in part with shares
of already-owned Common Stock, the Company will issue at the same time and return to the person
exercising the Option a certificate representing the number of any excess shares included in any
certificate or certificates delivered to the Company at the time of exercise.
The obligation of the Company to issue shares on exercise of an option is subject to the
effectiveness of a Registration Statement under the Securities Act of 1933, as amended, with
respect to such shares, if deemed necessary or appropriate by counsel to the Company. The Company
is not obligated to file such a Registration Statement. If at the time of exercise of the Option,
no such Registration Statement is in effect, the issuance of shares on exercise of the Option may
also be made subject to restrictions on the transfer of the shares, including the placing of an
appropriate legend on the certificates restricting the transfer thereof, and to such other
restrictions as the Committee, on the advice of counsel, may deem necessary or appropriate to
prevent a violation of applicable securities laws.
6. Withholding of Taxes. The Holder will be advised by the Company as the amount of
any Federal income, employment or excise taxes required to be withheld by the Company on any
compensation income resulting from the exercise of the Option, and the Holder will pay such taxes
directly to the Company upon request. State, local or foreign income or employment taxes may also
be required to be withheld by the Company and the Holder will also be required to pay such taxes
directly to the Company upon request. If the Holder does not pay any taxes required to be withheld
directly to the Company within ten (10) days after any such request, the Company may withhold such
taxes from any other compensation to which the Holder is entitled from the Company. The Holder
will hold the Company harmless in acting to satisfy its withholding obligations in this manner if
it becomes necessary to do so.
7. Interpretation of Plan and Agreement. This Agreement is an award agreement
referred to in Section 6.2 of the Plan. If there is any conflict between the Plan and this
Agreement, the provisions of the Plan shall control. However, there may be provisions in this
Agreement not contained in the Plan, which provisions shall nonetheless be effective. In addition,
to the extent that provisions of the Plan are expressly modified for purposes of this Agreement
pursuant to authorization in the Plan, the provisions of this Agreement shall control. Any dispute
or disagreement which shall arise under or in any way relate to the construction or interpretation
of the Plan or this Agreement shall be resolved by the Committee, and the decision of the Committee
shall be final, binding and conclusive for all purposes.
8. Effect of Agreement on Rights of Company and Holder. This Agreement does not confer
any rights on the Holder to continue in the employ of the Company or interfere in any way
with the rights of the Company to terminate the employment of the Holder or to otherwise
reassign or change the current position of the Holder.
9. Indemnification. The Holder indemnifies and holds harmless the Company from
and against any and all loss, damages, liability or expense, including costs and reasonable
attorneys’
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fees, to which the Company may be put or may incur by reason of or in connection with
any misrepresentation made by the Holder, any breach of the Holder’s warranties, or the Holder’s
failure to fulfill any of his or her covenants or agreements set forth herein.
10. Binding Effect. This Agreement shall be binding upon the successors and assigns of
the Company and upon the legal representatives, heirs and legatees of the Holder.
11. Entire Agreement. This Agreement constitutes the entire agreement between the
parties and supersedes all prior agreements and understandings, oral or written, between the
parties with respect to the subject matter of this Agreement.
12. Amendment. This Agreement may be amended only a written instrument signed by the
Company and the Holder.
13. Governing Law. This Agreement shall be governed by and construed and enforced in
accordance with the laws of the Commonwealth of Pennsylvania.
IN WITNESS WHEREOF, the Company and the Holder have executed this Agreement as of the date
first written above.
TOLLGRADE COMMUNICATIONS, INC.
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| Name: | ||||||
| Title: | ||||||
WITNESS: |
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| [Name of Employee] |
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