UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
(Amendment No. 1)
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6 (e)(2))
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-12
Consolidated Communications Holdings, Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if
other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction
applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how
it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or Schedule
and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
EXPLANATORY NOTE
Attached as Exhibit A to this filing is the Amended and Restated
Consolidated Communications Holdings, Inc. 2005 Long-Term Incentive
Plan, as amended by the Board of Directors on March 1, 2010 (subject
to stockholder approval), which was referred to in the Proxy Statement
of Consolidated Communications Holdings, Inc. filed on March 31, 2010.
EXHIBIT A
CONSOLIDATED COMMUNICATIONS HOLDINGS, INC.<1>
2005 LONG-TERM INCENTIVE PLAN
(As Amended and Restated Effective May 5, 2009)
<1> This copy of the 2005 Long-Term Incentive Plan reflects the
amendment made to Section 3.1 of the Plan that is discussed in
Proposal 3 of the Proxy Statement for the year ended December 31,
2009.
TABLE OF CONTENTS
Page
SECTION 1. PURPOSE . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 2. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . 1
2.1 BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.2 CASH INCENTIVE PROGRAM . . . . . . . . . . . . . . . . . 1
2.3 CAUSE . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.4 CHANGE EFFECTIVE DATE . . . . . . . . . . . . . . . . . . 2
2.5 CHANGE IN CONTROL . . . . . . . . . . . . . . . . . . . . 2
2.6 CODE . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.7 COMMITTEE . . . . . . . . . . . . . . . . . . . . . . . . 3
2.8 COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.9 DIRECTOR . . . . . . . . . . . . . . . . . . . . . . . . 4
2.10 ELIGIBLE EMPLOYEE . . . . . . . . . . . . . . . . . . . . 4
2.11 FAIR MARKET VALUE . . . . . . . . . . . . . . . . . . . . 4
2.12 GOOD REASON . . . . . . . . . . . . . . . . . . . . . . . 4
2.13 GRANT . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.14 ISO . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.15 1933 ACT . . . . . . . . . . . . . . . . . . . . . . . . 5
2.16 1934 ACT . . . . . . . . . . . . . . . . . . . . . . . . 5
2.17 NON-ISO . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.18 OPTION . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.19 OPTION CERTIFICATE . . . . . . . . . . . . . . . . . . . 5
2.20 OPTION PRICE . . . . . . . . . . . . . . . . . . . . . . 5
2.21 PARENT . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.22 PERFORMANCE PERIOD . . . . . . . . . . . . . . . . . . . 6
2.23 PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.24 RULE 16b-3 . . . . . . . . . . . . . . . . . . . . . . . 6
2.25 SAR VALUE . . . . . . . . . . . . . . . . . . . . . . . . 6
2.26 STOCK . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.27 STOCK APPRECIATION RIGHT . . . . . . . . . . . . . . . . 6
2.28 STOCK APPRECIATION RIGHT CERTIFICATE . . . . . . . . . . 6
2.29 STOCK GRANT . . . . . . . . . . . . . . . . . . . . . . . 6
2.30 STOCK GRANT CERTIFICATE . . . . . . . . . . . . . . . . . 6
2.31 STOCK UNIT GRANT . . . . . . . . . . . . . . . . . . . . 6
2.32 SUBSIDIARY . . . . . . . . . . . . . . . . . . . . . . . 6
2.33 TEN PERCENT STOCKHOLDER . . . . . . . . . . . . . . . . . 6
SECTION 3. SHARES AND GRANT LIMITS . . . . . . . . . . . . . . . . 7
3.1 SHARES RESERVED . . . . . . . . . . . . . . . . . . . . . 7
3.2 SOURCE OF SHARES . . . . . . . . . . . . . . . . . . . . 7
3.3 USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . 7
3.4 GRANT LIMITS . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 4. EFFECTIVE DATE . . . . . . . . . . . . . . . . . . . . 8
4.1 EFFECTIVE DATE . . . . . . . . . . . . . . . . . . . . . 8
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TABLE OF CONTENTS
(continued)
Page
4.2 STOCKHOLDER APPROVAL . . . . . . . . . . . . . . . . . . 8
SECTION 5. COMMITTEE . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 6. ELIGIBILITY . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 7. OPTIONS . . . . . . . . . . . . . . . . . . . . . . . . 9
7.1 COMMITTEE ACTION . . . . . . . . . . . . . . . . . . . . 9
7.2 $100,000 LIMIT . . . . . . . . . . . . . . . . . . . . . 9
7.3 OPTION PRICE . . . . . . . . . . . . . . . . . . . . . . 9
7.4 PAYMENT . . . . . . . . . . . . . . . . . . . . . . . . . 9
7.5 EXERCISE . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 8. STOCK APPRECIATION RIGHTS . . . . . . . . . . . . . . . 10
8.1 COMMITTEE ACTION . . . . . . . . . . . . . . . . . . . . 10
8.2 TERMS AND CONDITIONS . . . . . . . . . . . . . . . . . . 11
8.3 EXERCISE . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 9. STOCK GRANTS AND STOCK UNIT GRANTS . . . . . . . . . . 12
9.1 COMMITTEE ACTION . . . . . . . . . . . . . . . . . . . . 12
9.2 CONDITIONS . . . . . . . . . . . . . . . . . . . . . . . 12
9.3 DIVIDENDS, VOTING RIGHTS AND CREDITOR STATUS . . . . . . 13
9.4 SATISFACTION OF FORFEITURE CONDITIONS . . . . . . . . . . 15
9.5 PERFORMANCE-BASED STOCK GRANTS AND STOCK UNIT GRANTS . . 15
SECTION 10. CASH INCENTIVE PROGRAM . . . . . . . . . . . . . . . . 16
10.1 GENERAL . . . . . . . . . . . . . . . . . . . . . . . . . 16
10.2 PERFORMANCE GOALS . . . . . . . . . . . . . . . . . . . . 17
10.3 ADJUSTMENTS . . . . . . . . . . . . . . . . . . . . . . . 17
10.4 PERFORMANCE PERIOD . . . . . . . . . . . . . . . . . . . 17
SECTION 11. CONDITIONS OF TRANSFER . . . . . . . . . . . . . . . . 17
SECTION 12. SECURITIES REGISTRATION . . . . . . . . . . . . . . . 18
SECTION 13. LIFE OF PLAN . . . . . . . . . . . . . . . . . . . . . 19
SECTION 14. ADJUSTMENT . . . . . . . . . . . . . . . . . . . . . . 19
14.1 CAPITAL STRUCTURE . . . . . . . . . . . . . . . . . . . . 19
14.2 AVAILABLE SHARES . . . . . . . . . . . . . . . . . . . . 20
14.3 TRANSACTIONS DESCRIBED IN SECTION 424 OF THE CODE . . . . 20
14.4 FRACTIONAL SHARES . . . . . . . . . . . . . . . . . . . . 20
SECTION 15. CHANGE IN CONTROL . . . . . . . . . . . . . . . . . . 21
SECTION 16. AMENDMENT OR TERMINATION . . . . . . . . . . . . . . . 22
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TABLE OF CONTENTS
(continued)
Page
SECTION 17. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . 22
17.1 STOCKHOLDER RIGHTS . . . . . . . . . . . . . . . . . . . 22
17.2 NO CONTRACT OF EMPLOYMENT . . . . . . . . . . . . . . . . 23
17.3 WITHHOLDING . . . . . . . . . . . . . . . . . . . . . . . 23
17.4 CONSTRUCTION . . . . . . . . . . . . . . . . . . . . . . 23
17.5 OTHER CONDITIONS . . . . . . . . . . . . . . . . . . . . 23
17.6 RULE 16b-3 . . . . . . . . . . . . . . . . . . . . . . . 24
17.7 COORDINATION WITH EMPLOYMENT AGREEMENTS AND OTHER
AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . 24
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CONSOLIDATED COMMUNICATIONS HOLDINGS, INC.
2005 LONG-TERM INCENTIVE PLAN
(As Amended And Restated Effective May 5, 2009)
SECTION 1.
PURPOSE
-------
The primary purpose of this Plan is to promote the interest of
the Company by authorizing the Committee to grant Options, Stock
Appreciation Rights, Stock Grants, Stock Unit Grants and Cash
Incentive Program awards to Eligible Employees and Directors in order
to (1) attract and retain Eligible Employees and Directors, (2)
provide an additional incentive to each Eligible Employee or Director
to work to increase the Company's long-term value and (3) provide each
Eligible Employee or Director with a stake in the future of the
Company that corresponds to the stake of each of the Company's
stockholders.
SECTION 2.
DEFINITIONS
-----------
2.1 BOARD means the Board of Directors of the Company.
2.2 CASH INCENTIVE PROGRAM means a cash incentive program
described in Section 10.
2.3 CAUSE means, with respect to an Eligible Employee or
Director:
(a) the conviction of, pleading guilty to, or confessing or
otherwise admitting to any felony or any act of fraud,
misappropriation or embezzlement;
(b) the act or omission by the individual involving
malfeasance or gross negligence in the performance of
the individual's duties and responsibilities to the
material detriment of the Company; or
(c) the breach of any provision of any code of conduct
adopted by the Company which applies to the Company if
the consequence to such violation for any individual
subject to such code of conduct ordinarily would be a
termination of his or her employment by the Company or
removal from the Board, as applicable; provided
however,
(d) no such act or omission or event shall be treated as
"Cause" under this Plan unless (i) the individual has
been provided a detailed, written statement of the
basis for belief that such act or omission or event
constitutes "Cause" and an opportunity to meet with the
Committee (together with the individual's counsel if
the individual chooses to have counsel present at such
meeting) after the individual has had a reasonable
period in which to review such statement and, if the
act or omission or event is one which can be cured by
the individual, the individual has had at least a
thirty (30) day period to take corrective action and
(ii) a majority of the Committee after such meeting (if
the individual exercises the individual's right to have
a meeting) and after the end of such thirty (30) day
correction period (if applicable) determines reasonably
and in good faith that "Cause" does exist under this
Plan.
2.4 CHANGE EFFECTIVE DATE means either the date which includes
the "closing" of the transaction which makes a Change in Control
effective if the Change in Control is made effective through a
transaction which has a "closing" or the date a Change in Control is
reported in accordance with applicable law as effective to the
Securities and Exchange Commission if the Change in Control is made
effective other than through a transaction which has a "closing".
2.5 CHANGE IN CONTROL means a change in control of the Company
of a nature that would be required to be reported in response to Item
6(e) of Schedule 14A of Regulation 14A promulgated under the 1934 Act
as in effect at the time of such "change in control", provided that
such a change in control shall be deemed to have occurred at such time
as
(a) any "person" (as that term is used in Sections 13(d)
and 14(d)(2) of the 1934 Act), other than an
"affiliate" (as that term is defined in Section 5 of
Article IV of the Company's amended and restated
certificate of incorporation) of Richard A. Lumpkin, is
or becomes the beneficial owner (as defined in Rule
13d-3 under the 1934 Act) directly or indirectly, of
securities representing a majority of the combined
voting power for election of directors of the then
outstanding securities of the Company or any successor
to the Company;
(b) during any period of two consecutive years or less,
individuals who at the beginning of such period
constitute the Board cease, for any reason, to
constitute at least a majority of the Board, unless the
election or nomination for election of each new
director was approved by a vote of at least two-thirds
of the directors then still in office who were
directors at the beginning of the period;
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(c) the stockholders of the Company approve any
reorganization, merger, consolidation or share exchange
as a result of which the common stock of the Company
shall be changed, converted or exchanged into or for
securities of another corporation (other than a merger
with a wholly-owned subsidiary of the Company) or any
dissolution or liquidation of the Company or any sale
or the disposition of 50% or more of the assets or
business of the Company; or
(d) stockholders of the Company approve any reorganization,
merger, consolidation or share exchange unless (i) the
persons who were the beneficial owners of the
outstanding shares of the common stock of the Company
immediately before the consummation of such transaction
beneficially own at least a majority of the outstanding
shares of the common stock of the successor or survivor
corporation in such transaction immediately following
the consummation of such transaction and (ii) the
number of shares of the common stock of such successor
or survivor corporation beneficially owned by the
persons described in Section 2.5(d)(i) immediately
following the consummation of such transaction is
beneficially owned by each such person in substantially
the same proportion that each such person had
beneficially owned shares of the Company common stock
immediately before the consummation of such
transaction, provided (iii) the percentage described in
Section 2.5(d)(i) of the beneficially owned shares of
the successor or survivor corporation and the number
described in Section 2.5(d)(ii) of the beneficially
owned shares of the successor or survivor corporation
shall be determined exclusively by reference to the
shares of the successor or survivor corporation which
result from the beneficial ownership of shares of
common stock of the Company by the persons described in
Section 2.5(d)(i) immediately before the consummation
of such transaction.
2.6 CODE means the Internal Revenue Code of 1986, as amended.
2.7 COMMITTEE means (a) a committee of the Board which shall
have at least two members, each of whom shall be appointed by and
shall serve at the pleasure of the Board and shall come within the
definition of a "non-employee director" under Rule 16b-3 and an
"outside director" under Section 162(m) of the Code or (b) if the
Board does not have two members who meet this criteria, the Board.
2.8 COMPANY means Consolidated Communications Holdings, Inc. and
any successor to Consolidated Communications Holdings, Inc.
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2.9 DIRECTOR means any member of the Board who is not an
employee of the Company or a Parent or Subsidiary or an affiliate (as
such term is defined in Rule 405 of the 1933 Act) of the Company.
2.10 ELIGIBLE EMPLOYEE means an employee of the Company or any
Subsidiary or Parent to whom the Committee decides for reasons
sufficient to the Committee to make a grant under this Plan.
2.11 FAIR MARKET VALUE means either (a) the closing price on any
date for a share of Stock as reported by THE WALL STREET JOURNAL or,
if THE WALL STREET JOURNAL no longer reports such closing price, such
closing price as reported by a newspaper or trade journal selected by
the Committee or, if no such closing price is available on such date,
(b) such closing price as so reported in accordance with
Section 2.11(a) for the immediately preceding business day, or, if no
newspaper or trade journal reports such closing price or if no such
price quotation is available, (c) the price which the Committee acting
in good faith determines through any reasonable valuation method that
a share of Stock might change hands between a willing buyer and a
willing seller, neither being under any compulsion to buy or to sell
and both having reasonable knowledge of the relevant facts.
2.12 GOOD REASON means with respect to any Eligible Employee or
Director:
(a) the material reduction after the Change Effective Date
in the individual's base salary and/or bonus
opportunity without the individual's express written
consent;
(b) the material reduction after the Change Effective Date
in the scope, importance or prestige of individual's
duties, responsibilities or powers at the Company
without the individual's express written consent; or
(c) the Company transfers the individual's primary work
site to a new primary work site which is more than 30
miles (measured along a straight line) from the
individual's then current primary work site unless such
new primary work site is closer (measured along a
straight line) to the individual's primary residence
than individual's then current primary work site;
provided however;
(d) no such act or omission shall be treated as "Good
Reason" under this Plan unless:
(i) (A) The individual delivers to the Committee a
detailed, written statement of the basis for the
individual's belief that such act or omission
constitutes Good Reason, (B) the individual
delivers such statement before the later of (I)
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the end of the ninety (90) day period which starts
on the date there is an act or omission which
forms the basis for the individual's belief that
Good Reason exists or (II) the end of the period
mutually agreed upon for purposes of this
paragraph in writing by the individual and the
Committee, (C) the individual gives the Committee
a thirty (30) day period after the delivery of
such statement to cure the basis for such belief
and (D) the Individual actually submits his or her
written resignation to the Committee during the
sixty (60) day period which begins immediately
after the end of such thirty (30) day period if
the individual reasonably and in good faith
determines that Good Reason continues to exist
after the end of such thirty (30) day period; or
(ii) the Company states in writing to the individual
that the individual has the right to treat any
such act or omission as Good Reason under this
Plan and the individual resigns during the sixty
(60) day period which starts on the date such
statement is actually delivered to the individual.
2.13 GRANT means the award of an Option, Stock Appreciation
Right, Stock Grant or Stock Unit made under the Plan.
2.14 ISO means an option granted under this Plan to purchase
Stock which is intended to satisfy the requirements of Section 422 of
the Code.
2.15 1933 ACT means the Securities Act of 1933, as amended.
2.16 1934 ACT means the Securities Exchange Act of 1934, as
amended.
2.17 NON-ISO means an option granted under this Plan to purchase
Stock which is intended to fail to satisfy the requirements of
Section 422 of the Code.
2.18 OPTION means an ISO or a Non-ISO which is granted under
Section 7.
2.19 OPTION CERTIFICATE means the certificate (whether in
electronic or written form) which sets forth the terms and conditions
of an Option granted under this Plan.
2.20 OPTION PRICE means the price which shall be paid to purchase
one share of Stock upon the exercise of an Option granted under this
Plan.
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2.21 PARENT means any corporation which is a parent corporation
(within the meaning of Section 424(e) of the Code) of the Company.
2.22 PERFORMANCE PERIOD means a performance period described in
Section 9.5 and Section 10.
2.23 PLAN means this Consolidated Communications Holdings, Inc.
2005 Long-Term Incentive Plan, as Amended and Restated Effective May
5, 2009 and as amended from time to time thereafter.
2.24 RULE 16b-3 means the exemption under Rule 16b-3 to
Section 16(b) of the 1934 Act or any successor to such rule.
2.25 SAR VALUE means the value assigned by the Committee to a
share of Stock in connection with the grant of a Stock Appreciation
Right under Section 8.
2.26 STOCK means the common stock of the Company.
2.27 STOCK APPRECIATION RIGHT means a right which is granted
under Section 8 to receive the appreciation in a share of Stock.
2.28 STOCK APPRECIATION RIGHT CERTIFICATE means the certificate
(whether in electronic or written form) which sets forth the terms and
conditions of a Stock Appreciation Right which is not granted as part
of an Option.
2.29 STOCK GRANT means a grant under Section 9 which is designed
to result in the issuance of the number of shares of Stock described
in such grant rather than a payment in cash based on the Fair Market
Value of such shares of Stock.
2.30 STOCK GRANT CERTIFICATE means the certificate (whether in
electronic or written form) which sets forth the terms and conditions
of a Stock Grant or a Stock Unit Grant.
2.31 STOCK UNIT GRANT means a grant under Section 9 which is
designed to result in the payment of either cash (based on the Fair
Market Value of the number of shares of Stock described in such grant)
or Stock (based on the issuance of the number of shares of Stock
described in such grant), as determined in the sole discretion of the
Committee at the time of grant.
2.32 SUBSIDIARY means a corporation which is a subsidiary
corporation (within the meaning of Section 424(f) of the Code) of the
Company.
2.33 TEN PERCENT STOCKHOLDER means a person who owns (after
taking into account the attribution rules of Section 424(d) of the
Code) more than ten percent of the total combined voting power of all
classes of stock of either the Company, a Subsidiary or Parent.
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SECTION 3.
SHARES AND GRANT LIMITS
-----------------------
3.1 SHARES RESERVED. There shall (subject to Section 14) be
reserved for issuance under this Plan 750,000 shares of Stock
(1,650,000 shares of Stock as of March 1, 2010). No more than 750,000
shares of Stock (1,650,000 shares of Stock as of March 1, 2010) shall
be issued in connection with the exercise of ISOs.
3.2 SOURCE OF SHARES. The shares of Stock described in
Section 3.1 shall be reserved to the extent that the Company deems
appropriate from authorized but unissued shares of Stock and from
shares of Stock which have been reacquired by the Company. All shares
of Stock described in Section 3.1 shall remain available for issuance
under this Plan until issued pursuant to the exercise of an Option or
a Stock Appreciation Right or issued pursuant to a Stock Grant, and
any such shares of stock which are issued pursuant to an Option, a
Stock Appreciation Right or a Stock Grant which are forfeited
thereafter shall again become available for issuance under this Plan.
Finally, if the Option Price under an Option is paid in whole or in
part in shares of Stock or if shares of Stock are tendered to the
Company in satisfaction of any condition to a Stock Grant, such shares
thereafter shall become available for issuance under this Plan and
shall be treated the same as any other shares available for issuance
under this Plan.
3.3 USE OF PROCEEDS. The proceeds which the Company receives
from the sale of any shares of Stock under this Plan shall be used for
general corporate purposes and shall be added to the general funds of
the Company.
3.4 GRANT LIMITS. No Eligible Employee or Director in any
calendar year shall be granted an Option to purchase (subject to
Section 13) more than 300,000 shares of Stock or a Stock Appreciation
Right based on the appreciation with respect to (subject to
Section 14) more than 300,000 shares of Stock, and no Stock Grant or
Stock Unit Grant shall be made to any Eligible Employee or Director in
any calendar year where the Fair Market Value of the Stock subject to
such grant on the date of the grant exceeds $6,000,000. No more than
300,000 non-forfeitable shares of Stock shall (subject to Section 14)
be issued pursuant to Stock Grants or Stock Unit Grants under
Section 9, and no more than $5,000,000 may be paid to any Eligible
Employee under any Cash Incentive Program for each year of each
Performance Period under such program.
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SECTION 4.
EFFECTIVE DATE
--------------
4.1 EFFECTIVE DATE. The Plan was initially approved by the
stockholders of the Company, and became effective, as of July 21,
2005. The Plan is hereby amended and restated, effective as of May 5,
2009, subject to approval by the stockholders of the Company at the
Company's annual meeting of stockholders to be held on May 5, 2009 and
any adjournment or postponement thereof.
4.2 STOCKHOLDER APPROVAL. In the event the Plan is not approved
by stockholders at the Company's 2009 annual meeting, (a) the Plan as
amended and restated shall have no effect; (b) the terms of the Plan
as in effect immediately prior to the amendment and restatement shall
remain in effect and, to the extent permitted under those terms, shall
apply to all Grants and Cash Incentive Program payments made on or
after May 5, 2009; and (c) any Grants and Cash Incentive Program
payments made on or after May 5, 2009 not permitted under the terms of
the Plan as in effect immediately prior to the amendment and
restatement shall be cancelled.
SECTION 5.
COMMITTEE
---------
This Plan shall be administered by the Committee. The Committee
acting in its absolute discretion shall exercise such powers and take
such action as expressly called for under this Plan and, further, the
Committee shall have the power to interpret this Plan and (subject to
Section 15 and Section 16 and Rule 16b-3) to take such other action in
the administration and operation of this Plan as the Committee deems
equitable under the circumstances, which action shall be binding on
the Company, on each affected Eligible Employee or Director and on
each other person directly or indirectly affected by such action.
Furthermore, the Committee as a condition to making any grant under
this Plan to any Eligible Employee or Director shall have the right to
require him or her to execute an agreement which makes the Eligible
Employee or Director subject to non-competition provisions and other
restrictive covenants which run in favor of the Company.
SECTION 6.
ELIGIBILITY
-----------
Only Eligible Employees shall be eligible for a grant of ISOs
under this Plan, and only Eligible Employees shall be eligible to
participate in any Cash Incentive Program. All Eligible Employees and
all Directors shall be eligible for a grant of Non-ISOs, Stock
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Appreciation Rights, Stock Grants and Stock Unit Grants under this
Plan.
SECTION 7.
OPTIONS
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7.1 COMMITTEE ACTION. The Committee acting in its absolute
discretion shall have the right to grant Options to Eligible Employees
and to Directors under this Plan from time to time to purchase shares
of Stock, but the Committee shall not (subject to Section 14) take any
action, whether through amendment, cancellation, replacement grants,
or any other means, to reduce the Option Price of any outstanding
Options absent the approval of the Company's stockholders. Each grant
of an Option to a Eligible Employee or Director shall be evidenced by
an Option Certificate, and each Option Certificate shall set forth
whether the Option is an ISO or a Non-ISO and shall set forth such
other terms and conditions of such grant as the Committee acting in
its absolute discretion deems consistent with the terms of this Plan;
however, (a) if the Committee grants an ISO and a Non-ISO to a
Eligible Employee on the same date, the right of the Eligible Employee
to exercise the ISO shall not be conditioned on his or her failure to
exercise the Non-ISO and (b) if the only condition to exercise of the
Option is the completion of a period of service, such period of
service shall be no less than the one (1) year period which starts on
the date as of which the Option is granted unless the Committee
determines that a shorter period of service (or no period of service)
better serves the Company's interest.
7.2 $100,000 LIMIT. No Option shall be treated as an ISO to the
extent that the aggregate Fair Market Value of the Stock subject to
the Option which would first become exercisable in any calendar year
exceeds $100,000. Any such excess shall instead automatically be
treated as a Non-ISO. The Committee shall interpret and administer
the ISO limitation set forth in this Section 7.2 in accordance with
Section 422(d) of the Code, and the Committee shall treat this Section
7.2 as in effect only for those periods for which Section 422(d) of
the Code is in effect.
7.3 OPTION PRICE. The Option Price for each share of Stock
subject to an Option shall be no less than the Fair Market Value of a
share of Stock on the date the Option is granted; provided, however,
if the Option is an ISO granted to an Eligible Employee who is a Ten
Percent Stockholder, the Option Price for each share of Stock subject
to such ISO shall be no less than 110% of the Fair Market Value of a
share of Stock on the date such ISO is granted.
7.4 PAYMENT. The Option Price shall be payable in full upon the
exercise of any Option and, at the discretion of the Committee, an
Option Certificate can provide for the payment of the Option Price
either in cash, by check or in Stock which is acceptable to the
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Committee, through any cashless exercise procedure which is effected
by an unrelated broker through a sale of Stock in the open market and
which is acceptable to the Committee, by directing the Company to
withhold shares of Stock otherwise issuable in connection with the
exercise of the Option having a Fair Market Value equal to the
exercise price, or in any combination of such forms of payment. Any
payment made in Stock shall be treated as equal to the Fair Market
Value of such Stock on the date the certificate for such Stock (or
proper evidence of such certificate) is presented to the Committee or
its delegate in such form as acceptable to the Committee.
7.5 EXERCISE.
(a) EXERCISE PERIOD. Each Option granted under this Plan
shall be exercisable in whole or in part at such time
or times as set forth in the related Option
Certificate, but no Option Certificate shall make an
Option exercisable on or after the earlier of
(i) the date which is the fifth anniversary of the
date the Option is granted, if the Option is an
ISO and the Eligible Employee is a Ten Percent
Stockholder on the date the Option is granted, or
(ii) the date which is the tenth anniversary of the
date the Option is granted, if the Option is (A) a
Non-ISO or (B) an ISO which is granted to an
Eligible Employee who is not a Ten Percent
Stockholder on the date the Option is granted.
(b) TERMINATION OF STATUS AS ELIGIBLE EMPLOYEE OR DIRECTOR.
Subject to Section 7.5(a), an Option Certificate may
provide for the exercise of an Option after an Eligible
Employee's or a Director's status as such has
terminated for any reason whatsoever, including death
or disability.
SECTION 8.
STOCK APPRECIATION RIGHTS
-------------------------
8.1 COMMITTEE ACTION. The Committee acting in its absolute
discretion shall have the right to grant Stock Appreciation Rights to
Eligible Employees and to Directors under this Plan from time to time,
and each Stock Appreciation Right grant shall be evidenced by a Stock
Appreciation Right Certificate or, if such Stock Appreciation Right is
granted as part of an Option, shall be evidenced by the Option
Certificate for the related Option.
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8.2 TERMS AND CONDITIONS.
(a) STOCK APPRECIATION RIGHT CERTIFICATE. If a Stock
Appreciation Right is granted independent of an Option,
such Stock Appreciation Right shall be evidenced by a
Stock Appreciation Right Certificate, and such
certificate shall set forth the number of shares of
Stock on which the Eligible Employee's or Director's
right to appreciation shall be based and the SAR Value
of each share of Stock. Such SAR Value shall be no
less than the Fair Market Value of a share of Stock on
the date that the Stock Appreciation Right is granted.
The Stock Appreciation Right Certificate shall set
forth such other terms and conditions for the exercise
of the Stock Appreciation Right as the Committee deems
appropriate under the circumstances, but no Stock
Appreciation Right Certificate shall make a Stock
Appreciation Right exercisable on or after the date
which is the tenth anniversary of the date such Stock
Appreciation Right is granted.
(b) OPTION CERTIFICATE. If a Stock Appreciation Right is
granted together with an Option, such Stock
Appreciation Right shall be evidenced by an Option
Certificate, the number of shares of Stock on which the
Eligible Employee's or Director's right to appreciation
shall be based shall be the same as the number of
shares of Stock subject to the related Option, and the
SAR Value for each such share of Stock shall be no less
than the Option Price under the related Option. Each
such Option Certificate shall provide that the exercise
of the Stock Appreciation Right with respect to any
share of Stock shall cancel the Eligible Employee's or
Director's right to exercise his or her Option with
respect to such share and, conversely, that the
exercise of the Option with respect to any share of
Stock shall cancel the Eligible Employee's or
Director's right to exercise his or her Stock
Appreciation Right with respect to such share. A Stock
Appreciation Right which is granted as part of an
Option shall be exercisable only while the related
Option is exercisable. The Option Certificate shall
set forth such other terms and conditions for the
exercise of the Stock Appreciation Right as the
Committee deems appropriate under the circumstances.
(c) MINIMUM PERIOD OF SERVICE. If the only condition to
exercise of a Stock Appreciation Right is the
completion of a period of service, such period of
service shall be no less than the one (1) year period
which starts on the date as of which the Stock
Appreciation Right is granted unless the Committee
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determines that a shorter period of service (or no
period of service) better serves the Company's
interest.
8.3 EXERCISE. A Stock Appreciation Right shall be exercisable
only when the Fair Market Value of a share of Stock on which the right
to appreciation is based exceeds the SAR Value for such share, and the
payment due on exercise shall be based on such excess with respect to
the number of shares of Stock to which the exercise relates. An
Eligible Employee or Director upon the exercise of his or her Stock
Appreciation Right shall receive a payment from the Company in cash or
in Stock issued under this Plan, or in a combination of cash and
Stock, and the number of shares of Stock issued shall be based on the
Fair Market Value of a share of Stock on the date the Stock
Appreciation Right is exercised. The Committee acting in its absolute
discretion shall have the right to determine the form and time of any
payment under this Section 8.3.
SECTION 9.
STOCK GRANTS AND STOCK UNIT GRANTS
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9.1 COMMITTEE ACTION. The Committee acting in its absolute
discretion shall have the right to make Stock Grants and Stock Unit
Grants to Eligible Employees and Directors. Each Stock Grant and each
Stock Unit Grant shall be evidenced by a Stock Grant Certificate, and
each Stock Grant Certificate shall set forth the conditions, if any,
under which Stock will be issued under the Stock Grant or Stock Unit
Grant or cash will be paid under the Stock Unit Grant and the
conditions under which the Eligible Employee's or Director's interest
in any Grant will become non-forfeitable.
9.2 CONDITIONS.
(a) CONDITIONS TO ISSUANCE OF STOCK. The Committee acting
in its absolute discretion may make the issuance of
Stock under a Stock Grant, or the issuance of Stock or
payment in cash under a Stock Unit Grant, subject to
the satisfaction of one or more conditions which the
Committee deems appropriate under the circumstances for
Eligible Employees or Directors generally or for an
Eligible Employee or a Director in particular, and the
related Stock Grant Certificate shall set forth each
such condition and the deadline for satisfying each
such condition. Stock subject to a Stock Grant, or the
Stock or cash payment subject to a Stock Unit Grant,
shall be issued or paid to an Eligible Employee or
Director only after each such condition, if any, has
been timely satisfied, and any Stock issued in
connection with a Stock Grant shall be held by the
Company pending the satisfaction of the forfeiture
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conditions, if any, under Section 9.2(b) for the
related Stock Grant.
(b) CONDITIONS ON FORFEITURE OF STOCK OR CASH PAYMENT. The
Committee acting in its absolute discretion may make
any cash payment due under a Stock Unit Grant or Stock
issued in the name of an Eligible Employee or Director
under a Stock Grant or Stock Unit Grant non-forfeitable
subject to the satisfaction of one or more objective
employment, performance or other condition that the
Committee acting in its absolute discretion deems
appropriate under the circumstances for Eligible
Employees or Directors generally or for an Eligible
Employee or a Director in particular, and the related
Stock Grant Certificate shall set forth each such
condition, if any, and the deadline, if any, for
satisfying each such condition. An Eligible Employee's
or a Director's non-forfeitable interest in the shares
of Stock underlying a Stock Grant or the cash payable
or Stock issuable under a Stock Unit Grant shall depend
on the extent to which he or she timely satisfies each
such condition. If a share of Stock is issued under
this Section 9.2(b) before a Eligible Employee's or
Director's interest in such share of Stock is non-
forfeitable, (i) [such share of Stock shall not be
available for re-issuance under Section 3 until such
time, if any, as such share of Stock thereafter is
forfeited as a result of a failure to timely satisfy a
forfeiture condition and (ii)] the Company shall have
the right to condition any such issuance on the
Eligible Employee or Director first signing an
irrevocable stock power in favor of the Company with
respect to the forfeitable shares of Stock issued to
such Eligible Employee or Director in order for the
Company to effect any forfeiture called for under the
related Stock Grant Certificate.
(c) MINIMUM PERIOD OF SERVICE. If the only condition to
the forfeiture of a Stock Grant or a Stock Unit Grant
is the completion of a period of service, such period
of service shall be no less than the three (3) year
period which starts on the date as of which the Stock
Grant or Stock Unit Grant is made unless the Committee
determines that a shorter period of service (or no
period of service) better serves the Company's
interest.
9.3 DIVIDENDS, VOTING RIGHTS AND CREDITOR STATUS.
(a) CASH DIVIDENDS. Except as otherwise set forth in
Section 9.3(d) or in a Stock Grant Certificate, if a
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cash dividend is paid on a share of Stock after such
Stock has been issued under a Stock Grant, or a cash
dividend would be payable with respect to the shares of
Stock described in a Stock Unit Grant had such shares
been outstanding, but in each case before the first
date that an Eligible Employee's or a Director's
interest in such Stock or Stock Unit (i) is forfeited
completely or (ii) becomes completely non-forfeitable,
the Company shall pay such cash dividend directly to
such Eligible Employee or Director.
(b) STOCK DIVIDENDS. Except as otherwise set forth in
Section 9.3(d), if a Stock dividend is paid on a share
of Stock after such Stock has been issued under a Stock
Grant, or a Stock dividend would be payable with
respect to the shares of Stock described in a Stock
Unit Grant had they been outstanding, but in each case
before the first date that an Eligible Employee's or a
Director's interest in such Stock or Stock Unit (i) is
forfeited completely or (ii) becomes completely non-
forfeitable, the Company shall hold such dividend Stock
and pay such dividend Stock only upon, and to the
extent, the conditions under Section 9.2(b) applicable
to the related Stock Grant or Stock Unit Gran are
satisfied.
(c) OTHER. Except as otherwise set forth in Section
9.3(d), if a dividend (other than a dividend described
in Section 9.3(a) or Section 9.3(b)) is paid with
respect to a share of Stock after such Stock has been
issued under a Stock Grant, or such dividend would be
payable with respect to the shares of Stock described
in a Stock Unit Grant had they been outstanding, but in
each case before the first date that an Eligible
Employee's or a Director's interest in such Stock or
Stock Unit (i) is forfeited completely or (ii) becomes
completely non-forfeitable, the Company shall
distribute or hold such dividend in accordance with
such rules as the Committee shall adopt with respect to
each such dividend.
(d) PERFORMANCE-BASED GRANTS. Notwithstanding the
foregoing provisions of this Section 9.3, in the case
of any dividends otherwise payable as described in
Section 9.3(a), (b) or (c) with respect to a Stock
Grant or Stock Unit Grant subject to the attainment of
performance goals as described in Section 9.5, the
Company shall hold such dividends and pay such
dividends only upon, and to the extent, the conditions
under Section 9.2(b) applicable to the related Stock
Grant or Stock Unit Grant are satisfied.
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(e) VOTING. Except as otherwise set forth in a Stock Grant
Certificate, an Eligible Employee or a Director shall
have the right to vote the Stock issued under his or
her Stock Grant during the period which comes after
such Stock has been issued under a Stock Grant but
before the first date that an Eligible Employee's or
Director's interest in such Stock (i) is forfeited
completely or (ii) becomes completely non-forfeitable.
9.4 SATISFACTION OF FORFEITURE CONDITIONS. A share of Stock
shall cease to be subject to a Stock Grant or Stock Unit Grant at such
time as an Eligible Employee's or a Director's interest in such Grant
becomes non-forfeitable under this Plan, and the certificate or other
evidence of ownership representing such share, or if applicable the
cash payment, shall be transferred to the Eligible Employee or
Director as soon as practicable thereafter.
9.5 PERFORMANCE-BASED STOCK GRANTS AND STOCK UNIT GRANTS.
(a) GENERAL. The Committee in its discretion may make
Stock Grants and Stock Unit Grants to Eligible
Employees and Directors subject to one or more
conditions related to one or more performance goals,
including the performance goals described in
Section 9.5(b) that qualify the Grant as "performance-
based compensation" under Section 162(m) of the Code.
(b) PERFORMANCE GOALS. A performance goal is described in
this Section 9.5(b) if such goal relates to (i) free
cash flow, (ii) free cash flow per share, (iii)
earnings before interest, taxes, depreciation, and
amortization ("EBITDA"), (iv) improvement in EBITDA
margins, (v) revenue growth, (vi) maintenance of
targeted capital structure and leverage ratios, (vii)
pre or after-tax net income, (viii) earnings per share,
(ix) share price performance, (x) total stockholder
returns, (xi) economic value added, (xii) dividend
payout ratio, (xiii) broadband subscriber net
additions, (xiv) customer service operating results,
(xv) network performance and (xvi) any other criteria
the Committee deems appropriate. Performance goals may
be particular to one or more lines of business or
Subsidiaries or may be based on the performance of the
Company and its Subsidiaries as a whole.
(c) ADJUSTMENTS. When the Committee determines whether a
performance goal has been satisfied for any Performance
Period established by the Committee, the Committee may
exclude any or all "extraordinary items" as determined
under U.S. generally accepted accounting principles and
any other unusual or non-recurring items, including,
without limitation, the charges or costs associated
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with restructurings of the Company, discontinued
operations, and the cumulative effects of accounting
changes and, further, may take into account any unusual
or non-recurring events affecting the Company, changes
in applicable tax laws or accounting principles, or
such other factors as the Committee may determine are
reasonable and appropriate under the circumstances
(including, without limitation, taking into account any
factor that would result in the Company's paying non-
deductible compensation to an Eligible Employee).
(d) PERFORMANCE PERIOD. With respect to each Performance
Period established by the Committee, (i) the Committee
shall establish such performance goals relating to one
or more of the business criteria selected pursuant to
Section 9.5(b), and (ii) the Committee shall establish
targets for achievement of performance goals. The
performance goals and performance targets established
by the Committee may be identical for all Eligible
Employees and Directors for a given Performance Period
or, at the discretion of the Committee, may differ
among them. Following the completion of each
Performance Period, the Committee shall determine the
extent to which performance goals for that Performance
Period have been achieved and shall authorize the award
of Stock Grants, Stock Units, shares of Stock or cash,
as applicable, to the Eligible Participants and
Directors for whom the targets were established, in
accordance with the terms of the applicable Grant
Certificates.
SECTION 10.
CASH INCENTIVE PROGRAM
----------------------
10.1 GENERAL. The Committee may adopt one or more Cash Incentive
Programs under this Plan, and each such Program shall run for a
Performance Period which shall be expressed in whole years, from one
to five years. Such Cash Incentive Program shall be separate and
distinct from any other cash incentive plan or program sponsored by
the Company. The Committee shall determine the terms and conditions
for any Eligible Employee to participate in each such Program, and
payments shall be made thereunder based on the satisfaction of one or
more performance goals, including the performance goals described in
Section 10.2 that qualify the payments as "performance-based
compensation" under Section 162(m) of the Code. A performance goal
may be set in any manner determined by the Committee, including
looking to achievement on an absolute or relative basis in relation to
peer groups or indexes.
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10.2 PERFORMANCE GOALS. A performance goal is described in this
Section 10.2 if such goal relates to (a) free cash flow, (b) free cash
flow per share, (c) earnings before interest, taxes, depreciation, and
amortization ("EBITDA"), (d) improvement in EBITDA margins, (e)
revenue growth, (f) maintenance of targeted capital structure and
leverage ratios, (g) pre or after-tax net income, (h) earnings per
share, (i) share price performance, (j) total stockholder returns, (k)
economic value added, (l) dividend payout ratio, (m) broadband
subscriber net additions, (n) customer service operating results, (o)
network performance and (p) any other criteria the Committee deems
appropriate. Performance goals may be particular to one or more lines
of business or Subsidiaries or may be based on the performance of the
Company and its Subsidiaries as a whole.
10.3 ADJUSTMENTS. When the Committee determines whether a
performance goal has been satisfied for any period, the Committee may
exclude any or all "extraordinary items" as determined under U.S.
generally accepted accounting principles and any other unusual or non-
recurring items, including, without limitation, the charges or costs
associated with restructurings of the Company, discontinued
operations, and the cumulative effects of accounting changes and,
further, may take into account any unusual or non-recurring events
affecting the Company, changes in applicable tax laws or accounting
principles, or such other factors as the Committee may determine are
reasonable and appropriate under the circumstances (including, without
limitation, taking into account any factor that would result in the
Company's paying nondeductible compensation to an Eligible Employee).
10.4 PERFORMANCE PERIOD. With respect to each Performance Period
established by the Committee, (i) the Committee shall establish such
performance goals relating to one or more of the business criteria
selected pursuant to Section 10.2, and (ii) the Committee shall
establish targets for Eligible Employees for achievement of
performance goals. The performance goals and performance targets
established by the Committee may be identical for all Eligible
Employees for a given Performance Period or, at the discretion of the
Committee, may differ among Eligible Employees. Following the
completion of each Performance Period, the Committee shall determine
the extent to which performance goals for that Performance Period have
been achieved and shall authorize payment in accordance with the terms
of the Cash Incentive Program.
SECTION 11.
CONDITIONS OF TRANSFER
----------------------
Each Option and each Stock Appreciation Right granted under this
Plan and each Stock Grant and Stock Unit Grant made under this Plan
shall be transferable by the Eligible Employee or Director to whom the
related grant is made only by will or the laws of descent and
distribution, unless the Committee authorizes a transfer under
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circumstances other than by will or the laws of descent and
distribution in accordance with this Section 11. A transfer (other
than by will or the laws of descent and distribution) shall be
authorized in accordance with this Section 11 only if (a) an Eligible
Employee or Director requests in writing that the Committee authorize
such transfer, (b) the Eligible Employee or Director demonstrates to
the Committee's satisfaction that the transfer is contemplated in
connection with a professionally prepared estate plan for the Eligible
Employee or Director and (c) the Committee acting in its absolute
discretion determines that (1) the requested transfer is not
inconsistent with the purpose of this Plan, (2) there is no legal
prohibition against such transfer and (3) there will be a basis on
which to register any related shares of Stock under the 1933 Act or
there will be a registration exemption under the 1933 Act if the
request is granted. If a transfer is authorized in accordance with
this Section 11, the related Option, Stock Appreciation Right, Stock
Grant or Stock Unit Grant shall by operation of this Section 11 remain
immediately following such transfer subject to the same terms and
conditions as in effect immediately before such transfer, and no
shares of Stock shall be issued to any person pursuant to such
transfer and no cash shall be paid to any such person pursuant to such
transfer before the Eligible Employee or Director satisfies in full
all of the conditions for such issuance or payment and pays, or makes
provision satisfactory to the Committee for the payment of, any
applicable taxes due with respect to such issuance or payment. The
Committee as a condition to any authorization under this Section 11
may require an Eligible Employee or Director to reimburse the Company
for any additional expenses the Company incurs to register any
affected shares of Stock under the 1933 Act. Finally, if a transfer
is authorized in accordance with this Section 11, the Eligible
Employee or a Director shall by operation of this Section 11 have the
responsibility to notify any transferee of any events or conditions
which affect any related Option, Stock Appreciation Right, Stock Grant
or Stock Unit Grant, including any deadline for taking any action with
respect to any such Option, Stock Appreciation Right, Stock Grant or
Stock Unit Grant, and neither the Committee nor the Company shall
have any responsibility whatsoever to notify any transferee of any
such events or conditions. Subject to Section 17.5, the restrictions
on transferability described in this Section 11 shall not apply to
shares of Stock that have actually been delivered to the transferee as
a result of the exercise of an Option or Stock Appreciation Right or
the lapse of all restrictions with respect to a Stock Grant.
SECTION 12.
SECURITIES REGISTRATION
----------------------
As a condition to the receipt of shares of Stock under this Plan,
the Eligible Employee or Director shall, if so requested by the
Company, agree to hold such shares of Stock for investment and not
with a view of resale or distribution to the public and, if so
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requested by the Company, shall deliver to the Company a written
statement satisfactory to the Company to that effect. Furthermore, if
so requested by the Company, the Eligible Employee or Director shall
make a written representation to the Company that he or she will not
sell or offer for sale any of such Stock unless a registration
statement shall be in effect with respect to such Stock under the 1933
Act and any applicable state securities law or he or she shall have
furnished to the Company an opinion in form and substance satisfactory
to the Company of legal counsel satisfactory to the Company that such
registration is not required. Certificates or other evidence of
ownership representing the Stock transferred upon the exercise of an
Option or Stock Appreciation Right or upon the lapse of the forfeiture
conditions, if any, on any Stock Grant may at the discretion of the
Company bear a legend to the effect that such Stock has not been
registered under the 1933 Act or any applicable state securities law
and that such Stock cannot be sold or offered for sale in the absence
of an effective registration statement as to such Stock under the 1933
Act and any applicable state securities law or an opinion in form and
substance satisfactory to the Company of legal counsel satisfactory to
the Company that such registration is not required.
SECTION 13.
LIFE OF PLAN
------------
Notwithstanding anything to the contrary contained herein, no
Grant shall be made under this Plan, and no Cash Incentive Program
shall commence, on or after May 5, 2019.
SECTION 14.
ADJUSTMENT
----------
14.1 CAPITAL STRUCTURE. The grant caps described in Section 3.4,
the number, kind or class (or any combination thereof) of shares of
Stock subject to outstanding Options and Stock Appreciation Rights
granted under this Plan and the Option Price of such Options and the
SAR Value of such Stock Appreciation Rights as well as the number,
kind or class (or any combination thereof) of shares of Stock subject
to outstanding Stock Grants and Stock Unit Grants made under this Plan
shall be adjusted by the Committee in a reasonable and equitable
manner to preserve immediately after
(a) any equity restructuring or change in the
capitalization of the Company, including, but not
limited to, spin offs, stock dividends, large non-
reoccurring dividends, rights offerings or stock
splits, or
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(b) any other transaction described in Section 424(a) of
the Code which does not constitute a Change in Control
of the Company
the aggregate intrinsic value of each such outstanding Option, Stock
Appreciation Right, Stock Grant and Stock Unit Grant immediately
before such restructuring or recapitalization or other transaction.
14.2 AVAILABLE SHARES. If any adjustment is made with respect to
any outstanding Option, Stock Appreciation Right, Stock Grant or Stock
Unit Grant under Section 14.1, then the Committee shall adjust the
number, kind or class (or any combination thereof) of shares of Stock
reserved under Section 3.1 so that there is a sufficient number, kind
and class of shares of Stock available for issuance pursuant to each
such Option, Stock Appreciation Right, Stock Grant and Stock Unit
Grant as adjusted under Section 14.1 without seeking the approval of
the Company's stockholders for such adjustment unless such approval is
required under applicable law or the rules of the stock exchange on
which shares of Stock are traded. Furthermore, the Committee shall
have the absolute discretion to further adjust such number, kind or
class (or any combination thereof) of shares of Stock reserved under
Section 3.1 in light of any of the events described in Section 14.1(a)
and Section 14.1(b) to the extent the Committee acting in good faith
determinates that a further adjustment would be appropriate and proper
under the circumstances and in keeping with the purposes of this Plan
without seeking the approval of the Company's stockholders for such
adjustment unless such approval is required under applicable law or
the rules of the stock exchange on which shares of Stock are traded.
14.3 TRANSACTIONS DESCRIBED IN SECTION 424 OF THE CODE. If
there is a corporate transaction described in Section 424(a) of the
Code which does not constitute a Change in Control of the Company, the
Committee as part of any such transaction shall have right to make
Stock Grants, Stock Unit Grants and Option and Stock Appreciation
Right grants (without regard to any limitations set forth under
Section 3.4 of this Plan) to effect the assumption of, or the
substitution for, outstanding stock grants, stock unit grants and
option and stock appreciation right grants previously made by any
other corporation to the extent that such corporate transaction calls
for such substitution or assumption of such outstanding stock grants,
stock unit grants and stock option and stock appreciation right
grants. Furthermore, if the Committee makes any such grants as part
of any such transaction, the Committee shall have the right to
increase the number of shares of Stock available for issuance under
Section 3.1 by the number of shares of Stock subject to such grants
without seeking the approval of the Company's stockholders for such
adjustment unless such approval is required under applicable law or
the rules of the stock exchange on which shares of Stock are traded.
14.4 FRACTIONAL SHARES. If any adjustment under this Section 14
would create a fractional share of Stock or a right to acquire a
fractional share of Stock under any Option, Stock Appreciation Right
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or Stock Grant, such fractional share shall be disregarded and the
number of shares of Stock reserved under this Plan and the number
subject to any Options or Stock Appreciation Right grants and Stock
Grants shall be the next lower number of shares of Stock, rounding all
fractions downward. An adjustment made under this Section 14 by the
Committee shall be conclusive and binding on all affected persons.
SECTION 15.
CHANGE IN CONTROL
-----------------
If there is a Change in Control of the Company and there is no
assumption of the Options, Stock Appreciation Rights, Stock Units or
Stock Unit Grants that are outstanding immediately prior to the Change
Effective Date and no substitution of comparable grants with
comparable intrinsic values in connection with such Change in Control,
then as of the Change Effective Date for such Change in Control, any
and all conditions to the exercise of all such outstanding Options and
Stock Appreciation Rights on such date and any and all outstanding
issuance and forfeiture conditions on any such Stock Grants and Stock
Unit Grants on such date automatically shall be deemed 100% satisfied
as of such Change Effective Date, and the Board shall have the right
(to the extent expressly required as part of such transaction) to
cancel such Options, Stock Appreciation Rights, Stock Grants and Stock
Unit Grants after providing each Eligible Employee and Director a
reasonable period to exercise his or her Options and Stock
Appreciation Rights and to take such other action as necessary or
appropriate to receive the Stock subject to any Stock Grants and the
cash payable under any Stock Unit Grants; provided, if any issuance or
forfeiture condition described in this Section 15 relates to
satisfying any performance goal and there is a target for such goal,
such issuance or forfeiture condition shall be deemed satisfied under
this Section 15 only to the extent of such target unless such target
has been exceeded before the Change Effective Date, in which event
such issuance or forfeiture condition shall be deemed satisfied to the
extent such target had been so exceeded.
If there is a Change in Control of the Company and there is an
assumption of an Eligible Employee's or Director's Options, Stock
Appreciation Rights, Stock Units or Stock Unit Grants that are
outstanding immediately prior to the Change Effective Date or a
substitution of comparable grants with comparable intrinsic values in
connection with such Change in Control and the employment of such
Eligible Employee is either terminated without Cause or the Eligible
Employee terminates for Good Reason or a Director is asked to resign
other than for Cause, within twenty-four (24) months following the
Change Effective Date, then any and all conditions to the exercise of
all such Options and Stock Appreciation Rights and any and all
outstanding issuance and forfeiture conditions on any Stock Grants and
Stock Unit Grants shall be deemed 100% satisfied; provided, that if
any issuance or forfeiture condition described in this Section15
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relates to satisfying any performance goal and there is a target for
such goal, such issuance or forfeiture condition shall be deemed
satisfied under this Section 15 only to the extent of the target,
unless such target has been exceeded before the date of such
termination, in which event such issuance or forfeiture condition
shall be deemed satisfied to the extent such target had been so
exceeded.
A Change in Control shall affect payments under a Cash Incentive
Program only to the extent expressly provided in such Cash Incentive
Program, and a Change in Control shall affect a Stock Appreciation
Right or Stock Unit Grant which is subject to Section 409A of the Code
only if the Change in Control also constitutes a change in the
ownership or effective control of Company or in the ownership of a
substantial portion of the assets of the Company within the meaning of
Section 409A(a)(2)(A)(v) of the Code.
SECTION 16.
AMENDMENT OR TERMINATION
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This Plan may be amended by the Board from time to time to the
extent that the Board deems necessary or appropriate; provided,
however, (a) no amendment shall be made absent the approval of the
stockholders of the Company to the extent such approval is required
under applicable law or the rules of the stock exchange on which
shares of Stock are listed, and (b) no amendment shall be made to
Section 15 on or after the date of any Change in Control which might
adversely affect any rights which otherwise would vest on the related
Change Effective Date. The Board also may suspend granting Options or
Stock Appreciation Rights or making Stock Grants or Stock Unit Grants
under this Plan at any time and may terminate this Plan at any time;
provided, however, the Board shall not have the right unilaterally to
modify, amend or cancel any Option or Stock Appreciation Right granted
or Stock Grant made before such suspension or termination unless
(i) the Eligible Employee or Director consents in writing to such
modification, amendment or cancellation or (ii) there is a dissolution
or liquidation of the Company or a transaction described in
Section 14.1 or Section 15.
SECTION 17.
MISCELLANEOUS
-------------
17.1 STOCKHOLDER RIGHTS. No Eligible Employee or Director shall
have any rights as a stockholder of the Company as a result of the
grant of an Option or a Stock Appreciation Right pending the actual
delivery of the Stock subject to such Option or Stock Appreciation
Right to such Eligible Employee or Director. An Eligible Employee's or
a Director's rights as a stockholder in the shares of Stock which
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remain subject to forfeiture under Section 9.2(b) shall be set forth
in the related Stock Grant Certificate. Subject to Section 17.5, an
Eligible Employee or Director shall have the rights of a stockholder
of the Company with respect to any shares of Stock that have been
actually delivered to such individual as a result of the exercise of
an Option or Stock Appreciation Right or the lapse of all restrictions
with respect to a Stock Grant or Stock Unit Grant.
17.2 NO CONTRACT OF EMPLOYMENT. The grant of an Option or a
Stock Appreciation Right or a Stock Grant or Stock Unit Grant to an
Eligible Employee or Director under this Plan or his or her
participation in a Cash Incentive Program shall not constitute a
contract of employment or a right to continue to serve on the Board
and shall not confer on an Eligible Employee or Director any rights
upon his or her termination of employment or service in addition to
those rights, if any, expressly set forth in this Plan or the related
Option Certificate, Stock Appreciation Right Certificate, Stock Grant
Certificate or Cash Incentive Plan.
17.3 WITHHOLDING. Each Option, Stock Appreciation Right, Stock
Grant and Stock Unit Grant and participation in each Cash Incentive
Plan shall be made subject to the condition that the Eligible Employee
or Director consents to whatever action the Committee directs to
satisfy the minimum statutory federal and state tax withholding
requirements, if any, which the Company determines are applicable to
the exercise of such Option or Stock Appreciation Right or to the
satisfaction of any forfeiture conditions with respect to Stock
subject to a Stock Grant or Stock Unit Grant issued in the name of the
Eligible Employee or Director or to payments under any Cash Incentive
Plan. No withholding shall be effected under this Plan which exceeds
the minimum statutory federal and state withholding requirements.
17.4 CONSTRUCTION. All references to sections (Section) are to
sections (Section) of this Plan unless otherwise indicated. This Plan
shall be construed under the laws of the State of Delaware. Each term
set forth in Section 2 shall, unless otherwise stated, have the
meaning set forth opposite such term for purposes of this Plan and,
for purposes of such definitions, the singular shall include the
plural and the plural shall include the singular. Finally, if there
is any conflict between the terms of this Plan and the terms of any
Option Certificate, Stock Appreciation Right Certificate, Stock Grant
Certificate or Cash Incentive Program, the terms of this Plan shall
control.
17.5 OTHER CONDITIONS. Each Option Certificate, Stock
Appreciation Right Certificate or Stock Grant Certificate may require
that an Eligible Employee or a Director (as a condition to the
exercise of an Option or a Stock Appreciation Right or the issuance of
Stock subject to a Stock Grant) enter into any agreement or make such
representations prepared by the Company, including (without
limitation) any agreement which restricts the transfer of Stock
acquired pursuant to the exercise of an Option or a Stock Appreciation
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Right or a Stock Grant or provides for the repurchase of such Stock by
the Company.
17.6 RULE 16b-3. The Committee shall have the right to amend any
Option, Stock Grant or Stock Appreciation Right to withhold or
otherwise restrict the transfer of any Stock or cash under this Plan
to an Eligible Employee or Director as the Committee deems appropriate
in order to satisfy any condition or requirement under Rule 16b-3 to
the extent Rule 16 of the 1934 Act might be applicable to such grant
or transfer.
17.7 COORDINATION WITH EMPLOYMENT AGREEMENTS AND OTHER
AGREEMENTS. If the Company enters into an employment agreement or
other agreement with an Eligible Employee or Director which expressly
provides for the acceleration in vesting of an outstanding Option,
Stock Appreciation Right, Stock Grant or Stock Unit Grant or of a
payment under a Cash Incentive Plan or for the extension of the
deadline to exercise any rights under an outstanding Option, Stock
Appreciation Right, Stock Grant or Stock Unit Grant, any such
acceleration or extension shall be deemed effected pursuant to, and in
accordance with, the terms of such outstanding Option, Stock
Appreciation Right, Stock Grant or Stock Unit Grant and this Plan even
if such employment agreement or other agreement is first effective
after the date the outstanding Option or Stock Appreciation Right was
granted or the Stock Grant or Stock Unit Grant was made.
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IN WITNESS WHEREOF, the Company has caused its duly authorized
officer to execute this Plan to evidence its adoption of this Plan.
CONSOLIDATED COMMUNICATIONS
HOLDINGS, INC.
By:__________________________
Date:________________________
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