EX-10.1 2 a12-19976_1ex10d1.htm EX-10.1 EMPLOYMENT SECURITY AGREEMENT
Exhibit 10.1
THIS EMPLOYMENT SECURITY AGREEMENT (the “Agreement”) is entered into this day of , 20 , between Consolidated Communications Holdings, Inc., a Delaware corporation (the “Company”), and (“Executive”).
Executive is employed by the Company or one of its wholly-owned subsidiaries (referred to collectively as the “Company”) and the Company desires to provide certain security to Executive in connection with any potential change in control of the Company. Accordingly, the Company and Executive, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, hereby agree as follows:
Benefit Plan because of applicable law or contractual provisions, Executive shall be provided with substantially similar benefits and coverage for such period. Immediately following the expiration of the continuation period required by the preceding sentence, Executive shall be entitled to continued group health benefit plan coverage (so-called “COBRA coverage”) in accordance with Section 4980B of the Internal Revenue Code of 1986, as amended (the “Code”), it being intended that COBRA coverage shall be consecutive to the benefits and coverage provided for in the preceding sentence.
2. Definitions. For purposes of this Agreement:
(a) “Cause” shall mean: (i) the conviction of, pleading guilty to, or confessing or otherwise admitting to any felony or any act of fraud, misappropriation or embezzlement; (ii) the act or omission by Executive involving malfeasance or gross negligence in the performance of Executive’s duties and responsibilities to the material detriment of the Company; or (iii) the breach of any provision of any code of conduct adopted by the Company which applies to the Company if the consequence to such violation for any Executive subject to such code of conduct ordinarily would be a termination of his or her employment by the Company; provided however, no such act or omission or event shall be treated as “Cause” under this Agreement unless (a) Executive has been provided a detailed, written statement of the basis for belief that such act or omission or event constitutes “Cause” and an opportunity to meet with the Compensation Committee of the Board of Directors of the Company (the “Committee”) (together with Executive’s counsel if Executive chooses to have counsel present at such meeting) after Executive has had a reasonable period in which to review such statement and, if the act or omission or event is one which can be cured by Executive, Executive has had at least a thirty (30) day period to take corrective action and (b) a majority of the Committee after such meeting (if Executive exercises Executive’s right to have a meeting) and after the end of such thirty (30) day correction period (if applicable) determines reasonably and in good faith that “Cause” does exist under this Agreement.
(b) (i) “Good Reason” shall exist if:
a. there is any reduction after the Change Effective Date (as defined below) in Executive’s base salary and/or bonus opportunity without Executive’s express written consent;
b. there is any reduction after the Change Effective Date in the scope, importance or prestige of Executive’s duties, responsibilities or
powers at the Company without Executive’s express written consent; or
c. the Company transfers Executive’s primary work site to a new primary work site which is more than 30 miles (measured along a straight line) from Executive’s then current primary work site unless such new primary work site is closer (measured along a straight line) to Executive’s primary residence than Executive’s then current primary work site.
(ii) Notwithstanding the foregoing, no such act or omission shall be treated as “Good Reason” under this Agreement unless:
a. (1) Executive delivers to the Committee a detailed, written statement of the basis for the Executive’s belief that such act or omission constitutes Good Reason, (2) Executive delivers such statement before the later of (A) the end of the ninety (90) day period which starts on the date there is an act or omission which forms the basis for Executive’s belief that Good Reason exists or (B) the end of the period mutually agreed upon for purposes of this paragraph in writing by Executive and the Committee, (3) Executive gives the Committee a thirty (30) day period after the delivery of such statement to cure the basis for such belief and (4) Executive actually submits his or her written resignation to the Committee during the sixty (60) day period which begins immediately after the end of such thirty (30) day period if Executive reasonably and in good faith determines that Good Reason continues to exist after the end of such thirty (30) day period; or
b. The Company states in writing to Executive that Executive has the right to treat any such act or omission as Good Reason under this Agreement and Executive resigns during the sixty (60) day period which starts on date such statement is actually delivered to Executive.
(c) “Change in Control” shall mean a change in control of the Company of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of 1934 (the “1934 Act”) as in effect at the time of such “change in control”, provided that such a change in control shall be deemed to have occurred on the earliest to occur of any of the following:
(i) any “person” (as that term is used in Sections 13(d) and 14(d)(2) of the 1934 Act), other than an “affiliate” (as that term is defined in Section 5 of Article IV of the Company’s amended and restated certificate of incorporation) of Xxxxxxx X. Xxxxxxx, is or becomes the beneficial owner
(as defined in Rule 13d-3 under the 0000 Xxx) directly or indirectly, of securities representing a majority of the combined voting power for election of directors of the then outstanding securities of the Company or any successor to the Company;
(ii) during any period of two consecutive years or less, individuals who at the beginning of such period constitute the Board cease, for any reason, to constitute at least a majority of the Board, unless the election or nomination for election of each new director was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of the period;
(iii) the shareholders of the Company approve any reorganization, merger, consolidation or share exchange as a result of which the common stock of the Company shall be changed, converted or exchanged into or for securities of another corporation (other than a merger with a wholly-owned subsidiary of the Company) or any dissolution or liquidation of the Company or any sale or the disposition of 50% or more of the assets or business of the Company; or
(iv) shareholders of the Company approve any reorganization, merger, consolidation or share exchange unless (A) the persons who were the beneficial owners of the outstanding shares of the common stock of the Company immediately before the consummation of such transaction beneficially own at least a majority of the outstanding shares of the common stock of the successor or survivor corporation in such transaction immediately following the consummation of such transaction and (B) the number of shares of the common stock of such successor or survivor corporation beneficially owned by the persons described in § 2(c)(iv)(A) immediately following the consummation of such transaction is beneficially owned by each such person in substantially the same proportion that each such person had beneficially owned shares of the Company common stock immediately before the consummation of such transaction, provided (C) the percentage described in § 2(c)(iv)(A) of the beneficially owned shares of the successor or survivor corporation and the number described in § 2(c)(iv)(B) of the beneficially owned shares of the successor or survivor corporation shall be determined exclusively by reference to the shares of the successor or survivor corporation which result from the beneficial ownership of shares of common stock of the Company by the persons described in § 2(c)(iv)(A) immediately before the consummation of such transaction.
(d) “Change Effective Date” shall mean either the date which includes the “closing” of the transaction which makes a Change in Control effective if the Change in Control is made effective through a transaction which has a “closing” or the date a Change in Control is reported in accordance with applicable law as effective to
the Securities and Exchange Commission if the Change in Control is made effective other than through a transaction which has a “closing”.
(e) “Annual Compensation” shall mean the sum of: (i) Executive’s salary for one year at the greater of (A) Executive’s salary rate in effect immediately prior to the date of the Change in Control, or (B) Executive’s salary rate in effect on Executive’s Employment Termination; and (ii) the Amounts Payable Under Any Cash Bonus Plans (as defined below) in which Executive participates.
(f) “Employment Termination” shall mean the effective date of: (i) Executive’s voluntary termination of employment with the Company with Good Reason; or (ii) the termination of Executive’s employment by the Company without Good Cause.
(g) “Welfare Benefit Plan” shall mean each welfare benefit plan maintained or contributed to by the Company, including, but not limited to a plan that provides health (including medical and dental), life, accident or disability benefits or insurance, or similar coverage, in which Executive was participating immediately prior to the date of the Change in Control.
(h) “Amounts Payable Under Any Cash Bonus Plans” shall mean the annual amounts payable to Executive under any cash-based incentive or bonus plans or arrangements in which Executive participates, determined as if targeted performance goals under such plans or arrangements were attained at a 100% level, with respect to the fiscal year in which either Executive’s Employment Termination occurs or the Change in Control occurs, whichever produces a higher amount.
Anything in this Agreement to the contrary notwithstanding, in the event that any payment or distribution by or on behalf of the Company to or for the benefit of Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise) is determined to be a “parachute payment” pursuant to Section 280G of the Internal Revenue Code (the “Code”) (the “Payments”), and if any portion of the Payments is determined to be an “excess parachute payment” pursuant to Code Section 280G, the Company shall reduce, eliminate or postpone the amount otherwise payable to Executive pursuant to Section 1 of the Agreement by an amount such that the aggregate “present value” (as defined in Code Section 280G) of the Payments is one dollar less than an amount equal to three times Executive’s “base amount” (as defined in Code Sections 280G), so that Executive is not liable for any payment of the excise tax described in Code Section 4999.
4. Code Section 409A Compliance. Notwithstanding anything in this Agreement to the contrary:
(a) If at Executive’s Employment Termination Executive is a “Key Employee” as defined in Code Section 416(i) (without reference to paragraph 5 thereof), to the
extent any amounts payable to Executive pursuant to this Agreement are subject to Code Section 409A, payment of such amounts shall not be made until six months following Executive’s Employment Termination.
(b) Reimbursements or in-kind benefits provided under this Agreement that are subject to Code Section 409A are subject to the following restrictions: (i) the amount of expenses eligible for reimbursements, or in-kind benefits provided, to Executive during a calendar year shall not affect the expenses eligible for reimbursement or the in-kind benefits provided in any other calendar year, and (ii) reimbursement of an eligible expense shall be made as soon as practicable, but in no event later than the last day of the calendar year following the calendar year in which the expense was incurred.
securities owned by his spouse and all relatives and children residing in Executive’s principal residence.
(b) No Solicitation of Customers, Representatives, Agents or Employees. Executive agrees that he shall not, while Executive is employed by the Company and for [ ] year following any Employment Termination, directly or indirectly, in his individual capacity or otherwise, induce, cause, persuade, or attempt to do any of the foregoing in order to cause, any customer, representative, agent or employee of the Company to terminate such person’s relationship with the Company or to violate the terms of any agreement between said customer, representative, agent or employee and the Company.
13. Interpretation. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of Illinois, without regard to the conflict of law principles thereof.
15. Other Agreements. This Agreement supersedes and cancels any prior written or oral agreements and understandings relating to the terms of this Agreement including any prior Employment Security Agreement between Executive and the Company and any Change in Control Severance Agreement or similar arrangement between Executive and SureWest Communications.
Consolidated Communications |
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Holdings, Inc. |
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By: |
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Its: |
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Executive |
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