EXHIBIT 10.2
RESTRICTED STOCK AGREEMENT
This Restricted Stock Agreement (this "AGREEMENT") is made and entered into
as of March 25, 2002 (the "AWARD DATE"), by and between Focal Communications
Corporation, a Delaware corporation ("WE" or the "COMPANY"), and [**name], a
resident of [**state] ("YOU" or the "PARTICIPANT"). All capitalized terms used
in this Agreement shall have the meaning assigned to them in Section 5 of this
Agreement.
WHEREAS, Participant is an employee of the Company; and
WHEREAS, the Board of Directors of the Company (the "BOARD") and/or the
committee of the Board administering the Company's 1998 Equity and Performance
Incentive Plan (as this plan may be amended from time to time, the "PLAN") has
approved the award to Participant of shares of the common stock, $.01 par value
per share, of the Company (the "COMMON STOCK"), on the terms and conditions set
forth herein;
NOW, THEREFORE, in consideration of the mutual promises made herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto, intending to be legally bound, agree as
follows:
1. AWARD CERTAIN TERMS AND CONDITIONS.
(a) NUMBER OF SHARES AWARDED - PURCHASE PRICE. The Company hereby awards to
you, and you hereby purchase, as of the Award Date, [**no.] shares of Common
Stock (the "RESTRICTED SHARES"). Concurrently with the delivery of this
Agreement to the Company, you shall deliver a duly executed blank Assignment
Separate from Certificate (in the form attached hereto as Exhibit A) with
respect to the Restricted Shares. In connection with the issuance of the
Restricted Shares, the Board has determined that the Company has received from
you services with a value to the Company equal to at least $0.01 per share times
the number of Restricted Shares (the "PURCHASE PRICE").
(b) YOU ARE BOUND BY THE PLAN. A copy of the Plan is attached to this
Agreement as Exhibit B. By signing this Agreement, you certify that you have
completely and carefully reviewed this Agreement and the Plan. When you sign
this Agreement, you agree to be bound by all of the terms of the Plan and this
Agreement.
(c) YOU ARE BOUND BY ALL OF THE COMPANY'S POLICIES. As consideration for
the award of Restricted Shares hereunder, you agree to be bound by all Company
policies, as if fully stated in this Agreement.
(d) RETENTION OF COMPANY'S RIGHTS. By signing this Agreement, you agree
that nothing in this Agreement or in the fact that we have awarded you the
Restricted Shares (i) entitles you to remain employed by the Company for any
period of time or to continue to receive your present (or any other) rate of
compensation, (ii) affects our right to terminate your employment at any time
and for any reason, (iii) gives you the right to be selected at any time for
future awards of Restricted Shares or option grants, or (iv) provides for any
adjustment to the number of Restricted Shares upon the occurrence of any events,
except as described in Section 4 below.
(e) BINDING AGREEMENT; NONCONTRAVENTION. You represent and warrant to the
Company that this Agreement constitutes the legal, valid, and binding obligation
of you, enforceable in accordance with its terms, and your execution, delivery,
and performance of this Agreement does not and shall not conflict with, violate
or cause a breach of any agreement, contract, or instrument to which you are a
party or any judgment, order, or decree to which you are subject.
2. VESTING OF RESTRICTED SHARES.
(a) VESTING SCHEDULE. You shall acquire a vested interest in the Restricted
Shares as set forth in the following table:
-------------------------------- ------------------------------------------
CUMULATIVE PERCENTAGE OF RESTRICTED SHARES
VESTING DATE VESTED ON SUCH VESTING DATE
-------------------------------- ------------------------------------------
January 1, 2003 25%
-------------------------------- ------------------------------------------
July 1, 2003 37.5%
-------------------------------- ------------------------------------------
January 1, 2004 50%
-------------------------------- ------------------------------------------
July 1, 2004 62.5%
-------------------------------- ------------------------------------------
January 1, 2005 75%
-------------------------------- ------------------------------------------
July 1, 2005 87.5%
-------------------------------- ------------------------------------------
January 1, 2006 100%
-------------------------------- ------------------------------------------
Notwithstanding the foregoing sentence, and except as otherwise provided herein,
the above described vesting shall cease and no Unvested Restricted Shares (as
defined below) shall vest after the date on which your employment with the
Company terminates for any reason (the "TERMINATION DATE"). Restricted Shares
which have become vested pursuant to the terms of this Agreement are referred to
herein as "VESTED RESTRICTED SHARES," and all other Restricted Shares are
referred to herein as "UNVESTED RESTRICTED SHARES."
(b) ACCELERATION OF VESTING UPON DISCHARGE IN ANTICIPATION OF OR FOLLOWING
A CHANGE IN CONTROL. If your employment is terminated by the Company in
connection with or anticipation of a Change in Control, or if your employment is
terminated by the Company or a Successor Entity (as defined in Section 6) at any
time during the one-year period commencing on the date of a Change in Control,
all Unvested Restricted Shares shall automatically vest upon such termination of
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employment. If your employment is terminated by the Company at any time during
the one-year period commencing on the date the Company employs a new chief
executive officer who is not currently an employee of the Company, 50% of the
Unvested Restricted Shares shall automatically vest upon such termination of
employment. For the purpose of this Section 2(b), your employment shall be
deemed to have been terminated by the Company or a Successor Entity if your
employment (i) is actually terminated by the Company or a Successor Entity other
than for Cause or (ii) is terminated by you at any time during the one-year
period commencing on the date of a Change in Control or employment of a new
chief executive officer, as the case may be, for Good Reason (as defined in
Section 6).
(c) ACCELERATION OF VESTING UPON RETIREMENT, DISABILITY, OR DEATH. In the
event of (i) your retirement from the Company after attaining age 65, or, in the
Board's sole discretion, your retirement after attaining age 55 but not age 65,
(ii) your Disability (as defined in Section 5) if you become Disabled while an
employee of the Company and such Disability results in your separation of
employment from the Company, or (iii) your death if such death occurs while your
are employed by the Company, all Unvested Restricted Shares that would be
subject to vesting within one year after the occurrence of such event shall
automatically vest and become immediately exercisable.
(d) SUSPENSION OF VESTING. Notwithstanding anything to the contrary
contained in this Agreement, no Restricted Shares will vest unless and until the
Company's shareholders approve an amendment to the Plan to increase the number
of shares of Common Stock authorized for issuance thereunder to accommodate the
Restricted Shares to be issued under this Agreement and similar agreements that
are being executed on or about the date of this Agreement. The Company intends
to seek shareholder approval for such an amendment to the Plan at its Annual
Meeting of Stockholders that is scheduled to be conducted in June 2002.
(e) ESCROW. The Company shall have the right to hold the Unvested
Restricted Shares in escrow until those shares have vested in accordance with
the Vesting Schedule and until such time as you have paid the Company the
federal and state income and employment withholding taxes to which you become
subject as a result of the vesting of your Restricted Shares either by cash
payment or in accordance with another arrangement agreed upon between the
Company and you. If you decide to make an election under Section 83(b) of the
Internal Revenue Code, you must provide for payment of federal and state
employment and withholding taxes at this time.
(f) CANCELLATION OF SHARES. If requested by the Company, you or the holder
of Unvested Restricted Shares forfeited under Section 2(a) above shall deliver
to the Company any certificates therefor; provided, however, that if Participant
forfeits shares as provided in Section 2(a), then from and after such time, you
or the holder of such shares shall no longer have any rights as a holder of such
shares and the Company shall be deemed the owner and holder of such shares,
whether or not the certificates therefor have been delivered to Company as
required by this Agreement.
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(g) WITHHOLDING OF TAXES. We will be entitled, if necessary or desirable,
to withhold from you from any amounts due and payable by the Company to you the
amount of any withholding or other tax due from the Company with respect to the
issuance of the Restricted Shares, and we may defer the issuance of these shares
unless you agree to indemnify us of this withholding obligation to our
satisfaction. The Committee may, in its sole discretion, permit you to satisfy
this withholding obligation by: (i) having the Company withhold from the shares
to be issued a number of shares having a Fair Market Value equal to the required
withholding amount, or (ii) delivering to the Company shares of Common Stock
owned by you having a Fair Market Value equal to the required withholding
amount.
3. RESTRICTIONS ON TRANSFER OF RESTRICTED SHARES.
(a) RETENTION OF RESTRICTED SHARES. You cannot sell, transfer, assign,
pledge, hypothecate, or otherwise dispose of (whether with or without
consideration and whether voluntarily or involuntarily or by operation of law)
any interest in any Restricted Shares (a "TRANSFER" of Restricted Shares),
except (i) to your "family members" as defined in and in accordance with the
General Instructions to Form S-8 (in which case the restrictions set forth in
the Plan and in this Agreement will continue to apply to such Restricted Shares
after such Transfer and such permitted transferees of such Restricted Shares
will have agreed in writing to be bound by the provisions of this Agreement with
respect to such Restricted Shares) or (ii) in exchange for other Restricted
Shares as described in Section 4 below (each such transfer a "PERMITTED
TRANSFER").
(b) HOLDBACK AGREEMENT. You will not effect any public sale or distribution
of any equity securities of the Company, or any securities convertible into or
exchangeable or exercisable for such securities, during any holdback period
agreed to between the chief executive officer of the Company with respect to
shares of Common Stock held by him or her and the Company's underwriters in the
event of any underwritten registration of the Company's securities, unless the
Company otherwise agrees.
(c) TRANSFERS IN VIOLATION OF AGREEMENT. Any Transfer or attempted Transfer
of any Restricted Shares in violation of any provision of this Agreement will be
void, and the Company will not record any such purported Transfer on its books
or treat any purported transferee of such Restricted Shares as the owner thereof
for any purpose.
4. ADJUSTMENTS.
(a) In the event of any merger, consolidation, reorganization,
recapitalization, stock dividend, stock split, reverse stock split, combination
of shares, exchange of shares, change in corporate structure, or other change in
the shares of Common Stock, the Committee may in its discretion make such
adjustments in the number and type of Restricted Shares specified herein as it
determines to be appropriate and equitable (and such adjustment will in no event
be considered an amendment or modification of the Plan or of this Agreement).
The issuance by the Company of shares of stock of any class, or options or
securities exercisable or convertible into shares of stock of any class, for
cash or property, or for labor or services either upon direct sale, or upon the
exercise of rights or warrants to subscribe therefor, or upon exercise or
conversion of other
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securities, will not affect, and no adjustment by reason thereof will be made
with respect to, the Restricted Shares.
(b) Without limiting the foregoing, in the event of any merger,
consolidation, or other reorganization in which the Company is not the surviving
or continuing corporation or in which a Change in Control is to occur, the
Company's obligations regarding Restricted Shares granted hereunder and that are
outstanding on the date of such event will, on such terms as may be approved by
the Committee in its discretion prior to such event determines to be appropriate
and equitable, be assumed by the surviving or continuing corporation or canceled
in exchange for property (which may include cash and/or equity or securities
convertible into equity of the surviving or continuing corporation).
5. NONCOMPETE; NONSOLICITATION; CONFIDENTIALITY.
(a) You acknowledge that during the course of your employment with Focal
and its Subsidiaries you will require access to and become familiar with
sensitive, highly confidential, unique, and valuable information and trade
secrets of Focal and its Subsidiaries, the disclosure to or use by a competitor
would cause Focal material and irreparable harm. In addition, Focal and you
agree that the services you will render to Focal and its Subsidiaries will be of
a unique nature and significant value. Consequently, you represent that the
restrictions contained in this Section 5 are fair and reasonable with respect to
duration, geographic area, and scope, and acknowledges that your commitments
under this Section 5 constitute a material inducement to Focal to enter into
this Agreement.
(b) During the term of your employment and for a period ending six months
following the termination date, you shall not, without the prior written consent
of Focal, engage in any Competitive Activity. Notwithstanding the foregoing, in
the event of termination for Cause or if you terminate your employment with
Focal or a Subsidiary other than under Section 2(b), you may not, during the six
months following the termination date, engage in any Competitive Activity
whether or not you receives post-termination payments or benefits from Focal.
(c) You will not, without the prior written consent of Focal, during your
employment or thereafter disclose to any person not employed by Focal, or use in
connection with engaging in competition with Focal, any confidential or
proprietary information of Focal. For purposes of this Agreement, the term
"confidential or proprietary information" includes all information of any nature
and in any form that is owned by Focal and that is not publicly available (other
than by your breach of this Section 5(c)) or generally known to persons engaged
in businesses similar or related to those of Focal. Confidential or proprietary
information will include, without limitation, Focal's financial matters,
customers, employees, industry contracts, strategic business plans, product
development (or other proprietary product data), marketing plans, and all other
secrets and all other information of a confidential or proprietary nature. For
purposes of the preceding two sentences, the term "Focal" will also include any
Subsidiary (collectively, the "RESTRICTED GROUP"). The foregoing obligations
imposed by this Section 5(c) will not apply (i) during your employment, in the
course of the business of and for the benefit of Focal, (ii) if
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such confidential or proprietary information will have become, through no fault
of yours, generally known to the public, or (iii) if you are required by law to
make disclosure (after giving Focal notice and an opportunity to contest such
requirement).
(d) You will not, during your employment and for one year thereafter,
without the prior written consent of Focal, directly or indirectly, on behalf of
You or on behalf of any person, firm, or company, (i) hire (as an employee or
consultant) any person who was an employee of the Restricted Group during your
employment with the Restricted Group or thereafter or (ii) attempt to influence,
persuade, or induce, or assist any other person in so persuading or inducing,
any person or entity to give up, or to not commence, employment or a business
relationship with the Restricted Group.
(e) The provisions of this Section 5 are in addition to (and do not
supersede), and do not limit or affect the enforceability of, any
noncompetition, nonsolicitation, or confidentiality provisions of any other
agreement(s) that you may have with the Company or any Subsidiary.
6. DEFINITIONS.
"CAUSE" means that Executive shall have, in the reasonable determination of
the Board of Directors of Focal, after due inquiry, notice to Executive
specifying in reasonable detail the facts giving rise to such decision, and
providing Executive a reasonable opportunity to be heard:
(a) committed a felony involving fraud, embezzlement, or theft or committed
any other felony in a wrongful effort to further Focal's business interests;
(b) intentionally and wrongfully provided senior management or the Board of
Directors of Focal with materially incorrect information;
(c) failed to cooperate completely and honestly with any investigation by
Focal of Focal's activities or business practices, including without limitation,
investigations by Focal's human resources or legal personnel;
(d) reported to work under the influence of alcohol or illegal drugs;
(e) committed intentional wrongful damage to Focal's or any Subsidiary's
property;
(f) committed intentional wrongful disclosure of material confidential
information of Focal or any subsidiary;
(g) committed intentional wrongful engagement in any competitive activity;
(h) intentionally, wrongfully, and materially violated one or more of
Focal's policies (as posted on its internal website from time to time); or
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(i) otherwise engaged in a pattern of violation of Focal's policies (as
posted on its internal website from time to time) after Executive received
written notice from the Company of its belief that he or she violated one or
more policies specifying in reasonable detail the basis for such belief.
"CHANGE IN CONTROL" means the occurrence of one of the following events:
(a) Focal is merged or consolidated or reorganized with or into another
corporation or other legal person, and as a result of such merger,
consolidation, or reorganization less than a majority of the combined voting
power of the then-outstanding securities of such corporation or person
immediately after such transaction are held in the aggregate by the holders of
securities entitled to vote generally in the election of directors immediately
prior to such transaction;
(b) Focal sells or otherwise transfers all or substantially all of its
assets to any other corporation or other legal person, and less than a majority
of the combined voting power of the then-outstanding securities of such
corporation or person immediately after such sale or transfer is held in the
aggregate by the holders of Common Stock immediately prior to such sale or
transfer;
(c) There is a report filed on Schedule 13D or Schedule 14D-1 (or any
successor schedule, form or report), as promulgated in each case pursuant to the
Securities and Exchange Act of 1934 (the "Exchange Act"), disclosing that any
person (as the term "person" is used in Section 13(d)(3) or Section 14(d)(2) of
the Exchange Act) has become the beneficial owner (as the term "beneficial
owner" is defined in Rule 13d-3 promulgated under the Exchange Act or any
successor rule or regulation promulgated thereunder) of securities representing
50% or more of the Voting Stock; or
(d) If during any period of two consecutive years, individuals who at the
beginning of any such period constitute the directors and any new directors
whose election or nomination for election by Focal's stockholders was approved
by a vote of at least two-thirds of the directors then still in office who
either were directors at the beginning of the period or whose election was
previously so approved cease for any reason to constitute a majority of the
directors.
Notwithstanding the provisions of subparagraph (c) above, a "Change in Control"
shall not be deemed to have occurred for the purposes of this Agreement (i)
solely because Madison Dearborn Capital Partners either files or becomes
obligated to file a report on Schedule 13D (or any successor schedule or
report), as promulgated pursuant to the Exchange Act, disclosing beneficial
ownership by it of securities representing 50% or more of the Voting Stock, (ii)
solely because Focal or any Focal-sponsored employee stock ownership plan or
other employee benefit plan of Focal either files or becomes obligated to file a
report or proxy statement under or in response to Schedule 13D, Schedule 14D-1,
Form 8-K, or Schedule 14A (or any successor schedule, form or report or item
therein), as promulgated in each case pursuant to the Exchange Act, disclosing
beneficial ownership by it of securities representing 50% or more of the Voting
Stock or otherwise, or because Focal reports that a change in control of the
Company has or may have occurred or will or may occur in the future by reason of
such beneficial ownership or (iii) solely because of a change in control of any
Subsidiary.
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"CODE" means the Internal Revenue Code of 1986, as amended, and any
successor statute.
"COMMITTEE" means the Compensation Committee of the Board. The membership
of the Committee will be constituted so as to comply at all times with the
applicable requirements of Rule 16b-3 under the Securities Exchange Act and
Section 162(m) of the Code.
"COMMON STOCK" means the Common Stock, par value $.01 per share, of the
Company, and any other shares into which such stock may be changed by reason of
a recapitalization, reorganization, merger, consolidation, or any other change
in the corporate structure or capital stock of the Company.
"COMPANY" means
Focal Communications Corporation, a
Delaware corporation,
and (except to the extent the context requires otherwise) any "subsidiary
corporation" of
Focal Communications Corporation, as such term is defined in
Section 424(f) of the Code.
"COMPETITIVE ACTIVITY" means your participation, directly or indirectly,
either for yourself or for any other individual, corporation, partnership, joint
venture or other entity, in any business division, group, or franchise (or if
there are no divisions, any business) where such division, group or franchise
(or business, if applicable) engages or proposes to engage in any business
conducted by the Company or any of its Subsidiaries or proposed to be conducted
pursuant to a business plan of the Company or any of its Subsidiaries
(including, but not limited to, the sale or distribution of local switched
dialtone telecommunications services) in any Metropolitan Statistical Area in
which the Company or any of its Subsidiaries conducts such business or proposes
to conduct such business pursuant to such a business plan. For purposes of this
Agreement, the term "participate in" shall include, without limitation, having
any direct or indirect interest in any corporation, partnership, joint venture
or other entity, whether as a sole proprietor, owner, stockholder, partner,
joint venturer, creditor or otherwise, or rendering any direct or indirect
service or assistance to any individual, corporation, partnership, joint venture
and other business entity (whether as a director, officer, manager, supervisor,
employee, agent, consultant or otherwise), other than ownership of up to $1
million in value of the outstanding stock of any class which is publicly traded.
"DISABILITY" means your inability, due to illness, accident, injury,
physical or mental incapacity or other disability, to carry out effectively your
duties and obligations to the Company or to participate effectively and actively
in the management of the Company for a period of six months, as determined by
the Board in its good faith discretion.
"FAIR MARKET VALUE" of a share of Common Stock of the Company means, as of
the date in question, the officially-quoted closing selling price of the stock
(or if no selling price is quoted, the bid price) on the principal securities
exchange on which the Common Stock is then listed for trading (including for
this purpose the Nasdaq National Market) (the "MARKET") for the date in question
or, if the Common Stock is not then listed or quoted in the Market, the Fair
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Market Value will be the fair value of the Common Stock determined in good faith
by the Board; provided, however, that when Restricted Shares upon vesting are
immediately sold in the open market, the net sale price received may be used to
determine the Fair Market Value of any shares used to pay the exercise price or
withholding taxes and to compute the withholding taxes.
"GOOD REASON" means:
(i) a material reduction in base or targeted bonus compensation (but not
including any reduction related to a broader compensation or benefit
reduction that is not limited to any particular employee), it being
understood that a change in the form or measure of compensation, including
but not limited to a change from salary-based compensation to
commission-based compensation or a rearrangement of your compensation
package to include a different combination of salary, bonus, commission,
options, or other equity incentives, etc., shall not in and of itself
constitute such a reduction; or
(ii) a relocation of your place of employment to a site that is more than 50
miles from your place of employment immediately prior to the Change in
Control or employment of a new chief executive officer.
Notwithstanding the foregoing, an occurrence shall not constitute Good Reason
unless you notify the Company or a Successor Entity in writing within 30 days of
the occurrence that you consider the occurrence to be Good Reason and the
Company or Successor Entity fails to cure such occurrence within 30 days after
its receipt of such notice.
"OWNER" shall mean Participant and all subsequent holders of the Restricted
Shares who derive their chain of ownership through a Permitted Transfer from
Participant.
"PERSON" means an individual, a partnership, a corporation, a limited
liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
"SECURITIES EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, or any similar federal law then in force, provided this Agreement does
not supersede or preempt (i) that certain Executive Employment Agreement, dated
November 16, 2000, between you and the Company (and you hereby acknowledge your
continuing obligations thereunder) or (ii) that certain letter agreement dated
the date hereof, between you and the Company.
"SUBSIDIARY" means an entity in which Focal directly or indirectly
beneficially owns 50% or more of the outstanding Voting Stock.
"SUCCESSOR ENTITY" means a successor to the Company by merger,
consolidation, or other business combination, or a purchaser of all or
substantially all of the Company's assets or a majority of the Company's
outstanding voting securities, as the case may be.
"VOTING STOCK" means securities entitled to vote generally in the election
of directors of Focal.
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7. MISCELLANEOUS PROVISIONS.
(a) MANDATORY ARBITRATION. Subject to Section 7(g) below, all claims,
disputes, controversies or other matters in question arising under or relating
to this Agreement (collectively, "DISPUTES") will, if unable to be resolved
within 10 days of preliminary negotiation between you and the Company, be
resolved through binding arbitration in accordance with the commercial
arbitration rules and practices of the American Arbitration Association. Such
arbitration will be in Chicago, Illinois, or such other place as is mutually
agreeable to you and the Company. The cost of each arbitration proceeding,
including without limitation the arbitrator's compensation and expenses, hearing
room charges, court reporter transcript charges, reasonable attorney fees and
expenses, etc., will be allocated among the parties based upon the percentage
which the portion of the contested amount in such Dispute not awarded to each
party bears to the amount actually contested by such party. The parties hereto
agree that, subject to Section 7(g), mandatory arbitration under this Section
7(a) will be the sole and exclusive remedy for resolving and remedying all
Disputes hereunder.
(b) SEVERABILITY. Whenever possible, each provision of this Agreement will
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
(c) COMPLETE AGREEMENT. This Agreement embodies the complete agreement and
understanding between you and the Company concerning the grant of Restricted
Shares and supersedes and preempts any prior understandings or agreements,
written or oral, that address the grant of Restricted Shares to you.
(d) COUNTERPARTS. This Agreement may be executed in separate counterparts.
(e) SUCCESSORS AND ASSIGNS. Except as otherwise provided herein, this
Agreement will bind the parties hereto and their respective successors and
assigns and will inure to the benefit of and be enforceable by the parties
hereto and their respective successors and assigns whether so expressed or not.
(f) CHOICE OF LAW. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement and the exhibits hereto will be
governed by the internal law, and not the law of conflicts, of the State of
Delaware.
(g) EQUITABLE REMEDIES. You and we agree and acknowledge that money damages
would not be an adequate remedy if you or any other holder of Restricted Shares
were to breach any of the provisions of Sections 3 or 5, and that the Company
(or any third-party beneficiary hereof) may obtain specific performance and/or
other injunctive relief (without posting any bond or deposit) relief in order to
enforce or prevent any violations of the provisions of Sections 3 or 5 of this
Agreement.
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(h) AMENDMENT, MODIFICATION, OR WAIVER. The provisions of this Agreement
may be amended, modified, or waived only with the prior written consent of the
Company and you.
(i) NOTICES. All notices, demands or other communications to be given or
delivered under or by reason of the provisions of this Agreement will be in
writing and will be deemed to have been given when (i) delivered personally to
the recipient, (ii) if faxed to the recipient (with hard copy sent to the
recipient by reputable overnight courier service (charges prepaid) that same
day) if faxed before 5:00 p.m. Chicago time on a business day, and otherwise on
the next business day, or (iii) one business day after being sent to the
recipient by reputable overnight courier service (charges prepaid). Such
notices, demands and other communications will be sent to the following Persons
at the following addresses:
TO THE COMPANY:
Focal Communications Corporation
000 Xxxxx XxXxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: General Counsel
Telephone: 000-000-0000
Fax: 000-000-0000
TO YOU: at the address listed in the Company's records,
or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.
(j) DESCRIPTIVE HEADINGS; INTERPRETATION. The descriptive headings of this
Agreement are inserted for convenience only and do not constitute a substantive
part of this Agreement.
(k) TAXABLE INCOME AND SECTION 83(b) ELECTION. Under Section 83 of the
Code, the excess of the Fair Market Value of the Restricted Shares on the date
any forfeiture restrictions applicable to such shares lapse over the purchase
price paid for those shares will be reportable as ordinary income on the lapse
date. For this purpose, the term "forfeiture restrictions" includes the
restrictions set forth in Section 2 above. Participant may elect under Code
Section 83(b) to be taxed at the time the Restricted Shares are acquired, rather
than when and as such Restricted Shares vest and cease to be subject to such
forfeiture restrictions. Such election must be filed with the Internal Revenue
Service within 30 days after the date of this Agreement. PARTICIPANT UNDERSTANDS
THAT FAILURE TO MAKE THIS FILING WITHIN THE APPLICABLE THIRTY (30) DAY PERIOD
WILL RESULT IN THE RECOGNITION OF ORDINARY INCOME AS THE FORFEITURE RESTRICTIONS
LAPSE. PARTICIPANT ACKNOWLEDGES THAT IT IS PARTICIPANT'S SOLE RESPONSIBILITY,
AND NOT THE COMPANY'S, TO FILE A TIMELY ELECTION UNDER CODE SECTION 83(b) AND TO
PAY ANY TAXES ASSOCIATED THEREWITH, EVEN IF PARTICIPANT REQUESTS THE COMPANY OR
ITS REPRESENTATIVES TO MAKE THIS FILING ON HIS OR HER BEHALF.
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IN WITNESS WHEREOF, the parties hereto have executed this
Restricted Stock
Agreement on the date first written above.
FOCAL COMMUNICATIONS CORPORATION
By: /s/Xxxxxx X. Xxxxxx, Xx.
-----------------------------------
Xxxxxx X. Xxxxxx, Xx.
Chairman & Chief Executive Officer
PARTICIPANT
--------------------------------------
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