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EXHIBIT 10(l)
XXXXX TELECOM INC.
RESTRICTED STOCK AGREEMENT
PURSUANT TO 1992 STOCK PLAN
(Salary Increase Deferral)
Number of Restricted Shares January 12, 1999
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Xxxxx Telecom Inc., a Delaware corporation (hereinafter called the
"Company"), pursuant to its 1992 Stock Plan, as amended (hereinafter called the
"Plan"), a copy of which is attached hereto as EXHIBIT A and is incorporated
herein by reference, hereby awards unto _________________ (hereinafter called
the "Employee") ________ shares of Common Stock of the Company, par value $1.00
per share (hereinafter called "Common Stock"), as additional compensation for
services rendered to the Company or a subsidiary thereof and in lieu of any
increase in the Employee's salary for a period of two years after the year in
which the Employee last received an increase in salary (except in unusual
circumstances as determined by the Management Compensation Committee, in its
sole discretion), on the terms and subject to the conditions hereinafter set
forth. These shares are referred to in this Agreement as "Restricted Shares"
during the applicable Restriction Period (as defined in paragraph 3(d) hereof).
Acceptance of the Restricted Shares shall be deemed to be agreement by the
Employee to the terms and conditions set forth in this Agreement and the Plan.
Certificates representing the Restricted Shares may not be sold or otherwise
transferred and must be held by the Employee until the end of the applicable
Restriction Period. Until such terms and conditions have lapsed with respect to
any Restricted Shares, the certificate for such shares will bear a legend to the
effect that they were issued or transferred subject to, and may be sold or
otherwise disposed of only in accordance with, the terms of this Agreement and
the Plan.
1. STOCKHOLDER STATUS. Effective upon the date of delivery to the Employee
of certificates for Restricted Shares registered in the Employee's name, the
Employee will be a holder of record of the Restricted Shares and will have all
rights of a stockholder with respect to such shares (including the right to vote
such shares at any meeting of stockholders of the Company and the right to
receive all dividends paid with respect to such shares), subject only to the
terms and conditions imposed by this Agreement and the Plan.
2. EFFECT OF CHANGES IN CAPITALIZATION. The number of Restricted Shares are
subject to adjustment as provided in Section 7 of the Plan. Any additional or
different shares or securities issued as the result of such an adjustment will
be delivered to the Employee and will be deemed to be included within the term
"Restricted Shares." The certificates or other instruments evidencing such
additional or different shares or securities shall bear the legend referred to
in the introductory paragraph; PROVIDED, HOWEVER, that any fractional shares and
any pre-emptive or other rights or warrants to purchase securities issued to the
Employee as a holder of Restricted Shares in connection with a public offering
will be issued to the Employee free and clear of all terms and conditions
imposed by this Agreement and the Plan.
3. LAPSE OF RESTRICTIONS. (a) The restrictions set forth in paragraph 4
below will lapse (i) in four equal consecutive annual installments, each equal
to one-fourth of the original number of Restricted Shares set forth in the first
paragraph of this Agreement, as such number may be adjusted pursuant to
paragraph 2 above (hereinafter called the "Original Number"), at the close of
business on December 31, 2005 and at the close of business on
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each December 31 thereafter, or (ii) with respect to one-eighth of the Original
Number at the end of the first period of ninety-one consecutive calendar days
commencing on or after December 31, 2001 during which the average daily Closing
Price (as defined below in this paragraph 3(a)) of the Company's Common Stock
equals or exceeds $15.00 per share, an additional one-eighth of the Original
Number at the end of the first such period during which such daily Closing Price
equals or exceeds $20.00 per share, an additional one-eighth of the Original
Number at the end of the first such period during which such daily Closing Price
equals or exceeds $25.00 per share and an additional one-eighth of the Original
Number at the end of the first such period during which such daily Closing Price
equals or exceeds $30.00 per share, or (iii) with respect to one-eighth of the
Original Number at the end of the first period of three consecutive fiscal years
of the Company commencing with the fiscal year 1999 during which the average net
income (excluding extraordinary and other non-operating gains and losses) per
share of Common Stock per year ("Average Net Income") equals or exceeds $1.03,
an additional one-eighth of the Original Number at the end of the first such
period during which Average Net Income equals or exceeds $1.13, an additional
one-eighth of the Original Number at the end of the first such period during
which Average Net Income equals or exceeds $1.27 and an additional one-eighth of
the Original Number at the end of the first such period during which Average Net
Income equals or exceeds $1.40, with any such Shares as to which restrictions
lapse pursuant to the preceding clause (ii) or (iii) prior to December 31, 2005
or any December 31 thereafter to be applied against the installments of the
Original Number set forth in clause (i) in the order in which the restrictions
would otherwise have lapsed with respect to such installments on December 31,
2005 and on each December 31 thereafter. The foregoing Closing Price and Average
Net Income amounts are subject to adjustment in the same manner as the price per
share of Options as provided in Section 7 of the Plan.
For purposes of this Agreement, "Closing Price" shall mean the
reported last sale price regular way or, in case no such reported sale takes
place on such day, the average of the reported closing bid and asked prices
regular way for Common Stock of the Company, in either case as reported on the
New York Stock Exchange Composite Tape, or, if at any time the Common Stock of
the Company is not listed or admitted to trading on such Exchange, on the
principal national securities exchange on which the Common Stock of the Company
is listed or admitted to trading, or if not listed or admitted to trading on any
national securities exchange, on the National Association of Securities Dealers
Automated Quotations National Market System or, if the Common Stock of the
Company is not listed or admitted to trading on any national securities exchange
or quoted on such National Market System, the average of the closing bid and
asked prices for Common Stock of the Company in the over-the-counter market as
furnished by any New York Stock Exchange member firm selected from time to time
by the Company for that purpose.
(b) Notwithstanding paragraph 3(a) above, the restrictions set forth in
paragraph 4 below will lapse on all Restricted Shares at the close of business
on the date on which a Change in Control of the Company (as defined below in
this paragraph 3(b)) shall occur; PROVIDED, HOWEVER, that such restrictions will
not lapse on any Restricted Shares with respect to which any amount, as
determined by the Company's independent auditors in accordance with the
principles of sections 280G(d)(3) and (4) of the Internal Revenue Code of 1986,
as amended (the "Code"), when added to any other payment or benefit received or
to be received by the Employee in connection with a Change in Control of the
Company or the termination of the Employee's employment, would not be deductible
by the Company by
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reason of section 280G of the Code; PROVIDED, FURTHER, that no portion of any
such amount with respect to any Restricted Shares and no portion of any such
other payment or benefit shall be taken into account which in the opinion of tax
counsel selected by the Company's independent auditors and acceptable to the
Employee does not constitute a "parachute payment" within the meaning of section
280G(b)(2) of the Code (without regard to subsection (A)(ii) thereof).
For purposes of this Agreement, a Change in Control of the Company shall
mean:
(A) any "person", as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")
(other than the Company, any trustee or other fiduciary holding
securities under an employee benefit plan of the Company, or any
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 securities of the Company representing 30% or more of the combined
voting power of the Company's then outstanding securities;
(B) during any period of two consecutive 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 the Company to effect a transaction described in clause
(A), (C) or (D) of this paragraph) whose election by the Board 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 at least a majority thereof;
(C) the stockholders of the Company approve a merger or consolidation of
the Company with any other corporation, other than (I) 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) more than 80% of the combined
voting power of the voting securities of the Company or such surviving
entity outstanding immediately after such merger or consolidation or
(II) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which no
"person" (as hereinabove defined) acquires more than 30% of the
combined voting power of the Company's then outstanding securities; or
(D) 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 of all or substantially all of the Company's assets.
For purposes of this Agreement, the date on which a Change in Control
shall occur shall be the date on which public announcement of the acquisition of
such percentage described in clause (A) above shall have been made, or the date
on which the change in the
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composition of the Board described in clause (B) above shall have occurred, or
the date of any such stockholder approval described in clauses (C) or (D) above.
(c) Notwithstanding paragraph 3(a) above, the restrictions set forth in
paragraph 4 below will not lapse on any Restricted Shares with respect to which
any amount (the "Cap Amount"), as determined by the Company's independent
auditors in accordance with the principles of section 162(m) of the Code, when
added to any other compensation received or to be received by the Employee in
any given fiscal year, would not be deductible by the Company by reason of
section 162(m) of the Code UNTIL such time as the Management Compensation
Committee determines, in its sole discretion using its best judgment, that such
Cap Amount (or portion thereof), when added to all other compensation received
or to be received by the Employee in such fiscal year, would be deductible by
the Company, as determined by the Company's independent auditors in accordance
with the principles of section 162(m) of the Code; PROVIDED, HOWEVER, that in
the event of the termination of Employee's employment by the Company or any
subsidiary thereof as a result of the death or permanent disability of Employee,
or the termination of Employee's employment and concurrent retirement pursuant
to normal or early retirement under a retirement plan of the Company or any
subsidiary thereof, or the involuntary termination of Employee's employment by
the Company or any subsidiary thereof, the restrictions set forth in paragraph 4
below will immediately lapse on any Restricted Shares comprising a Cap Amount;
and PROVIDED FURTHER, that in the event of the voluntary termination of
Employee's employment by the Company or any subsidiary thereof, the Restricted
Shares comprising a Cap Amount shall remain subject to the forfeiture provisions
set forth in paragraph 5 below.
(d) As soon as practicable after the restrictions with respect to any
installment of Restricted Shares lapse (i) at the end of the period applicable
to such installment set forth in paragraph 3(a) above (the "Restriction Period")
or (ii) pursuant to paragraphs 3(b), 3(c) or 5 hereof, the Company will deliver
to the Employee, or the Employee's legal representative in case of the
Employee's death, promptly after surrender of the Employee's certificate(s) for
the Restricted Shares to the Treasurer of the Company, the certificate or
certificates for such shares free of any legend or further restrictions together
with a new certificate representing any remaining Restricted Shares. It shall be
a condition to the obligation of the Company to issue or transfer shares of
Common Stock upon the lapse of restrictions with respect to any installment of
Restricted Shares that the Employee (or any person entitled to act under this
paragraph 3(d)) pay to the Company, or elect to relinquish to the Company a
portion of such Restricted Shares equal in value to, such amount as may be
required by the Company for the purpose of satisfying its liability to withhold
federal, state, local or foreign income or other taxes by reason of such
issuance or transfer. If the amount required is not paid or authorized to be
relinquished and withheld from such Restricted Shares, the Company may refuse to
issue or transfer shares of Common Stock. Furthermore, the Employee (or any
person entitled to act under this paragraph 3(d)) may likewise elect to
relinquish to the Company an additional portion of such Restricted Shares up to
an amount equal in value to the estimated amount of federal, state, local or
foreign income or other taxes to be paid in connection with the lapsing of
restrictions on such Restricted Shares with respect to which withholding by the
Company is not required based on the Employee's estimated maximum marginal tax
rates; PROVIDED, HOWEVER, that the maximum number of Shares that may be withheld
shall not exceed 47 percent of such Restricted Shares. The Company shall pay to
the governmental entities designated by the Employee (or any person entitled to
act under this paragraph 3(d))
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the amounts designated by such Employee (or any person entitled to act under
this paragraph 3(d)) pursuant to this paragraph 3(d).
4. RESTRICTIONS. During the Restriction Period, neither the Restricted Shares
nor any right or privilege pertaining thereto may be sold, transferred,
assigned, pledged, hypothecated or otherwise disposed of or encumbered in any
way, by operation of law or otherwise, and shall not be subject to execution,
attachment or similar process. Upon any attempt to transfer, assign, pledge,
hypothecate or otherwise dispose of or encumber the Restricted Shares or any
right or privilege pertaining thereto, otherwise than by will or by the laws of
descent and distribution, or upon the levy of any execution, attachment or
similar process thereupon, the Restricted Shares and all rights and privileges
given hereby shall immediately terminate and the Restricted Shares shall be
forfeited to the Company pursuant to paragraph 5 hereof.
5. FORFEITURE. (a) All the Employee's rights to, and interest in, the Restricted
Shares shall terminate and be forfeited to the Company without payment of
consideration if either (i) the Employee's employment by the Company or any
subsidiary thereof terminates for any reason other than the Employee's death,
disability, retirement pursuant to normal or early retirement under any
retirement plan of the Company or any subsidiary of the Company or termination
by the Company or any subsidiary of the Company; PROVIDED, HOWEVER, that the
Employee's employment will not be deemed to have terminated for this purpose
while the Employee is on a leave of absence which has been approved by the
Company, or (ii) any action prohibited by paragraph 4 hereof is taken. In the
event of termination of employment as a result of death or permanent disability,
the restrictions set forth in paragraph 4 hereof will lapse with respect to the
Original Number multiplied by a fraction, the denominator of which shall be 120
and the numerator of which shall be the number of full months of employment of
the Employee by the Company or any subsidiary of the Company after December 31,
1998 (the "Pro Rata Number"), and the remaining Restricted Shares in excess of
the Pro Rata Number shall be forfeited in accordance with this paragraph 5(a)
or, if the Original Number with respect to which restrictions have lapsed
pursuant to paragraph 3 hereof prior to such termination of employment exceeds
the Pro Rata Number, all remaining Restricted Shares in excess of such Original
Number with respect to which restrictions have lapsed pursuant to paragraph 3
hereof shall be forfeited in accordance with this paragraph 5(a); in the event
of termination of employment and concurrent retirement pursuant to normal or
early retirement under a retirement plan of the Company or any subsidiary
thereof, the Pro Rata Number shall continue to be subject to the provisions of
paragraph 3 hereof (provided that the lapsing of restrictions for such Pro Rata
Number under paragraph 3(a) and 3(c) shall be determined based on the Original
Number) and the remaining Restricted Shares in excess of the Pro Rata Number
shall be forfeited in accordance with this paragraph 5(a) or, if the Original
Number with respect to which restrictions have lapsed pursuant to paragraph 3
hereof prior to such termination of employment and retirement exceeds the Pro
Rata Number, all remaining Restricted Shares in excess of such Original Number
with respect to which restrictions have lapsed pursuant to paragraph 3 hereof
shall be forfeited in accordance with this paragraph 5(a); and in the event of
termination by the Company or any subsidiary thereof of the Employee's
employment by the Company or any subsidiary thereof for any reason, the
restrictions set forth in paragraph 4 hereof will lapse with respect to the
lesser of the Pro Rata Number and the Pro Rata Number multiplied by a fraction,
the denominator of which shall be the Closing Price of the Company's Common
Stock on the date of such termination of employment and the numerator of which
shall be $8.00 (the
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"Modified Pro Rata Number"), and the remaining Restricted Shares in excess of
the lesser of the Pro Rata Number and the Modified Pro Rata Number shall be
forfeited in accordance with this paragraph 5(a) or, if the Original Number with
respect to which restrictions have lapsed pursuant to paragraph 3 hereof prior
to such termination of employment exceeds the Pro Rata Number, all remaining
Restricted Shares in excess of such Original Number with respect to which
restrictions have lapsed pursuant to paragraph 3 hereof shall be forfeited in
accordance with this paragraph 5(a). For purposes of this Agreement, a transfer
of employment from the Company to a subsidiary or from a subsidiary to the
Company or between subsidiaries shall not be deemed a termination of employment.
(b) If Restricted Shares are forfeited for any of the reasons stated in
paragraph 5(a) hereof, such forfeiture shall be effective upon the occurrence of
the event giving rise to the forfeiture. The Employee agrees to repay to the
Company all dividends, if any, paid after such event with respect to the
Restricted Shares which have been forfeited.
(c) If at any time the Employee forfeits any Restricted Shares pursuant to
this Agreement, the Employee agrees to return the certificate or certificates
for such Restricted Shares to the Company duly endorsed in blank or accompanied
by a stock power duly executed in blank.
(d) Determination as to whether an event has occurred resulting in the
forfeiture of, or lapse of restrictions on, Restricted Shares, in accordance
with this Agreement, shall be made by the Company's Management Compensation
Committee, and all determinations of the Committee shall be final and
conclusive.
6. NOTICES. (a) Any notice to the Company pursuant to any provision of this
Agreement will be deemed to have been delivered when delivered in person to the
Secretary of the Company or when deposited in the United States mail as
certified or registered mail, return receipt requested, addressed to the
Secretary of the Company at the executive offices of Xxxxx Telecom Inc., at
00000 Xxxxxxx Xxxxxxxxx, Xxxxxxxxx, Xxxx 00000, or such other address as the
Company may from time to time designate in writing by notice to the Employee
given pursuant to paragraph 6(b) below.
(b) Any notice or demand to the Employee pursuant to any provision of this
Agreement will be deemed to have been delivered to the Employee when delivered
to the Employee in person or when deposited in the United States mail as
certified or registered mail, return receipt requested, addressed to the
Employee at the Employee's address given at the end of this Agreement or the
Employee's address on the stockholder records of the Company or such other
address as the Employee may from time to time designate in writing by notice to
the Company given pursuant to paragraph 6(a) above.
7. COMPANY RIGHT TO TERMINATE EMPLOYMENT AND OTHER REMEDIES. Nothing provided
herein shall be construed to affect in any way the right or power of the
Company, subject to the provisions of any other written agreement between the
Employee and the Company relating to the subject matter, to terminate the
Employee's employment as an employee of or a consultant to the Company at any
time for any reason with or without cause, nor to preclude the Company from
taking any action or enforcing any remedy available to it with respect to any
action or conduct on the Employee's part.
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8. ADDITIONAL DOCUMENTS. (a) It is the intention of the Company that this award
of Restricted Shares shall meet the requirements of, and result in the
application of, the rules prescribed by Section 83 of the Code and applicable
Regulations thereunder. Accordingly, each and every provision shall be construed
and interpreted in such manner as to conform with such intention and the Company
reserves the right to execute and to require the Employee to execute any further
agreements or other instruments, which may be effective as of the date of the
award of the Restricted Shares covered by this Agreement, including, but without
limitation, any instrument modifying or correcting any provision hereof, or any
action taken hereunder or contemporaneously herewith, and to take any other
action, which may be effective as of the date of the award of the Restricted
Shares covered by this Agreement, that, in the opinion of counsel for the
Company, may be necessary or desirable to carry out such intention.
(b) If the Employee fails, refuses or neglects to execute and deliver any
instrument or document or to take any action requested by the Company to be
executed or taken by the Employee pursuant to the provisions of paragraph 8(a)
above for a period of thirty (30) days after the date of such request, the
Company may require the Employee, within ten (10) days after delivery to the
Employee of a written demand by the Company, to forfeit all Restricted Shares
then held by the Employee.
9. SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall be binding
upon and inure to the benefit of the Company, its successors and assigns, and
the Employee and, to the extent applicable, the Employee's legal representative.
10. GOVERNING LAW. The validity, interpretation, performance and enforcement of
this Agreement and the Employee's rights in, to and under the Restricted Shares
shall for all purposes be governed by the laws of the State of Delaware without
giving effect to the principles of conflicts of laws thereof.
11. 1992 STOCK PLAN. The provisions hereof shall be subject to all the terms,
provisions and conditions of the Plan (as amended from time to time by the Board
of Directors of the Company within the limitations permitted by the Plan) and
the rules and regulations relating to the Plan prescribed by the Management
Compensation Committee of the Company, and this Agreement and the Plan and said
rules and regulations relating thereto shall be construed as one instrument and
in the event of any inconsistency the provisions of the Plan as interpreted and
construed by the Management Compensation Committee shall control.
XXXXX TELECOM INC.
By /s/
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Member
Management Compensation Committee
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ACCEPTANCE. The Restricted Shares of Common Stock of Xxxxx Telecom Inc. awarded
to the undersigned Employee under the foregoing Restricted Stock Agreement and
the 1992 Stock Plan are hereby accepted on the terms and subject to the
conditions of such Restricted Stock Agreement and 1992 Stock Plan.
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Employee's Signature
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(Employee's Address) Employee's Social Security
Number
INSTRUCTION. Employee should sign and print his address and social security
number in the spaces provided above, which serves as the Employee's acceptance
of the Restricted Shares.
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