Exhibit 10.1
INSIGHT COMMUNICATIONS COMPANY, INC.
1999 EQUITY INCENTIVE PLAN
RESTRICTED SHARES CANCELLATION
AND
DEFERRED STOCK AWARD AGREEMENT
AGREEMENT, dated as of March 15, 2005 ("Grant Date"), between Insight
Communications Company, Inc., a Delaware corporation (the "Company"), and Xxxx
Xxxxx (the "Grantee").
W I T N E S S E T H:
WHEREAS, the Company has previously granted 75,000 restricted shares of its
common stock, $.01 par value ("Common Stock") to the Grantee, of which 60,000
shares (the "Restricted Shares") remain subject to a substantial risk of
forfeiture; and
WHEREAS, the Board of Directors of the Company (the "Board"), upon the
authorization and direction of the Compensation Committee of the Board (the
"Committee"), has determined that it would be in the best interests of the
Company to allow the Grantee to surrender all such Restricted Shares and to
grant deferred stock ("Deferred Stock") to the Grantee as documented herein.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. SURRENDER OF RESTRICTED SHARES AND GRANT OF DEFERRED STOCK. Subject to
the terms and conditions set forth herein, the Grantee hereby surrenders all
outstanding Restricted Shares held by the Grantee effective as of the date
hereof, and the Company hereby grants to the Grantee, as of the date hereof,
60,000 shares of Deferred Stock.
2. TRANSFER RESTRICTIONS. The Deferred Stock granted herein may not be
assigned, alienated, pledged, attached, sold or otherwise transferred or
encumbered by the Grantee, and any purported assignment, alienation, pledge,
attachment, sale, transfer or encumbrance shall be void and unenforceable
against the Company or any subsidiary of the Company. The Deferred Stock shall
be subject to a risk of forfeiture upon the Grantee's Termination of Employment
(as defined in Section 6 below) until the end of the Vesting Date (as defined in
SECTION 6 below).
3. CANCELLATION OF STOCK CERTIFICATES FOR RESTRICTED SHARES. Upon execution
of this agreement, (i) the Grantee shall deliver to the Company a stock
certificate or certificates representing all of the Restricted Shares, either
endorsed to the Company's order or accompanied by a stock power endorsed to the
Company's order, or other appropriate documentation if the Shares are
uncertificated, and (ii) an appropriate officer of the Company shall direct the
transfer
agent and registrar of the Company's Common Stock to make appropriate entries
upon their records showing cancellation of the certificate or certificates for
such Restricted Shares.
4. DELIVERY OF COMMON STOCK IN SETTLEMENT OF DEFERRED STOCK. The Company
will deliver Common Stock certificates to the Grantee in settlement of all
vested shares of Deferred Stock on the last business day of the week ending (i)
at six months after the Grantee's Termination of Employment or, (ii) if the
Company's common stock as of the Grantee's Termination of Employment is not
publicly tradable on an established securities exchange or otherwise, the week
after the Grantee's Termination of Employment (the "Settlement Date"); provided,
however, that no such delivery shall be made until the Grantee has delivered to
the Company the amount necessary for the Company to satisfy its federal, state
and local employment and income tax withholding obligation as provided in
Section 11.
The Grantee shall have no right to receive the Common Stock certificates in
settlement of the Deferred Stock until the Settlement Date and shall have no
rights as a stockholder of the Company with respect to the Deferred Stock until
the Company delivers such Common Stock certificates. Upon issuance of the shares
of Common Stock in the Grantee's name in settlement of the Deferred Stock, the
Grantee will be the holder of record of such Common Stock and will have all
rights of a shareholder with respect to such shares (including the right to vote
such shares at any meeting of shareholders of the Company and the right to
receive all dividends paid with respect to such shares).
5. DIVIDEND EQUIVALENTS ON DEFERRED STOCK. Whenever dividends are paid or
distributions made with respect to shares of Common Stock, the Grantee will be
credited with "Dividend Equivalents" (i.e., the right to receive payments equal
to dividends or property, if and when paid or distributed, on a specified number
of shares of Common Stock, or such other securities of the Company as may be
substituted or resubstituted for such shares) with respect to the Deferred Stock
credited to the Grantee as of the record date for such dividend or distribution.
Such Dividend Equivalents will credited to the Grantee in the form of additional
shares of Deferred Stock in a number determined by dividing the aggregate value
of such Dividend Equivalents by the fair market value of a share of Common Stock
at the payment date of the dividend or distribution (rounding to the nearest
whole number of shares). The additional Deferred Stock credited to Grantee
pursuant to this Section 5 will be subject to the same vesting and delivery
conditions that apply to the shares of Deferred Stock with respect to which the
Dividend Equivalents are issued.
6. VESTING. The number of shares of Deferred Stock set forth below shall
vest as of the "Vesting Dates" specified in the Table below, provided that the
Grantee has not had a Termination of Employment (as defined below) prior to such
Vesting Date.
Number of shares of
Deferred Stock
Vesting Date Vesting
---------------------------- -------------------------
3/1/06 15,000
3/1/07 15,000
3/1/08 15,000
3/1/09 15,000
For purposes of this Agreement, the Grantee will have a "Termination of
Employment" on the date the Grantee ceases, for any or no reason, to provide
services to the Company or any of its subsidiaries. Except as provided in
Section 7, if the Grantee's has a Termination of Employment prior to the Vesting
Date, the Grantee will immediately forfeit all remaining unvested shares of
Deferred Stock, and all of the Grantee's rights to and interest in such
remaining unvested Deferred Stock shall terminate upon forfeiture without
payment of any consideration.
7. ACCELERATION OF VESTING. Notwithstanding Section 6, upon the Grantee's
Termination of Employment due to death or disability (within the meaning of
Section 409A of the Internal Revenue Code of 1986, as amended (the "Code")), all
shares of Deferred Stock granted hereunder shall immediately vest.
8. NO SPECIAL EMPLOYMENT RIGHTS. Neither the granting nor the vesting of
the Deferred Stock under this Agreement shall be construed to confer upon the
Grantee any right with respect to the continuation of the Grantee's employment
by the Company (or any affiliate of the Company) or interfere in any way with
the right of the Company (or any affiliate of the Company), subject to the terms
of any separate employment agreement to the contrary, at any time to terminate
such employment or to increase or decrease the compensation of the Grantee from
the rate in existence as of the date hereof.
9. INVESTMENT INTENT; TRANSFER RESTRICTIONS. The Grantee will acquire any
Common Stock issued in settlement of the Deferred Stock for the Grantee's own
account for investment purposes only and not with a present view to, or for
resale in connection with, any distribution thereof, or any direct or indirect
participation in any such distribution, in whole or in part, within the meaning
of the Securities Act of 1933, as amended (the "Securities Act"). No arrangement
exists between the Grantee and the Company and any other person regarding the
resale or distribution of any Common Stock to be delivered in settlement of the
Deferred Stock. The Grantee understands that the right to transfer unrestricted
shares of Common Stock obtained upon settlement of the Deferred Stock is not
permitted absent registration under the Securities Act or an exemption
therefrom.
The Company may, without liability for its good faith actions, place legend
restrictions upon the Common Stock obtained upon settlement of the Deferred
Stock and issue "stop transfer" instructions requiring compliance with
applicable securities laws and the terms of the Restricted Shares.
Grantee represents and warrants to the Company that Grantee is the record
and beneficial owner of Restricted Shares. Grantee owns the Restricted Shares
free and clear of all claims, charges, equities, liens, security interests,
pledges, mortgages or encumbrances (other than (i) as will be discharged on or
prior to the date hereof and (ii) any restrictions under the Securities Act or
state securities laws).
10. AMENDMENT. The Board or the Committee may amend this Agreement with the
consent of the Grantee when and subject to such conditions as are deemed to be
in the best interests of the Company.
11. TAX WITHHOLDING. Whenever any Common Stock is delivered in settlement
of Deferred Stock under the terms of this Agreement (a "Taxable Event"), the
Grantee must remit or, in appropriate cases, agree to remit when due, the
minimum amount necessary for the Company to satisfy all of its federal, state
and local withholding tax requirements relating to such Taxable Event. The
Committee may require the Grantee to satisfy these minimum withholding tax
obligations by any (or a combination) of the following means: (i) a cash
payment; (ii) withholding from compensation otherwise payable to the Grantee;
(iii) authorizing the Company to withhold from the shares of Common Stock
deliverable to the Grantee in settlement of Deferred Stock a number of shares
having a fair market value, as of the Settlement Date, less than or equal to the
amount of the withholding obligation; or (iv) delivering to the Company
unencumbered "Mature Shares" (as defined below) of Common Stock having a fair
market value, as of the date the withholding tax obligation arises, less than or
equal to the amount of the withholding obligation.
The Company shall not deliver any shares of Common Stock in settlement of
Deferred Stock unless the Grantee remits (or in appropriate cases agrees to
remit) all withholding tax requirements relating to the Taxable Event in
accordance with this Section 11.
The term "Mature Shares" as used herein shall mean shares of Common Stock
for which the holder has good title, free and clear of all liens and
encumbrances, and which such holder either (i) has held for at least six months
or (ii) has purchased on the open market.
12. FICA WITHHOLDING. Notwithstanding any provision herein to the contrary,
the Grantee must remit or, in appropriate cases, agree to remit when due, the
amount necessary for the Company to satisfy all of its FICA withholding
requirements with respect to the vesting of Deferred Stock. The Committee may
require the Grantee to satisfy this FICA withholding obligations by any (or a
combination) of the following means: (i) a cash payment; (ii) withholding from
compensation otherwise payable to the Grantee; or (iii) delivering to the
Company unencumbered "Mature Shares" (as defined in Section 11 above) of Common
Stock having a fair market value, as of the date the FICA withholding obligation
arises, less than or equal to the amount of the withholding obligation.
13. NOTICES. Any communication or notice required or permitted to be given
hereunder shall be in writing, and, if to the Company, to its principal place of
business, attention: Secretary, and, if to the Grantee, to the address as
appearing on the records of the Company. Such
communication or notice shall be deemed given if and when (a) properly addressed
and posted by registered or certified mail, postage prepaid, or (b) delivered by
HAND.
14. INTERPRETATION. The Board or the Committee shall interpret and construe
the terms and provisions of this Agreement, and their interpretations and
determinations shall be conclusive and binding upon the parties hereto and any
other person claiming an interest hereunder, with respect to any issue arising
hereunder. The Deferred Stock has not been granted pursuant to the Insight
Communications Company, Inc. 1999 Equity Incentive Plan, and any shares of
Common Stock deliverable in settlement of the Deferred Stock to the Grantee
shall be issued from the authorized and unissued shares of Common Stock.
15. GOVERNING LAW. The validity, construction and interpretation of this
Agreement shall be governed by and determined in accordance with the laws of the
State of New York.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date above written.
INSIGHT COMMUNICATIONS COMPANY, INC.
By:
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GRANTEE:
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Xxxx Xxxxx