EXHIBIT 10.21
RESTRICTED STOCK AGREEMENT
PURSUANT TO THE 1998 STOCK INCENTIVE PLAN, AS AMENDED
This Restricted Stock Agreement (this "AGREEMENT") is made and entered into
as of the date of award indicated below (the "AWARD DATE") by and between
Allegiance Telecom, Inc., a Delaware corporation ("WE" or the "COMPANY"), and
the person named below as participant ("YOU" or the "PARTICIPANT"). All
capitalized terms used in this Agreement and not otherwise defined shall have
the meanings assigned to them in Paragraph 5 of this Agreement.
WHEREAS, Participant is an employee of the Company; and
WHEREAS, pursuant to negotiations between the Company and you, you have
agreed to exchange certain options to purchase shares of Common Stock previously
issued to you, for a certain number of shares of Common Stock to be issued under
the Company's 1998 Stock Incentive Plan (as this plan may be amended from time
to time according to its terms, the "PLAN");
WHEREAS, this exchange of stock options for shares of restricted stock
hereunder has been approved by the Company's Board of Directors (the "BOARD");
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 accept, as of the Award Date, in consideration of
the cancellation of options to purchase [Options_Outstanding] shares of Common
Stock issued to you pursuant to that stock option agreement dated as of October
15, 2001, the number of shares of Common Stock indicated below (the "RESTRICTED
SHARES"). Concurrently with the delivery of this Agreement, you shall deliver a
duly executed blank Assignment Separate from Certificate (in the form attached
as Exhibit I) with respect to the Restricted Shares.
Participant: < < First_Name_ > > < < Initial > > < < Last_Name > >
Award Date: < < Grant_Date > >
Number of Restricted Shares Awarded: < < M_80_restricted_award > >
(b) YOU ARE BOUND BY THE PLAN. A copy of the Plan has been previously
provided to you. You acknowledge that a current version of the Plan is available
on the Company's intranet site, and the Company agrees to supply to you a paper
copy of the current version of the Plan upon your request. When you sign this
Agreement, you will be deemed to have completely and carefully reviewed this
Agreement and the Plan and we therefore advise you to do so before you sign.
When you sign this Agreement, you agree to be bound by all of the terms of the
Plan and this Agreement with respect to the Restricted Shares.
(c) YOU ARE BOUND BY ALL OF THE COMPANY'S POLICIES. As consideration
for the award of Restricted Shares hereunder, you agree that you have signed and
that you will continue to be bound by (i) all Company policies, including but
not limited to, the Company's Anti-Slamming and Anti-Cramming policy, as such
policies may be updated from time to time and (ii) the Company's Agreement to
Protect Intellectual Property. The Anti-Slamming and Anti-Cramming policy and
the Agreement to Protect Intellectual Property is specifically incorporated
herein by reference, as if fully stated in this Agreement.
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(d) RETENTION OF COMPANY'S RIGHTS. When you sign this Agreement, you
will also be deemed to 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) affect our right to terminate your
employment at any time and for any reason, (iii) give you the right to be
selected at any time for future awards of Restricted Shares or option grants, or
(iv) provide for any adjustment to the number of Restricted Shares upon the
occurrence of any events except as described in Paragraph 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 follows: 34% of the total number of Restricted Shares
granted hereunder shall vest on February 25, 2003; an additional 2.75% of the
total number of Restricted Shares granted hereunder shall vest on the last day
of each month thereafter.
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 A CHANGE IN CONTROL. Upon the
consummation of a Change in Control, if you are still employed by the Company
immediately prior to such consummation, all Unvested Restricted Shares shall
become Vested Restricted Shares.
(c) ACCELERATION UPON DEATH OR DISABILITY. All Unvested Restricted
Shares shall become Vested Restricted Shares upon the Termination Date if your
employment with the Company terminates because of your death or permanent
physical disability (as determined by the Committee in its sole discretion).
(d) CUSTODY. The Company (or its representatives) shall have the
right to hold the Unvested Restricted Shares in custody 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
or otherwise, by cash payment or other 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.
(e) DEFERRAL OF RECEIPT OF SHARES. At any time prior to the date
which is at least six (6) months prior to any Vesting Date (for example, for the
first Vesting Date of February 25, 2003, you must deliver your notice on or
before August 25, 2003), you may deliver written notice to the Company (in the
form attached as Exhibit III or such other form as approved by the Committee)
setting forth your election to defer the distribution of all or any portion of
the Restricted Stock that may vest on such Vesting Date (if any); in such event,
no certificates representing shares of Common Stock will be delivered to you
until the date of the event specified in such written notice. Your decision to
defer the distribution of stock certificates is irrevocable. Notwithstanding a
deferral of the distribution of the Common Stock hereunder, all Common Stock
that is vested Restricted Stock will be distributed promptly after an official
public announcement of a Change in Control or after termination of your
employment for any reason. Until shares of Common Stock that are vested
Restricted Stock are distributed to you, you will not have any voting rights or
rights to cash dividends with respect to such shares.
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(f) CANCELLATION OF SHARES. If requested by the Company, you or the
holder of Unvested Restricted Shares forfeited pursuant to Paragraph 2(a) shall
deliver to the Company any certificates therefor; provided, however, that if
Participant forfeits shares as provided in Paragraph 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.
(g) WITHHOLDING OF TAXES. We will be entitled, if necessary or
desirable, to withhold from you from any amounts due and payable by us to you,
the amount of any withholding or other tax due with respect to the issuance,
vesting or distribution of the Restricted Shares, and we may defer the issuance
or distribution of these shares unless you agree to indemnify us of this
withholding obligation to our satisfaction. In order to satisfy all withholding
and other taxes due hereunder, you agree to the following:
(i) as a condition of receiving any Vested Restricted Shares,
you authorize the Company to sell, on each Vesting Date (or shortly
thereafter), the number of Vested Restricted Shares that the Company
deems necessary to satisfy the applicable withholding or other taxes;
(ii) you agree that the proceeds received from the sale of
Vested Restricted Shares pursuant to this Paragraph 2(g) will be used
to satisfy the withholding or other taxes and, accordingly, you hereby
authorize the Company's brokers or other agents to pay such proceeds
to the Company for such purpose. You understand that to the extent
that the proceeds obtained by such sale exceeds the amount necessary
to satisfy the withholding or other taxes, such excess proceeds shall
be distributed to you; and
(iii) you acknowledge and agree that, in the event that there
is not a market in the Common Stock, the Company will have the right
to make other arrangements to satisfy the withholding or other taxes
due hereunder.
In addition, you may satisfy your tax obligation by cash payment, in
accordance with the delivery procedures established by the Company from time to
time. You agree to take such other action reasonably requested by the Company to
assist the Company with its withholding and other tax obligations hereunder.
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 below in Paragraph 4 (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 the
seven days prior to and the 90-day period commencing on the effective date 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.
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4. ADJUSTMENTS. In the event of any merger, consolidation,
reorganization, recapitalization, stock dividend, 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 securities, will not affect, and no adjustment by reason
thereof will be made with respect to, the Restricted Shares.
Without limitation of 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, all of
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 prior to such event, be assumed by the surviving or continuing
corporation or canceled in exchange for property (including cash).
5. DEFINITIONS.
"CHANGE IN CONTROL" means the occurrence of one of the following
events:
(i) if any "person" or "group" as those terms are used in
Sections 13(d) and 14(d) of the Securities Exchange Act, other than an
Exempt Person, is or becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Securities Exchange Act), directly or indirectly,
of securities of the Company representing 50% or more of the combined
voting power of the Company's then outstanding securities; or
(ii) during any period of two consecutive years, individuals
who at the beginning of such period constitute the Board and any new
directors whose election by the Board or nomination for election by
the Company's stockholders was approved by 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 thereof; or
(iii) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than a
merger or consolidation (A) which would result in all or a portion of
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 50% of the combined voting power of the voting securities of the
Company or such surviving entity outstanding immediately after such
merger or consolidation or (B) by which the corporate existence of the
Company is not affected and following which the Company's chief
executive officer and directors retain their positions with the
Company (and constitute at least a majority of the Board); or
(iv) 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 the Company's
assets, other than a sale to an Exempt Person.
"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.
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"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 Allegiance Telecom, Inc., a Delaware corporation, and
(except to the extent the context requires otherwise) any "subsidiary
corporation" of Allegiance Telecom, Inc., as such term is defined in Section
424(f) of the Code.
"EXEMPT PERSON" means any employee benefit plan of the Company or a
trustee or other administrator or fiduciary holding securities under an employee
benefit plan of the Company.
"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 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
compute and pay the withholding taxes.
"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.
6. MISCELLANEOUS PROVISIONS.
(a) MANDATORY ARBITRATION. Subject to Paragraph (g) below and subject
to matters covered by the securities laws, 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 Dallas, Texas,
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 Paragraph (g) below and
subject to matters covered by the securities laws, mandatory arbitration under
this Paragraph 6(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 and the Plan embody the
complete agreement and understanding among the parties and supersede and preempt
any prior understandings, agreements or representations by or among the parties,
written or oral, which may have related to the subject matter hereof in any way.
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(d) COUNTERPARTS. This Agreement may be executed in separate
counterparts, none of which need contain the signature of more than one party
hereto but each of which will be deemed to be an original and all of which taken
together will constitute one and the same agreement.
(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 Paragraph 3 hereof, and that the
Company (or any third-party beneficiary hereof) may in its sole discretion apply
to any court of law or equity of competent jurisdiction (without posting any
bond or deposit) for specific performance and/or other injunctive relief in
order to enforce or prevent any violations of the provisions of Paragraph 3 of
this Agreement.
(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 either you or a majority (based on the number of
Restricted Shares held) of the Participants negatively affected by a similar
amendment made to their Restricted Stock Agreement.
(i) BUSINESS DAYS. If any time period for giving notice or taking
action hereunder expires on a day which is a Saturday, Sunday or legal holiday
in the State of Illinois, the time period will be automatically extended to the
business day immediately following such Saturday, Sunday or holiday.
(j) 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 (a) delivered personally to
the recipient, (b) telecopied to the recipient (with hard copy sent to the
recipient by reputable overnight courier service (charges prepaid) that same
day) if telecopied before 5:00 p.m. Dallas, Texas time on a business day, and
otherwise on the next business day, or (c) 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 parties
at the following addresses:
TO THE COMPANY:
Allegiance Telecom, Inc.
Attn: Xxxx Xxxxxx
0000 Xxxxx Xxxxxxx Xxxxxxxxxx
Xxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (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.
Notwithstanding anything herein to the contrary, the Company may provide you
with written notice by sending you an email or posting information applicable to
this Agreement and/or Plan on the Company's Intranet site.
(k) DESCRIPTIVE HEADINGS; INTERPRETATION. The descriptive headings of
this Agreement are inserted for convenience only and do not constitute a
substantive part of this Agreement. Whenever required by the
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context, any pronoun used in this Agreement shall include the corresponding
masculine, feminine or neuter forms, and the singular forms of nouns, pronouns,
and verbs shall include the plural and vice versa. Reference to any agreement,
document, or instrument means such agreement, document, or instrument as amended
or otherwise modified from time to time in accordance with the terms thereof,
and if applicable hereof. The use of the words "include" or "including" in this
Agreement shall be by way of example rather than by limitation. The use of the
words "or," "either" or "any" shall not be exclusive.
(l) DELIVERY BY FACSIMILE. This Agreement and any amendments hereto
to the extent signed and delivered by means of a facsimile machine, will be
treated in all manner and respects as an original agreement and will be
considered to have the same binding legal effect as if it were the original
signed version thereof delivered in person. At the request of any party, each
other party hereto will reexecute original forms thereof and deliver them to all
other parties. No party hereto will raise the use of a facsimile machine to
deliver a signature or the fact that any signature or agreement or instrument
was transmitted or communicated through the use of a facsimile machine as a
defense to the formation or enforceability of a contract and each such party
forever waives any such defense.
(m) EXCISE TAX. If either (a) it is determined by the Internal
Revenue Service or any other applicable governmental agency that any payment or
distribution of any type to or for your benefit pursuant to this Agreement by
the Company, any Person who acquires ownership or effective control of the
Company, or ownership of a substantial portion of the assets of the Company
(within the meaning of section 280G of the Code and the regulations thereunder)
or any affiliate of such Person (the "TOTAL PAYMENTS") would be subject to the
excise tax imposed by section 4999 of the Code or any interest or penalties with
respect to such excise tax (such excise tax, together with any such interest and
penalties, are collectively referred to as the "EXCISE TAX"), or (b) the Company
or any such Person withholds any portion of such payment or distribution or
otherwise seeks to reduce your benefits under this Agreement on account of the
Excise Tax, then the Company and such Person shall be jointly and severally
obligated to pay you an additional payment (a "GROSS-UP PAYMENT") in an amount
such that, after payment by you of all federal, state and local taxes (including
any interest or penalties imposed with respect to such taxes), including any
Excise Tax, imposed upon the Gross-Up Payment, you retain an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon the Total Payments. The
Company and such Person shall be obligated to pay all of your costs (including
reasonable attorney fees and expenses) incurred in enforcing their obligations
under this Paragraph 6(m).
(n) 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 (absent a deferral election pursuant to Paragraph 2(e) above).
For this purpose, the term "forfeiture restrictions" includes the restrictions
set forth in Paragraphs 2 and 3 above. Participant may elect under Code Section
83(b) to be taxed at the time the Restricted Shares are awarded pursuant to this
paragraph, 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 thirty (30) days after the date of this
Agreement. THE FORM FOR MAKING THIS ELECTION IS ATTACHED AS EXHIBIT II.
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), EVEN IF PARTICIPANT REQUESTS THE COMPANY OR ITS REPRESENTATIVES
TO MAKE THIS FILING ON HIS OR HER BEHALF.
IN WITNESS WHEREOF, the parties hereto have executed this Restricted Stock
Agreement on the Award Date.
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ALLEGIANCE TELECOM, INC.
By:
--------------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Chief Executive Officer
PARTICIPANT
-----------------------------------------------
Name: < < First_Name_ > > < < Initial > > < < Last_Name > >
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EXHIBIT I
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED __________________ hereby sell(s), assign(s) and transfer(s)
unto Allegiance Telecom, Inc. (the "COMPANY"), _____________ (___) shares of the
Common Stock of the Company standing in his or her name on the books of the
Company represented by Certificate No. __________ herewith and do(es) hereby
irrevocably constitute and appoint ____________ Attorney to transfer the said
stock on the books of the Company with full power of substitution in the
premises.
Dated:
--------------
Signature
----------------------------
INSTRUCTION: Please do not fill in any blanks other than the signature line.
Please sign exactly as you would like your name to appear on the issued stock
certificate. The purpose of this assignment is to enable the company to
re-acquire the Restricted Shares upon forfeiture without requiring additional
signatures on the part of the Participant.
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EXHIBIT II
ELECTION TO INCLUDE RESTRICTED STOCK IN GROSS INCOME
PURSUANT TO SECTION 83(b) OF THE INTERNAL REVENUE CODE
On [_____________, ___], the undersigned acquired shares of restricted
stock (the "RESTRICTED STOCK") of Allegiance Telecom, Inc., a Delaware
corporation.
Therefore, pursuant to Code Section 83(b) and Treasury Regulation
Section 1.83-2 promulgated thereunder, the undersigned hereby makes an election,
with respect to the Restricted Stock, to report as taxable income for the
calendar year 200__ the excess (if any) of the value of the Restricted Stock on
[_________________] over the purchase price thereof.
The following information is supplied in accordance with Treasury
Regulation Section 1.83-2(e):
1. The name, address and social security number of the undersigned:
[Name][Address][SSN]
2. A description of the property with respect to which the election
is being made: _____ shares of common stock of Allegiance Telecom, Inc., a
Delaware corporation.
3. The date on which the Restricted Stock was acquired: [__________
____] The taxable year for which such election is made: 200__.
4. The restrictions to which the property is subject: 34% of the
Restricted Stock will vest on ____________________ and the remaining amount will
vest as follows: ________________.
5. The fair market value on [_____________, ______] of the property
with respect to which the election is being made, determined without regard to
any lapse restrictions and in accordance with Revenue Procedure 23-27:
[_____________]
6. The amount paid and to be paid for such property: $[________].
* * * * *
A copy of this election is being furnished to Allegiance Telecom, Inc.
pursuant to Treasury Regulation Section 1.83-2(e)(7). A copy of this election
will be submitted with the 200__ federal income tax return of the undersigned
pursuant to Treasury Regulation Section 1.83-2(c).
Dated: [_____________ ____]
________________________
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EXHIBIT III
FORM OF NOTICE OF DEFERRAL
[Dated at least six (6) months prior to a Vesting Date]
(for example, for the first Vesting Date of February 25, 2003,
you must deliver your notice on or before August 25, 2003)
Allegiance Telecom, Inc.
0000 Xxxxx Xxxxxxx Xxxxxxxxxx
Xxxxxx, XX 00000
Attn: Xxxx Xxxxxx, Stock Option Department
Fax: 469/000-0000
Pursuant to section 2(e) of that certain Restricted Stock Agreement dated as of
_____, 2002, I hereby elect to defer the distribution of _____ shares of Vested
Restricted Shares (the "Deferral Shares") which may vest on ___________________,
until (any such date to which the shares are deferred, the "Deferral Date")
[select option and fill in blanks]:
/ / the earlier of (i) [date] [no earlier than the applicable original
Vesting Date] and (ii) such time as the closing price of the Allegiance Telecom,
Inc. common stock on Nasdaq closes at $______ or higher [such stock price must
be at least 20% higher than the closing price prior to the date of this deferral
election]; or
/ / [date] [no earlier than the applicable original Vesting Date].
I understand that if I elect to defer distribution of stock certificates, no
stock certificates representing the Deferral Shares will be delivered to me
until the Deferral Date. I understand that my deferral is irrevocable and that I
may make a deferral election once with respect to a particular vesting date.
However, I also understand that the Restricted Stock Agreement referred to above
has provisions that may "accelerate" the delivery of stock certificates in
limited circumstances, notwithstanding my election to defer.
This originally signed letter will be forwarded to Xxxx Xxxxxx.
Sincerely,
[Printed name and signature of employee]
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